M/S ULTRA-TECH CEMENT LTD. versus MAST RAM & ORS.
[2024] 9 S.C.R. 443, Supreme Court of India, 2024
Outcome: Case Allowed (Granted)
Segment: Issues
[2024] 9 S.C.R. 443 : 2024 INSC 709
M/s Ultra-Tech Cement Ltd. 
v. 
Mast Ram & Ors.
(Civil Appeal No. 10662 of 2024)
20 September 2024
[J.B. Pardiwala* and Manoj Misra, JJ.]
Issue for Consideration
Whether the subject land and all other liabilities associated with it 
were transferred to the Appellant in terms of the Scheme; Whether 
it was the Appellant or JAL who was legally obliged to pay the 
compensation amount determined under the Supplementary 
Award; Whether the land in terms of Section 101 of the Right 
to Fair Compensation and Transparency in Land Acquisition, 
Rehabilitation and Resettlement Act, 2013 can be returned to the 
Respondent Nos. 1-6 at this stage under the scheme of the Act; In 
other words, what is the scope of Section 101; Whether the State 
of Himachal Pradesh, being a welfare state, had the responsibility 
to ensure full payment of compensation amount determined under 
the Supplementary Award dated 02.05.2022.
Headnotes†
Land Acquisition Act, 1894 – Land Acquisition, Rehabilitation 
and Resettlement Act, 2013 – The High Court allowed the writ 
petition filed by the Respondent Nos. 1 to 6 herein (original 
petitioners) and directed the Appellant herein to pay the 
requisite amount towards compensation as determined in the 
Supplementary Award dated 02.05.2022 passed by the Land 
Acquisition Collector (LAC) (Respondent No. 10) in the first 
instance with liberty to recover the same from JAL (Respondent 
No. 11) if permissible under the legal
relationship between the 
two companies – Correctness:
Held: An analysis of the Scheme agreed between the Appellant 
and JAL is the key to determine who should pay the amount 
determined under the Supplementary Award dated 02.05.2022 – 
Clause 1.1 (o) defines the “Effective Date” as the date on which 
the Scheme becomes effective in accordance with its terms, which 
shall be the Closing Date [defined in Clause 1.1(k) and Clause 
* Author
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10.1]  – The said date was decided to be 29.06.2017 among the 
parties – The parties by way of Clause 1.1(w)(ix) agreed that all 
litigations pertaining to the business and assets being transferred 
to the Appellant that arose before or on the Closing Date would not 
be transferred to the Appellant and will remain with JAL – Clause 
7.1 of the Scheme states without any ambiguity that any legal 
or other proceeding by or against JAL or its unit operating the 
cement project relating to the JAL Business as defined in Clause 
1.1(w), initiated on or arising and pending before the Effective 
Date shall remain with JAL – The facts indicate that the land 
acquisition proceedings had commenced before the Effective Date 
of the Scheme (i.e. 29.06.2017) and the compensation remained 
undetermined as on the Effective Date – These facts attract 
the application of Clause 7.1 of the Scheme as the acquisition 
proceedings and the liability to pay compensation associated with it 
squarely falls within the meaning of ‘other proceedings’ as intended 
by the parties under the said Clause – JAL has also not disputed 
that it had made payment of the amount determined under the 
Award of 2018 i.e., Rs. 10,77,53,842/- after the Effective Date of 
the Scheme – The said amount has already been disbursed to 
the landowners – After the LAC determined the amount under the 
Award dated 08.06.2018, JAL paid the same without any protest 
or reference to
the Scheme  – Therefore, at the stage of the  
Supplementary Award pertaining to the same land and same 
original landowners, JAL cannot be allowed to take the plea that 
the payments with respect to the subject land were required to be 
made by the Appellant. [Paras 21, 22, 24, 26, 27, 28, 29]
Land Acquisition, Rehabilitation and Resettlement Act, 
2013 – s.101 – It is the case of JAL that the substantial delay 
in acquisition of the subject land has frustrated its purpose, 
and it could not make any use of the land – It was submitted 
that if the Appellant does not require the said land, then it 
should be returned to the original landowners and the amount 
of Rs. 10,77,53,842/- paid under the Award of 2018 should be 
refunded to JAL:
Held: The necessary conditions for the application of Section 
101 are: (1) the land should be unutilized; and (2) the period it 
remains not in use should be at least five years from the date 
of taking of possession – There is no merit in the contention 
of JAL that the land be returned to the original landowners –
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445
M/s Ultra-Tech Cement Ltd. v. Mast Ram & Ors.
While period of five years has elapsed from the date of taking of 
possession by JAL, the first condition that the land should remain 
unutilized is not fulfilled – The subject land was acquired for the 
purpose of providing a safety zone to the mining area of the  
cement plant – No other use except that the subject land may 
pose hazard to the residents was envisaged during the acquisition 
proceedings – JAL cannot pray for return of the land as that 
would result in endangering the lives and property of the original 
landowners – It is also found that the subject land has been in 
use all throughout the operation of the cement project by serving 
as a safety zone and the condition of being unutilized is not 
satisfied – It is not in dispute that the Supplementary Award had 
to be passed as the compensation for standing crops, structures 
and other damages for the subject land which could not be fixed 
and evaluated under the Award No. 1 dated 08.06.2018 –  The 
passing of Supplementary Award was not a fresh exercise but rather 
a continuation/extension of the Award of 2018  – Therefore, when 
JAL has already paid the compensation amount as determined 
under the previous Award without any demur, it cannot be allowed 
to question its liability under the Supplementary Award and make 
a plea for return of the land at this stage on the ground that 
the purpose of the land is frustrated due to delay in
acquisition 
proceedings. [Paras 35, 36, 37, 38, 39]
Land Acquisition, Rehabilitation and Resettlement Act, 2013 – 
s.101 – Scope of:
Held: The instant section was introduced in the 2013 Act for 
the first time as a beneficial provision for the landowners whose 
lands were usurped but remained unutilized or were not used 
in accordance with the purpose stated in the notifications under 
Section 4 – However, the application of the Section is warranted 
only in the circumstances where the return of the land would 
benefit the landowners – The party which has failed to utilize the 
land cannot plead for the return of the land and consequent refund 
of the compensation paid, as that would tantamount to taking 
advantage of its own wrong or default. [Para 40]
Constitution of India – Art.300-A – Role of the State under 
Article 300-A of the Constitution – Responsibility of State to 
ensure full payment of compensation determined:
Held: It is settled that once the compensation has been determined, 
the same is payable immediately without any requirement of a
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representation or request by the landowners and a duty is cast on 
the State to pay such compensation to the land losers, otherwise 
there would be a breach of Article 300-A of the Constitution – In the 
instant case, the Government of Himachal Pradesh as a welfare 
State ought to have proactively intervened in the matter with a view 
to ensure that the requisite amount towards compensation is paid 
at the earliest – The State cannot abdicate its constitutional and 
statutory responsibility of payment of compensation by arguing that 
its role was limited to initiating acquisition proceedings under the 
MOU signed between the Appellant, JAL and itself – This Court finds 
that the delay in the payment of compensation to the landowners 
after taking away ownership of the subject land from them is in 
contravention to the spirit of the constitutional scheme of Article 
300A and the idea of a welfare State – The State Government, 
in peculiar circumstances, was expected to make the requisite 
payment towards compensation to the landowners from its own 
treasury and should have thereafter proceeded to recover the 
same from JAL – Instead of making the poor landowners to run 
after the powerful corporate houses, it should have compelled JAL 
to make the necessary payment  – Also, the State of Himachal 
Pradesh, being a welfare state, did not ensure payment of  
compensation to the Respondent Nos. 1-6 before taking possession 
of
their land – A bare reading of Section 38 of the 2013 Act 
indicates that the payment of full and final compensation to the 
land owners is a precursor to taking possession of the land sought 
to be acquired from such persons – In fact, the landowners had 
to approach the High Court to seek directions to the LAC for 
passing of the supplementary award which was finally passed on 
02.05.2022 that is, after a period of almost four years from the date 
of passing of the Award of 2018 – Further, Section 41 of 1894 Act 
necessitates an agreement between the appropriate government 
and the company for whose purpose the land is being acquired – 
One of the purposes of such an agreement is to ensure that 
payment towards the cost of acquisition is made by the company 
to the appropriate government and it is only upon such payment 
that the land is transferred to the company – Thus, it can be said 
that JAL was mandated to make the requisite payment to the State 
of Himachal Pradesh prior to the subject land being transferred 
to it – However, even before the amount of compensation could 
be determined by way of a supplementary award as stipulated in 
the Award dated 08.06.2018, the subject land stood transferred to
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447
M/s Ultra-Tech Cement Ltd. v. Mast Ram & Ors.
