Dipak Babaria & ANR. Vs. State of Gujarat & Ors.
[Civil Appeal N. 836 of 2014 @ out of Special Leave Petition (Civil) No.36738/2012]
H.L. Gokhale J.
1. Leave Granted.
2. This appeal by Special Leave seeks to challenge the judgment and order dated 30.8.2012 rendered by a Division Bench of the Gujarat High Court dismissing Writ Petition (PIL) No.44 of 2012 filed by the appellants herein. The Writ Petition had various prayers, but essentially it sought to challenge the permission granted by the Collector, Bhuj, to sell certain parcels of agricultural land situated in district Kutch, which were said to have been purchased earlier by the respondent No.4 herein, one Indi gold Refinery Limited of Mumbai, for industrial purpose in favour of respondentNo.5 i.e. one Alumina Refinery Limited, Navi Mumbai, as being impermissible under the provisions of the Gujarat (earlier 'Bombay' prior to the amendment in its application in the State of Gujarat) Tenancy and Agricultural Lands (Vidarbha Region and Kutch Areas) Act, 1958 (Tenancy Act, 1958 for short).
It was submitted that under Section 89A of this Act, agricultural land can be permitted to be sold by an agriculturist to another person for industrial purpose provided the proposed user is bona-fide. In the event, the land is not so utilised by such a person for such purpose, within the period as stipulated under the act, the Collector of the concerned district has to make an enquiry under sub-Section 5 thereof, give an opportunity to the purchaser with a view to ascertain the factual situation, and thereafter pass an order that the land shall vest in the State Government on payment of an appropriate compensation to the purchaser which the Collector may determine.
It was contended that there was no provision for any further transfer of agricultural land from one industrial purchaser to any third party, once again, for industrial purpose when the first purchaser of agricultural land had defaulted in setting up the industry. Apart from being in breach of the law, the transaction was stated to be against public interest, and a mala-fide one resulting into a serious loss to the public exchequer. The Writ Petition criticised the role of the Collector and the Revenue Minister of the State Government, and sought an inquiry against them in the present case, and also a direction to the state authorities to resume the concerned land.
3. The impugned judgment and order rejected the said writ petition on two grounds, firstly that there was delay in initiating the said Public Interest Litigation (PIL), and that the writ petitioner had suppressed the material facts before the Court concerning the investment claimed to have been made by the respondent No.5.
4. The writ petition, and now this appeal raise the issues with respect to the underlying policy and purpose behind the relevant provisions of the Tenancy Act, 1958. In that connection, it also raises the issue with respect to the duties of the revenue officers on the spot, such as the Collector, the importance of the role of senior administrative officers of the State Government, and whether a Minister of the Government can direct the administrative officers and the Collector to act contrary to the provisions and policy of the statute. The Secretary of the Department of Revenue of the Government of Gujarat, and the Collector of District Kutchat Bhuj are joined as respondent Nos. 2 and 3 to this appeal. The facts leading to this appeal are as follows:-
5. It is pointed out by the appellants that the respondent No.4Indigold Refinery Ltd. (Indigold for short) which is a company having its office in Mumbai, purchased eight parcels of land owned by one Virji Jivraj Patel and Jayaben Virji Patel residing at Bankers Colony, Bhuj, admeasuring in all 39 acres and 25 gunt has (i.e. roughly 40 acres) by eight sale deeds all dated 30.1.2003, for a consideration of about Rs.70 lakhs.
These eight sale deeds are supposed to have been signed for respondent No.4 Indi gold by one Hanumantrao Vishnu Kharat, its Chairman-cum-Managing Director. The lands are situated in villages Kukma and Moti Reldi in the district of Kutch. The sale deeds indicated that the purchaser had purchased these lands for industrial purpose, and that the purchaser will obtain the permission from the Deputy Collector, Bhuj for purchasing the said land within one month from the date of those sale deeds. The respondent No.4 is said to have applied for the necessary permission under Section 89A of the Tenancy Act, 1958 on 31.1.2003, and the Collector of Bhuj is stated to have given the requisite certificate of purchase of the lands under sub-section(3) (c) (i) of the said section. It appears that thereafter no steps were taken by respondent No.4 to put up any industry on the said land.
6. Five years later, the respondent No.4 is stated to have applied on 6.12.2008 to the Deputy Collector at Bhuj for permission to sell these lands. The Collector of Bhuj sought the guidance from the Revenue Department, and in view of the direction of the Revenue Department, the Deputy Collector granted the permission on 15.1.2010, to sell the lands to respondent No. 5 treating it as a special case, and not to be treated as a precedent. Thereafter, the respondent No.4 conveyed the concerned lands to respondent No.5 by sale deed dated 19.1.2010.
Respondent No.5 also obtained permission from the Industries Commissioner on 8.3.2010 for putting up the industry. Subsequently, the Collector issued the certificate as required under Section 89A (3) (c) (i) of the Tenancy Act, 1958, on 21.5.2010, that respondent No.5 had purchased the land for a bona-fide purpose. The permission for a non-agricultural user was given to the respondent No.5 on5.1.2011. The Gujarat Mineral Development Corporation (GMDC) - which got itself impleaded in this appeal as respondent No.6 has entered into a Memorandum of Understanding (MOU for short) on 30.11.2011 with M/s Earth Refinery Pvt. Ltd. which is the holding company of respondent No.5 to purchase 26% of equity in a joint venture company to be set up by them, and which will own the industry.
7. It appears that a Gujarati Daily "Sandesh" in an article dated 20.8.2011 reported that there was a huge loss to the State exchequer in the sale of these lands to a private company almost to the tune of Rs.250crores. The newspaper reported that although the respondent No.4 had purchased the concerned lands at village Kukma and Moti Reildi on 30.1.2003, no industrial activity was started till 2008 as required by the law, and after a long period of five years the land was to be sold to Alumina Refinery Limited (Alumina for short). One Mr. Nitin Patel is the Managing Director of this Alumina, and Mr. Nilesh Patel who is his brother is its Director (Legal and Human Resources).
