;(>"«auiB IWCS.,, HI6H COURT OF CHHATTISGARH AT BILASPUR Writ ADpeal No.69/2009 JUD6MENT FOR CONSIDERATION Sd/- Dhirendra Mishra Judge HON'BLE SHRI R.N. CHANDRAKAR. J °) Ct-' Sd/- R.N. CHANDRAKAR. Judge POST FOR JUD6MENTON^^~-2-2010 Sd/- OhirendiaMistea Judge APPELLANT (Respondent) State of Chhottisgarh Vs RESPONDENT (Petitioner) Bharat Aluminium Company Limited ^^%. ''fS'i s' ^•<s^/ ''^vss^ ^ HIGH COURT OF CHHATTIS6ARH AT BILASPUR DIVISION BENCH: HON'BLE SHRI DHIRENbRA MISHRA & HON'BLE SHRI R.N. CHANDRAKAR. JJ. Writ Appeal No.69/2009 APPELLANT (Respondent) Vs RESPONDENT (Petitioner) State of Chhattisgarh, Through: The Secretary, Sovernment of Chhattisgarh, Department of Revenue, &KS. Bhawan, Mantralaya, Raipur, Chhattisgarh. Bharat Aluminium Company Limited, through its Director, Balco Korba (Chhattisgarh). Present: Mr. Sumesh Bajaj, Government Advocate Mr. L. Nageshwara Rao, Sr. Advocate with Mr. Abhishek Sinha, Mr. P.C. Sen, Mr; P. Shandilya <& Mr. Deep Verma, Advocates For the appellant For the respondent JU&6MENT (Passed on<2£'February, 2010) Dhirendra Mishra. J 1. This writ appeal Under Section 2 of the C.G. High Court (Appeal to Division Bench) Act, 2006 by the appellant (hereinafter shall be referred as 'the State') is directed against the order dated 06.02.Z009 passed in W.P. No.5328/1996 by which the writ petition filed by the respondent herein (hereinafter shall be referred as 'the Balco') has been partly allowed on the following terms:- • For 1136 acres of land for which BALCO has paid premium and lease rent in accordance with the letter dated 18-3-1968, BALCO shall not be liable to pay '^..- .sy ^•s:; ss-y* (,. II y W.A. No.69 of Z009 PageNo. Z of33 the increased premium and lease rent, except as per the promise made in the letter dated 18-3-1968. • For 947.95 acres of forest land, BALCO shall be liable to pay money for compensatory afforestation and NPV, if not paid earlier' as determined by the M.0.E.F., Sovernment of India. • For remaining land i.e. 668.67 acres, BALCO shall be liable to pay the premium and lease rent as on the date when possession was takenover in accordance with the Revenue Book Circular. • The possession of the land on 1804.67 acres cannot be held asunauthorized possession, as the petitioner was allowed to set up its projectlong back without any objection by the State Authorities. Further the State Authorities have collected the taxes and the Corporation has also collected the property tax. • All the applications made by BALCO which have not been considered till date the same shall be considered forthwith and appropriate orders shall be passed. • After the orders are passed on the applications made by BALCO, BALCO may file reply to the notices dated 21-6-2005 & 28-6-2005 issued by the Tahsildar, Korba. • The impugned letter dated 20-9-1993 (Annexure- P/3) is accordingly quashed. 2. The Balco has also filed cross objection under Order 41 Rule 22 read with Section 151 of the CPC and prayed for direction to the State to execute a formal document of lease deed with reSpect to 1804.67 acres of government land in its possession and set aside the impugned order to the f^ W.A. No.69 of 2009 Page No. 3 of 33 ^ extent that it directs payment of NPV with respect of 947.95 acres of land in possession of the Balco. 3. Mr. Bhupesh Baghel has also filed an application (IA No.06/09) for permission to intervene. 4. Briefly stated, Balco's case in the petition is that the Secretary, Commerce and Industries Department, addressed a Demi-Official letter dated 18.3.1968 (Annexure P-1) (for short '&O') to the Managing Director of the Balco and proposed that the land may be granted to the Balco for its project at Korba on 99 years lease subject to terms and conditions mentioned in the said letter. The Balco vide its reply dated 13.6.1968 (Annexure P-2) conveyed it's acceptance to the proposal on the terms and conditions detailed in the said letter. It was also mentioned that the total requirement of land is about 1616 acres. They would take possessipn of the forest land immediately required for Alumina plant and clear- of the forest growth and requested that remaining forest land may be cleared by the Forest Department of the State and vacant land be handed over to the company at the earliest and land needed shall be demarcated by the Chief Project Engineer of the company. It was further requested that after the particulars of the lands are ascertained, the possession of the same be handed over to the C.P.M., Korba pending execution of formal lease documents. 