ANIL AGARWAL FOUNDATION ETC. ETC. versus STATE OF ORISSA AND ORS.

Citation: [2023] 8 S.C.R. 969 · Decided: 12-04-2023 · Supreme Court of India · Bench: M.R. SHAH · Disposal: Dismissed

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Judgment (excerpt)

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   [2023] 8 S.C.R. 969
969
ANIL AGARWAL FOUNDATION ETC. ETC.
v.
STATE OF ORISSA AND ORS.
(Civil Appeal Nos. 1144-1146 of 2011)
APRIL 12, 2023
[M. R. SHAH AND KRISHNA MURARI, JJ.]
Land Acquisition Act, 1894 – ss. 4(1), 6, 44B – Land
Acquisition Rules, 1963 – rr. 3 & 4 – Acquisition Proceedings –
Allotment of land – To Private Company – For setting up of
University – Undue Favour to Company – Non-compliance of
Mandatory Provisions – Doctrine of Public Trust – Violation of –
Appellant, a private company at that time, made a representation to
the Govt to grant land to set up a University – Necessary steps were
taken by the Govt for allotment of land – However, the Law
Department opined that the land can be acquired only for a Public
Company under the 1894 Act – Pursuant to which, appellant
company passed resolution to change the status from Private
Company to Public Company and intimated the same to Govt. –
Thereafter, Land Acquisition notifications u/s 4(1) of the Act were
issued for 6917.63 acres – Writ Petition was filed in the High Court
challenging the entire acquisition proceedings – Division Bench of
High Court allowed the Petition and held that the entire proceeding
was in flagrant violation of the statutory provisions of the Act –
High Court quashed the acquisition proceedings by observing that
the public interest was affected and there was violation of rule of
law – On appeal, held: Initiation of the acquisition proceedings
was by the Vedanta Foundation and thereafter by the Anil Agarwal
Foundation, which admittedly at the relevant time and as on
19.07.2006 was a private company – It was the case of appellant
that it successfully converted into the public company on 23.11.2006
and it increased number of members from 3 to 7 and in terms of
Section 44 of the Companies Act, 1956, it amended its Articles of
Association to delete the restriction on free transferability of the
shares and the same has been acknowledged by the Registrar of
Companies (ROC) by acknowledgment dated 21.02.2007 and
03.03.2011 – However, even the subsequent acknowledgment by
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SUPREME COURT REPORTS
[2023] 8 S.C.R.
the Registrar of Companies on 21.02.2007 and 03.03.2011 was
much after s.4(1) notification which were issued between 13.12.2006
to 21.08.2007 – Therefore, legally, the appellant was not converted
to public company at the relevant time – At the relevant time, when
the company was a private company, in view of the bar under s.44-
B of the 1894 Act, the lands in question could not have been sought
to be acquired by the appellant company – Subsequent conversion
from private company to public company was an attempt to get out
of the statutory provision under the Act, 1894, which is mala fide
exercise on the part of the appellants – Even there was non-
compliance of mandatory provisions under rr.3 and 4 of the Rules,
1963 and therefore, the entire acquisition proceedings for the
beneficiary company was vitiated – There was also non-application
of mind by the State Government on environmental aspects and
passing of two rivers from the acquired lands in question – How the
maintenance of the rivers etc. can be handed over to the beneficiary
company – If the lands in question are continued to be acquired by
the beneficiary company, the control of the rivers would be with the
said private company, which would violate the Doctrine of Public
Trust – Further, there is a Wildlife Sanctuary, just adjacent across
the road to the proposed university and the lands acquired –
Therefore, large-scale construction for establishment of the proposed
university as observed by the High Court will also adversely affect
the Wildlife Sanctuary, entire Eco system and the ecological
environment in the locality – Even otherwise, there is non-application
on part of the State Government on the requirement of the lands by
the beneficiary company – From the material on record, it appears
that undue benefits were proposed / in fact offered and given to the
beneficiary company providing undue largesse – It is not appreciable
why the Government offered such an undue favour to one trust/
company – Thus, the entire acquisition proceedings and the benefits,
proposed by the State Government were vitiated by favourism and
violative of Art.14 of the Constitution – High Court was justified in
setting aside the entire acquisition proceedings, which was vitiated
by non-compliance of the statutory provisions under the Act, 1894
and the Rules, 

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