The newspaper stated that Alumina had written a letter to the Chief Minister Mr. Narendra Modi, on18.6.2009 that the Government should grant the necessary permission. It is further stated that on the said proposal being placed before them, the officers of the Revenue Department had placed negative remarks, and yet a permission was granted to sell 2 lakh sq. yds. of land at a throw away price when the rate of land was Rs.3500 - 4000 per sq. yd.. It was alleged that there was a direct involvement of the Chief Minister in this scam, and with a view to avoid Lokayukata enquiry, although a commission was appointed under Hon'ble Mr. Justice M.B. Shah, a former Judge of Supreme Court of India to enquire into a number of other controversial projects, this scam was excluded there from.
8. There was also a news item in another Daily "Kachchh Mitra" on1.2.2011 that the Alumina Refinery Limited was given permission by breaching rules and regulations. The farmers of the nearby villages were worried, and some 200 farmers had protested against the proposal as it would affect their agricultural activities due to pollution. It was stated that they had sowed plants of tissue-culture Israeli dry-dates. They had planted lacs of Kesar Mango trees. They were also cultivating crops of Papaiya, Aranda, Wheat, Cotton, groundnuts etc. If the refinery work starts in this area, it will affect the agricultural work badly. There was also a fear that the blackish and toxic air of the factory will spoil the plants.
9. All this led the appellants to file the earlier mentioned writ petition, for the reliefs as prayed. The petition enclosed the above referred news reports, as also the information obtained through enquiry under the Right to Information Act, 2005 by one Shri Shashikant Mohanlal Thakker of Madhapur Village of Taluka Bhuj. This information contained the documents incorporating the file notings of the revenue department and the orders granting permission. The aforesaid writ petition was filed on28.2.2012. An affidavit in reply to the writ petition was filed by above referred Nitin Patel on behalf of respondent No.5, and the appellants filed a rejoinder.
Respondent No.5 filed a sur-rejoinder thereto. The respondentNo.1 State of Gujarat filed an affidavit in reply on 16.8.2012, and the petitioner filed a rejoinder to the Government's affidavit on 10.11.2012.After the writ petition was filed on 28.2.2012 an order of status-quo was granted on 1.3.2012, and it continued till the dismissal of the petition on30.8.2012 when the order of stay was vacated. However, when the present SLP was filed, an order of status-quo was granted by this Court on4.1.2013, and it has continued till date. Relevant provisions of the Statute:-
10. In as much as we are concerned with the provisions contained in Section 89 and Section 89A of the Tenancy Act, 1958, it is necessary to reproduce the two sections in their entirety. These two sections appear in Chapter VIII of the Tenancy Act, 1958. The sections read as follows:-
"CHAPTER VIII
RESTRICTIONS ON TRANSFERS OF AGRICULTURAL LANDS
AND ACQUISITION OF HOLDINGS AND LANDS
89 Transfers to non-agriculturists barred.-
Transfers to non-agricul-turists barred
(1) Save as provided in this Act,
a) no sale (including sales in execution of a decree of a Civil Court or for recovery of arrears of land revenue or for sums recoverable as arrears of land revenue), gift exchange or lease of any land or interest therein, or
b) no mortgage of any land or interest therein, in which the possession of the mortgaged property is delivered to the mortgagee,
shall be valid in favour of a person who is not an agriculturist or who being an agriculturist cultivates personally land not less than three family holdings whether as owner or partly as tenant or who is not an agricultural labourer:
Provided that the Collector or an officer authorised by the State Government in this behalf may grant permission for such sale, gift, exchange, lease or mortgage, in such circumstances as may be prescribed:
[Provided further that no such permission shall be granted, where land is being sold to a person who is not an agriculturists for agricultural purpose, if the annual income of such person from other source exceeds five thousand rupees.]
(2) Nothing in this section shall be deemed to prohibit the sale, gift, exchange or lease of a dwelling house or the site thereof or any land appurtenant to it in favour of an agricultural labourer or an artisan.
(3) Nothing in this section shall apply to a mortgage of any land or interest therein effected in favour of a co-operative society as security for the land advanced by such society.
(4) Nothing in section 90 shall apply to any sale made under sub-section (I).
89A. Sale of land for bonafide industrial purpose permitted in certain cases:-
(1) Nothing in section 89 shall prohibit the sale or the agreement for the sale of land for which no permission is required under sub-section (1) of section 65B of the Bombay Land Revenue Code, 1879 (Bom. V of 1879) in favour of any person for use of such land by such person for a bonafides industrial purpose:
Provided that-
a) the land is not situated within the urban agglomeration as defined in clause (n) of section 2 of the Urban Land (Ceiling and Regulation) Act, 1976 (33 of 1976),
b) where the area of the land proposed to be sold exceeds ten hectares, the person to whom the land is proposed to be sold in pursuance of this sub-section shall obtain previous permission of the Industries Commissioner, Gujarat State, or such other officer, as the State Government may, by an order in writing, authorise in this behalf.
c) the area of the land proposed to be sold shall not exceed four times the area on which construction for a bonafide industrial purpose is proposed to be made by the purchaser:
Provided that any additional land which may be required for pollution control measures or required under any relevant law for the time being in force and certified as such by the relevant authority under that law shall not be taken into account for the purpose of computing four times the area.
d) where the land proposed to be sold is owned by a person belonging to the Scheduled Tribe, the sale shall be subject to the provisions of section 73AA of the Bombay Land Revenue Code, 1879 (Bom. V of 1879).
2) Nothing in the Section 90 shall apply to any sale made in pursuance of subsection (1).
3) (a) Where the land is sold to a person in pursuance of sub- section (1) (hereinafter referred to as "the purchaser"), he shall within thirty days from the date of purchase of the land for bonafides industrial purpose, send a notice of such purchase in such form alongwith such other particulars as may be prescribed, to the Collector and endorse a copy thereof to the Mamlatdar.
(b) Where the purchaser fails to send the notice and other particulars to the Collector under clause (a) within the period specified therein, he shall be liable to pay, in addition to the non-agricultural assessment leviable under this Act, such fine not exceeding two thousand rupees as the Collector may subject to rules made under this Act, direct.
(c) Where, on receipt of the notice of the date or purchase for the use of land for a bonafides industrial purpose and other particulars sent by the purchaser under clause (a), the Collector, after making such inquiry as he deems fit-
(i) is satisfied that the purchaser of such land has validly purchased the land for a bonafide industrial purpose in conformity with the provisions of sub-section (1), he shall issue a certificate to that effect to the purchaser in such form and with in such time as may be prescribed.