5. The Collector, Bilaspur vide its letter of Annexure P-18 dated 25.3.1971 informed the Balco that out of total demanded government land of 1136 acres, 947.95 acres of land is the forest land and the Conservator of Forest has already assessed the compensation at Rs.3,19,656/- and directed to deposit the same. The Balco was also directed to deposit a sum of Rs.2,49,920/- towards premium and annual W.A. No.69 of2009 ''f»i^^e9 Page No. 4 of 33 rent of 1136 acres of land, as proposed vide Annexure P-1 dated 18.3.1968. It was mentioned in the above memo that the proposed demand is made in anticipation of approval from the 6overnment and the Balcoshall be liable to pay the difference of amount as per decision of the Sovernment. 6. The Balco confirmed deposit of compensation for forest produce and also deposited the premium and annual rent, as demanded vide Annexure P-18, in March, 1971. The Balco also applied for transfer of 2.68 acres <& 27.69 acres of additional forest land vide Annexure P-19 <& P-20. Between 1968 & 1976 the Balco applied for allotment of additional land from time to time and on their applications, objections were invited by the revenue department and proceedings for transfer of possession of land were initiated. 7. The Department of Revenue, Sovernment of M.P. vide their letter dated 20.9.1993 (Annexure P-3) accorded permission for granting permanent lease of 338.66 acres of land situated in Village Risda <& Kohadiya of District Bilaspur to the Balco for establishing its factory on general and special conditions mentioned in the said order. Three copies of the aforesaid order was sent to the Secretary, Finance Department with a request to forward one copy to the Accountant fieneral, Madhya Pradesh, Swalior. One copy each was also forwarded to the Commissioner, Bilaspur DJvision and Balco. 8. Thereafter, demand notice was issued for a sum of Rs.8,66,960/- towards annual lease rent and premium vide Annexure P-4. The Balco contested the issuance of demand notice vide Annexure.P-5 and contended that in accordance with memo dated 26.3.1971 (Annexure P-18) they have already deposited Rs.2,49.920/- towards premium and annual lease rent for 1136 acres of land, which also includes 338.66 ";'"-<'?>. ••^s: , '•<» .. "'sBSsi. ii i'-.'af^ g I? J »^,,.,«''^r ".h.C;**'1''' W.A. No.69 of 2009 Page No. 5 of 33 acres of land against which demand note has been issued, and requested to allow them to deposit annual rent for 16 years ©Rs.20/- per acre and necessary demand note be issued. A revised revenue receipt certificate for a sum of Rs.15,71,371/- was issued by the Tehsildar vide Annexure P- 9 dated 16.12.1996 and the Balco was directed to deposit the aforesaid amount by 19.12.1996. 9. After issuance of Revenue Recovery Certificate of Annexure P-9, the Balco filed the writ petition seeking substantive retief for quashing of allotment order dated 20.9.1993 (Annexure P-3); to declare that the Balco is liable to pay premium ©Rs.200/- per acre and annual rent ©Rs.20/- per acre. However, relief Nos.2 & 3 have been deleted by way of amendment and additional reliefs for direction to the respondent to enter into and execute the lease deed in terms of the letter of allotment dated 18.3.1968; and direction to restrain the respondent from taking any action contrary to terms of the letter of allotment dated 18.3.1968 have been added. lO.The State Government in their counter affidavit dated 06.11.1997 averred that the State Sovernment vide its decision dated 20.9.1993 fixed the terms <& conditions of the lease for alldtment of land to the Balco and the demand letter of Annexure P-9 was issued for 338.66 acres of land as per decision of the State Sovernment. Proposal bf the Secretary, Commerce & Industries Department is not a final offer fo'r 99 years lease ashis recommendations were not accepted by the Revenue Department and ultimate decision was to be taken by the (Sovernment acting through the Revenue bepartmeht. It was specifically stated that the Balco did not deposit the premium and rent amount within six tftonths in compliance of theorder of the State Sovernment, -""<1.-'-. "'^i^ , ^ •SS-. 3:. ..,'a^" W.A. No.69 of 2009 Page No. 6 of 33 therefore, permanent lease could not be executed and it is Still kept in abeyance and the Balco are in unauthorized occupation of the government land admeasuring 338.66 acres of land. 11. The Tehsildar, Korba vide its memo dated 07.03.2005 (Annexure P-11), addressed to the Town Administration Officer of the Balco, informed that demarcation of entire land in possession of the Balco is to be done on 9.3.2005 and directed to make necessary arrangements for the same. In response to the above memo.vide letter of Annexure P-12 the Balco apprised that the company is in possession of 2753.91 acres of land comprising of 1804.87 acres of land given on lease by the State Government and 949.04 acres of freehold private