MAHANADI COALFIELDS LTD. Vs. STATE OF ODISHA
LAWS(SC)-2023-1-53
SUPREME COURT OF INDIA
Decided on January 20,2023

MAHANADI COALFIELDS LTD. Appellant
VERSUS
STATE OF ODISHA Respondents

JUDGEMENT

M.R.SHAH,J. - (1.)Feeling aggrieved and dissatisfied with the impugned judgment and order dated 02.04.2019, passed by the High Court of Orissa at Cuttack in W.P. (C) No. 2477/2009, by which, the High Court has dismissed the said writ petition preferred by the appellant herein and has confirmed the demand made by the District Magistrate & Collector, Sambalpur, of Rs. 70 lakhs towards the premium of the government land, the appellant - Mahanadi Coalfields Ltd. has preferred the present appeal.
(2.)The facts leading to the present appeal in a nutshell are as under: -
2.1 That the lands in question owned by the State Government of Odisha came to be acquired by the Government of India under Section 9 of the Coal Bearing Areas (Acquisition and Development) Act, 1957 (hereinafter referred to as the Act, 1957). That thereafter, vide order dated 04.09.1981 and in exercise of powers conferred by Sub-section (1) of Section 11 of the Act, 1957 with respect to some lands acquired, the Central Government directed that the rights in or over the lands vested absolutely in the Central Government, shall, instead of continuing to vest in the Central Government, under Sub-section (1) of Section 10, vest in the Western Coalfields Limited. That vide order dated 15.12.1988, with respect to some other lands acquired by the Central Government and in exercise of powers conferred by the Sub-section (1) of Section 11 of the Act, 1957, the Central Government directed that the said lands and rights so vested shall, with effect from 16.05.1987 instead of continuing to so vest in the Central Government, shall vest in the Government Company, subject to the terms and conditions mentioned in the said order. That is how, the appellant acquired the lands and rights over the lands in question. That respondent issued the demand notice dated 15.03.1984 for a sum of Rs. 70 lakhs towards premium for Government land and Rs. 40 lakhs towards compensation. That various similar demand notices were issued for area of Non-Forest Government land and Revenue Forest land. The demands were challenged by the appellant by way of writ petition before the High Court. Before the High Court, Section 18(a) of the Act, 1957 was pressed into service by the appellant herein and it was submitted that in view of the notification as the lands and rights on the lands absolutely vested in the Central Government thereafter, the State Government is not entitled to any compensation with respect to the lands so acquired/vested except the royalty leviable under Section 18(a) of the Act, 1957. By the impugned judgment and order the High Court has interpreted Section 2(d) of the Act, 1957 and has observed that the State Government can be said to be person interested in land and therefore, entitled to the compensation over and above in lieu of losing the rights over the land. That thereafter, by the impugned judgment and order the High Court has dismissed the writ petition and has confirmed the demand(s).

2.2 Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court the appellant - original writ petitioner - Mahanadi Coalfields Limited has preferred the present appeal.

(3.)Shri K.M. Nataraj, learned ASG, appearing on behalf of the appellant has taken us to the entire scheme of the Act, 1957 right from Section 4 to Section 11. It is submitted that as per Section 4 of the Act, 1957, whenever it appears to the Central Government that coal is likely to be obtained from land in any locality, it may, by notification in the Official Gazette give notice of its intention to prospect for coal therein. It is submitted that thereafter after following the due procedure as required the Central Government being satisfied, after considering the report, if any, made under Section 8 that any land or any right in or over such land should be acquired, a declaration shall be made by it to that effect. It is submitted that thereafter once the declaration under Section 9 of the Act is issued on the publication in Official Gazette of the declaration, the land or the rights in or over the land, as the case may be, shall vest absolutely in the Central Government free from all encumbrances as per Section 10 of the Act. It is further submitted that as per Section 11 of the Act, notwithstanding anything contained in Section 10, the Central Government may, if it is satisfied that a Government company is willing to comply or has complied with such terms and conditions as the Central Government may think fit to impose, direct, by order in writing, that the land or the rights in or over the land, as the case may be, shall, instead of vesting in the Central Government under Section 10 or continuing to so vest, vest in the Government company either on the date of publication of the declaration or on such other date as may be specified in the direction. It is submitted that therefore, once the land or the rights vested in the Central Government and/or in a Government company (under Section 11), the same is vested absolutely free from all encumbrances and the State Government is not entitled to recover any amount of premium of the land or the compensation or any rental except the royalty leviable under Section 18(a) of the Act, 1957. It is submitted that therefore, the demands made by the State Government upheld by the High Court towards premium/rental, etc., is absolutely illegal.
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