(ii) is not so satisfied, he shall, after giving the purchaser an opportunity of being heard, refuse to issue such certificate and on such refusal, the sale of land to the purchaser shall be deemed to be in contravention of section 89.
(d) (i) The purchaser aggrieved by the refusal to issue a certificate by the Collector under sub-clause (ii) of clause (c) may file an appeal to the State Government or such officer, as it may, by an order in writing, authorise in this behalf.
(ii) The State Government or the authorised officer shall, after giving the appellant an opportunity of being heard, pass such order on the appeal as it or he deems fit.
4) The purchaser to whom a certificate is issued under sub- clause (i) of clause (c) of sub-section (3), shall commence industrial activity on such land within three years from the date of such certificate and commence production of goods or providing of services within five years from such date:
Provided that the period of three years or, as the case may be, five years may, on an application made by the purchaser in that behalf, be extended from time to time, by the State Government or such officer, as it may, by an order in writing authorise in this behalf, in such circumstances as may be prescribed.
(5) Where the Collector, after making such inquiry as he deems fit and giving the purchaser an opportunity of being heard, comes to a conclusion that the purchaser has failed to commence industrial activity or production of goods or providing of services within the period specified is clause (b) of sub-section (4), or the period extended under the proviso to that clause, the land shall vest in the State Government free from all encumbrances on payment to the purchaser of such compensation as the Collector may determine, having regard to the price paid by the purchaser and such land shall be disposed of by the State Government, having regard to the use of land.
"The pleadings of the parties before the High Court:-
11. The appellants had contended in paragraph 6 of their Writ Petition that the permission given to Indi gold to sell the land was contrary to the provisions and restrictions imposed under the law, and contrary to the original permission granted to them by the Deputy Collector, Bhuj, on 1.5.2003. The market value of the land in question goes into crores of rupees, and such an act will result in huge loss to the public exchequer. They had contended that the decision was malafide. The decision was alleged to have been taken for a collateral purpose, which was apparently neither legal nor in the interest of the administration and public interest. Inasmuch as it was concerning disposal of public property, the only mode to be adopted was a fair and transparent procedure which would include holding a public auction inviting bids, and thereby providing equal opportunity to all interested or capable industries, in order to promote healthy competition and to fetch the right market price.
The decision has been taken at the instance of the Hon'ble Revenue Minister. It was also submitted that, there were possibilities that the directors / promoters and the management of Indi gold and Alumina are the same, and if that is so, it would be a design to defraud the Government. Alumina had contended that it had signed an MOU with the State Government during the Vibrant Gujarat Investors' Summit, 2009. The appellants had submitted that the same cannot be a ground to grant the permission to sell, contrary to the mandatory provisions of law.
Section 89A makes a contingent provision in case the land is not used for industrial activity within the time provided, and such mandatory provisions of the Act cannot be bypassed merely upon the endorsement made by the Hon'ble Revenue Minister. The action on the part of the State is absolutely arbitrary. The State or a public authority which holds the property for the public, and which has the authority to grant the largesse, has to act as a trustee of the people, and therefore to act fairly and reasonably. The holders of pubic office are ultimately accountable to the public in whom the sovereignty vests. The action of the Government is arbitrary, and therefore violative of Article14 of the Constitution of India.
12. Respondent No.5 was the first to file a reply to this petition in the High Court which was affirmed by Mr. Nitin Patel on 11.7.2009. In this reply he principally submitted that it was not correct to say that the land was being given away at a throwaway price, causing great loss to the public exchequer to the tune of Rs.250 crores, as alleged. The State Authorities and the Revenue Minister have not acted in violation of any mandatory provisions of law. The affidavit further narrated the various events in the matter leading to the sale deed dated 19.1.2010 by Indi gold in favour of Alumina, and the permission of the Industries Commissioner dated 8.3.2010. It was also pointed out that permission had been granted by the Collector, Bhuj on 5.1.2011. Thereafter, it was contended that the land has been purchased by the respondent No.5 way back in January 2010, and the petition, making frivolous and baseless allegations, has been filed two years after the said transaction.
13. Then, it was pointed out that the respondent No.5 was incorporated under the Companies Act in the year 2008, and that the company is promoted by Earth Refining Company Pvt. Limited. Respondent No.5 wanted to manufacture high value added products from bauxite ore available in Kutch district which ore was currently sold or exported as it is without any value addition. The intention of respondent No.5 was in line with and supported by Government of Gujarat Industries and Mines Policies, 2009.The project was to be first of its kind in Gujarat, with technology supplied to it by National Aluminum Company Ltd. (shortly known as NALCO),a Government of India Enterprise. A share holding agreement dated30.11.2011 had been entered into between GMDC and Earth Refining Company Ltd. whereby GMDC had agreed to be joint venture partner, and to subscribe to 26% of the equity share capital of the new company. NALCO has provided advanced technology for the project.
14. It was further submitted in para 15 (g) of the reply that, the opinions of all the subordinate officers are "inconsequential and not binding on the Revenue Minister". The decision of the Minister cannot be faulted on the basis of certain notings of a lower authority.
15. One Mr. Hemendera Jayantilal Shah, Additional Secretary, Revenue Department filed the reply on behalf of the respondent-State. In paragraph 3.4 it was contended that the notings from the Government files reflect only the exchange of views amongst the officers of the departments. The decision of the State Government to grant permission for sale of the land could not be said to be arbitrary, malafide or in the colourable exercise of power. Three reasons were given in support thereof:-
(i) If the land had been directed to be vested in the State Government, State would have been required to pay compensation to M/s Indi gold under Section 89A(5) which is otherwise a long-drawn process involving Chief Town Planner and State Level Valuation Committee, for the purpose of determining the valuation of the land, and thereafter for finding the suitable and interested party to set up an industry on the land in question.
(ii) In the sale to Alumina, the State Government's own interest through its public sector undertaking had been involved, and therefore there has been a substantial compliance of the spirit flowing from the provisions of Section 89A(5).
(iii) The price of the land in question was around Rs.4.35 crores as per the Jantri (i.e. official list of land price) at the relevant time, and it had come down to Rs.2.08 crores, as per the revised Jantri rated of 2011.Thus, apart from time being consumed in the process, perhaps there would have been a loss to the public exchequer.
Thereafter, it was stated in paragraph 4 of the reply as follows:-
"I further respectfully say that the action of the State Government was bonafide and taking into consideration all the aspects of the matter, viz.
