23 January 2014
Supreme Court
Download

DIPAK BABARIA Vs STATE OF GUJARAT .

Bench: H.L. GOKHALE,J. CHELAMESWAR
Case number: C.A. No.-000836-000836 / 2014
Diary number: 37909 / 2012
Advocates: ANIRUDH SHARMA Vs VISHAL GUPTA


1

Page 1

REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL N.  836     OF 2014 (@ out of  SPECIAL LEAVE PETITION (CIVIL) NO.36738/2012)

Dipak Babaria & Anr. …    Appellants

            Versus

State of Gujarat & Ors. …    Respondents

J  U  D  G  E  M  E  N  T

H.L. Gokhale J.

Leave Granted.

2. This  appeal  by  Special  Leave seeks  to  challenge  

the  judgment  and  order  dated  30.8.2012  rendered  by  a  

Division  Bench  of  the  Gujarat  High  Court  dismissing  Writ  

Petition (PIL)  No.44 of 2012 filed by the appellants herein.  

The  Writ  Petition  had  various  prayers,  but  essentially  it  

sought to challenge the permission granted by the Collector,  

Bhuj,  to sell  certain parcels of agricultural  land situated in

2

Page 2

district  Kutch,  which  were  said  to  have  been  purchased  

earlier by the respondent No.4 herein, one Indigold Refinery  

Limited  of  Mumbai,  for  industrial  purpose  in  favour  of  

respondent  No.5  i.e.  one  Alumina  Refinery  Limited,  Navi  

Mumbai, as being impermissible under the provisions of the  

Gujarat  (earlier  ‘Bombay’  prior  to  the  amendment  in  its  

application in the State of Gujarat) Tenancy and Agricultural  

Lands (Vidarbha Region and Kutch Areas) Act, 1958 (Tenancy  

Act, 1958 for short).  It was submitted that under Section 89A  

of this Act, agricultural land can be permitted to be sold by  

an  agriculturist  to  another  person  for  industrial  purpose  

provided the proposed user is  bona-fide.  In the event,  the  

land is  not so utilised by such a person for  such purpose,  

within the period as stipulated under the act, the Collector of  

the concerned district  has to  make an enquiry  under  sub-

Section 5 thereof, give an opportunity to the purchaser with a  

view to ascertain the factual situation, and thereafter pass an  

order that the land shall  vest in the State Government on  

payment of  an appropriate compensation to the purchaser  

which the Collector may determine.  It was contended that  

2

3

Page 3

there was no provision for any further transfer of agricultural  

land from one industrial purchaser to any third party, once  

again,  for  industrial  purpose  when  the  first  purchaser  of  

agricultural  land  had  defaulted  in  setting  up  the  industry.  

Apart from being in breach of the law, the transaction was  

stated  to  be  against  public  interest,  and  a  mala-fide  one  

resulting into a serious loss to the public exchequer. The Writ  

Petition criticised the role of the Collector and the Revenue  

Minister  of  the  State  Government,  and  sought  an  inquiry  

against them in the present case, and also a direction to the  

state authorities to resume the concerned land.  

3. The  impugned  judgment  and  order  rejected  the  

said writ petition on two grounds, firstly that there was delay  

in initiating the said Public Interest Litigation (PIL), and that  

the writ petitioner had suppressed the material facts before  

the Court concerning the investment claimed to have been  

made by the respondent No.5.

4. The  writ  petition,  and  now this  appeal  raise  the  

issues  with  respect  to  the  underlying  policy  and  purpose  

behind the relevant provisions of the Tenancy Act, 1958.  In  

3

4

Page 4

that connection, it also raises the issue with respect to the  

duties  of  the  revenue  officers  on  the  spot,  such  as  the  

Collector, the importance of the role of senior administrative  

officers of the State Government, and whether a Minister of  

the  Government  can  direct  the  administrative  officers  and  

the Collector to act contrary to the provisions and policy of  

the statute.  The Secretary of the Department of Revenue of  

the Government of Gujarat, and the Collector of District Kutch  

at Bhuj are joined as respondent Nos. 2 and 3 to this appeal.

