East India Corporation Ltd vs Principal Secretary To ...
2021 Latest Caselaw 12204 Mad

                                                                                 W.P.(MD)No.17654 of 2019
                                       East India Corporation Ltd., v. The Principal Secretary to Government

                            BEFORE THE MADURAI BENCH OF MADRAS HIGH Court
                                                   DATED: 23.06.2021
                                                         CORAM:
                            THE HONOURABLE MR.JUSTICE N.ANAND VENKATESH

                                            W.P.(MD)No.17654 of 2019
                                    and W.M.P.(MD) No.14118 and 14121 of 2021
                                           (Through Video Conferencing)

                     East India Corporation Ltd.,
                     Represented by its Managing Director,
                     Meenakshi                                                      ... Petitioner


                                                             Vs.


                     1.Principal Secretary to Government
                       Government of Tamil Nadu
                       Fort St. George,
                       Chennai 600 009.

                     2.Additional Chief Secretary/Commissioner of
                           Land Administration,
                       Ezhilagam
                       Chepauk, Chennai.

                     3.District Collector,
                       Dindigul District,
                       Dindigul




                     1/18



https://www.mhc.tn.gov.in/judis/
                                                                                 W.P.(MD)No.17654 of 2019
                                       East India Corporation Ltd., v. The Principal Secretary to Government

                     4.District Revenue Officer,
                       Dindigul Collectorate Building,
                       Dindigul 624 004.

                     5.Revenue Divisional Officer/Land Acquisition Officer,
                       Sub Collector Office Road,
                       Dindigul 624 001.

                     6.The Special Tahsildar (Land Acquisition)
                       Karur-Dindigul Broadgauge line Unit no.III
                       Dindigul.

                     7.General Manager,
                       Southern Railway Headquarters,
                       Park Town
                       Chennai 600 003.                                             ... Respondents

                     PRAYER : Writ Petition is filed under Article 226 of the Constitution of
                     India for issuance of a Writ of Certiorarified Mandamus to call for the
                     Government order in G.O.(Ms) No.28 Transport (I.1) Department dated
                     05.03.2019 and quash the same and consequently direct the respondents to
                     pass an appropriate Government order including the additional amount of
                     compensation as provided under Section 23(1-A) of Land Acquisition Act
                     1894.


                                   For Petitioner      :Ms.N.Krishnaveni
                                                       Senior Counsel for
                                                       Mr.P.Thiyagarajan



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https://www.mhc.tn.gov.in/judis/
                                                                                   W.P.(MD)No.17654 of 2019
                                         East India Corporation Ltd., v. The Principal Secretary to Government


                                    For Respondents :Mr.M.Lingadurai for R1 to R6
                                                    Government Advocate (Civil)

                                                         Mr.S.Manohar for
                                                         Mr.A.Haja Mohideen for R7&R8


                                                            ORDER

The present writ petition questions the legality of the Government

order in G.O.Ms.No. 28 Transport (I.1) Department dated 05.03.2019 and

the petitioner is also seeking for a consequential relief for a direction to the

respondents to calculate the compensation as provided under Section 23

(1-A) of the Land Acquisition Act, 1894 (hereinafter referred to as 'the 1894

Act) and issue a fresh Government order.

2. This case has a checkered history. According to the petitioner

company, the lands belonging to the petitioner company measuring almost

an extent of one acre was taken possession in the year 1984. Acquisition

proceedings were initiated in the year 1987 to acquire a larger portion of

lands for formation of a broad gauge railway line. The 4(1) notification that

https://www.mhc.tn.gov.in/judis/ W.P.(MD)No.17654 of 2019 East India Corporation Ltd., v. The Principal Secretary to Government

was issued on 24.02.1987 lapsed by operation of law in the year 1990.

Thereafter fresh acquisition proceedings were commenced in the year 1990.

The 4(1) notification that was issued on 24.12.1990 became a subject matter

of challenge before this Court in W.P.No.7766/1992. During the pendency

of the writ petition, this Court suggested that some negotiation can take

place and a compensation can be fixed and paid to the petitioners therein.

3. The Railways wrote a letter to the second respondent stating that

the extent of one acre and 60635 sq. ft. situated at Adiyanuthu Village is not

required for the Railways and the acquisition proceedings insofar as these

lands are concerned can be dropped. On receipt of the letter, the

Government passed a G.O. to the effect that the acquisition proceedings

lapsed.

4. In the meantime, the Tahsildar, Dindigul issued notice to the

petitioner and there was some exchange of notices, wherein, the petitioner

claimed damages to the tune of Rs.10 crores and also called upon the

https://www.mhc.tn.gov.in/judis/ W.P.(MD)No.17654 of 2019 East India Corporation Ltd., v. The Principal Secretary to Government

respondents to deliver possession of the property.