(i) the land is being used for the industrial purpose,
(ii) a dire need for industrialization in the Kutch District;
(iii) MoU arrived at during the Vibrant Summit, 2009, whereby, a ready and interested party was available to start the industry immediately on the land in question; and
(iv) GMDC possessing 26% of the share in such interested party, i.e. M/s Alumina Refinery Pvt. Ltd.
"It is relevant to note that no reply was filed on behalf of Indi gold. Additional pleadings of the parties in this Court:-
16. As far as this Court is concerned, a counter affidavit was filed on behalf of the State Government by one Mr. Ajay Bhatt, Under Secretary, Land Reforms. In his reply, he stated that in any event in the present process the State is the beneficiary in permitting this transaction with GMDC which is a Government Undertaking. It will have 26% stock in respondent No.5. In paragraph 4(E)(e)(ii) he stated that since the Government's own interest was involved, there has been a substantial compliance of the spirit flowing from the provisions of Section 89A(5) of the Act.
17. A counter was also filed in this Court by one Mr. Deepak Hansmukhlal Gor, Vice President of respondent No.5-Alumina. He pointed out that although the petition in the High Court was moved as a PIL, the petitioner No.1 was in fact a leader of the opposition party in the State. In order to mislead the Court it was stated in the petition that the land was worth Rs.250 crores. It was further submitted that to seek an interim relief a false statement had been made in the writ petition that no activity had been initiated by respondent No.5 on the concerned land by the time writ petition was filed. The respondent No.5 had made substantial investment and construction on the land, and photographs in that behalf were placed on record.
It was also submitted that the decision of the State Government was in tune with Mineral Development Policy, 2008 of the Government of India and Gujarat Mineral Policy, 2003. It was then pointed out that apart from other controversies, the present controversy has also been included for the consideration of Hon'ble Mr. Justice M.B. Shah, Former Judge of this Court. The sale of land in the present case was rightly considered as a special one, and the challenge thereto was highly unjustified and impermissible. The respondent No.5 filed various documents thereafter, including the various permissions obtained by respondent No.5for the project and the technology supply agreement entered into between NALCO and M/s Earth Refining Company Ltd. It was submitted that the Respondent No. 5 is a bona-fide purchaser of the land, and in any case it should not be made to suffer for having invested for industrial development. It is claimed that Respondent No. 5 has made an investment to the tune of Rs 6.85 crores as on 31.3.2012 on the project, and moved in some machinery on the site.
18. The appellant No.1 has filed his rejoinder to both these counters. He has stated that he has not suppressed that he is a political activist, which is what he has already stated in the petition. He has maintained his earlier submissions in the writ petition, and denied the allegations made in the two counter affidavits.
19. As stated earlier, GMDC has applied for joining as respondentNo.6. In its application it has stated that Alumina was selected through transparent evaluation. Then, it was short-listed for setting up the project in Kutch at the Vibrant Gujarat Summit in 2009. It also defended the Government's decision on the ground that it is going to have 26% equity in respondent No.5.Points for consideration before this Court:
20. It, therefore, becomes necessary for this Court to examine whether the decision taken by the Government to permit the transfer of the agricultural land from respondent No. 4 to respondent No. 5, was legal and justified. For that purpose one may have to consider the developments in this matter chronologically as disclosed from the above pleadings of the parties, as well as from the material available from the Government files placed for the perusal of the Court. Thereafter, one will have to see the scheme underlying Sections 89 and 89A, and then examine whether there has been any breach thereof, and if it is so what should be the order in the present case? Material on record and the material disclosed from the files of the Government and the Collector:-
21. The respondents have contended that the sale transaction between respondent Nos.4 and 5 took place because of the financial constraints faced by respondent No.4 Indi gold Refinery Limited, and that is reflected in their letter dated 16.6.2009 addressed to the Collector, Bhuj. The letter-head of the respondent No.4 shows that it claims to have a gold refinery at Chitradurg in State of Karnataka. This letter refers to their earlier letter dated 6.12.2008, and letter dated 12.6.2009 from respondentNo.5 Alumina. The relevant paragraph of letter dated 16.6.2009 reads as follows:- "........
With regret we have hereby to inform you that due to financial constraints on our part we are unable to execute our proposed refinery project on the said land. We are well aware of the fact that sufficient amount of time has passed from the date of permission granted by the office of Deputy Collector-Bhuj to set up the project. We have tried our level best to set up the industry on the land in question." M/s Alumina Refinery (P) Ltd. having their registered office in Mumbai has shown keen interest to set their Alumina Refinery Project on our above mentioned ownership land. A copy of consent letter dated 12.06.2009 has already been sent to your office by M/s Alumina Refinery (P) Ltd., whereby they have applied to avail the permission to purchase our above ownership land u/s 89. We appreciate and are thankful to your office and Government of Gujarat for giving us an opportunity to purchase and set up of our then proposed refinery project on the above mentioned agricultural land. We would like to confirm that we had a clear intention to set up industry on the above mentioned land, it is only because of non availability of monetary fund we are not in a position to set up our industry on the above mentioned agricultural land.Further, we are also not having any intention to take any undue advantage in form of booking any profit by sale of ownership land to M/s Alumina Refinery (P) Ltd. We, hereby request your office to kindly grant the permission to sale all the above land and allow us to execute the Sale Deed for registration with the competent authority......"
(emphasis supplied)
22. The earlier letter dated 6.12.2008 mentioned in this letter of16.6.2009, however, nowhere mentions that respondent No.4 had any financial constraints because of which it could not set up the industry and the fore it wanted to sell the particular land. This letter is seen in the file of the Collector. This letter reads as follows:-
"INDIGOLD REFINERIES LIMITED
6th December 2008
To,
Collector of Kutch,
Bhuj, State of Gujarat
Sub:- Permission for the sale of agricultural land admeasuring 39 acres 25 gunt has at Moti Reladi Kukama, Taluka Bhuj, District Kutch, State of Gujarat.
Dear Sir,
Reference to above, we have to respectfully inform your good self that we had purchased land as per details here below for setting up of Industrial project:-
Sr.no.
Name of Village
Survey No.
Measurement Acres and gunthas
1.
Kukama
94/1
4/14
2.
Kukama
94/2
2/16
3.
Moti Reladi
101/1
9/30
4.
Moti Reladi
106
6/10
5.
