Case: Ceat Limited (Formerly Known As Ceat Tyres of India Limited) Vs. The State of Maharashtra and 5 Others

2. The Petitioner is a company engaged in manufacturing of tyres for wide range of vehicles. In the year 1950, the Petitioner-Company made an application to the erstwhile Government of Bombay for land to set up a tyre manufacturing unit at Bhandup, Bombay. Pursuant to the agreements dated 15.10.1958 and 17.01.1969 entered with the Petitioner-Company, the Government initiated acquisition proceedings and acquired the land under the provisions of the Land Acquisition Act, 1894 under two separate Awards dated 11.03.1970 and 26.10.2005. The Petitioner-Company was put in possession of the acquired land upon payment of compensation under the Award. The allotment of the acquired land was subject to the terms and conditions stipulated in Sanads dated 29.12.1969 and 23.06.1975 issued in favour of the Petitioner-Company. The land acquired under these two awards is more particularly described in the Schedule to the Sanads dated 29.12.1969 and 23.06.1975, and shall be hereinafter referred to as the acquired land3. In the development plan of the Municipal Corporation, Greater Bombay, part of the acquired land admeasuring 945 sq. meters under CTS No. 354 corresponding to Survey No.220 (part), is reserved for the Railways. The said land shall be hereinafter referred to as the reserved land4. Sometime in the year 1964 the Government of Maharashtra initiated acquisition process to acquire 249.56 sq. yards from the reserved land for public purpose. The Petitioner-Company handed over physical possession of the said land to the Central Railways on 1.11.1964. By an Award dated 11.03.1970 the Government acquired 249.64 yards of the reserved land and paid a total compensation of Rs.861/- to the Petitioner-Company as per Clause-5 of the Sanad5. In the year 2003 the Assistant Executive Metropolitan Engineer, Transport Project (Railways) informed the Petitioner-Company that an area of 350.20 sq.mts. from the reserved land was required for construction of Nahur Railway Station. The Petitioner-Company held several meetings with the concerned Authorities, and by letter dated 12.08.2003 addressed to the Addl. Collector, Bandra (East), Mumbai, offered to hand over possession of 560 sq. meters of the reserved land for the purpose of construction of Nahur Railway station6. By an Award No.LAQ/414/Bhandup, dated 26.10.2005 the Special Land Acquisition Officer-3, acquired land under Survey No.352 (part) and 358 (part) of village Bhandup for construction of Nahur Railway station. The Government did not acquire the reserved land admeasuring 357.90 sq. meters under the said Award dated 26.10.2005. However by Order dated 28.03.2006, the Collector, Mumbai Suburban District, directed the Petitioner-Company to hand over possession of the said land admeasuring 357.90 sq.meters to the City Survey Officer, Mumbai and to submit the claim for compensation as mentioned in Clause 5 of Sanad dated 29.12.1969 for further necessary action. In furtherance of the said Order, the Petitioner-Company handed over possession of the land admeasuring 357.9 sq. meters to the City Survey Officer, who in turn handed over the said land to the Central Railway, Government of India. The etitioner-Company also submitted an application for fixation of compensation as per clause 5 of the Sanad dated 29.12.1969.