The facts leading to this appeal are as follows:-

5. It  is  pointed  out  by  the  appellants  that  the  

respondent  No.4  Indigold  Refinery  Ltd.  (Indigold  for  short)  

which is a company having its office in Mumbai, purchased  

eight  parcels  of  land  owned  by  one  Virji  Jivraj  Patel  and  

Jayaben  Virji  Patel  residing  at  Bankers  Colony,  Bhuj,  

admeasuring in all 39 acres and 25 gunthas (i.e. roughly 40  

acres)  by  eight  sale  deeds  all  dated  30.1.2003,  for  a  

consideration of about Rs.70 lakhs.  These eight sale deeds  

are  supposed  to  have  been  signed  for  respondent  No.4  

Indigold by one Hanumantrao Vishnu Kharat,  its Chairman-

4

5

Page 5

cum-Managing Director.   The lands are situated in villages  

Kukma and Moti Reldi in the district of Kutch.  The sale deeds  

indicated that the purchaser had purchased these lands for  

industrial  purpose,  and  that  the  purchaser  will  obtain  the  

permission  from the Deputy  Collector,  Bhuj  for  purchasing  

the said land within one month from the date of those sale  

deeds. The respondent No.4 is said to have applied for the  

necessary permission under Section 89A of the Tenancy Act,  

1958 on 31.1.2003,  and the  Collector  of  Bhuj  is  stated  to  

have given the requisite certificate of purchase of the lands  

under sub-section (3) (c) (i) of the said section.  It appears  

that thereafter no steps were taken by respondent No.4 to  

put up any industry on the said land.   

6. Five years later, the respondent No.4 is stated to  

have applied on 6.12.2008 to the Deputy Collector at Bhuj for  

permission to sell these lands.  The Collector of Bhuj sought  

the guidance from the Revenue Department, and in view of  

the  direction  of  the  Revenue  Department,  the  Deputy  

Collector  granted the  permission on  15.1.2010,  to  sell  the  

lands to respondent No. 5 treating it as a special case, and  

5

6

Page 6

not to be treated as a precedent.  Thereafter, the respondent  

No.4 conveyed the concerned lands to respondent No.5 by  

sale deed dated 19.1.2010. Respondent No.5 also obtained  

permission from the Industries Commissioner on 8.3.2010 for  

putting up the industry.  Subsequently, the Collector issued  

the certificate as required under Section 89A (3) (c) (i) of the  

Tenancy Act, 1958, on 21.5.2010, that respondent No.5 had  

purchased the land for a bona-fide purpose.  The permission  

for a non-agricultural user was given to the respondent No.5  

on 5.1.2011. The Gujarat Mineral  Development Corporation  

(GMDC)  –  which  got  itself  impleaded  in  this  appeal  as  

respondent  No.6  has  entered  into  a  Memorandum  of  

Understanding (MOU for short) on 30.11.2011 with M/s Earth  

Refinery  Pvt.  Ltd.  which  is  the  holding  company  of  

respondent No.5 to purchase 26% of equity in a joint venture  

company  to  be  set  up  by  them,  and  which  will  own  the  

industry.  

