IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN FRIDAY, THE 11TH DECEMBER 2009 / 20TH AGRAHAYANA 1931 WA.No. 2038 of 2005() --------------------- AGAINST THE JUDGEMENT/ORDER IN OP.5220/2000 Dated 16/05/2005 .................... APPELLANT(S): ADDL. 3RD RESPONDENT ---------------------------------- PETRONET CCK LTD., IRIMPANAM INSTALLATION OF BPCL, IRIMPANAM-682 309, REPRESENTED BY ITS COMPANY SECRETARY. BY ADV. SRI.M.PATHROSE MATTHAI, SENIOR ADVOCATE SRI.RONY J.PALLATH RESPONDENT(S): PETITIONERS IN OP/RESPONDENT ------------------------------------------- 1. NIRMAL ANTONY, SILVASTREE KALAM, CHANDRAPURAM, PUDUSSERY, PALAKKAD. 2. UNION OF INDIA, REPRESENTED BY THE SECRETARY TO THE MINISTRY OF PETROLEUM AND NATURAL GAS, NEW DELHI. SRI.JOHNSON P.JOHN R2 BY ADV. SMT.SUMATHY DANDAPANI, SCGSC R1 BY SRI.T.C.MOHANDAS SRI.T.M.SUNIL SMT.M.PREETHA SMT.ANJU GOVIND THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 11/12/2009, ALONG WITH WA NO. 2039 OF 2005 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C .N. RAMACHANDRAN NAIR & V.K. MOHANAN, JJ. --------------------------------------------------- W.A. No. 2038,2039,2040,2041,2044, 2052, 2053,2063, 2066,2074,2076, 2106,2107, 2108, 2109, 2110, 2111, 2112,2113,2114, 2115, 2136, 2137, 2138, 2146,2154, 2167, 2183, 2201, 2207,2230, 2261, 2262, 2263, 2287, 2292, 2293, 2307, 2308, 2312, 2330, 2333,2376 OF 2005 & Cross-objections 9, 12,13, 15, 17, 18, 24, & 31/2006 ----------------------------------------------------- Dated this the 11th day of December, 2009 JUDGMENT Ramachandran Nair, J. These Writ Appeals and Cross-objections arise from the same judgment of the learned single Judge upholding the constitutional validity of the Petroleum and Minerals Pipelines (Acquisition of right of user in land) Act, 1962, hereinafter called the "Act", with certain observations and findings on the compensation payable under various clauses of Section 10 of the Act. 2. The appellant-company in the Writ Appeals is a Corporation falling under Section 2(b) of the Act which has laid pipelines over a metre below the surface of the properties of respondents for movement 2 of petroleum products from the Refinery at Kochi to their Depot at Karur. Writ Petitions were filed by the land owners challenging the constitutional validity of statutory provisions which authorise the Corporation to acquire the right to lay pipeline through the property of land owners. The statutory scheme authorises the land owners to continue to use the property for any purpose except construction of building or other structures, construction or excavation of any tank, well, reservoir or dam, or planting of trees even after pipelines are laid. Compensation payable under Section 10(1) read with sub-section (3) of Section 10 is for the actual loss suffered by the land owners. Obviously laying of pipelines involve crop loss, disability for cultivation and use of the land for the purposes for which it was used during laying of pipelines. Besides the compensation for actual loss suffered in terms of Section 10(1) read with sub-section (3) of Section 10, the Act provides for mandatory compensation at 10% of the market value of the land to be paid to the land owner or any person affected on account of disability attached to the land covered by the proviso to Section 9(1) of the Act. The learned single Judge held that disabilities suffered by the land owners on account of laying of pipelines are such that they are entitled to full compensation for the value of the land as 3 given in land acquisition cases. However, the learned single Judge held that laying of pipelines beneath the surface of the land does not require or involve any acquisition of land, and it is only a right enjoyed by the corporation and therefore he turned down the land owners' challenge against constitutional validity of the provisions. Further, while disposing of the Writ Petitions, the learned single Judge explained the scope of compensation payable under all the sub-sections of Section 10 and held that the compensation payable under Section 10(4) is by way of solatium referred to in the land acquisition Act and is payable in addition to the compensation payable under Section 10(1) read with sub-section (3) of the Act. It is against these findings of the learned single Judge on the scope of compensation payable under Section 10 of the Act that the Corporation has filed these Writ Appeals. Even though most of the land owner-writ petitioners have not challenged the judgment upholding constitutional validity of the provisions of the Act, eight of them have filed Cross-Objections for sustaining their challenge against constitutional validity of the provisions of the Act. We have heard senior counsel, Sri. Pathrose Matthai, appearing for the appellant-Corporation, senior counsel Smt. Sumathy Dandapani, appearing for the central Government, senior counsel Sri. T.C. 4 Mohandas, appearing for the land owners- Cross-objectors and other counsel appearing for the respondents- land owners. 