5. Since the representation made by the petitioner was not considered,

the petitioner approached this Court and filed W.P.(MD) No.1389/2014

seeking for a direction to the respondents to consider the representation and

the same was ordered by this Court on 19.06.2014. Since this order was not

complied with, a contempt petition was filed in Cont.P.No.570/2015. This

Court, after taking into consideration the fact that the lands were taken

possession and the petitioner was not paid any compensation, directed the

respondents to deposit a sum of Rs.10 crores. It was informed to this Court

that the amount has been deposited before the Revenue Divisional Officer,

Dindigul. This Court directed the Revenue Divisional Officer, Dindigul to

deposit the amount in a nationalized bank until further orders. Since the

amount was deposited, the contempt petition was closed.

6. Even at this stage, there was no land acquisition proceedings

initiated nor the petitioner was paid any compensation, but, however, the

https://www.mhc.tn.gov.in/judis/ W.P.(MD)No.17654 of 2019 East India Corporation Ltd., v. The Principal Secretary to Government

petitioner had already lost possession of the lands. Therefore, the petitioner

once again filed a writ petition in W.P.(MD) No.10757/2016 for a direction

to the respondents to initiate land acquisition proceedings and complete the

process within the time stipulated by the Court. The petitioner also filed

W.P.(MD) No.10758/2016 for a direction to the respondents to pay a sum of

Rs.10 crores with accrued interest to the petitioner, pursuant to the same

being deposited on the orders passed in the contempt petition.

7. This Court took up both the writ petitions for hearing and insofar as

W.P.(MD) No.10757/2016 is concerned, this Court directed the respondents

to commence and complete the acquisition proceedings under the Tamil

Nadu Acquisition of Lands for Industrial Purpose Act, 1997 (hereinafter

referred to as 'the 1997 Act') within a period of one year from the date of

receipt of a copy of the order and the petitioner was also directed to

cooperate with the respondents for completing the acquisition proceedings.

In view of this order, the other writ petition that was filed by the petitioner

in W.P.(MD) No.10758/2016 claiming for compensation was closed. The

https://www.mhc.tn.gov.in/judis/ W.P.(MD)No.17654 of 2019 East India Corporation Ltd., v. The Principal Secretary to Government

petitioner was aggrieved by the closure of the writ petition in W.P.(MD) No.

10758/2016 and hence, preferred an appeal in W.A.(MD) No.150/2017.

This writ appeal was allowed by a judgment dated 25.04.2017 and the

petitioner was permitted to withdraw Rs.10 crores along with accrued

interest by imposing a condition that this amount will be adjusted as against

the compensation that will be determined and paid to the petitioner on

conclusion of the land acquisition proceedings. Pursuant to the same, the

petitioner had also withdrawn the amount.

8. A paper publication was made on 23.12.2017 under Section 3(2) of

the 1997 Act seeking for objections from persons interested in the lands

sought to be acquired. Since there was no progress in the acquisition

proceedings and it was not completed within the time stipulated by this

Court, the petitioner filed Cont.P.(MD) No.84/2018. During the pendency

of this contempt petition, the impugned G.O., came to be passed, wherein,

the draft award of Rs.10,22,82,598/- was approved and there was a further

direction to the third respondent to recover the excess amount of

https://www.mhc.tn.gov.in/judis/ W.P.(MD)No.17654 of 2019 East India Corporation Ltd., v. The Principal Secretary to Government

Rs.48,65,576/- from the petitioner. Aggrieved by the same, the present writ

petition has been filed before this Court.

9. Heard the learned Senior counsel for the petitioner, the learned

Government Advocate appearing on behalf of the respondents 1 to 6 and the

learned counsel appearing on behalf of the respondents 7 and 8.

10. The 7th and 8th respondents have filed a counter affidavit. The

relevant portions in the counter affidavit are extracted hereunder:

“With reference to para no.11 to 19 of the affidavit, I submit that the land acquisition proceedings in G.O. has been issued by the Principal Secretary to Government, Transport Department, Chennai, as per the G.O.(Ms) No.28 dated 05.03.2019. Following is the compensation to be paid to M/s.East India Corporation Ltd., Madurai. The amount of Rs.

10,00,00,000/- (Rupees ten crores only) has been paid to the land owner on 10.05.2017, considering the interest part for the period between 14.05.2017 to probable date of passing the Award 05.03.2019 is Rs.71,48,174/-. Hence, excess amount of Rs.48,65,576/- has to be recovered from M/s.East India

https://www.mhc.tn.gov.in/judis/ W.P.(MD)No.17654 of 2019 East India Corporation Ltd., v. The Principal Secretary to Government

Corporation Ltd., Madurai, as per the G.O. Railway authorities has to pay the damages/rent for the land for the period entered on the portion of the land upto the date of publication of 3(2) notice.