JAL – This is in contravention of Section 38 of the 2013 Act and 
Section 41 of the 1894 Act respectively – Thus, the Respondent 
Nos. 7 (State of Himachal Pradesh) and 10 (LAC) are directed 
to pay the compensation amount of Rs. 3,05,31,095/- – The total 
amount paid by the State shall be recovered from the Respondent 
No. 11 (JAL). [Paras 47, 48, 50, 52, 54, 55, 58]
Case Law Cited
Kolkata Municipal Corporation & Anr. v. Bimal Kumar Shah & Ors. 
[2024] 5 SCR 831 : 2024 SCC OnLine SC 968 – relied on.
Roy Estate v. State of Jharkhand [2009] 7 SCR 343 : (2009) 12 
SCC 194; Union of India v. Mahendra Girji (2010) 15 SCC 682; 
Mansaram v. S.P. Pathak [1984] 1 SCR 139 : (1984) 1 SCC 125; 
Dharnidhar Mishra (D) and Another v. State of Bihar and Others 
[2024] 6 SCR 714 : 2024 SCC OnLine SC 932; State of Haryana v. 
Mukesh Kumar [2011] 14 SCR 211 : (2011) 10 SCC 404; Tukaram 
Kana Joshi and Ors. thr. Power of Attorney Holder v. M.I.D.C. and 
Ors. [2012] 13 SCR 29 : (2013) 1 SCC 353; Kukreja Construction 
Company & Ors. v. State of Maharashtra & Ors., 2024 SCC OnLine 
SC 2547; Premlal & Ors. v. State of Himachal Pradesh & Ors., 
CWP No. 481 of 2010 – referred to.
List of Acts
Land Acquisition Act, 1894; Land Acquisition, Rehabilitation and 
Resettlement Act, 2013; Companies Act, 1956; Constitution of India.
List of Keywords
Section 101 of Land Acquisition, Rehabilitation and Resettlement 
Act, 2013; Section 38 of
Land Acquisition, Rehabilitation and 
Resettlement Act, 2013; Section 41 of Land Acquisition Act, 1894; 
Sections 391-394 of the Companies Act, 1956; Article 300-A of 
the Constitution of India; Payment of compensation; Return of 
acquired land; Agreement with appropriate government; Power to 
take possession of land to be acquired.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 10662 of 2024
From the Judgment and Order dated 12.07.2022 of the High Court of 
Himachal Pradesh at Shimla in CWP No.2350 of 2018
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Appearances for Parties
Navin Pahwa, Sr. Adv., Mahesh Agarwal, Rishi Agrawala, Ankur 
Saigal, Victor Das, Ms. Geetika Sharma, Sudipto Sicar, Ms. Manavi 
Agarwal, E. C. Agrawala, Advs. for the Appellant.
Puneet Rajta, A.A.G., Ranjit Kumar, Sr. Adv., Subhash Chandran 
Kr, Virender Thakur, Ms. Krishna Lr, Biju P Raman, Himanshu 
Tyagi, Vikrant Narayan Vasudeva, Sarthak Chiller, Rohit Lochav, 
Ms. Sharmila Upadhyay, Pawan R Upadhyay, Sarvjit Pratap Singh, 
M/s. Unuc Legal Llp, Advs. for the Respondents.
Judgment / Order of the Supreme Court
Judgment
J.B. Pardiwala, J.
For the convenience of exposition, this judgment is divided into the 
following parts: -
INDEX*
I.
FACTUAL MATRIX …………………………………………
3
II.
SUBMISSIONS ON BEHALF OF THE APPELLANT ….....
8
III.
SUBMISSIONS ON BEHALF OF THE RESPONDENT 
NOS. 1-6 …………………………………..........................
12 
IV.
SUBMISSIONS ON BEHALF OF THE RESPONDENT 
NO. 10 …...........................................................................
13 
V.
SUBMISSIONS ON BEHALF OF THE RESPONDENT 
NO. 11.............................................................................
15 
VI.
ISSUES FOR DETERMINATION …………………………
17
VII.
ANALYSIS …………………………………………………..
18
A.
Scheme of Arrangement between the Appellant and 
JAL under Sections 391 to 394 respectively of the 
Companies Act, 1956 ………………….....................
18
* Ed. Note: Pagination as per the original Judgment.
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M/s Ultra-Tech Cement Ltd. v. Mast Ram & Ors.
B.
Return of acquired land under the 2013 Act …………
25
C.
Impugned Order of the High Court …...………………
28
D.
Role of the State under Article 300-A of the 
Constitution ……...….................................................
30
VIII. CONCLUSION ……………………………………………...
37
1.	
Leave Granted.
2.	
This appeal arises from the order passed by the High Court of 
Himachal Pradesh at Shimla dated 12.07.2022 in Civil Writ Petition 
No. 2350/2018 filed by the Respondent Nos. 1 to 6 herein (original 
petitioners) by which the High Court allowed the writ petition and 
directed the Appellant herein to pay the requisite amount towards 
compensation as determined in the Supplementary Award dated 
02.05.2022 passed by the Land Acquisition Collector, Arki (“LAC”) 
(Respondent No. 10) in the first instance with liberty to recover the 
same from M/s Jaiprakash Associates Limited (“JAL”) (Respondent 
No. 11) if permissible under the legal relationship between the two 
companies.
I.	
FACTUAL MATRIX
3.	
The State of Himachal Pradesh (Respondent No. 7) issued a 
notification dated 25.07.2008 under Section 4 of the Land Acquisition 
Act, 1894 (the “1894 Act”) through its Department of Industries 
declaring its intention to acquire the subject land admeasuring 56-14 
bigha, situated at Mauza Bhalag, Tehsil Arki, District Solan, Himachal 
Pradesh (the “subject land”) in favour of Jaypee Himachal Cement 
project, a unit of JAL, invoking
special powers in cases of urgency 
as provided under Section 17 of the 1894 Act. It appears that the 
purpose for acquiring the subject land was to create a safety zone 
surrounding the mining area. In other words, the subject land was 
situated in the vicinity of the leasehold area of the mining project 
and could not have been otherwise used for residential purposes 
or creation of any other structures. Subsequently notifications were 
also issued under Sections 6 and 7 respectively of the 1894 Act. 