Moti Reladi
100/1
2/20
6.
Moti Reladi
107
4/15
7.
Moti Reladi
105/4
5/21
8.
Moti Reladi
110/2/3
4/16
Total
39 acres 25 gunthas
The above piece of land was purchased with the permission granted by Deputy Collector, Bhuj, Kutch, wide letter no. LND/VC/1169/03 dated 2nd May 2003. We further respectfully inform yourself that we are no more interested to put any industrial project in the said land and therefore we are disposing off entire piece of land as per aforesaid details to our prospective client. We, therefore, request your good self to kindly give us your permission for sale, so as to enable us to register the sale deed with the concern competent authority. We hope you will extend your maximum corporation and assistances in this regard and oblige.
Thanking you
Yours faithfully
Sd/-
Indi gold Refineries Ltd.
Hanumantrao V. Kharat"
(emphasis supplied)
23. As stated earlier, the File notings of the Revenue Department, were obtained through an RTI inquiry, and were placed on record along with the Writ Petition. The learned counsel for the State of Gujarat was good enough to produce the original files for our perusal. In the file of the Revenue Department, there is an Email dated 1.7.2009 from Shri Nitin Patel, Chairman & MD of respondent No.5 forwarding his letter dated 30.6.2009addressed to Smt. Anandiben M. Patel, Hon'ble Minister of Revenue recording the minutes of the meeting held in her office on 29.6.2009. Immediately thereafter, the respondent No.5 has written a letter to the Chief Minister of Gujarat seeking permission to purchase these lands.
The Secretary to the Chief Minister, Shri A.K. Sharma has then sent a letter on 2.7.2009 to the Principal Secretary, Revenue Department informing him that Shri Nitin Patel, of respondent No.5, had approached them with their representation dated 18.6.2009. It had inked an MOU during the Vibrant Gujarat Global Summit for establishing an Alumina Refinery, and they had identified a land suitable for that purpose. This letter further stated: "On verification of the issue, necessary action may kindly be taken at the earliest. In the meantime, a brief note indicating the possible course of action may please be sent to this office.
24. "In view of this note from the Secretary to the Chief Minister, the Revenue Department sought the factual report from the Collector by their letter dated 6.7.2009. What we find however, is that instead of sending a factual report, the Collector for warded the original proposal of respondent No.5 itself to the Department, and sought their decision thereon in favour of Alumina through his letter dated 31.7.2009. Thereafter, we have the note dated 7.8.2009 in the Government file which is signed by then Section Officer and Under Secretary, Land Revenue.
This note refers to the fact that a letter dated 2.7.2009 had been received from the Secretary to the Chief Minister. Thereafter, a letter dated 31.7.2009 had been received from the Collector, Kutch stating that respondent No.4 had purchased the concerned land admeasuring 39 acres and 25 guntas, but no industrial use had been made, and that the respondent No.5 had shown his willingness to purchase the land. Thereafter, the note records what the Collector had stated viz.
"Taking into consideration the reasons shown in the submission of Alumina Refinery Company addressed to the Hon'ble C.M., dated 18.6.2009, it is submitted to grant permission for purchasing land".
25. The departmental note thereafter states in sub-paragraph A, B,C of paragraph 4, that under the relevant law the purchaser of the land should commence the industrial activity within a period of 3 years from date of the certificate of purchase, and within 5 years start the manufacture of goods and provide the services. Where the purchaser fails to commence the industrial activity, the Collector has to initiate an enquiry as to whether the purchaser has failed to commence industrial activity or production, as mentioned in clause (b) of sub-section 4.
Thereafter, if on giving the purchaser an opportunity to be heard, the Collector comes to a conclusion that the purchaser has failed to do so, he has to determine the payment of compensation, and pass an order that the land shall vest in the State Government. Thereafter the note records:-
" .....Taking into consideration the above provisions, whatever action required to be taken, is to be taken by Collector, Kutch, means there is no question at all of the authority for a period of more than five years. Further vide letter dated 6.7.2009, Collector was informed to submit factual report. Instead of the same, proposal is submitted by him. Vide order dated 1.5.2003 Deputy Collector has granted permission to Indigold Refinery Company under Section-89 of the T.A. with regard to the lands in question.
The time limit of this permission has come to an end. Now another company, Alumina Refinery Co. wants to purchase land of this company and establish a project. Looking to the same, taking into consideration the above provisions, whatever action is required to be taken, the same is to be taken at his (Collector) level only. This is submitted for consideration whether to inform Collector accordingly or not? As Collector is required to take action as per the legal provisions, any action on proposal of Collector is not required to be taken by this office. Therefore, proposal of the Collector be sent back. Submitted respectfully..."
(emphasis supplied)
26. Since, the Secretary of the Hon'ble Chief Minister had sought a note indicating the possible course of action, the Deputy Secretary, Land Revenue made a note on 25.8.2009, and at the end thereof, he stated as follows:- "........ Under these circumstances, looking to legal provisions, there is a provision that either the company carries out the industrial activity or the State Government resumes the land. There is no provision for mutual transfer by the parties. As suggested by the Secretary to the Hon'ble C.M., note indicating the above position be sent separately."
27. A note was, thereafter, made by the Principal Secretary, Land Revenue, which recorded that as per existing policy such sale was not permissible. In para 2 of his note he stated: "as per rules, the land is to be resumed by Collector in case of failure to utilize for industrial use". In para 5 thereof he however suggested "that in such case, as in cases under the Land Acquisition Act, 50% of the unearned income being required to be charged by the State Government can be introduced as a policy measure". The Principal Secretary, Revenue Department marked para 2 above as "A" and then remarked on 29.8.2009 as follows:-
"We may resume as "A" of pre-page and allot as per the existing policy on land price". The Chief Secretary wrote thereon on 1.9.2009 -
"We should take back the land. Allotment may be separately examined". What is relevant to note is that the Minister of Revenue Smt. Anandiben Patel thereafter put a remark on 10.9.2009:- "Land is of private ownership. As a special case, permission be granted for sale".