3. So far as appellant-Corporation is concerned, their grievance is against the observations and findings of the learned single Judge with regard to compensation payable under various provisions of Section 10(1) of the Act. For easy reference the findings of the learned single Judge contained in the judgment are extracted hereunder: 42. The result that follows is: (1) I uphold the constitutionality of the Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act, 1962. The challenge against the constitutionality on all the grounds raised in the Writ Petition will fail. (2) It is declared that the compensation payable under Section 10(4) of the P.P. Statute is over and above the compensation payable under Section 10(1) and is in the nature of solatium. (3) The competent authority and the District Judge while determining compensation under Section 10(1) or 10(2) as the case may be, shall apart from the aspects mentioned in Section 10(3)(i), 10(3)(ii), and 10(3)(iii) also take into account the diminution in the value and utility of the acquired land inclusive of the sub-soil on account of the interdicts imposed upon the land and the land owners under the proviso to Section 9. ............. 5 The appellant apprehends that the learned single Judge has expanded the scope of compensation payable by stating that compensation payable under Section 10(4) is over and above the compensation payable under Section 10(1) and is in the nature of solatium and further by holding that the competent authority or the District Judge, as the case may be, while determining the compensation under Section 10(1) or Section 10(2), should take into account, in addition to the aspects mentioned in Section 10(3)(i) to (iii), the diminution in value and utility of the land on account of interdicts imposed on the land and land owners under the proviso to Section 9. In the first place, we notice that the learned single Judge has not upheld the constitutional validity of the statutory provisions based on any specific meaning assigned by him to the provisions for payment of compensation. Senior counsel appearing for the appellant contended that after upholding constitutional validity, the Court has no authority to expand the scope of compensation payable under the provisions of the Act. Before proceeding to consider this contention, we have to examine whether the court has given any meaning or new dimension to the provisions on compensation different from what the legislature intended. In our view, the conclusion recorded in clause (2) of paragraph 42 above is 6 perfectly right because compensation payable under Section 10(4) is over and above the compensation payable under Section 10(1). Compensation payable under Section 10(1) is for actual loss suffered by the land owners on account of laying of pipelines by the Corporation at one and a half metres beneath the surface of the land. This is a matter depending upon facts of each case. In fact compensation payable under Section 10(1) is for the actual damage, loss or injury sustained by the land owners or person interested in the land, beneath which pipeline is laid. There may be cases where pipeline is laid by destroying crop and the time taken for laying pipeline may prevent the party from cultivating crop for a season or for sometime. Cases of this nature will certainly involve actual loss, damage or injury entitling the land owner for compensation for the actual loss suffered either on account of loss of crop or on account of disability to cultivate or use the land for a duration during which pipeline is laid. We make it clear that we have only cited illustrative situations warranting compensation under Section 10(1) and we cannot exhaustively consider the circumstances that will lead to injury, loss or damage to the land owners or the person affected in the land during the course of laying pipelines. Section 10(3) only gives guidelines to the 7 competent authority and to the District Judge to take into account the circumstances stated therein while considering compensation which are again for temporary disability suffered by the land owners on account of laying of pipelines. However, Section 10(4) speaks about compensation in absolute terms payable to the land owners which is 10% of the market value of the land, which in our view is for the disabilities attached to the land and the land owners in respect of land used for laying the pipeline. It is worthwhile to refer to disabilities contained in Section 9, which are the following: 9. Restrictions regarding the use of land.