Coal Fields Ltd. & ANR. Vs. Mathias Oram & Ors.  INSC 508 (19
SUPREME COURT OF INDIA CIVIL APELLATE JURISDICTION SPECIAL LEAVE PETITION (C)
NO.6933 OF 2007 Mahanadi Coal Fields Ltd. & Anr. ...Petitioners Versus
Mathias Oram & Ors. ...Respondents ORDER AFTAB ALAM,J.
Speaking in the Constituent Assembly on November 25, 1949 Dr. B.R.
Ambedkar, the chief architect of the Constitution of India made one of the most
incisive remarks on it:
the 26th of January 1950, India would be a democratic country in the sense that
India from that day would have a government of the people, by the people and
for the people. The same thought comes to my mind. What would happen to her
democratic Constitution? Will she be able to maintain it or will she lose it
again? This is the second thought that comes to my mind and makes me as anxious
as the first...
26th of January 1950, we are going to enter into a life of contradictions. In
politics we will have equality and in social and economic life we will have
inequality. In politics we will be recognizing the principle of one man one
vote and one vote one value. In our social and economic life, we shall, by
reason of our social and economic structure, continue to deny the principle of
one man one value. How long shall we continue to live this life of
contradictions? How long shall we continue to deny equality in our social and
economic life? If we continue to 2 deny it for long, we will do so only by
putting our political democracy in peril. We must remove this contradiction at
the earliest possible moment or else those who suffer from inequality will blow
up the structure of political democracy which this Assembly has so laboriously
would have been Dr. Ambedkar's reaction to the facts of this case? This is one
of the thoughts in our mind while dealing with the case.
Since independence India has indeed covered a long way on the path
of development and economic growth. It continues to take long strides on that
path. But how far have we been able to live down the fears expressed by Dr.
Ambedkar about our democratic Constitution? How far have we been able to get
rid of the contradictions in our life? This case raises these difficult
We are anxious that India should develop and grow fast and become
strong to take its rightful place in the comity of nations.
Development is reckoned in terms of investments in urban
infrastructure, roads and highways, communication, technology, extraction and
commercial exploitation of minerals, generation of power, production of steel
and other essential metals and alloys. Creation of wealth is of utmost
importance. Redemption lies in GDP (Gross Domestic product).
India does not lack material resources required for development.
vast treasures of minerals lying buried deep inside its earth. But excavation
of minerals from the bosom of the earth and putting them to good industrial and
commercial use require lots of initial investment and highly 3 advanced
technology. Those too are now available as blessings of globalization. The
imperialist's formula of "philanthropy plus five percent" is the
accepted norm. Public-Private Partnership (PPP) is the latest mantra.
reasonable profits, companies and corporations, both Indian and multinational
are willing and ready not only to do the mining for us but also to undertake
the development of the region by providing schools, hospitals, and many similar
amenities and facilities to the local population. Even the public sector
undertakings are not lagging far behind in the race.
But there is one catch. There is also the involvement of the human
factor. Most of the mineral wealth of India is not under uninhabited wasteland.
It lies mostly under dense forests and areas inhabited by people who can claim
to be the oldest dwellers of this ancient country. Any large scale mining,
therefore, needs not only huge investments and application of highly developed
technology but also en masse relocation of the people dwelling upon the land
that needs to be mined or at any rate getting the land freed from its
inhabitants, for whom it may be the only source of sustenance.
we have the laws to handle such situations. There is the Mines and Minerals
(Development & Regulation), Act 1957, the Indian Forest Act, 1927, the
Forest Conservation Act, 1980, (in many States) laws restricting and regulating
trade in forest produce and above all the Land Acquisition Act, 1894 and its
clone the Coal Bearing Areas (Acquisition and Development) Act, 1957 that
envisage compulsory acquisition of land by the 4 government for any public
purpose on payment of its market value (plus solatium for the compulsory nature
of acquisition!) to the land holder. The law is based on the twin sound
principles of the eminent domain of the sovereign and the largest good of the
Seen thus, the whole issue of development appears to be so simple,
logical and commonsensical. And yet, to millions of Indians, development is a
dreadful and hateful word that is aimed at denying them even the source of
their sustenance. It is cynically said that on the path of `maldevelopment'
almost every step that we take seems to give rise to insurgency and political
extremism (which along with terrorism are supposed to be the three gravest
threats to India's integrity and sovereignty).