land, however, the State Government has not executed the lease deed. A team was constituted by the Additional Collector vide his order dated 9.6.2005 for demarcation of entire land in possession of the Balco vide Annexure P-13 and the Tehsildar ordered for demarcation vide Annexure P-15 dated 13.6.2005. Thereafter, vide Annexure P-17 ten notices under Section 248 of the C.6. Land Revenue Code, 1959 (for short 'Code, 1959') were issued for total area 1731.74 acres. iZ.The State Government in their additional reply averred that the Balco is presently in occupation as an encroacher of forest land registered as "Bade Jhad Ka Jangal & Chhote Jhad Ka Jangal" etc. and the said land cannot be allotted to the Balco 'for carrying out any non-forestactivity in view of the provisions of the Forest (Conservation) Act, 1980 (for short "the Act,1980'). It was also objected that a civil suit at the instance of the Balco for the similar reliefs is pending in the Court of learned 1s Additional District Judge and- an interim order has been passed in favour of the Balco W.A. No.69 of 2009 v^ Page No. 7 of 33 vide Annexure R-3 and the Balco cannot be permitted to prosecute in two different forums with respect to the same piece of land. bocument dated 18.3.1968 is not an order of allotment as no lease deed has been ever executed between the Balco and the State Sovernment. Payment towards premium and annual rent and compensation for forest produce by the Balco, in compliance of the memo of the Deputy Collector, would not make the Balco a government lessee. Advance possession of the lands in question was never delivered to the Balco and notices under Section 248 of the Code, 1959 were strictly in order. There is no allotment of land to the extent of 2700 acres. The Balco has built-up the township and other buildings without obtaining sanction. The issue before the Hon'ble Supreme Court in the judgment delivered in the matter of Balco Employees' Union (Regd) Vs. Union of India and others was regarding policy of disinvestment and issue regarding encroachment of the Government land by the Balco was never in issuein that matter and therefore, any observation in the said judgment by the Hon'ble Supreme Court is of no help to the Balco. 13.8alco in it's rejoinder to the reply filed by the State contended that as per revenue circular dated 11.4.1962 allotment of government land for industries in the town whose population is between 10,000 to 15,000 was to be made ©Rs.200/- per acre as premium with Rs.20/- as annual rent. Circular also provides that the land shall be given perpetually or on lease for 99 years with a further condition of renewal in 30 years and increase of rent shall not be more than 25%. Proposal dated 18.6.1968 was in accordance with the above notificati'on. The Balco took possession of 1804.67 acres of land, as per requirement of the project, by making ' (2002) 2 SCC 333 W.A. No.69 of 2009 ^s Page No. 8 of 33 applications to the government in this regard. After taking over the possession, the Balco has erected Integrated Alumina Project with related facilities such as township, quarters for employees, schools, hospitals, civic centers, places of worships, recreation clubs, play grounds, stadium, auditorium, training center, water treatment plants, provision for banks, post office, police station, security barracks, cinema hall etc. and the same were completed by 1976-77. The Balco has paid Rs.15,25,36,377/- between 1976-77 and 2006-07 towards property tax on the total property in its possession. Records of the erstwhile municipal authority demonstrate that the Balco was in possession of 2616 acres of land (comprising the government and freehold land) way back in the year 1976-77 and the allegation that the Balco is an encroacher is merely an afterthought and the same has been made pursuant to the disinvestment to harass the Balco. The Balco has already entered into Memo of Understandings (MoUs) with the State Sovernment in October, 2006 for setting-up a 1200 mega watt thermal power plant at a cost of Five Thousand Crore and has also committed to contribute huge sum in establishing an engineering college by the State in Korba and development of Mainpat as tourist spot. The Balco is occupying the land as per the terms and conditions of the government allotment order dated 18.3.1968 and the State Sovernment is estopped from reneging from the terms and conditions of the said grant. The constructions were completed much before the enactment of the Act, 1980. .The Balco has already paid the lease rent up to 31.3.2007 vide Annexure P-35 iis per terms and conditions of the order of allotment dated 18.3.1968. The Balco in order to resolve the present impasse made an offer vide its letters dated ..!