-- (1) The owner or occupier of the land with respect to which a declaration has been made under sub-section (1) of Section 6, shall be entitled to use the land for the purpose for which such land was put to use immediately before the date of the notification under sub-section (1) of Section 3: Provided that, such owner or occupier shall not after the declaration under subsection (1) of Section 6-- (i) construct any building or any other structure; (ii) construct or excavate any tank, well, reservoir or dam; or (iii) plant any tree. on that land. (2) The owner or occupier of the land under which any pipeline has been laid shall not do any act or permit any act to be done which will or is likely to cause any damage 8 in any manner whatsoever to the pipeline. ............... It is obvious from Section 9(1) that once the pipelines are laid, possession will revert back to the land owner who is free to use the land for the purposes for which such land was put to use immediately before the date of the notification issued under sub-section (1) of Section 3 of the act. Restrictions are against construction of building or any structure, and against excavation or construction of any tank, well, reservoir, dam, etc., and against planting of trees and against doing anything that is likely to cause damage to the pipeline. In other words, without affecting the pipeline laid, that is without constructing any building, digging the land or planting trees, the owner is free to use the land for cultivation or any other purpose. In our view, the compensation payable under Section 10(4) is for the diminution in value of the land on account of disabilities attached to it under Section 9(1) and (2) of the Act. The compensation provided under this provision is 10% of the market value. In our view, styling of the compensation as equivalent to solatium payable under the Land Acquisition Act by the learned single Judge does not give any new 9 dimension to the compensation payable under Section 10(4). In this view of the matter, clause (3) of paragraph 42 of the judgment above extracted can only mean that the compensation payable under Section 10(4) is over and above the compensation payable under Section 10(1) read with sub-section (3). We therefore hold that besides the compensation provided for actual damage and injuries sustained by the land owners or the person interested in the land under Section 10(1) read with sub-section (3) thereof, the only compensation payable is 10% of the market value payable under Section 10(4) of the Act to the land owners which is compensation payable for the restrictions in regard to use and enjoyment of land under Section 9(1) and (2) of the Act. We dispose of the Writ Appeals clarifying the judgment of the learned single Judge as above. However, the above findings on the compensation payable will be subject to the scope and application of Section 18 of the Act discussed below, while considering constitutional validity of the provisions. 4. This leaves us with the Cross-objections filed by eight land owners, who contended before us that the learned single Judge was not justified in upholding the constitutional validity of the provisions. The main ground of challenge against constitutional validity of the statute, 10 as argued by senior counsel Sri. T.C. Mohandas, appearing for the cross-objectors, is based on Section 18 of the Act, which is as follows: 18. Application of other laws not barred.-- The provisions of this Act shall be in addition to, and not in derogation of, any other law for the time being in force relating to acquisition of land. The contention of senior counsel appearing for the land owners is that the above provision gives discretion to the competent authority either to proceed for acquisition of land under the provisions of the Land Acquisition Act or to proceed to issue declaration under Section 3 of the Act acquiring only the right to lay pipeline beneath the surface of the land for movement of petroleum products. To a specific question as to whether appellant-Corporation has acquired land from some or few land owners and from remaining land owners only acquired the right to lay pipeline under the Act in their discretion leading to discrimination between the two set of land owners, counsel submitted that they have no information. Counsel appearing for the Corporation on the other hand submitted that no discrimination is shown among land owners because no land is acquired under the provisions of the Land Acquisition Act and in all cases acquisition is only of the right to lay pipeline by issuing notification under Section 3 and declaration 11 under Section 6 of the Act and the land owner or the person interested in the land was given compensation in terms of the provisions of the Act. In fact, we are told that the compensation cases are pending at various stages, and even in this Court CRPs are pending and posted along with WAs and Cross-objections. In order to consider the contention of cross-objectors, we have to consider whether Section 18 is capable of application in a discriminatary manner. 