The resistance with which the state's well meaning efforts at
development and economic growth are met makes one to think about the reasons
for such opposition to the state's endeavours for development. Why is the
state's perception and vision of development at such great odds with the people
it purports to develop? And why are their rights so dispensable? Why do India's
GDP and HDI (Human Development Index, which is broadly used as measure of life
expectancy, adult literacy and standard of living) present such vastly
different pictures? With the GDP of $ 1.16Trillion (for 2008) Indian economy is
twelfth largest in US Dollar terms and it is the second fastest growing economy
in the world. But according to the Human Development Report 2009 (published by
UNDP), the HDI for 5 India is 0.612 (for 2007) which puts it at the 134th place
among 182 countries. India has maintained the same HDI and rank since the
previous year, and it continues to be categorized under "Medium Human
The counter argument goes like this. It is very often the process
of development that most starkly confirms the fears expressed by Dr. Ambedkar
about our democracy. A blinkered vision of development, complete apathy towards
those who are highly adversely affected by the development process and a
cynical unconcern for the enforcement of the laws lead to a situation where the
rights and benefits promised and guaranteed under the constitution hardly ever
reach the most marginalized citizens.
This is not to say that the relevant laws are perfect and very
sympathetic towards the dispossessed. There are various studies that detail the
impact of dispossession from their lands on tribal people. It is pointed out
that even when laws relating to land acquisition and resettlement are
implemented perfectly and comprehensively (and that happens rarely!),
uncomfortable questions remain. For a people whose lives and livelihoods are
intrinsically connected to the land, the economic and cultural shift to a
market economy can be traumatic.
On many occasions laws are implemented only partially. The scheme
of land acquisition often comes with assurances of schools, hospitals, roads, 6
and employment. The initial promises, however, mostly remain illusory. The aims
of income restoration and house resettlement prove to be very difficult.
with even the basic regulations causes serious health problems for the local
population and contamination of soil and water.
But there is yet another far worse scenario where even the most
basic obligation under the law is not complied with and even the fig leaf of
legality is dispensed with.
The case in question is a textbook example.
But before going into the facts of the case two other things need
to be stated. This case comes from Orissa which is one of the seven states
where a particularly violent group of political extremists, has been able to
gain sufficient strength to pose a threat to Constitutional governance of the
group openly defies the democratic system of the country and is committed to
overthrow the Constitution by brutal and murderous means.
to news paper reports, in the district of Sundergarh, where the acquired lands
are situated, the extremist group looted 550 kilograms of explosives in April
2003 and in August 2009 blew up a railway station.
The other fact is that this is not an isolated case. We have come
across many such cases of land acquisition.
Now, to the facts of the case: Mahanadi Coalfields Ltd., the
petitioner before this Court, is one of the subsidiaries of Coal India Ltd.,
the biggest coal producing organisation in the country and one of the
`Navratnas' 7 among India's public sector undertakings. Mahanadi Coalfields
Ltd. has filed this SLP against the judgment and order passed by Orissa High
Court on November 13, 2006 in Writ Petition (Civil) No.11463 of 2003. By the
impugned judgment the High Court directed the Central Government and the
petitioner (respondent no.1 before the High Court) to "proceed forthwith
in accordance with the provisions of the [Coal Bearing Areas (Acquisition and
Development) Act, 1957] to determine the compensation payable to the land
owners including the (writ) petitioners and make payment of the compensation as
would be determined in accordance with law as expeditiously as possible,
preferably within six months from the date of receipt of our order."
This order was passed in connection with lands of the writ
petitioners (respondents 1 to 27 before this court) and others that were taken
in acquisition as far back as in the year 1987.
The Central Government issued the preliminary notification under
section 4(1) of the Coal Bearing Areas (Acquisition and Development) Act, 1957
Act on February 11, 1987, giving notice of its intention to prospect for coal
in Revenue Village Gopalpur, District Sundergarh, Orissa. The notification also
covered the lands of the respondents. This was followed by another notification
under section 7(1) of the Act on July 27, 1987 giving notice of the
Government's intention to acquire the notified lands. Finally, the declaration
of acquisition under section 9 of the Act was made by the 8 notification issued
on July 10, 1989 as the result of which the notified lands, along with all
rights therein, vested absolutely in the Central Government.