^5"-. v:- ~~"<^.. ';..A-% ^. i' 'fl'*9& J E^ 't •?';1-°-^' W.A. No.69 of Z009 Page No. 9 of 33 (g) 30.12.Z006 & 22.1.2007 to settle the dispute without prejudice to its right in this petition. l4.Mr. Sumesh Bajaj, learned Government Advocate for the State vehemently argued that &0 letter of Annexure P-1 issued by the Secretary, Commerce <& Industries is merely a proposal and the same does not contain any specific detail about the lands proposed to be given on lease. Acceptance of the Balco vide Annexure P-2 was also conditional. There is nothing on record to show that Balco was dllotted 2700 acres ofland between 1968 <& 1971 as the amount of premium and rent paid by Balco was only in respect of 1136 acres of land. A memo by the Deputy Collector addressed to the Balco clearly stipulates that the amount of premium and rent deposited is only provisional subject to any change by the State Government and it is specifically mentioned that the Balco shall be obliged to deposit the difference of amount. Since the Balco accepted the conditions of Annexure P-18 and deposited the compensation for forest produce, premium and rent, it is also bound by conditions that if there is any change in the premium and rent fixed by the State Government, then it shall be payable by the Balco and thus, the Balco is estopped from challenging the order of Annexure R-3, which has been issued as per decision and approval of the State Sovernment. No money was deposited by the Balco in furtherance of Annexure P-1 in the year 1968 and entire deposits were made after receipt of memo of Annexure P-18 and thereafter proceedings/exercise of public advertisement, survey etc. were undertaken. There is no document to show any transfer of right/possession of the government lands to the Balco and none of the letters filed by The Balco praying for execution of lease deed contains peceipt of any authority. Contention of the Balco that they W.A. No.69 of 2009 Page No. 10 of 33 made various representations for execution of the lease deed way back in the year 1973 and the same were not considered, would not make the stale claim of Balco alive, as the same is barred by delay and laches. The Balco is in possession of 1804.67 acres of government land including 947.95 acres of the forest land. Out of this 1804.67 acres of land, premium and lease rent has been paid for 1136 acres in the year 1971 as per order of Annexure P-18, however, no document has been filed by Balco for 668.67 acres of land. The Sovernment did not object to the possession of Balco on the government land as the possession was in the nature of permissive possession as they agreed and accepted the Annexure P-18. Their possession becomes illegal and unauthorized only on expiry of six months from 20.9.1993 when they failed to deposit the demanded premium and rent. Even according to the Revenue Book Circular (Annexure P- 32), in the year 1968 the Industry Department had no power to grant lease and fix premium <& lease rent and this power was always with the State Sovernment and the administrative department, which is Revenue bepartment. In the cases of allotment of land,the Revenue bepartment acts through the Collector. The rates of premium and lease rent in Schedule-I of Annexure P-32 were not applicable in the year 1993 when the allotment was made vide Annexure P-3. Notices issued by the Tehsildar vide Annexure P-17 under Section 248 of the Code, 1959 have not been quashed and it has been observed that The Balco may file reply to the same after the orders are passed on the applications of Balco. Thus, the question of unauthorized possession is yet to be adjudicated and -decided by the competent fact finding authority. In these circumstances, the finding that possession of Balco was not unauthorized is erroneous and W.A. No.69 of 2009 Page No. 11 of 33 premature. Balco would not become the government lessee only on the ground that the premium and lease rent, that too without there being any valid order, has been paid and payment of property tax alone by the Balco would not authorize their possession in view of Section 141 of the Municipal Corporation Act, 1956. The Balco ought not to have undertaken constructionon such lands which were never leased out or transferred or handed over to it. The finding in the impugned order that Balco shall not be liable to pay the increased premium and lease rent except as per promise made in the letter dated 18.3.1968 is erroneous in view of Annexure P-18 which clearly spelt out that demand was tentative and the Balco would be liable to pay any difference of amount as decided by the State Government. Since the Balco, acting upon the demand note of Annexure P-18, deposited the premium and lease