4.	
It appears from the materials on record that during the acquisition 
proceedings, some of the landowners, including the Respondent Nos.
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1-6 herein did not allow the authorities to undertake the evaluation 
of their houses, trees, structures, etc., standing on the subject land 
for the purpose of determination of compensation. 
5.	
The acquisition proceedings ultimately came to be challenged by 
some of the landowners before the High Court by way of CWP No. 
2949 of 2009 titled as Premlal & Ors. v. State of Himachal Pradesh 
& Ors. and CWP No. 481 of 2010 titled as Chunni Lal & Ors. v. 
State of Himachal Pradesh & Ors. inter alia, on the ground that 
sub-section (4) of Section 17 of the 1894 Act could not have been 
invoked as the acquisition was not for any public purpose. The High 
Court passed an ad interim order dated 14.12.2011 granting stay on 
the acquisition proceedings. 
6.	
The High Court by a common judgment dated 23.06.2016 dismissed 
the writ petitions referred to above inter alia, on the ground that 
acquisition of the lands in question was for a public purpose as the 
said land contained vital raw material (limestone) for the manufacturing 
of cement and the usage of such mineral wealth would advance the 
public purpose of infrastructure development. 
7.	
As the writ petitions stood dismissed, the Land Acquisition Collector, 
Arki proceeded to pass the Award No. 1/2018 dated 08.06.2018 as per 
Section 11(1) of the 1894 Act and Section 24(1)(a) of the Right to Fair 
Compensation and Transparency in Land Acquisition, Rehabilitation 
and
Resettlement Act, 2013 (the “2013 Act”) determining the 
compensation to the tune of Rs. 10,77,53,842.27/- (Rupees Ten 
Crore Seventy Seven Lakh Fifty Three Thousand Eight Hundred and 
Forty Two and Twenty Seven paisa Only) along with the incidental 
charges @ 2% amounting to Rs. 9,09,315.12/-. The LAC clarified 
in the award passed by him that the compensation amount towards 
the houses and other structures constructed prior to the date of 
notification under Section 4, whose survey was not allowed by the 
landowners during the acquisition proceedings would be considered 
in the supplementary award that may be passed separately after the 
reports regarding the valuation of structures were received.
8.	
The amount as determined under the Award dated 08.06.2018 was 
deposited by JAL and disbursed to the landowners. The possession 
certificate dated 07.06.2019 in respect of the subject land was issued 
in favour of JAL. Subsequently, the entries in the revenue record of 
the subject land in favour of JAL came to be mutated on 12.11.2020.
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M/s Ultra-Tech Cement Ltd. v. Mast Ram & Ors.
9.	
Being dissatisfied with the Award dated 08.06.2018, the Respondent 
Nos. 1-6 herein filed writ petition no. 2350 of 2018 before the High 
Court on 16.09.2018, praying for a direction to the LAC to pass a 
supplementary award after quantifying the compensation for the 
damage caused to the structures and standing crops on the subject 
land for the period between 2008 and 2018 as well as for a direction 
to the LAC to pass a fresh award under the provisions of the 2013 
Act to provide additional amount @ 12% on market value with effect 
from the date of notification under Section 4 till the date of Award 
dated 18.06.2018. On 12.07.2019, the Respondent Nos. 1-6 also 
filed a Reference Petition under the 2013 Act praying inter alia for 
the enhancement of the amount of compensation determined under 
the Award dated 08.06.2018.
10.	 On 24.11.2021, the High Court passed an order directing the 
LAC to pass a supplementary award in accordance with law. On 
23.05.2022, the High Court recorded that the supplementary award 
dated 02.05.2022 had been passed in compliance with its order dated 
24.11.2021 under which an additional amount of Rs. 3,02,75,605/- 
along with incidental charges @ 2% of total assessment value was 
to be paid by JAL. Thus, the total additional amount determined 
was Rs. 3,05,31,095/- (Rupees Three Crore Five Lakh Thirty One 
Thousand and Ninety Five). However, the High Court recorded on
20.06.2022 that the said amount had not been deposited in terms 
of its order dated 23.05.2022. 
11.	 During the pendency of the acquisition proceedings, JAL entered into 
an agreement with the Appellant herein for the transfer of the cement 
project in question. In this regard, a Scheme of Arrangement was 
signed between the Appellant, JAL and Jaypee Cement Corporation 
Ltd. (the unit of JAL operating the cement project) (the “Scheme”) under 
the relevant provisions of the Companies Act, 1956. The Scheme was 
approved by the National Company Law Tribunal (“NCLT”) Mumbai 
Bench on 15.02.2017 and NCLT Allahabad Bench on 02.03.2017.
12.	 On 21.06.2017, the Director of Industries, Department of Industries, 
Government of Himachal Pradesh issued a letter to JAL and the 
Appellant acknowledging the approval given by the Joint Secretary to 
the Government of Himachal Pradesh as regards the transfer of the 
cement plant, as per the Scheme approved by the NCLT and as per 
the Tripartite Agreement between the Appellant, JAL and Government 
of Himachal Pradesh respectively, entered into on 29.06.2017.
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13.	 In such circumstances, the High Court examined the relationship 
between the Appellant and JAL and also referred to the Scheme 
for the purpose of determining the issue as to who should pay the 
compensation amount determined under the Supplementary Award 
to the Respondent Nos. 1-6 respectively.  
14.	 On 12.07.2022, the High Court relying on Clause 7.1 of the Scheme, 
passed the impugned order, directing the Appellant to pay the 
compensation amount at the first instance and left it open for the 
Appellant to recover the same from JAL later, if permissible in law.
15.	 In view of the aforesaid, the Appellant is before this Court with the 
present appeal.
II.	
SUBMISSIONS ON BEHALF OF THE APPELLANT
16.	 Mr. Navin Pahwa, the learned senior counsel appearing for the 
Appellant made the following submissions:
a.	
The High Court, in its impugned order, erred in directing 
the Appellant to pay the compensation amount determined 
under the Supplementary Award because the initial Award 
dated 08.06.2018 as well as the Supplementary Award dated 
02.05.2022 were passed by the LAC fixing the liability to pay 
compensation on JAL.
b.	
The High Court failed to consider that under the Scheme 
between the Appellant and JAL, as sanctioned by NCLT, 
Mumbai on 15.02.2017 and NCLT, Allahabad on 02.03.2017, 
all contingent liabilities pertaining to matters relating to the 
“JAL Business” (as defined in Clause 1.1(w) of the Scheme),
including those of pending litigations where the disputed 
claims were not crystallized on or before the effective date, 
i.e., 29.06.2017, would be the sole liability of JAL. Since the 
acquisition proceedings for the subject land were initiated by a 
notification under Section 4 of the 1894 Act dated 25.07.2008, 
therefore, the litigation was pending as on 29.06.2017 (the 
“Effective Date”) and the disputed claim was not crystallized till 
the passing of the Supplementary Award dated 02.05.2022.
c.	
The High Court erred in recording that the Appellant had made 
the payment under the Award dated 08.06.2018, whereas 
factually, it was JAL who had paid the compensation amount
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M/s Ultra-Tech Cement Ltd. v. Mast Ram & Ors.
under the said Award. The High Court also failed to consider that 
by making the payment under the Award dated 08.06.2018, JAL 
had accepted its liability for claims arising out of the acquisition 
proceedings.
d.	