28. Thereafter, it is seen from this file that in view of this direction by the Minister, the matter was further discussed. A note was then made by the Principal Secretary, Revenue Department on 21.9.2009 -"Discussed. We may resubmit to adopt a procedure for such cases". The Principal Secretary, Land Revenue made a detailed note thereafter on14.10.2009 referring to the amendment brought in by Gujarat Act No.7 of1997 incorporating Section 63AA in the Bombay Tenancy and Agricultural Lands Act, 1948, and the developments in the present matter up to the noting made by the Minister, that the land may be permitted to be sold as a special case. Thereafter, he sought an opinion as to whether or not an action similar to a provision under the
Land Acquisition Act on the occasion of sale of land providing for taking of 50% amount of unearned income by the State Government, be taken in the present case. The Chief Secretary made a note thereon as follows:-
"It would be proper to give land to the new party provided industry department recommends as per the laid down rules. As indicated in page 9/D note (marginal). Let us take back land under 63AA and then re-allot to the new party".
15.10 The Minister still made a note thereon on 4.11.2009:-
"As a special case as suggested earlier, permission for sale be given".
In view of this direction by the minister, the department has, thereafter, taken the decision that the permission be given as a special case but not to be treated as precedent. Thus, the opinion of the Principal Secretary, Land Revenue that 50% of the unearned income be taken by the Government was not accepted. Similarly, the opinion of the Chief Secretary that the land be resumed, and then be re-allotted to the new party was also not accepted.
29. This has led to the communication from the State Government to the Collector dated 18.12.2009 that the Government had granted the necessary permission to respondent No.5 to purchase the land, treating itas a special case. The said letter reads as follows:-
"Urgent/RPAD
Sr. No.: GNT/2809/2126/Z
State of Gujarat
Revenue Department
11/3 Sardar Bhavan Sachivalay
Gandhinagar
Date: 18/12/2009
To,
The Collector Kutch-Bhuj
Subject: Shri Nitin Patel c/o M/s Indigold Refinery/Alumina Representation qua the land of Kukma and Moti Reldi
Reference: Your letter dated 31/9/09 bearing no. PKA-3- Land- Vs. 2083/2009
Sir,
In connection with your above referred and subject letter, the land of Kukma and Moti Reldi admeasuring Acre 39 Guntha 25 was purchased by Indigold Refinery as per the provisions of Bombay Tenancy and Agricultural Lands (Vidharbha Region and Kutch Area) Act, 1958; Section 89. However due to financial incapability, the Company is unable to establish industry and other company M/s Alumina Refinery Pvt. Ltd. being ready to purchase the said land, upon careful consideration the Government on the basis of treating the case as "A special case and not to be treated as precedent" has granted the permission.
2. Papers containing pages 1 to 89 are returned herewith.
Encl: As above
Yours sincerely
Section Officer
Revenue Department
State of Gujarat
Copy to: Select File/Z Branch
Select File/Z Branch/N.S.A"
30. Thereafter, the Deputy Collector has issued an order dated15.1.2010 granting permission to sell the land for industrial purpose under Section 89A of the Act. He, however, added that the action of issuing the certificate can be taken only after the submission of a project report and technical recommendation letter of Industries Commissioner by respondent No.5. The above referred order dated 15.1.2010 of the Deputy Collector granting permission to sale the land reads as follows:-
No. Jaman Vashi/218/09
Office of Deputy Collector
Bhuj,
Date-15/01/2010
To Shri Hanumantrav V. Kharat
Indi Gold Refineries Limited
201-212, EMCS House
289 SBSL, Fort
Mumbai-400 001
Subject:- Regarding getting the approval for sale of the agricultural land of village Kukma and Moti Reldi, Taluka Bhuj purchased for industrial purpose, under Section-89-A of the Tenancy Act. Read:- Letter No. Ganat/2809/2126/Z dated 18/12/2009 of the Revenue Department of the Government, Gandhinagar.
Sir,
With reference to the above subject it is to be informed that vide this office certificate No. Land/Vasi/1169/03 dated 01/05/2003 you have been granted permission under Section-89-A of the Tenancy Act for purchasing agricultural land for industrial purpose as under:-
In the above lands as the company due to financial circumstances is not in a position to establish any industry, with reference to your application dated 06/12/2008 seeking the permission for sale of the above land for industrial purpose to Shri Alumina Refinery (Pvt.) Limited, Mumbai for the Alumina Refinery project, vide the above referred letter of the R.D. of the Government as a "special case and with a condition not to treat as the precedent" the permission is granted, which may be noted.
As the above land is admeasuring more than 25 Acres, in this case on submission of the Project Report and the Technical recommendation letter of Industries Commissioner, G.S., Gandhinagar by the party desirous to purchase the land Alumina Refinery (Pvt.) Ltd., Mumbai, further action can be taken by this office for issuing the certificate under Section-89 of the Tenancy Act, which may be noted.
Sd/-
Deputy Collector,
Bhuj
Copy to Alumina Refinery (Pvt.) Ltd.
1501-1502 Shiv Shankar Plaza-
Near HDFC Bank, Sector-8 Airoli,
New Mumbai-400 708"
31. This led to the sale deed between respondent No.4 and 5 for sale of the lands at Rs.1.20 crores. It is, however, interesting to note that the sale deed is signed for Indi gold by Nitin Patel on the basis of the power of attorney from them, and for Alumina by his brother Nilesh Patel. Subsequently the permission from the Industries Commissioner was obtained on 8.3.2010, and the certificate under Section 89A (3) (c) (i) of purchase for bona-fide industrial purpose on 21.5.2010.The submissions on behalf of the appellants:-
32. The decision of the State Government to permit the transfer of the concerned agricultural lands was challenged by the appellants on various grounds. Firstly, it was submitted that Section 89 basically bars transfer of agricultural land to the non-agriculturists. Section 89A makes an exception only in favour of a bonafide industrial user. The industry is required to be set-up within three years from the issuance of necessary certificate issued by the Collector for that purpose, and the production of the goods and services has to start within five years.
If that is not done, the Collector has to take over the land after holding an appropriate enquiry under sub-section (5) of 89A, and the land has to vest in the Government after paying the compensation to the purchaser which has to be determined having regard to the price paid by the purchaser. In the instant case, it is very clear that the respondent No. 4 had expressed their inability to develop the industry way back on 6.12.2008. The Collector was, therefore, expected to hold an enquiry and pass appropriate order. This was a power coupled with a duty.