7. It  appears  that  a  Gujarati  Daily  “Sandesh”  in  an  

article dated 20.8.2011 reported that there was a huge loss  

to the State exchequer in the sale of these lands to a private  

6

7

Page 7

company  almost  to  the  tune  of  Rs.250  crores.   The  

newspaper reported that although the respondent No.4 had  

purchased the concerned lands at  village Kukma and Moti  

Reildi  on  30.1.2003,  no  industrial  activity  was  started  till  

2008 as required by the law, and after a long period of five  

years the land was to be sold to Alumina Refinery Limited  

(Alumina  for  short).   One  Mr.  Nitin  Patel  is  the  Managing  

Director  of  this  Alumina,  and  Mr.  Nilesh  Patel  who  is  his  

brother  is  its  Director  (Legal  and Human Resources).   The  

newspaper stated that Alumina had written a letter  to  the  

Chief  Minister  Mr.  Narendra  Modi,  on  18.6.2009  that  the  

Government  should  grant  the  necessary  permission.   It  is  

further stated that on the said proposal being placed before  

them,  the officers  of  the Revenue Department  had placed  

negative remarks, and yet a permission was granted to sell 2  

lakh sq. yds. of land at a throw away price when the rate of  

land was Rs.3500 – 4000 per sq.  yd..   It  was alleged that  

there was a direct involvement of the Chief Minister in this  

scam, and with a view to avoid Lokayukata enquiry, although  

a commission was appointed under Hon’ble Mr. Justice M.B.  

7

8

Page 8

Shah, a former Judge of Supreme Court of India to enquire  

into a number of other controversial projects, this scam was  

excluded therefrom.

8. There  was  also  a  news  item  in  another  Daily  

“Kachchh  Mitra”  on  1.2.2011  that  the  Alumina  Refinery  

Limited  was  given  permission  by  breaching  rules  and  

regulations.  The farmers of the nearby villages were worried,  

and some 200 farmers had protested against the proposal as  

it would affect their agricultural activities due to pollution.  It  

was  stated  that  they  had  sowed  plants  of  tissue-culture  

Israeli  dry-dates.   They  had  planted  lacs  of  Kesar  Mango  

trees.  They were also cultivating crops of Papaiya, Aranda,  

Wheat, Cotton, groundnuts etc.  If the refinery work starts in  

this area, it will affect the agricultural work badly. There was  

also a fear that the blackish and toxic air of the factory will  

spoil the plants.

9. All  this  led  the  appellants  to  file  the  earlier  

mentioned  writ  petition,  for  the  reliefs  as  prayed.   The  

petition enclosed the above referred news reports,  as also  

the information obtained through enquiry under the Right to  

8

9

Page 9

Information  Act,  2005  by  one  Shri  Shashikant  Mohanlal  

Thakker of Madhapur Village of Taluka Bhuj.  This information  

contained the documents incorporating the file notings of the  

revenue  department  and  the  orders  granting  permission.  

The  aforesaid  writ  petition  was  filed  on  28.2.2012.   An  

affidavit  in  reply  to  the  writ  petition  was  filed  by  above  

referred Nitin  Patel  on behalf  of  respondent No.5,  and the  

appellants  filed  a  rejoinder.   Respondent  No.5  filed  a  sur-

rejoinder thereto. The respondent No.1 State of Gujarat filed  

an affidavit in reply on 16.8.2012, and the petitioner filed a  

rejoinder to the Government’s affidavit on 10.11.2012.  After  

the writ petition was filed on 28.2.2012 an order of status-

quo  was  granted  on  1.3.2012,  and  it  continued  till  the  

dismissal of the petition on 30.8.2012 when the order of stay  

was vacated.  However, when the present SLP was filed, an  

order of status-quo was granted by this Court on 4.1.2013,  

and it has continued till date.    

Relevant provisions of the Statute:-

10. In as much as we are concerned with the provisions  

contained in Section 89 and Section 89A of the Tenancy Act,  

9

10

Page 10

1958, it is necessary to reproduce the two sections in their  

entirety.   These two sections appear in Chapter VIII  of the  

Tenancy Act, 1958.  The sections read as follows:-

“CHAPTER VIII RESTRICTIONS ON TRANSFERS OF AGRICULTURAL LANDS

AND ACQUISITION OF HOLDINGS AND LANDS

89  Transfers  to  non-agriculturists  barred.-  

Transfers to (1) Save as provided in this Act,  non-agricul- turists barred

(a) no  sale  (including  sales  in   execution  of  a  decree  of  a  Civil   Court or for recovery of arrears of   land  revenue  or  for  sums  recoverable  as  arrears  of  land  revenue), gift exchange or lease of   any land or interest therein, or