20, 1993, the Central Government issued the notification under section 11 of
the Act vesting the acquired land and all rights therein in the petitioner
company, retrospectively, with effect from November 17, 1991. It is undeniable
that the lands of the writ petitioners (respondents before this court) were
covered by the notifications under sections 7, 9 and 11 of the Act. Nevertheless,
the writ petitioners, and others whose lands were similarly acquired, were
never paid any compensation for their lands. After a futile running from pillar
to post for about fourteen years, the writ petitioners knocked the doors of the
High court, claiming compensation for their lands. Before the High Court, the
relevant facts as noted above, were all admitted. But it seems that the claim
of the writ petitioners was over shadowed by the dispute between the coal
company and the Central Government. The coal company took the stand that the
lands of the writ petitioners, and some other lands, were not required by it
and it proposed de- notification of those lands (This, after more than twenty
years of acquisition!). On behalf of the Central Government, however, it was
stated that the coal company's proposal for de-notification was rejected by
order dated September 12, 2006. The High Court then referred to section 13(5)
of the Act and pointed out that any person whose land is acquired under section
9 of the Act must be paid compensation after taking into consideration the 9
factors enumerated under that sub-section of section 13. The High Court
expressed its concern that the writ petitioners were not paid compensation for
their lands taken away from them more than two decades ago and disposed of the
writ petition with the direction to both the coal company and the Central
Government, as noted above.
The Central Government, apparently, did not take much notice of
the High Court order but the coal company brought the matter to this court. It
seeks to challenge the High Court order on the plea that it has no liability to
pay compensation for the lands acquired by the Central Government since they
are of no use for the purpose of mining operations nor are they likely to be
needed in the near future as per the mining plan approved by the Central
Government. Apart from this, the petitioner has taken some rather strange
pleas. It is pleaded that the acquisition proceedings were still incomplete
because no steps were taken for determining the market value of the lands and
no compensation was paid to the land holders. If this is not adding insult to
injury we do not know what else is! It is also alleged the lands are not in
possession of the coal company and they are still in the possession of the land
holders, including the writ petitioners. This last allegation is strongly
denied by the writ petitioners.
The SLP remains pending in this Court for the last three years.
Now, twenty three years have passed and the writ petitioners remain unpaid of
the compensation for their lands. In the meanwhile some of them (respondents 5
10 and 24) are reported to be dead. It was in these circumstances that on
January 9, 2010 we requested Mr. Gopal Subramanium, the Solicitor General for
India, to assist the court on behalf of the Central Government.
immediately realised the gravity of the matter and the deep distress caused to
the court by this case. He asked for some time to try to resolve the matter
between the Central Government and the coal company at his own level and to
ensure that the land holders whose lands were acquired are paid lawful
compensation without any further delay. On the last date (May 13, 2010) he
informed this Court that he had been able to make the Central Government and
the coal company agree to a scheme through which the whole matter may be
resolved and compensation may be paid not only to the writ petitioners but to
all the land holders whose lands were acquired. The scheme proposed by Mr. Subramanium
and agreed upon by the Central Government and the Coal Company is as follows:
The land in Village Gopalpur, District Sundergarh, Orissa stands acquired by
the Central Government and ownership is vested with MCL, which will determine
and pay compensation to the erstwhile landowners.
In respect of vast portions of the acquired land (excluding the area where
mining activities are being undertaken), actual physical possession was never
taken. The State of Orissa and its officers are directed to assist MCL in
taking actual physical possession of the acquired land.
Since the matter pertains to an acquisition of 1987 i.e. more than two decades
ago, the extent of actual physical possession needs to be re-ascertained, it is
necessary that the genuine landowners, amount of compensation payable, status
of 11 possession, use to which the land has been put in the last two decades,
is discovered. The entire land needs to be surveyed again.
In accordance with the advice of the learned Solicitor General, a Claims
Commission needs to be set up with representatives of the Central Government as
well as MCL. It is submitted that the Claims Commission will consist of 3
Members:- (a) A former Judge of the High Court of Orissa (Chairman);
officer who has held a post/office equivalent to the rank of Secretary to the
Government of India;
officer to be nominated by Chairman, Coal India Ltd.