A judgment of this Court in Indian Council for Enviro-Legal Action Vs. Union of India & Ors. Reported in 1996 (5) SCC 281, was relied upon to submit that a law is usually enacted because the legislature feels that it is so necessary. When a law is enacted containing some provisions which prohibit certain types of activities, it is of utmost importance that such legal provision are effectively enforced. In Section 89A there is no provision for a further transfer by such a party which has not developed the industry, and therefore, the Collector ought to have acted as required by Section 89A(5). In that judgment it was observed "enacting of a law, but to lerating its infringement, is worse than not enacting a law at all." It was submitted that in the instant case the state itself has issued an order in violation of the law.
33. It was then submitted that the Collector was expected to dispose of the land by holding an auction. The judgment of this court in Centre for Public Interest Litigation and Ors. Vs. Union of India and Ors. reported in 2012 (3) SCC 1 was relied upon in support, wherein it has been held that natural resources are national assets and the state acts as trustee on behalf of its people. Public Interest requires that the disposal of the natural resources must be by a fair, transparent and equitable process such as an auction. The same having not been done, the State exchequer has suffered. Reliance was also placed on the judgment in Noida Entrepreneurs Association Vs. Noida and ors. reported in 2011 (6) SCC508 to submit that whatever is provided by law to be done cannot be defeated by an indirect and circuitous contrivance.
34. In the instant case, the transfer of the land has been permitted because respondent No. 5 directly approached the Chief Minister and thereafter the Revenue Minister. It was submitted that such an act of making of a special case smacks of arbitrariness. The judgment of this Court in Chandra Bansi Singh Vs. State of Bihar reported in 1984 (4) SCC316 was relied upon in this behalf. In that matter the state of Bihar had released a parcel of land acquired by it for the benefit of one particular family which had alleged to have exercised great influence on the Government of the time. The action of the State was held to be a clear act of favouritism.
Another judgment of this Court in Manohar Joshi Vs. State of Maharashtra and Ors. reported in 2012 (3) SCC 619 was also relied upon to criticise a direct approach to the ministers rather than going through the statutory authorities. Reliance was also placed on the judgment in Bhaurao Dagdu Paralkar Vs. State of Maharashtra reported in 2005 (7) SCC605 which has explained the concept of 'fraud' from paragraph 9 to 12thereof. In paragraph 12 amongst others it has referred to an earlier judgment in Shrisht Dhawan Vs. Shaw Bros reported in 1992 (1) SCC 534 which relies upon the English judgment in Khawaja Vs. Secy. of State for Home Deptt. reported in 1983 (1) All ER 765. In para 20 of Shrisht Dhawan(supra) this Court has observed:- "
If a statute has been passed for some one particular purpose, a court of law will not countenance any attempt which may be made to extend the operation of the Act to something else which is quite foreign to its object and beyond its scope.' Present day concept of fraud on statute has veered round abuse of power or mala fide exercise of power. It may arise due to overstepping the limits of power or defeating the provision of statute by adopting subterfuge or the power may be exercised for extraneous or irrelevant considerations. The colour of fraud in public law or administrative law, as it is developing, is assuming different shades......"
35. The learned senior counsel for the appellants Mr. Huzefa Ahmadi submitted that the appellants' writ petition should not have been dismissedonly on the ground of delay, in as much as the environmental clearance to the project was granted on 19.2.2012 and the writ petition was filed in March 2012. He submitted that similarly the appellant cannot be criticized for suppression of any information about the investment made by respondent No. 5, since the appellant cannot be aware of the same. In any case he submitted that in as much as there has been an immediate interim order, the plea of large investment having been made is untenable.
As far as the objection to the appellant No 1 being a person belonging to a rival political party is concerned, he submitted that he has specifically accepted that he is a political activist. In any case, he submitted that the Collector did not act in accordance with law at any point of time. Similarly, the order passed by the Government is not a reasoned order and is undoubtedly arbitrary. The power in the Collector implied a duty in him to act in accordance with law. He relied upon a judgment of this Court in Deewan Singh & Ors. Vs. Rajendra Pd. Ardevi & Ors. reported in 2007 (10)SCC 528 in this behalf. Submissions on behalf of the State Government:-
36. The defence of the Government has principally been that because Indigold was not in a position to set up the industry, and Alumina had given a proposal in the Vibrant Gujarat summit to set up its project on the very land, the proposal was accepted. It had entered into an MOU with GMDC which was to have 26% equity therein. While looking into the proposal, initially there was some hesitation on the part of the Government as can be seen from the notings of the officers in the Government files. However, ultimately looking into the totality of the factors, the Government took the decision to permit the transfer of the land. It is not mandatory that the land must be resumed under Section 89A (5) of the Tenancy Act, if the initial purchaser does not set up the industry.
Section 89A (5) does not operate automatically. Besides, the permission to Indi gold to sell the land can be explained with reference to the authority of the Collector available to him under the first proviso to Section 89(1) read with condition No. (4) of the permission dated 1.5.2003 granted to Indi gold to purchase the concerned lands. This condition No. (4) reads as follows:-
"4. These lands cannot be sold, mortgaged, gifted or transferred in any manner etc. without obtaining prior permission of the competent officer."Last but not the least, Section 126 of the Tenancy Act was relied upon to submit that the State Government has an overall control which permits it to issue the necessary directions. This Section 126 reads as follows:- "126. Control- In all matters connected with this Act, the State Government shall have the same authority and control over the [Mamlatdar] and the Collectors acting under this Act as [it has and exercises] over them in the general and revenue administration."
37. The learned senior counsel Mr. And hyarujina appearing for the State, submitted that the Collector had the authority to grant such a permission to sell under Rule 45 (b) of the Bombay Tenancy and Agricultural Lands Rules, 1959. This rule reads as follows:- "45.Circumstances in which permission for sale, etc. of land under section 89 may be granted - The Collector or any other officer authorised under the proviso to sub-section (1) of section 89 may grant permission for sale, gift exchange, lease or mortgage of any land in favour of a person who is not an agriculturists or who being an agriculturists, cultivates personally land not less than three family holdings whether as tenure holder or tenant or partly as tenure holder and partly as tenant in any of the following circumstances:-
a) such a person bona fide requires the land for a non- agricultural purpose; or
b) the land is required for the benefit of an industrial or commercial undertaking or an educational or charitable institution" .....Submissions on behalf of the other respondents:-
38. Since it was the respondent No.4 Indigold, which had initially purchased the land for industrial purpose, the stand of Indi gold was of significance. It is, however, very relevant to note that Indigold had neither filed any affidavit in the High Court, nor in this Court, and their counsel Mr. Trivedi stated that he has no submissions to make. It is the failure of the respondent No. 4 to set up the industry, and the subsequent justification on the basis of financial difficulties for the same which has led to the sale of the land. It is strange that such a party had nothing to state before the Court. This is probably because it had already received its price after selling the land. The respondent No. 4 appeared to be very much disinterested in as much as even the sale documents were signed on their behalf by Mr. Nitin Patel, the Managing Director of Alumina. Mr. Ahmadi, learned counsel for the appellant therefore alleged collusion amongst all concerned.