Court's reasoning:
11. We have perused the record and considered the rival submissions advanced by the learned Counsel for the respective parties. It is not in dispute that the Petitioner-Company had applied to the erstwhile Government to allot land for setting up a tyre manufacturing unit at Bhandup. Pursuant to two separate agreements dated 15.10.1958 and 17.01.1969 entered with the Petitioner-Company, the Government acquired the land and upon payment of compensation under the Award, allotted the acquired land to the Petitioner-Company under Sanads dated 29.12.1969 and 23.6.1975. The Sanads state that the lands have been vested in the Petitioner-Company subject to the provisions of the Maharashtra Land Revenue Code. The Petitioner-Company has sought to construe the term vested as transfer of ownership15. The aforesaid pronouncements make it clear that vesting does not necessarily connote vesting in title but also includes vesting of interest, vesting in possession or vesting of right to enjoy the property, etc. Since the word vest is of ambiguous import and has no fixed connotation, it would be necessary to refer to the relevant terms and conditions of the Sanad to understand the meaning of the word and the context in which it is used18. A plain reading of the terms and conditions of the Sanad clearly indicate that the Government had acquired the land under the Land Acquisition Act and vested the same in favour of the Petitioner Company in accordance with the provisions of Maharashtra Land Revenue Code. The allotment of the land to the Petitioner-Company was for a specific purpose of setting up a tyre manufacturing unit. The Sanad restricts the user of the land and restrains the PetitionerCompany from dealing with the property or using the same for any other purpose without prior permission of the Government. The Government has also imposed absolute restrain on alienation of the land or any part thereof in any manner without prior permission of the Government. This restriction in particular clearly indicates that the Government had not vested absolute title in favour of the Petitioner-Company but had conferred on the Petitioner-Company the status of Class-II occupant. In terms of Section 2(23) r/w. Section 29 of Maharashtra Land Revenue Code, the occupant Class II is only a holder in actual possession of unalienated land in perpetuity subject to restrictions on right to transfer. The status of a Class II occupant cannot be equated with that of a owner. Hence, we are not inclined to accept the submissions of the learned Counsel for the PetitionerCompany that the Petitioner-Company is the absolute owner of the acquired land21. In the instant case, the Government has not transferred the title of the acquired land in favour of the Petitioner, but has only allotted the land to the Petitioner for setting up a tyre manufacturing factory. In normal circumstances, the Government could not have unilaterally resumed the land which was required for public purpose without invoking provisions of Land Acquisition Act and paying compensation to the Petitioner for the interest held by him or rights created in his favour in respect of such land. However the obligation on the part of the Government to acquire the land by invoking the provisions of Land Acquisition Act has been obviated by the Petitioner by accepting the terms and conditions set out in Clause 5 of the Sanad22. A plain reading of this Clause clearly indicates that when the land or any part thereof is required for public purpose, the PetitionerCompany, on being called upon by the Government in writing, is bound to transfer such land to the Government. In consideration of such transfer the Government is liable to pay to the PetitionerCompany a sum equal to the amount of compensation awarded under the said Act and paid by the Company in respect of land so transferred including the percentage awarded under Section 23(2) of the said Act together with costs of development, value of any strucvture and other components specified in clause 5 of the Sanad and as estimated by the Executive Engineer. The Petitioner-Company having accepted the allotment of the land under the Sanad is bound by the terms and conditions stipulated in the Sanad. The law in this regard is well settled23. In the instant case, the Petitioner-Company having voluntarily accepted the terms and conditions of the allotment as stipulated in Sanad, the State Government is not liable to acquire the land or pay the compensation to the Petitioner-Company under the provisions of the Right to Fair Compensation Act. In our considered view, issuance of writ of mandamus would result in permitting the Petitioner-Company to wriggle out of its obligation under Clause 5 of the Sanad. Suffice it to say, the writ of mandamus cannot be issued to avoid obligation under the contract. Hence the writ of mandamus as prayed for cannot be issued24. It is to be noted that the Petitioner-Company has already surrendered the possession of the land admeasuring 357.9 sq.meters from CTS No.354 under possession receipt dated 30.06.2006, copy of which is annexed to the Petition at Exhibit-I. The Government was therefore bound to pay to the Petitioner-Company compensation as stipulated in clause 5 of the Sanad. It is not in dispute that the Government has not paid the compensation in respect of the said land under the premise that the Petitioner-Company had not raised its claim for compensation. Clause 5 of the Sanad does not necessitate raising of such claim but cast an obligation on the Government to quantify the compensation as stipulated therein. The Government was therefore not justified in not paying the compensation. Be that as it may, in the affidavit-in-reply, the Deputy Collector has stated that the Petitioner-Company can file an application for compensation in accordance with clause 5 of the Sanad with the office of the Respondent No.5 and that the same will be considered in accordance with law.