8.With reference to para no.20 of the affidavit, I submit that the damages/rent for the period between 07.06.1990 to 22.12.2017 has been worked out and the same was forwarded to the District Collector, Dindigul for confirming the amount. But it was returned back from the District Collector, Dindigul stating that damages/rent has to be calculated by Railways with intimation to them. Damages/rent calculation is sent to competent authority for sanction. The account section has returned the proposal to submit with following details.

(I) Breakup details of advertisements charges of Rs. 2,00,000/-

(II) Breakup details for establishment charges of Rs. 1,48,30,977/-

(III) Also encumbrance, legal opinion charges and other charges etc., related with the land case etc. may be submitted. For the advertisement charges, the rate, copy of paper cutting of the advertisement etc., to be submitted. Hence RDO/DG was advised vide ltr. Dated 22.08.2019, 11.10.2019, 26.11.2019, 14.01.2020, 19.02.2020, 10.03.2020, 09.05.2020,

https://www.mhc.tn.gov.in/judis/ W.P.(MD)No.17654 of 2019 East India Corporation Ltd., v. The Principal Secretary to Government

08.08.2020, 09.11.2020 & 10.02.2021 to submit above details so as to process for payment of damage/rent. But as on date reply yet to received. Hence railway is making all efforts to process damage/rent to petitioner. After obtaining the sanction, the amount will be paid to the Land Owner M/s.East India Corporation Ltd., Madurai.”

11. The main issue that arises for consideration is as to whether the

compensation was determined as per the provisions of the 1894 Act by

taking into consideration the requirements as provided under Section 23 (1-

A) of the Act.

12. The 1997 Act specifically provides under Section 7(6) of the Act

that in determining the amount of compensation, the Collector shall be

guided by the provisions contained under Sections 23 and 24 of the 1894

Act. Therefore, this Court has to examine as to whether the compensation

determined satisfied the provisions of Sections 23 and 24 of the 1894 Act.

For proper appreciation Section 23(1-A) is extracted hereunder:

https://www.mhc.tn.gov.in/judis/ W.P.(MD)No.17654 of 2019 East India Corporation Ltd., v. The Principal Secretary to Government

“(1-A) In addition to the market value of the land, as above provided, the Court shall, in every case, award an amount calculated at the rate of twelve per centum per annum on such market value for the period commencing on and from the date of the publication of the notification under section 4, sub-section (1), in respect of such land to the date of the award of the Collector or the date of taking possession of the land, whichever is earlier.”

13. In the present case, even though the petitioner claims that the

possession of the lands were taken in the year 1984, it is an admitted fact

over which there is no dispute that the lands were taken possession and

handed over to the Railways on 07.06.1990. The date of taking possession

of the lands becomes important for the purpose of calculating the

compensation under Section 23(1-A). It is seen from the records that the

District Collector, Dindigul, through proceedings dated 08.01.2016, while

forwarding the proposal had calculated the compensation that would be

payable if the lands are acquired. In the said proposal, it has been clearly

stated that it must be calculated from the date of taking possession ie., from

https://www.mhc.tn.gov.in/judis/ W.P.(MD)No.17654 of 2019 East India Corporation Ltd., v. The Principal Secretary to Government

07.06.1990 up to the date of passing of the award, which was fixed as

30.06.2016, since the approval has to be granted by taking into

consideration the compensation payable as on that date. At this stage, the

respondents have properly understood the scope of Section 23(1-A). The

entire problem arose when the award was passed on 05.03.2019. For proper

appreciation, S.No.8 in the award is extracted hereunder:

8. 1296 Additional amount on Market value on land Rs.68,69,421.27.

value (ie., Rs.4,75,95,648.51) from the late date of publication of 3(2) notice ie., 22.12.2017 to the date of passing award ie., on 05.03.2019 (i.e., from 22.12.2017 to 05.03.2019 – 439 days) Rs.

4,75,95,648.51 x 12/100 x 439/365)

14. The above column that has been extracted pertains to the

additional amount of market value of the land calculated at the rate of 12%

per annum on such market value. While making this calculation, Section

23(1-A) becomes relevant. It is clear from the said provisions that it has to

be calculated from the date of publication of the notification or from the date

of taking possession of the lands, whichever is earlier till the date of passing

of the award. In the present case, the date of taking possession of the lands

https://www.mhc.tn.gov.in/judis/ W.P.(MD)No.17654 of 2019 East India Corporation Ltd., v. The Principal Secretary to Government

was on 07.06.1990. The date of publication of Section 3(2) notice under the

1997 Act was on 22.12.2017. Therefore, as per Section 23(1-A), the date of

taking possession was earlier and the same should have been taken into

consideration, while calculating the additional amount of market value.