39. The respondent No. 5, however, contested the matter vigorously. Mr. Krishnan Venugopal, learned senior counsel appearing for respondent No. 5 pointed out that the respondent No. 5 had entered into a correspondence with GMDC earlier, and thereafter participated in the Vibrant Gujarat Summit. He pointed out that the respondent No. 5 had previous experience in dealing in Alumina products, and therefore was interested in setting up the plant in Kutch. It intended to use the bauxite available in that district, and finally it was going to have a production of 25,000 metric tonnes of Alumina per-annum. It was being setup with an investment of Rs. 30 crores. The project was being set up in furtherance of the Industrial Policy of the State of Gujarat and with the technical know-how from NALCO. He drew our attention to the project report and the photographs showing the work done so far.
40. It was submitted that the respondent No.5 had also entered into an MOU with GMDC where under GMDC was to supply bauxite for 25 years, and it was to have 26% equity participation. It is however, material to note that there are 3 MOUs placed on record. The first MOU is dated 13.1.2009between Alumina Refinery Pvt. Ltd. and GMDC which is basically like a declaration of intent to set up the plant, and it contains the assurance of support from the Government of Gujarat. The second MOU between them is dated 9.9.2009, and it records that Government of Gujarat has agreed to support this refinery, and that the GMDC had agreed to supply, on priority basis, the plant-grade bauxite to this plant. It is this document which states that GMDC will invest in the equity of Alumina Refinery to an extent not exceeding 26%.
It contains the promise to supply bauxite. Mr. Krishnan Venugopal, fairly accepted that this document cannot be construed as a contract, and that it can at best be utilised as a defence to insist on a promissory estoppel. The third MOU is dated 30.11.2011 which is an agreement between Earth Refinery Pvt. Ltd. which the holding company of Respondent No. 5 and GMDC. In clause 2.1 of this agreement they have agreed to set up a joint venture Company by name Alumina Refinery Ltd. Clause 6.2 of this agreement states that equity participation of GMDC in this company shall be 26%. The obligation of GMDC has been spelt out under clause 4.2 to supply bauxite.
41. The principal submission of respondent No. 5 is that it is a bonafide purchaser of land of respondent No. 4, it has a serious commitment for industrial development, and it is acting in accordance with the industrial policy of the State. There is nothing wrong if the Minister directs the transfer of the unutilized land of respondent No. 4 to respondent No. 5 for industrial purpose, and this should be accepted as permissible.
The minister's action cannot be called malafide since it is in the interest of the industrial development of the State. Mr. Krishnan Venugopal submitted that the right to transfer is incidental to the right of ownership, and relied upon paragraph 36 of the judgment of this Court in DLF Qutab Enclave Complex Educational Charitable Trust Vs. State of Haryana and Ors. reported in 2003 (5) SCC 622. He further submitted that unless the possession of the unutilized area is taken over by the State, the landlord's title to it is not extinguished. There is no automatic vesting of land in the instant case. He relied upon the judgment of this Court in Ujjagar Singh Vs. Collector reported in 1996 (5) SCC 14 in this behalf.
42. It was then submitted that notings cannot be made a basis for an inference of extraneous consideration, and reliance was placed upon the observations of this Court in paragraph 35 in Jasbir Singh Chhabra Vs. State of Punjab reported in 2010 (4) SCC 192. He pointed out that the law laid down in Centre for Public Interest Litigation and Ors. Vs. Union of India and Ors. (supra) had been clarified by a Constitution Bench in the matter of Natural Resources Allocation, In Re: Special Reference (1) of2012 reported in 2012(10) SCC 1. He referred to paragraph 122 of the judgment which quotes the observations from Katuri Lal Lakshmi Reddy Vs. State of J & K reported in 1980 (4) SCC 1 as follows:- " 122. In Kasturi Lal Lakshmi Reddy v. State of J & K, while comparing the efficacy of auction in promoting a domestic industry, P.N. Bhagwati, J. observed: (SCC p. 20, para 22)
"22. ... If the State were giving a tapping contract simpliciter there can be no doubt that the State would have to auction or invite tenders for securing the highest price, subject, of course, to any other relevant overriding considerations of public wealth or interest, but in a case like this where the State is allocating resources such as water, power, raw materials, etc. for the purpose of encouraging setting up of industries within the State, we do not think the State is bound to advertise and tell the people that it wants a particular industry to be set up within the State and invite those interested to come up with proposals for the purpose.
The State may choose to do so, if it thinks fit and in a given situation, it may even turn out to be advantageous for the State to do so, but if any private party comes before the State and offers to set up an industry, the State would not be committing breach of any constitutional or legal obligation if it negotiates with such party and agrees to provide resources and other facilities for the purpose of setting up the industry....."He also referred to paragraph 146 of the judgment (Per Khehar J), therein, where the learned Judge has observed that the court cannot mandate one method to be followed in all facts and circumstances, and auction and economic choice of disposal of natural resources is not a constitutional mandate. It was therefore submitted that, it was not necessary that the Collector ought to have opted for auction of the concerned parcel of land.
43. The learned senior counsel Mr. Krishnan Venugopal, lastly drew our attention to the Jantri prices of the land in 2008. He pointed out that at the highest, the State would have sold this land, as per the Jantri price, for Rs. 4.35 crores. Assuming that the State was also to pay Rs.1.20 crores as compensation to Indigold, the loss to the State would come to Rs 3.15 crores. He submitted that if it comes to that, the respondent No. 5, along with Indigold, could be asked to compensate the state for this difference of 3.15 crores or such other amount as may be directed, but its project must not be made to suffer.
44. GMDC was represented by learned senior counsel Mr. Giri. He defended the action of the State as something in furtherance of the industrial policy of the State. If the land was to be sold a