The subject land was acquired for JAL. Accordingly, the LAC 
had issued a possession certificate dated 07.06.2019 in favour 
of JAL and handed over spot possession of the subject land 
to it under Section 16 of the 1894 Act. The subject land was 
duly mutated in the name of JAL vide Mutation No. 232 dated 
12.11.2020. The High Court failed to take into consideration the 
fact that the subject land had not been transferred as an asset 
to the Appellant under the Scheme. To establish the same, 
the Appellant had placed on record and referred to a Chart 
of Comparison of Khasra Numbers under the Scheme and 
the Khasra Numbers which were transferred to JAL under the 
Award dated 08.06.2018 contending that none of the Khasra 
Numbers of the subject land or portions thereof overlap with 
the Khasra Numbers of the land/assets transferred under the 
Scheme. Therefore, since the Appellant was not enjoying the 
possession or benefit, if any, of the subject land, the liability 
of paying the compensation under the Supplementary Award 
could not have been fastened on it. 
e.	
As per the Scheme, the Appellant only purchased certain 
assets listed in the Schedule-I and Schedule-IA thereof on a 
“slump exchange
basis” and did not take over JAL. Mr. Pahwa 
clarified that JAL is a surviving entity and the High Court had 
erred in understanding that JAL stood merged or transferred 
with the Appellant.
f.	
Mr. Pahwa also brought our attention to the order passed 
by this Court dated 16.12.2019 in Ultratech Cement Ltd. v. 
Tonnu Ram, SLP (C) (Diary) No. 42997 of 2019 wherein this 
Court clarified that the impugned judgment of the High Court of 
Himachal Pradesh could not have been construed as permitting 
third party to pursue claim for recovery against the Appellant 
in disregard of the Scheme and the executing court would be 
duty-bound to examine the purport of the Scheme and pass 
orders strictly in consonance therewith.
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The relevant observations made by this Court in Tonnu Ram 
(supra) are reproduced below:
“…It cannot be construed as permitting third party 
to pursue claim for recovery against the petitioner in 
disregard of the scheme of arrangement propounded 
by the NCLT in respect of respondent No.4- M/s. 
Jaiprakash Industries. 
Despite this clear position, if any third party intends to 
pursue remedy against the petitioner, the Executing 
Court would be duty bound to examine the purport 
of the stated scheme propounded by the NCLT 
and pass orders strictly in consonance therewith. 
It would be open to the petitioner to invite attention 
of the Executing Court or any other Forum about the 
relevant provisions in the scheme in support of the 
argument that the liability to pay the dues will remain 
that of respondent No.4- M/s. Jaiprakash Industries 
as per the stated scheme.”
[Emphasis supplied]
g.	
The senior counsel also submitted that JAL had made a 
declaration on oath in Form-16A under Order XXI Rule 41(2) 
of the Code of Civil Procedure, 1908 dated 04.12.2023 in Civil 
Revision Petition No. 174 of 2022 titled Tohnu Ram (Deceased) 
v. M/s Ultratech Cement Ltd. before the High Court of Himachal 
Pradesh which read as follows:
“…(e) Other Property: List of Property of Jaiprakash 
Associates Ltd., i.e. Land measuring 56-14 bigha, 
situate at village bhalag, PO Kandhar, Tehsil Arki, 
Distt. Solan (HP), vide which the Mutation was
attested on 12.11.2020 in favour of Jaiprakash 
Associates Ltd…”
Therefore, in view of the above, the subject land remained in 
ownership of JAL and the Appellant had no connection with the 
subject land, directly or indirectly and that the subject land was neither 
acquired for the benefit of the Appellant nor was it transferred under 
the Scheme to the Appellant.
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M/s Ultra-Tech Cement Ltd. v. Mast Ram & Ors.
III.	
SUBMISSIONS ON BEHALF OF THE RESPONDENT NOS. 1-6
17.	 Mr. Biju P. Raman, the learned counsel appearing for the Respondent 
Nos. 1-6 made the following submissions:
a.	
The subject land forms a part of the safety zone area meant 
for the cement plant that was being operated by the cement 
unit of JAL. The District Administration acquired 56.14 bhigas 
of land and the Award for the same was passed on 08.06.2018 
by the LAC, Arki. 
b.	
The plant/project had been taken over by the Appellant herein 
by acquiring all the assets and liabilities of JAL in the year 2017 
and all movable and immovable assets and liabilities ancillary 
thereto were transferred to the Appellant, which was affirmed 
by a tripartite Memorandum of Understanding signed between 
the Appellant, JAL and the Government of Himachal Pradesh 
(the “MOU”) dated 29.06.2017.
c.	
The High Court vide order dated 12.07.2022 recorded the 
submission of the Respondent Nos. 1-6 that the payment 
towards the Award No. 1 of 2018 pertaining to the subject land 
was deposited by the Appellant.
d.	
The Appellant and JAL are trying to escape from their legal 
obligation and liability to pay the compensation amount 
as determined under the Supplementary Award to the 
Respondents and are in collusion with each other creating 
an inter-se dispute with the intention of depriving the original 
landowners of their legitimate right to receive compensation 
due to
them. 
e.	
The subject land was acquired for public purpose and was 
being utilized by the Appellant for its purposes.   
IV.	
SUBMISSIONS ON BEHALF OF THE RESPONDENT NO. 10
18.	 Mr. Puneet Rajta, the learned Additional Advocate General appearing 
for the Respondent No. 10 i.e., the Land Acquisition Collector, Arki 
made the following submissions:
a.	
The subject land was acquired in the year 2018 for providing a 
safety zone to the cement plant which had already been taken 
over by the Appellant in the year 2016.
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b.	
The acquired land is being utilized by the Appellant as a safety 
zone for the cement plant being run by them. However, the land 
is recorded in the name of JAL.
c.	
The role of the State was limited to the extent of initiating the 
acquisition proceedings and as per the MOU signed with the 
Government of Himachal Pradesh, all costs pertaining to the 
acquisition/transfer of land would be borne by the company 
only. It was clarified that the State had no role to play in the 
business of manufacturing or running the cement plant of the 
company and all payments under the Award No. 1 of 2018 dated 
08.06.2018 stood paid to the landowners by JAL.
d.	
The Supplementary Award was passed on 02.05.2022 in 
accordance with the direction of the High Court dated 16.09.2018 
in CWP No. 2350 of 2018 and the High Court through a separate 
order dated 12.07.2022 directed the Appellant to make the 
payment to the landowners and recover the said amount from 
JAL. The said order was challenged by the Appellant and this 
Court while issuing notice vide order dated 22.08.2022 directed 
that there shall be a stay of operation and implementation of 
the impugned order of the High Court.
e.	
The land is being used by the Appellant for the purpose of 
operating the cement plant however, they are raising disputes 
only with the view to deny the rights of the landowners. Therefore, 
the liability for payment of compensation be fixed as against
the 
Appellant or JAL. It was submitted that if the State was directed 
to compensate the landowners, it would have to do so out of 
public funds and seek reimbursement.
V.	
SUBMISSIONS ON BEHALF OF THE RESPONDENT NO. 11
19.	 Mr. Ranjit Kumar, the learned senior counsel appearing for the 
Respondent No. 11 i.e., M/s Jaiprakash Associates Limited (JAL) 
made the following submissions:
a.	
During the process of passing of the Supplementary Award 
dated 02.05.2022, JAL had clarified that that it had handed 
over the cement project to the Appellant on 29.06.2017 and the 
subject land was acquired for the purpose of mining activities 
and safety zone. It was asserted that the subject land was an 
integral part of the cement project. Therefore, whosoever was
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operating the cement plant and carrying out the mining activities 
was responsible for maintaining the safety zone. Accordingly, 
it was the duty of the Appellant to pay the amount determined 
under the Supplementary Award.
b.	