rent and thus accepted the conditions of Annexure P-18, therefore, the Balco is estopped from challenging the decision of the State Sovernment vide Annexure P-3 whereby rent was finally fixed by the State Government. Referring to Section 3 of the Sovernment (Srants Act, 1895 it was argued that the memo of Annexure P-1 cannot be said to be a grant and conditions of Annexure P-3 would prevail. birection by the learned Single Judge to the Balco to pay money for compensatory afforestation and NPV for 947.95 acre of forest land, as determined by MOEF, Government of India, could be issued only if the allotment was found tp be valid and possession authorized. In view of the provisions contained in the Act, 1980 no such direction could be issued as the Act, 1980 has retrospective effect. ?- ^x"'"\ ^'^'^ \ i 1 ^</ W.A. No.69 of 2009 Page No. 12 of 33 The finding in the impugned order that the Balco shall be liable to pay premium and lease rent, as on the date when the possession was taken over, in accordance with the Revenue Book Circulars for the remaining land i.e. 668.67 acres is concerned, such relief could be granted only if the allotment is found to be valid and possession authorized. In the absence of any document regarding title or possession, such relief could not be granted, particularly when the Balco has not paid any amount against the aforesaid land and possession is being claimed only on the basis of making applications. The order does not determine the issue between the parties and as such ambiguous and no such ambiguous writ can be granted. The finding in the impugned order that possession of 1804.67 acres of land cannot be held as unauthorized possession, as the Balco wasallowed to set-up its project long back without any objection by the State authorities and further that the State authorities have collected the taxes and the Corporation has also collected property tax, is also not sustainable as there was no occasion for the State authorities to object earlier as the possession has become unauthorized only on expiry of six months period of Annexure P-3 dated 20.9.1993. Balco was requested for execution of lease deed till 19.12.1996 vide Annexures P-4 to P-10. Even otherwise illegality cannot be permitted to be perpetuated only on the ground that no objection was taken earlier. • Contention of the Balco that the Hon'ble Supreme Court had decided the matter in the earlier proceedings between the parties (Western Coalfields Ltd Vs. Special Area bevelopment Authority reported in 1982 (1) SCC125) on'the basis of averments made by the State (Sovernment, is ^' •''' •f'..^ W./\. No.69 of 2009 ^ Page No. 13 of 33 also incorrect as the Hon'ble Supreme Court didnot pass the said order on the basis of averments of the State Government, on the contrary the contention of the Balco was negated and it was held that even occupier is liable to pay tax under Section 141 (2) of the Municipal Corporation Act, 1956 and thus, collection of property tax from the Balco was upheld. No relief in the terms of declaration that possession is valid could be granted in a writ proceeding. It was also argued that Balco did not seek any relief for such declaration. Learned Single Judge referring to the stand taken by the State Sovernment in the counter affidavit dated 13.2.1978 filed in the High Court of Madhya Pradesh in M.P. No.555/77 has held that the possession of the Balco cannot be held to be unauthorized, though there was no foundational pleading by the Balco in the writ petition related 'to the affidavit filed by the State in the property tax case and such affidavit cannot confer any rightin favour of the Balco for which Balco is legally entitled. Direction to the State authorities to decide the applications made by the Balco and pass appropriate orders is meaningless unless the finding on the possession and other finding that the Balco shall be liable to pay premium and lease rent as per promise made in the letter dated 18.3.1968 (Annexure P-1) are not set aside. Mr. Bajaj opposing the prayer of the Balco in itscross- objection for direction to the State to execute the lease deed argued that from the documents of Annexures P-4 to P-9 the Balco was requested to pay the outstanding amount so that lease deed could be executed and it was the Balco, who failed to comply with the directions, due to which the lease deed could not be executed. In the absence of any W.A. No.69 of 2009 Page No. 14 of 33 acceptance of right, claim for the same and denial by the authority, no mandamus can be issued against the State for execution of lease deed in favour of the Balco. The judgment of the Hon'ble Supreme Court between the Balco and the State Government, which is reported in (2002) 2 SCC