Instead it has been calculated from the date of the publication of the

notification. As a result of the same, the amount of compensation payable to

the petitioner gets substantially reduced. On the face of it, such a

calculation goes against the provisions of Section 23(1-A) of the 1894 Act.

15. The learned counsel for the Railways submitted that while this

Court passed an order in W.P.(MD) No.10757/2016, there was a direction to

the effect that the respondents must commence and complete the acquisition

proceedings under the 1997 Act. Since the acquisition itself was commenced

only in the year 2017, the respondents were perfectly right in calculating the

award. The learned counsel submitted that in the present case, the award is

covered by the orders passed by this Court in the earlier writ petition.

https://www.mhc.tn.gov.in/judis/ W.P.(MD)No.17654 of 2019 East India Corporation Ltd., v. The Principal Secretary to Government

16. This Court is not in agreement with the said submissions made by

the learned counsel on behalf of the Railways. This Court had merely

directed the acquisition proceedings to be commenced and completed under

the 1997 Act. That does not mean that the compensation will be payable to

the petitioner only from the date of issuance of the notification under the

Act. This is an unfortunate case, where the possession was taken in the year

1990 and after several directions issued by this Court, the acquisition

commenced only in 2017. Therefore, this Court never meant that the period

between 1990 up to 2017 must be given a go by. Such an order could not

have been passed by this Court, since it will directly affect the rights of the

petitioner guaranteed under Article 300-A of the Constitution of India. A

person who is deprived of his property must be paid the appropriate

compensation, failing which, the same will result in expropriation.

17. In view of the above, this Court is of the considered opinion that

the calculation of the additional amount to the market value of the land was

not made in accordance with Section 23(1-A) of the 1894 Act. To that

https://www.mhc.tn.gov.in/judis/ W.P.(MD)No.17654 of 2019 East India Corporation Ltd., v. The Principal Secretary to Government

extent, the award stands vitiated and requires the interference of this Court.

18. The impugned Government order dated 05.03.2019 was based on

the award that has been held to be bad by this Court and therefore, the

impugned Government order also requires the interference of this Court.

19. In the result, the impugned Government order in G.O.Ms.No. 28

Transport (I.1) Department dated 05.03.2019 is hereby quashed. The

calculation that has been made at S.No.8 in the award dated 05.03.2019 with

regard to the additional market value of the land is also set aside. There

shall be a direction to the 5th respondent, namely, the Revenue Divisional

Officer and Land Acquisition Officer to once again calculate the additional

market value in accordance with Section 23(1-A) of the 1894 Act by taking

into consideration the period from the date on which the possession was

taken till the date of the award, namely, from 07.06.1990 up to 05.03.2019.

This exercise shall be completed by the 5th respondent within six weeks from

the date of receipt of a copy of this order. The 5th respondent shall give an

https://www.mhc.tn.gov.in/judis/ W.P.(MD)No.17654 of 2019 East India Corporation Ltd., v. The Principal Secretary to Government

opportunity to the petitioner and the 7th and 8th respondents before passing

the award. The fresh award shall be communicated to the petitioner and a

copy of the same shall also be sent to the first, 7th and 8th respondents. The

first respondent, on receipt of the award, shall pass a fresh Government

order within a period of six weeks from the date of receipt of the award from

the 5th respondent.

20. This writ petition is accordingly allowed with the above

directions. No costs. Consequently connected Miscellaneous Petitions are

closed.

                                                                                               23.06.2021
                     Index          : Yes/No
                     Internet       : Yes
                     RR

Note: In view of the present lock down owing to COVID-19 pandemic, a web copy of the order may be utilized for official purposes, but, ensuring that the copy of the order that is presented is the correct copy, shall be the responsibility of the advocate/litigant concerned.

https://www.mhc.tn.gov.in/judis/ W.P.(MD)No.17654 of 2019 East India Corporation Ltd., v. The Principal Secretary to Government

To

1.Principal Secretary to Government Government of Tamil Nadu Fort St. George, Chennai 600 009.

2.Additional Chief Secretary/Commissioner of Land Administration, Ezhilagam Chepauk, Chennai.

3.District Collector, Dindigul District, Dindigul

4.District Revenue Officer, Dindigul Collectorate Building, Dindigul 624 004.

5.Revenue Divisional Officer/Land Acquisition Officer, Sub Collector Office Road, Dindigul 624 001.

6.The Special Tahsildar (Land Acquisition) Karur-Dindigul Broadgauge line Unit no.III Dindigul.

7.General Manager, Southern Railway Headquarters, Park Town Chennai 600 003.

https://www.mhc.tn.gov.in/judis/ W.P.(MD)No.17654 of 2019 East India Corporation Ltd., v. The Principal Secretary to Government

N.ANAND VENKATESH, J.

RR

W.P.(MD)No.17654 of 2019

23.06.2021

https://www.mhc.tn.gov.in/judis/