During the course of the hearing of the Writ Petition No. 2350 of 
2018, the Appellant had stated that it did not require the subject 
land for its projects. The Counsel contended that since JAL had 
already handed over the cement project to the Appellant and 
the subject land was acquired for the purpose of safety zone 
for the said project, the Appellant cannot say that they never 
had any need for this particular land.
c.	
Although the State Government had handed over the symbolic 
possession of the subject land in favour of JAL on 07.06.2019 yet 
the physical possession of this land remained with the villagers/
landowners including Respondent Nos. 1-6 who had illegally 
occupied the subject land and had constructed houses/structures 
on the same even after the deliverance of the Award dated 
08.06.2018 and the Supplementary Award dated 02.05.2022.
d.	
It was submitted that the substantial delay in the issuance of 
the Award by the LAC had frustrated the purpose of acquisition 
for JAL. Since the entire project has been under the custody 
and possession of the Appellant, it is the appropriate party to 
address the issue of the requirement of the subject land for the 
purpose of
Mining Activities & Safety Zone. If the Appellant is not 
interested in the subject land, then the same should be returned 
to the original landowners (Respondent Nos. 1-6 herein) and 
the amount deposited as an award of Rs. 10,77,53,842/- in the 
year 2018 should be refunded to JAL.
e.	
Mr. Kumar contended that according to the statement provided by 
the Appellant to the High Court, it can be reasonably concluded 
that the Appellant does not require the land in question, which 
was acquired for the purpose of Mining Activities and Safety Zone 
for the Cement project. Therefore, the Appellant may proceed 
to submit an application in this regard to the Government of 
Himachal Pradesh, as submitted before the High Court.
f.	
The Counsel reiterated that JAL had sold out and handed over 
the entire cement project to the Appellant in the year 2017, 
which included the acquired private land and government land
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diverted for this purpose. It was submitted that the subject land 
was required for an entity involved in cement production in the 
area, therefore, the responsibility for maintaining the Safety Zone 
of the cement project was with the Appellant. If the Appellant is 
not interested in the acquired subject land, then the same may 
be returned and the amount of Rs. 10,77,53,842/- deposited 
as award in the year 2018 be refunded to JAL.
VI.	 ISSUES FOR DETERMINATION
20.	 Having heard the learned counsel appearing for the parties and having 
gone through the materials on record, the following four questions 
fall for our consideration: -
i.	
Whether the subject land and all other liabilities associated with 
it were transferred to the Appellant in terms of the Scheme?
ii.	
Whether it was the Appellant or JAL who was legally obliged 
to pay the compensation amount determined under the 
Supplementary Award?
iii.	
Whether the land in terms of Section 101 of the 2013 Act can 
be returned to the Respondent Nos. 1-6 at this stage under 
the scheme of the Act? In other words, what is the scope of 
Section 101?
iv.	
Whether the State of Himachal Pradesh, being a welfare state, had 
the responsibility to ensure full payment of compensation amount 
determined under the Supplementary Award dated 02.05.2022?
VII.	 ANALYSIS
A.	
Scheme of Arrangement between the Appellant and JAL 
under Sections 391 to 394 respectively of the Companies 
Act,
1956
21.	 An analysis of the Scheme agreed between the Appellant and JAL as 
sanctioned by the NCLT, Mumbai and NCLT, Allahabad respectively 
is the key to determine who should pay the amount determined 
under the Supplementary Award dated 02.05.2022. With respect to 
the Scheme, the following questions need to be looked into:
i.	
Whether the dispute pertaining to payment of the requisite 
amount under the Supplementary Award arose before or after 
the “Effective Date” fixed in the Scheme?
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ii.	
Whether the subject land is an integral part of the cement 
project and the liability of paying compensation under the 
Supplementary Award for the said land can be imposed on the 
Appellant despite the said land not being in its name?
22.	 Clause 1.1 (o) defines the “Effective Date” as the date on which the 
Scheme becomes effective in accordance with its terms, which shall 
be the Closing Date [defined in Clause 1.1(k) and Clause 10.1]. The 
said date was decided to be 29.06.2017 among the parties.
23.	 Clause 1.1(w) defines the business and assets transferred by JAL 
to the Appellant. The definition of the same is reproduced below:
“…(w) “JAL Business” means the business of 
manufacturing, sale and distribution of cement and clinker 
manufactured at the JAL Cement Plants, including all 
rights to operate such business, its movable or immovable 
assets, captive power plants, DG sets, coal linkages, rights, 
privileges, liabilities, guarantees, land, leases, licenses, 
permits, mining leases, prospecting licenses for mining of 
limestone, letters of intent for mining of limestone, tangible 
or intangible assets, goodwill, all statutory or regulatory 
approvals, logistics, marketing, warehousing, selling 
and distribution networks (marketing employees, offices, 
depots, guest houses and ether related facilities for the JAL 
Business), employees, existing contracts including fly-ash 
contracts, railway
sidings, fiscal incentives in relation to the 
JAL Business, more particularly described in Schedule I 
hereto, but does not include
(i)	
construction equipment and such assets to be listed 
in Schedule II.
(ii)	
any liability including contingent liability disclosed in 
the balance sheet of JAL Business on the Closing 
Date provided to the Transferee, other than those 
included in the JAL Financial Indebtedness and JAL 
Net Working Capital; 
(iii)	 any guarantee or deposits for any disputes; 
(iv)	 the JAL Excluded Employees;
(v)	
JAL Non Moving Stores, Doubtful Receivables of 
the JAL Business, non-recoverable debtors, loans
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or advances in the books of the Transferor1. For 
this purpose, non-recoverable debtors; loans or 
advances shall refer to such debtors; loans or 
advances for which Transferor1 has not received 
any confirmation for the receivables as mentioned 
in Clause 9.1 (i); 
(vi)	 coal mitting block - Mandla (North) and the related 
guarantees, deposits etc; 
(vii)	 fiscal incentives in relation to the JAL Business that 
accrue up to the Closing Date; 
(viii)	 any intellectual property of Transferor1; 
(ix)	 litigations pertaining to the JAL Business as of 
the Closing Date;
(x)	
freehold plot of land admeasuring about 1087 square 
metres at Varanasi and land admeasuring 24.7 acres 
outside the Balaji plant in Krishna, Andhra Pradesh; 
(xi)	 180 megawatt power plant at Churk, Uttar Pradesh; 
(xii)	 railway siding in Turki, Rewa, Madhya Pradesh; 
(xiii)	 Related Party payables or receivables; and 
(xiv)	Ghurma limestone mine, Padrach limestone mine 
and Bari dolomite mine
It is clarified that the guarantee listed in Schedule III B, 
which shall be updated as of the Closing Date, shall be 
the only guarantees which shall be taken over by the 
Transferee on the Closing Date…”
[Emphasis Supplied]
24.	 The parties by way of Clause 1.1(w)(ix) agreed that all litigations 
pertaining to the business and assets being transferred to the 
Appellant that arose before or on the Closing Date would not be 
transferred to the Appellant and will
remain with JAL. 
