A) ABSTRACT / HEADNOTE
This case addresses the responsibility of paying compensation related to land acquisition under a Scheme of Arrangement between M/s Ultra-Tech Cement Ltd. and M/s Jaiprakash Associates Limited (JAL). The judgment deliberates on the liabilities assigned through contractual agreements under the Companies Act, 1956, the application of Section 101 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, and the constitutional obligation of welfare states under Article 300-A of the Constitution of India. The Supreme Court analyzed clauses in the Scheme, facts surrounding compensation under supplementary awards, and the duty of the State to ensure timely compensation, ultimately ordering the State to pay the landowners and recover the amount from JAL.
Keywords: Scheme of Arrangement, Land Acquisition, Section 101, Article 300-A, Welfare State
B) CASE DETAILS
- Judgement Cause Title: M/s Ultra-Tech Cement Ltd. v. Mast Ram & Ors.
- Case Number: Civil Appeal No. 10662 of 2024
- Judgement Date: 20 September 2024
- Court: Supreme Court of India
- Quorum: Hon’ble J.B. Pardiwala and Manoj Misra, JJ.
- Author: Hon’ble J.B. Pardiwala, J.
- Citation: [2024] 9 S.C.R. 443; 2024 INSC 709
- Legal Provisions Involved: Sections 17 and 41 of the Land Acquisition Act, 1894; Section 101 of the Land Acquisition, Rehabilitation and Resettlement Act, 2013; Sections 391–394 of the Companies Act, 1956; Article 300-A of the Constitution of India.
- Judgments Overruled by the Case: None
- Case is Related to Which Law Subjects: Corporate Law, Land Acquisition Law, Constitutional Law
C) INTRODUCTION AND BACKGROUND OF JUDGEMENT
The case originates from a High Court order in which the appellant, M/s Ultra-Tech Cement Ltd., was directed to pay supplementary compensation for land acquired for a safety zone under a cement project initially operated by JAL. The dispute stemmed from whether the liability for compensation transferred to Ultra-Tech under the Scheme. The High Court’s decision led to an appeal, wherein the Supreme Court reviewed the relevant provisions, facts, and legal frameworks.
D) FACTS OF THE CASE
- Land Acquisition: In 2008, 56.14 bighas of land were acquired in Himachal Pradesh to create a safety zone for a cement project.
- High Court Stay: Acquisition proceedings were stayed but later upheld for public purpose, emphasizing the need for the land as a safety zone.
- Scheme of Arrangement: In 2017, JAL transferred its cement project, excluding specific liabilities, to Ultra-Tech under a Scheme sanctioned by NCLT.
- Supplementary Award: After initial compensation in 2018, a supplementary award in 2022 included additional amounts for damages.
- Dispute on Liability: Ultra-Tech contended that JAL retained liability for claims pre-dating the Scheme’s effective date.
E) LEGAL ISSUES RAISED
- Whether liabilities associated with the subject land were transferred to Ultra-Tech under the Scheme.
- Whether JAL or Ultra-Tech was obliged to pay compensation under the supplementary award.
- Whether the subject land could be returned to landowners under Section 101 of the 2013 Act.
- Whether the State had a constitutional duty under Article 300-A to ensure prompt compensation.
F) PETITIONER/APPELLANT’S ARGUMENTS
- Contractual Interpretation: Ultra-Tech emphasized the Scheme clauses, asserting liabilities for pre-2017 disputes remained with JAL.
- No Ownership of Land: Ultra-Tech argued the land was not transferred under the Scheme and was not in its possession.
- Precedent: Reference to earlier Supreme Court judgments reinforcing the principle that liability remains with the original owner in absence of express transfer.
- Delay in Supplementary Award: Contended the delay frustrated acquisition purposes, and the State failed in its duty.
G) RESPONDENT’S ARGUMENTS
- Public Purpose and Utilization: JAL argued the land formed part of the safety zone essential for project operations, thus obligating Ultra-Tech.
- High Court Findings: Cited High Court observations that compensation payment was linked to the project under Ultra-Tech.
- Constitutional Responsibility: The State and companies had joint responsibility to protect landowners’ rights.
H) RELATED LEGAL PROVISIONS
- Land Acquisition Act, 1894: Sections 17 and 41
- Land Acquisition, Rehabilitation and Resettlement Act, 2013: Sections 101 and 38
- Companies Act, 1956: Sections 391–394
- Constitution of India: Article 300-A
I) JUDGEMENT
Ratio Decidendi:
- The Scheme explicitly excluded liabilities for pre-2017 disputes, assigning responsibility for compensation under the supplementary award to JAL.
- The land was acquired for public safety purposes, precluding return under Section 101 as it remained “utilized.”
- The State’s failure to ensure prompt compensation violated Article 300-A’s welfare mandate.
Obiter Dicta:
- The judiciary underscored the constitutional duty of States to uphold landowners’ rights.
Guidelines:
- Payment of compensation must precede possession under statutory mandates.
- State accountability must be balanced against corporate obligations in acquisition processes.
J) REFERENCES
Important Cases Referred:
- Kolkata Municipal Corporation v. Bimal Kumar Shah [2024 SCC OnLine SC 968]
- Roy Estate v. State of Jharkhand [2009] 7 SCR 343
- State of Haryana v. Mukesh Kumar (2011) 10 SCC 404
Statutes Referred:
- Land Acquisition Act, 1894
- Land Acquisition, Rehabilitation and Resettlement Act, 2013
- Companies Act, 1956
