TATA STEEL LTD. versus STATE OF JHARKHAND & OTHERS

Citation: [2015] 14 S.C.R. 1 · Decided: 24-09-2015 · Supreme Court of India · Bench: JASTI CHELAMESWAR · Disposal: Appeal(s) allowed
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Judgment (excerpt)

(2015) 14 S.C.R. 1 
TATA STEEL LTD. 
v. 
STATE OF JHARKHAND & OTHERS 
(Civil Appeal No. 7929 of 2015) 
SEPTEMBER 24, 2015 
[J. CHELAMESWAR AND 
ABHAY MANOHAR SAPRE, JJ.] 
A 
B 
Bihar Industrial Areas Development Authority Act, 1974: c 
State of Bihar (predecessor-in-interest of the respondent 
State) transferred an interest in land admeasuring 350 acres 
for a period of 99 years by a document dated 18.3. 1969-To 
appellant-Company for setting up industry- One of the terms 0 
and conditions for transfer [Condition No. 4 (xiv)] stipulated 
that the land was to be used by the appellant for the specified 
purpose within a period of one year failing which lease was to 
be terminated - Appellant utilized only 200 acres of land for 
setting up industry- Enactment of 1974 Act with the object E 
of planned development of industrial areas - Respondent-
Authority constituted under an ordinance which preceded the 
Act- State of Bihar as per document dated 18. 07. 1973 made 
another grant of 1266 acres of land to the Authority, to own, 
possess and hold the same forthe development of Industries F 
- Show Cause Notice issued by the Authority to appellant for 
surrender of unutilized 150 acres of land out of the allotted 
350 acres of land by taking action u/s. 6(2-a} of the Act and 
Clause 
4 
(xiv) 
of 
the 
document 
dated 
18. 03. 1969 - Subsequently 100 acres of the land out of the G 
150 acres was cancelled by order dated 17. 11.2008 -
Appel/ant~Company's writ petition against the order dated 
17. 11.2008 dismissed - On appeal, held: The respondent-
Authority has the power u/s. 6(2-a) to cancel the allotment of 
1 
H 
2 
SUPREME COURT REPORTS 
(2015] 14 S.C.R. 
A land only in the case of allotment made by it - In the case of 
property transferred by the State (prior to the Act) can be dealt 
with by the Authority only in terms of the original document 
by which the property was transferred - Clause (xiv) of the 
terms and Conditions of the document dated 18.3. 1969 (by 
B which the property in question was transferred by the State) 
does not contemplate taking possession of part of the land-
It only contemplates termination of the Grant in the event of 
failure to use the land for specified purpose - Thus, it can 
only be invoked in case of total failure -
The allottee-
C Company in the present case, since established the industry, 
cannot be said not to have utilised the land for specified 
purpose - Clause (xiv) r/w clause (v) shows that it was never 
intended by the Grant that every inch of the land must be 
0 
utilised for the purpose of establishment of industry. 
Government Grants Act, 1895: 
Applicability of the Act - Held: The Act does not apply 
to instrumentalities and bodies corporate controlled by the 
. E State. 
s.2 - Transfer of land or any interest therein by the 
Government - Is not governed by the Transfer of Property 
Act, 1882- They are to be ascertained from the tenor of the 
F document made by the Government evidencing such 
transfer. 
Allowing the appeal, the Court 
HELD: 1. As per section 2 of the Government Grants 
G Act, 1895, when Government transfers land or any 
interest therein to any person, such a transfer is not 
governed by the Transfer of Property Act, 18~2. The 
rights and obligations flowing from the transfer of either 
a piece of land or an interest therein by the Government 
H cannot be determined on the basis of the rights and 
TATA STEEL LTD. v. STATE OF JHARKHAND & OTHERS 
3 
obligations specified under the Transfer of Property Act, A 
1882. They are to be ascertained only from the tenor of 
the document made by the Government evidencing such 
a transfer. The transaction dated 18.3.1969 is a grant 
(Grant-I) covered by the Government Grants Act. 
·Therefore, the rights and obligations created by the B 
documents dated 18.03.1969 (Grant I) and the document 
dated 18.07 .1973 (Grant II) are regulated only by the terms 
of the documents by which those grants were made. 
[Paras 6, 16, 17] [11-A; 17-8-D; 18-A, F] 
Hajee S. V.M. Mohamed Jamaludeen Bros. & Co. 
v. G.overnment of Tamil Nadu 1997 (2) SCR 413 
: (1977) 3 sec 466 - relied on. 
c 
2.1 The power (legal authority) of the respondent 0 
Authority to deal with any land can flow from two. 
sources, (i) the statutory powers conferred on it under 
various provisions of the Bihar Industrial Areas 
Development Authority Act, 197 4 over the areas notified 
under the Act to be either "industrial area" or E 
"development area". The powers and
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