25.	 The aforesaid aspect has been further elaborated under Clause 7 
of the Scheme which is reproduced below:
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“7. LEGAL PROCEEDINGS
7.1 All legal or other proceedings (whether civil or 
criminal, including before any statutory or judicial 
or quasi-judicial authority or tribunal) by or against 
the Transferor1 and /or the Transferor2, initiated on 
or arising and pending before the Effective Date, 
and relating to the JAL Business and the JCCL 
Business shall remain with the Transferor1 and/or the 
Transferor2, as the case may be. 
7.2	 In the event any case or matter pertaining to 
contingent liabilities being in the nature of disputed claims, 
not crystallized on the Closing Date or guarantees listed in 
Schedule III A and Schedule XI A or any similar instrument 
by whatsoever name called which have been advance 
against disputes related to the JAL Business or the JCCL 
Business existing on the Closing Date, or pertaining to NPV 
of afforestation charges in respect of mining land being 
Block 1, 2, 3, 4 and Ningha of Dalla Plant and Jaypee Super 
Plant, by force of law are transferred to the Transferee, then 
the Transferor1 and the Transferor 2, shall have full control 
in respect of the defence of such proceedings including 
filing the necessary appeals, revisions, etc.. provided that 
the Transferor1 and the Transferor2, as the case may be, 
shall not, take any action that is detrimental to the operation 
of the JAL Business and the JCCL Business. Provided that 
in respect of such cases pertaining to immovable
properties 
which are part of the JAL Business or the JCCL Business, 
as the case may be the Transferee shall have a right to 
participate in such proceedings to ensure that no action 
detrimental to the operation of JAL Business and the JCCL 
Business is taken. It is clarified that: (a) any liabilities in 
respect of cases or matter referred to in this Clause 7.2 
shall be paid by the Tranferor1 or the Transferor2 and if 
paid by the Transferee, the same shall be reimbursed by 
the Transferor1 or the Transferor2 within 7 (seven) days 
of such payment; and (b) the aforesaid bank guarantees 
provided by the Transferor1 and the Transferor2 in respect 
of the contingent liabilities being in the nature of disputed 
claims related to the JAL Business or the JCCL Business
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shall continue wherever required and the Transferee shall 
have no obligation to replace such bank guarantees on the 
Closing Date and in the event the period of any such bank 
guarantee expires after the Closing Date, the Transferor1 
and /or the Transferor2, as the case may be, shall renew 
or replace such guarantees wherever required. 
7.3 The Transferor1, the Transferor2 and the Transferee 
shall give full and timely cooperation to each other for 
the pursuit of such case or matter. The Transferee shall 
promptly give necessary authorization, power of attorney, 
board resolution, etc. for pursuit of such case or matter to 
the Transferor1 and the Transferor2. ”
[Emphasis Supplied]
26.	 Clause 7.1 of the Scheme states without any ambiguity that any 
legal or other proceeding by or against JAL or its unit operating the 
cement project relating to the JAL Business as defined in Clause 
1.1(w), initiated on or arising and pending before the Effective Date 
shall remain with JAL. 
27.	 It is pertinent to note that the subject land was acquired under the 
compulsory provisions of the 1894 Act to provide a safety zone 
for the cement plant and mining areas. Therefore, the land was 
acquired in connection with the JAL Business. The acquisition 
proceedings began with the notification issued under Section 4 
dated 25.07.2008 which was stayed by the High Court of Himachal 
Pradesh on 14.12.2011. After the disposal of the writ
petitions filed by 
the original landowners, the operation of the stay on the acquisition 
proceedings came to an end on 23.06.2016. As the next step towards 
the proceedings, an Award dated 08.06.2018 was passed. The 
facts indicate that the land acquisition proceedings had commenced 
before the Effective Date of the Scheme (i.e. 29.06.2017) and the 
compensation remained undetermined as on the Effective Date. To 
our understanding, these facts attract the application of Clause 7.1 
of the Scheme as the acquisition proceedings and the liability to pay 
compensation associated with it squarely falls within the meaning of 
‘other proceedings’ as intended by the parties under the said Clause.
28.	 JAL has also not disputed that it had made payment of the amount 
determined under the Award of 2018 i.e., Rs. 10,77,53,842/- after
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the Effective Date of the Scheme. The said amount has already 
been disbursed to the landowners. There is nothing on record to 
show that the payment of compensation amount at that time was 
contested by JAL. 
29.	 Further, the exercise of determination of compensation amount which 
is a part of the acquisition proceedings remained pending even 
after the Effective Date of the Scheme. After the LAC determined 
the amount under the Award dated 08.06.2018, JAL paid the same 
without any protest or reference to the Scheme. Therefore, at the 
stage of the Supplementary Award pertaining to the same land and 
same original landowners, JAL cannot be allowed to take the plea 
that the payments with respect to the subject land were required to 
be made by the Appellant. 
30.	 As regards the contention of JAL that the subject land formed an 
integral part of the cement project transferred to the Appellant for 
the purpose of payment of compensation determined under the 
Supplementary Award, we find it difficult to accept the same. The 
subject land was acquired as a safety zone for the cement project 
and in light of the several safety hazards as stated in the Award No. 
1 of 2018, the land had to be acquired to safeguard the lives and 
property of the original landowners.
31.	 However, we take notice of the fact that the subject land was not 
covered under the list of assets transferred to the Appellant under 
the
Scheme and remains in the ownership of the JAL till date. While 
we agree that the acquisition of the subject land was done for the 
purposes of the cement project, we cannot accept the contention of 
JAL that the liabilities arising out of the said land should be fastened 
upon the Appellant without any such liabilities being covered by the 
Scheme, not even on the strength of the argument that the subject 
land was integral to the cement project. 
32.	 We may only say that the issue regarding the ownership of the subject 
land may be decided between the parties i.e., the Appellant and JAL 
amongst themselves. In our considered view, disputes regarding the 
ownership of the subject land, if any cannot be an impediment to the 
legitimate rights of the original landowners to receive compensation. 
Therefore, the contention of JAL that the Appellant should pay the 
amount as determined under the Supplementary Award because the 
subject land was integral to the cement project is rejected.
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B.	
Return of acquired land under the 2013 Act
33.	 It is the case of JAL that the substantial delay in acquisition of the 
subject land has frustrated its purpose, and it could not make any 
use of the land. It was submitted that if the Appellant does not require 
the said land, then it should be returned to the original landowners 
and the amount of Rs. 10,77,53,842/- paid under the Award of 2018 
should be refunded to JAL.
34.	 The return of acquired land is governed by Section 101 of the 2013 
Act which is reproduced below:
“101. Return of unutilised land.– When any land acquired 
under this Act remains unutilised for a period of five 
years from the date of taking over the possession, the 
same shall be returned to the original owner or owners or 
their legal heirs, as the case may be, or to the Land Bank 
of the appropriate Government by reversion in the manner 
as may be prescribed by the appropriate Government. 
Explanation.—For the purpose of this section, “Land 
Bank” means a governmental entity that focuses on the 
conversion of Government owned vacant, abandoned, 
unutilised acquired lands and tax-delinquent properties 
into productive use.”
[Emphasis Supplied]
35.	 The necessary conditions for the application of Section 101 are: (1) 
the land should be unutilized; and (2) the period it remains not in use 
should be at least five years from the date of taking of possession.
36.	 We do not find any merit in the
contention of JAL that the land be 
returned to the original landowners. While we agree that a period 
of five years has elapsed from the date of taking of possession by 
JAL, the first condition that the land should remain unutilized is not 
fulfilled.