5. The Act is in force in the country from 1962 onwards. Admittedly pipelines have been laid in the properties of several land owners by invoking the provisions of the Act, that is by paying compensation in terms of the Act only for right to use the land for retaining the pipelines. In fact, except where the pipelines pass through urban areas, most of the pipelines are laid through agricultural land which are used for cultivation of various crops like paddy, wheat, etc. The embargo under Section 9 is only against planting trees and construction of building or tanks, etc. Short of these activities, farmers whose lands are utilised on payment of compensation for laying pipelines beneath the surface of the land are not affected at all inasmuch as they are allowed to cultivate the land on regular basis and take the yield. Therefore in our view most of the land owners over 12 whose lands the Corporation enjoys the right for laying and retaining pipelines are beneficiaries of the compensation because even after laying pipelines they are cultivating their land and earning income. In the first place, in our view, if the provisions of the Act are struck down, it will affect large number of beneficiaries who by making small sacrifice in the form of deprivation of right to construct structures and planting trees, are getting compensation from the Corporation for laying and retaining pipelines. As already stated, most of the farm lands through which pipelines are laid in India are unfit and are not used for construction of buildings, or for tree planting and so much so there is actually no loss for the farmers. However, they are getting compensation for laying and retaining pipelines through such land only because of the notional loss contemplated under Section 10(4) of the Act. We have to examine the petitioners' challenge against constitutional validity in the context of application of the Act for the country as a whole and the general grievance of land owners. Considering the general applicability of the Act, we feel more land owners will be beneficiaries and only a few will be probably affected. Of course, if the land taken over for laying pipelines is a house site, we feel the restriction under Section 9 against construction of building 13 will deprive the land owner virtually of his entire rights on the land. In such cases, we feel the land owner can compel the Corporation to acquire the land under the Land Acquisition Act as contemplated under Section 18 of the Act because the Act does not provide for compensation for the deprivation of the right of use for which the land was intended. There will be only very rare and exceptional cases of this nature warranting acquisition because if the land owner has sufficient space for construction of house left in his property after excluding the property used by the Corporation to lay pipeline the provision for acquisition under Section 18 cannot be forced on the Corporation. However, we disagree with the view expressed by the learned single Judge that the authority or District Judge authorised to grant compensation can cover losses of the type stated above while granting compensation under Section 10(1) read with Section 10(3). If compensation for actual loss for a case of the type stated above is claimed, then recourse is only to Section 18 for acquisition under the Land Acquisition Act. If the Corporation does not proceed to acquire, it is for the land owner to approach the High Court for appropriate direction. Besides case of the nature stated above, the purpose of Section 18 is to enable the Corporation to acquire land for the purpose 14 of construction of office building, pump house, or the like in connection with laying, retention and operation of pipelines. Since the Act does not provide for acquisition of land, it is specifically stated in Section 18 that along with acquisition of right to use for laying pipelines, for any purpose and purposes in connection therewith, where exclusive ownership and possession of the land is required by the Corporation, it is free to invoke acquisition proceedings under the Land Acquisition Act. We do not find any conflict in Section 18 with other provisions of the Act because it is only an enabling provision to acquire land if so desired. The apprehension of the petitioners that Section 18 is capable of misuse is not established with any facts. Corporation has clearly stated that no land is acquired for the use of the Corporation to the exclusion of the land owner and all what is so far done is acquisition of right in land only for laying pipelines beneath it. We are of the view that if the Corporation wants to make any construction or installation or requires exclusive possession for any purpose, they are free to acquire the land under the Land Acquisition Act. What Section 18 says is that the Act does not affect the right of the Corporation to seek acquisition of land under the Land Acquisition Act, if required. We do not therefore find any merit in the petitioners' 15 challenge against validity of statutory provisions. Consequently the Cross-objections are dismissed and W.A.s are disposed of as above, subject to the findings and observations above stated modifying judgment of the learned single Judge. (C.N.RAMACHANDRAN NAIR) Judge. (V.K. MOHANAN) Judge. kk 16