Claims Commission will carry out the exercise referred to above and submit a
report on the compensation payable and the persons to whom it should be paid,
within a period six months.
The above-said report will be submitted to the Central Government, and upon
formal approval by the Central Government, MCL will make payment within a
further period of two months.
Some portions of the land have been determined to be unsuitable for the
Petitioner having regard to physical features (mining being impossible, area
being heavily populated, etc.).
Claims Commission will examine whether possession of such portions has been
taken over by the Petitioner. It would be open to the Claims Commission to
recommend de- notification/release of the said land from acquisition.
In view of the special facts obtaining above, the Central Government may be
permitted to de-notify the said land from the acquisition as a special case,
since the land is not required and possession also was never taken.
Even in the case of the de-notified land, suitable compensation, in appropriate
cases, may have to be paid to the landowners. The Claims Commission may also
give a report on this aspect of the matter.
The learned Solicitor General has opined that such matters of uncertain
acquisition or pending compensation claims lead to unnecessary social tensions
and the Petitioner must act in a 12 spirit of good governance. Upon examination
of all the surrounding villages, in the light of the opinion of the learned
Solicitor General, for the sake of uniformity as well as fairness, the above
exercise would be carried out for the following villages as well:
Sardega ii. Jhupurunga iii. Ratansara iv. Tikilipara v. Siarmal vi. Tumulia
vii. Karlikachhar viii. Kulda ix. Bankibahal x. Balinga xi. Garjanbahal xii.
Bangurkela xiii. Kiripsira xiv. Lalma R.F.
must be noted that in the case of Sardega and Tikilipara Villages, part-payment
has already been made. Further, in the case of Bankibahal and Balinga Villages,
full payment has already been made but possession has not been fully taken.
The Petitioner and the Central Government shall assist in the establishment of
the Commission including the provision of suitable infrastructure. The
honorarium payable to the Commission may be determined by this Hon'ble Court.
This Order is being passed with the agreement of all parties and in the
peculiar facts and circumstances of this case.
order shall not operate as a precedent."
The scheme proposed by Mr. Subramanium was shown to Mr. Janaranjan
Das, counsel, appearing for the writ petitioners-respondents and he also gave
his express consent to it. We, accordingly, approve the scheme but with certain
clarifications and modifications as stated below.
We nominate Mr. Justice A.K. Parichha, a former Judge of the High
Court of Orissa as Chairman of the Commission. Mr. Solicitor General in
consultation with the Secretary, Ministry of Coal, Government of India, shall
nominate an officer who has held a post/office equivalent to the rank of
Secretary to the Government of India as one of the members of the Commission
within two weeks from today. Similarly, the Chairman, Coal India Ltd. shall
nominate an officer as the other member of the Commission.
Justice A.K. Parichha, shall be paid honorarium, equal to the monthly salary of
a sitting High Court Judge and he shall be entitled to all other facilities as
available to a sitting judge of the High Court. The officer nominated by Mr.
Subramanium/Secretary, Ministry of Coal, Government of India, shall similarly
be entitled to honorarium and other facilities available to a serving officer
of his rank. All the expenses of the Commission shall be borne by Coal India
Ltd. The Commission shall prepare its report as envisaged in the scheme, first
in respect of the lands in village Gopalpur, District Sundergarh, Orissa, as
soon as possible and in any event not later than four months from today. In
case the Commission recommends de-notification/release of any portion of the
lands earlier acquired, it would also determine the rate or the amount of
compensation/mesne profit payable to the land holder. The Commission shall
submit its report not to the Central Government but to this Court for approval
and further directions. Any de-notification/release of the land 14 would be
only subject to further orders passed by this Court in light of the
Commission's report. The Commission may proceed with the survey in relation to
the acquired lands in other villages, as suggested in paragraph 9 of the scheme
only after submitting its report in respect of village Gopalpur and subject to
further orders by this court.
The officers of the State Government and the coal company shall
extend full help and cooperation to the Commission in preparing the report and
in the discharge of their duties in terms of the scheme.
We record our deep appreciation of Mr. Subramanium for sharing the
feelings of the court and for his effort to resolve this matter. We may,
however, remind him that his task is not over. It has only begun.
Put up on receipt of the Commission's report.