37.	 The subject land was acquired for the purpose of providing a safety 
zone to the mining area of the cement plant. The objective for acquiring 
the subject land mentioned in the Award of 2018 is reproduced below:
“…3. Compulsory Acquisition by invoking the provisions 
of Section 17 (4)
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During the process of Notification issued under Section 
- 4 of the Land Acquisition Act, the matter was taken up 
for compulsory acquisition U/s 17(4) of Land Acquisition, 
Act, 1894 with the Govt. or Himachal Pradesh for the 
reasons that the land area under acquisition fell just 
below the mine leasehold area and was necessarily 
required as Mining Area Safety Zone. As the land area 
under acquisition cannot be allowed for any residential 
purpose in view of safety reasons and because the 
land proposed for acquisition is located just along 
the bank or Bhalag Nallah and most of the residents 
of village Bhalag had been constructing structures in 
large numbers on the right Bank of Nallah in Bhalag 
village, therefore provisions of compulsory acquisition 
needed to be invoked. 
Furthermore, to invoke the provisions of compulsory 
acquisition, it was submitted vide this office letter No. 
2766 dated 06.01.2009 to Pr. Secretary (Industries) GoHP 
that the main dumping site of the project at Baga - 
Sehnali is situated above village Bhalag and during the 
unprecedented I I heavy rain season of 2007 – 08, muck 
had over flown into the Bhalag Nallah endangering 
the Safety Zone area under proposed acquisition…” 
[Emphasis Supplied]
38.	 Therefore, the acquisition of the subject land was done as a safety 
measure for the residents of the area and not to be used actively in 
the cement project. No other use
except that the subject land may 
pose hazard to the residents was envisaged during the acquisition 
proceedings. JAL cannot pray for return of the land as that would 
result in endangering the lives and property of the original landowners. 
We find that the subject land has been in use all throughout the 
operation of the cement project by serving as a safety zone and the 
condition of being unutilized is not satisfied.
39.	 It is not in dispute that the Supplementary Award had to be passed as 
the compensation for standing crops, structures and other damages 
for the subject land which could not be fixed and evaluated under 
the Award No. 1 dated 08.06.2018. The same was also recorded 
in the Award of 2018. We find that the passing of Supplementary
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Award was not a fresh exercise but rather a continuation/extension 
of the Award of 2018. Therefore, when JAL has already paid the 
compensation amount as determined under the previous Award 
without any demur, it cannot be allowed to question its liability under 
the Supplementary Award and make a plea for return of the land at 
this stage on the ground that the purpose of the land is frustrated 
due to delay in acquisition proceedings. 
40.	 At this stage, it is necessary for us to discuss the purport of Section 
101 of the 2013 Act. The instant section was introduced in the 2013 
Act for the first time as a beneficial provision for the landowners 
whose lands were usurped but remained unutilized or were not used 
in accordance with the purpose stated in the notifications under 
Section 4. However, the application of the Section is warranted only 
in the circumstances where the return of the land would benefit the 
landowners. The party which has failed to utilize the land cannot 
plead for the return of the land and consequent refund of the 
compensation paid, as that would tantamount to taking advantage 
of its own wrong or default. 
C.	
Impugned Order of the High Court
41.	 The High Court directed the Appellant herein to pay compensation 
amount determined under the Supplementary Award at the first 
instance and if permissible, recover the same from JAL.
42.	 We find that the High Court’s reasoning for passing such a
direction 
is unsustainable for the following reasons:
i.	
The High Court has referred to Clause 7.1 of the Scheme but 
has not applied it correctly in any manner, thereby ignoring the 
Scheme of Arrangement between the parties.
ii.	
The High Court has also recorded that JAL has been taken 
over by the Appellant herein and that the Appellant had made 
payment of compensation under the Award No. 1 of 2018 dated 
08.06.2018. We find that these are incorrect facts on the basis 
of the materials presented to us by the parties to this appeal. 
JAL has only transferred the cement project and clinkerisation 
business to the Appellant by way of the Scheme and is still 
existing independently of the Appellant’s control in respect of 
its other functions.
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The documents on record also show that it was JAL that had 
made payments under the Award of 2018 and not the Appellant. 
iii.	
The High Court failed to consider that the ownership of the 
subject land continued to be with JAL despite the Scheme 
being brought into effect on 29.06.2017. The Appellant cannot 
be directed to make payment of the amount determined by the 
Supplementary Award for the portions of land which are neither 
in its ownership nor possession. 
iv.	
The High Court also failed to consider the order of this Court in 
Tonnu Ram (supra) dated 16.12.2019 which imposed a duty 
on the executing court to examine the purport of the Scheme 
propounded by the NCLT and pass orders strictly in consonance 
therewith. It was held that it would be open to the Appellant to 
take support of the relevant provisions of the Scheme in support 
of the argument that the liability to pay the dues remains with 
JAL as per the stated scheme.
D.	
Role of the State under Article 300-A of the Constitution
43.	 The Right to Property in our country is a net of intersecting rights which 
has been explained by this Court in Kolkata Municipal Corporation 
& Anr. v. Bimal Kumar Shah & Ors., 2024 SCC OnLine SC 968. 
A division bench of this Court identified seven non-exhaustive sub-
rights that accrue to a landowner when the State intends to acquire 
his/her property. The relevant observations of this Court under the 
said
judgment are reproduced below:
“…27. 
… Seven such sub-rights can be identified, albeit non-
exhaustive. These are: i) duty of the State to inform the 
person that it intends to acquire his property – the right 
to notice, ii) the duty of the State to hear objections to 
the acquisition – the right to be heard, iii) the duty of the 
State to inform the person of its decision to acquire – the 
right to a reasoned decision, iv) the duty of the State to 
demonstrate that the acquisition is for public purpose – 
the duty to acquire only for public purpose, v) the duty 
of the State to restitute and rehabilitate – the right of 
restitution or fair compensation, vi) the duty of the 
State to conduct the process of acquisition efficiently
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and within prescribed timelines of the proceedings – 
the right to an efficient and expeditious process, and 
vii) final conclusion of the proceedings leading to vesting 
– the right of conclusion…”
[Emphasis Supplied]
This Court held that a fair and reasonable compensation is the sine 
qua non for any acquisition process. 
44.	 In Roy Estate v. State of Jharkhand, (2009) 12 SCC 194; Union 
of India v. Mahendra Girji, (2010) 15 SCC 682 and Mansaram 
v. S.P. Pathak, (1984) 1 SCC 125, this Court underscored the 
importance of following timelines prescribed by the statutes as well 
as determining and disbursing compensation amount expeditiously 
within reasonable time.
45.	 The subject land came to be acquired by invoking special powers in 
cases of urgency under Section 17(4) of the 1894 Act. The invocation 
of Section 17(4) extinguishes the statutory avenue for the landowners 
under Section 5A to raise objections to the acquisition proceedings. 
These circumstances impose onerous duty on the State to facilitate 
justice to the landowners by providing them with fair and reasonable 
compensation expeditiously. The seven sub-rights of the landowners 
identified by this Court in Kolkata Municipal Corporation (supra) 
are corresponding duties of the State. We regret to note that the 
amount of Rs. 3,05,31,095/- determined as compensation under the 
Supplementary Award has not been paid to the landowners for a 
period of more than
two years and the State of Himachal Pradesh 
as a welfare State has made no effort to get the same paid at the 
earliest.
46.	 This Court has held in Dharnidhar Mishra (D) and Another v. 
State of Bihar and Others, 2024 SCC OnLine SC 932 and State 
of Haryana v. Mukesh Kumar, (2011) 10 SCC 404 that the right to 
property is now considered to be not only a constitutional or statutory 
right, but also a human right. This Court held in Tukaram Kana Joshi 
and Ors. thr. Power of Attorney Holder v. M.I.D.C. and Ors., (2013) 
1 SCC 353 that in a welfare State, the statutory authorities are legally 
bound to pay adequate compensation and rehabilitate the persons 
whose lands are being acquired. The non-fulfilment of such obligations 
under the garb of industrial development, is not permissible for any
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welfare State as that would tantamount to uprooting a person and 
depriving them of their constitutional/human right.
47.	 That time is of the essence in determination and payment of 
compensation is also evident from this Court’s judgment in Kukreja 
Construction Company & Ors. v. State of Maharashtra & Ors., 
2024 SCC OnLine SC 2547 wherein it has been held that once 
the compensation has been determined, the same is payable 
immediately without any requirement of a representation or request 
by the landowners and a duty is cast on the State to pay such 
compensation to the land losers, otherwise there would be a breach 
of Article 300-A of the Constitution. 
48.	 In the present case, the Government of Himachal Pradesh as a 
welfare State ought to have proactively intervened in the matter with 
a view to ensure that the requisite amount towards compensation is 
paid at the earliest. The State cannot abdicate its constitutional and 
statutory responsibility of payment of compensation by arguing that 
its role was limited to initiating acquisition proceedings under the 
MOU signed between the Appellant, JAL and itself. We find that the 
delay in the payment of compensation to the landowners after taking 
away ownership of the subject land from them is in contravention to 
the spirit of the constitutional scheme of Article 300A and the idea 
of a welfare State.  
49.	 Acquisition of land for public purpose is
undertaken under the power 
of eminent domain of the government much against the wishes of 
the owners of the land which gets acquired. When such a power is 
exercised, it is coupled with a bounden duty and obligation on the 
part of the government body to ensure that the owners whose lands 
get acquired are paid compensation/awarded amount as declared 
by the statutory award at the earliest.
50.	 The State Government, in peculiar circumstances, was expected to 
make the requisite payment towards compensation to the landowners 
from its own treasury and should have thereafter proceeded to recover 
the same from JAL. Instead of making the poor landowners to run 
after the powerful corporate houses, it should have compelled JAL 
to make the necessary payment.
51.	 Although the requirement to pass a supplementary award for the 
purpose of determining additional compensation for the standing
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trees, damaged structures, houses, etc. had been envisaged and 
recorded in the Award dated 08.06.2018, yet the possession of the 
subject land came to be handed over to JAL vide the possession 
certificate dated 07.06.2019 without passing such a supplementary 
award. We are of the considered view that the omission or lapse to 
complete such exercise before taking possession of the land could 
be said to be in contravention of the mandate of Section 38(1) of the 
2013 Act. The relevant portion of Section 38 is reproduced below:
“38. Power to take possession of land to be acquired. – 
(1) The Collector shall take possession of land after 
ensuring that full payment of compensation as well 
as rehabilitation and resettlement entitlements are paid or 
tendered to the entitled persons within a period of three 
months for the compensation and a period of six months 
for the monetary part of rehabilitation and resettlement 
entitlements listed in the Second Schedule commencing 
from the date of the award made under section 30: Provided 
that the components of the Rehabilitation and Resettlement 
Package in the Second and Third Schedules that relate to 
infrastructural entitlements shall be provided within a period 
of eighteen months from the date of the award: Provided 
further that in case of acquisition of land for irrigation or 
hydel project, being a public purpose, the rehabilitation 
and resettlement shall be completed six
months prior to 
submergence of the lands acquired…” 
[Emphasis supplied]
52.	 A bare reading of Section 38 as reproduced above indicates that 
the payment of full and final compensation to the land owners is a 
precursor to taking possession of the land sought to be acquired from 
such persons. It is clear from the facts that the acquisition proceedings 
herein failed to confirm to this statutorily mandated sequence of 
events. It is regrettable that the State of Himachal Pradesh, being 
a welfare state, did not ensure payment of compensation to the 
Respondent Nos. 1-6 before taking possession of their land. In fact, 
the landowners had to approach the High Court to seek directions to 
the LAC for passing of the supplementary award which was finally 
passed on 02.05.2022 that is, after a period of almost four years 
from the date of passing of the Award of 2018.
[2024] 9 S.C.R. 
471
M/s Ultra-Tech Cement Ltd. v. Mast Ram & Ors.
53.	 Further, the acquisition proceedings for the subject land had 
commenced vide the notification under Section 4 dated 25.07.2008. In 
such circumstances it is necessary to consider the relevant provisions 
of the 1894 Act, more particularly Section 41 thereof which pertains 
to the process required to be followed in cases of acquisition of land 
for companies. The relevant portion of Section 41 of the 1894 Act 
is reproduced below:
“41. Agreement with appropriate Government. – 
If the appropriate Government is satisfied [after considering 
the report, if any, of the Collector under section 5A, sub-
section (2), or on the report of the officer making an inquiry 
under section 40 that the proposed acquisition is for any 
of the purposes referred to in clause (a) or clause (aa) 
or clause (b) of sub-section (1) of section 40, it shall 
require the Company to enter into an agreement 
with the appropriate Government, providing to the 
satisfaction of the appropriate Government for the 
following matters, namely :- 
(1) the payment to the appropriate Government of the 
cost of the acquisition; 
(2) the transfer, on such payment, of the land to the 
Company….”  
[Emphasis supplied]
54.	 Section 41 necessitates an agreement between the appropriate 
government and the company for whose purpose the land is being 
acquired. One of the purposes of such an agreement is to ensure 
that payment towards the cost of
acquisition is made by the company 
to the appropriate government and it is only upon such payment 
that the land is transferred to the company. Thus, it can be said that 
JAL was mandated to make the requisite payment to the State of 
Himachal Pradesh prior to the subject land being transferred to it. 
55.	 However, as discussed in the foregoing paragraphs, even before 
the amount of compensation could be determined by way of a 
supplementary award as stipulated in the Award dated 08.06.2018, 
the subject land stood transferred to JAL. This, in our view, is in 
contravention of Section 38 of the 2013 Act and Section 41 of the 
1894 Act respectively.
472
[2024] 9 S.C.R.
Digital Supreme Court Reports
56.	 Thus, we deem it appropriate to direct the Respondent Nos. 7 and 
10 that is, the State of Himachal Pradesh and the Land Acquisition 
Collector, Arki, to pay the amount of Rs. 3,05,31,095/- to the 
Respondent Nos. 1-6 for expeditious conclusion of the acquisition 
proceedings. However, we clarify that the State shall recover the 
said amount from JAL as the liability to pay the cost of acquisition 
of the subject land ultimately falls on JAL in view of the aforesaid 
discussion.
VIII.	  CONCLUSION
57.	 For all the foregoing reasons, this appeal succeeds and is hereby 
allowed in the aforesaid terms. The impugned order dated 12.07.2022 
passed by the High Court is set aside.
58.	 The Respondent Nos. 7 and 10 are directed to pay the compensation 
amount of Rs. 3,05,31,095/- (Rupees Three Crore Five Lakh 
Thirty-One Thousand and Ninety-Five Only) along with 9% interest 
thereupon from the date of passing of the Supplementary Award i.e., 
02.05.2022 till the date of realization, within a period of fifteen days 
from today. The total amount paid by the State shall be recovered 
from the Respondent No. 11 (JAL).
Result of the Case: Appeal allowed.
†Headnotes prepared by: Ankit Gyan