(b) no  mortgage  of  any  land  or   interest  therein,  in  which  the  possession  of  the  mortgaged  property  is  delivered  to  the  mortgagee,

shall be valid in favour of a person who is not   an agriculturist or who being an agriculturist   cultivates personally land not less than three  family holdings whether as owner or partly   as  tenant  or  who  is  not  an  agricultural   labourer: Provided  that  the  Collector  or  an  officer   authorised by the State Government in this   behalf  may grant permission for  such sale,   gift,  exchange,  lease  or  mortgage,  in  such   circumstances as may be prescribed:

10

11

Page 11

[Provided  further  that  no  such  permission   shall be granted, where land is being sold to   a  person  who  is  not  an  agriculturists  for   agricultural purpose, if the annual income of   such person from other source exceeds five   thousand rupees.] (2) Nothing in this section shall be deemed  to prohibit the sale, gift, exchange or lease   of a dwelling house or the site thereof or any   land  appurtenant  to  it  in  favour  of  an  agricultural labourer or an artisan. (3) Nothing in this  section shall  apply to a   mortgage  of  any  land  or  interest  therein   effected in favour of a co-operative society   as  security  for  the  land advanced by such  society. (4)  Nothing in section 90 shall apply to any   sale made under sub-section (I).

89A.  Sale  of  land  for  bonafide  industrial purpose permitted in certain  cases:-

(1) Nothing in section 89 shall prohibit   the  sale  or  the  agreement  for  the  sale  of   land  for  which  no  permission  is  required  under sub-section (1) of section 65B of the  Bombay Land Revenue Code, 1879 (Bom. V   of 1879) in favour of any person for use of   such  land  by  such  person  for  a  bonafides   industrial purpose:

Provided that— (a) the land is not situated within the urban  

agglomeration as defined in clause (n)   of section 2 of the Urban Land (Ceiling   and Regulation) Act, 1976 (33 of 1976),

(b) where the area of the land proposed to   be  sold  exceeds  ten  hectares,  the  person to whom the land is proposed to   

11

12

Page 12

be sold in pursuance of this sub-section   shall obtain previous permission of the   Industries Commissioner, Gujarat State,   or  such  other  officer,  as  the  State   Government  may,  by  an  order  in   writing, authorise in this behalf.

(c) the area of the land proposed to be sold   shall not exceed four times the area on   which  construction  for  a  bonafide   industrial  purpose  is  proposed  to  be  made by the purchaser: Provided that any additional land which   may  be  required  for  pollution  control   measures  or  required  under  any  relevant law for the time being in force  and  certified  as  such  by  the  relevant   authority  under  that  law  shall  not  be  taken into  account  for  the  purpose of   computing four times the area.

(d) where the land proposed to be sold is   owned  by  a  person  belonging  to  the  Scheduled  Tribe,  the  sale  shall  be   subject  to  the  provisions  of  section  73AA  of  the  Bombay  Land  Revenue  Code, 1879 (Bom. V of 1879).

(2) Nothing in the Section 90 shall apply to   any  sale  made  in  pursuance  of   subsection (1).

(3) (a) Where the land is sold to a person in   pursuance  of  sub-section  (1)   (hereinafter  referred  to  as  “the  purchaser”), he shall within thirty days   from the date of purchase of the land   for bonafides industrial purpose, send a   notice  of  such  purchase  in  such  form  alongwith such other particulars as may  be  prescribed,  to  the  Collector  and  endorse  a  copy  thereof  to  the  Mamlatdar.

12

13

Page 13

(b) Where the purchaser fails to send  the notice and other particulars to the   Collector  under  clause  (a)  within  the   period  specified  therein,  he  shall  be   liable  to  pay,  in  addition  to  the  non- agricultural  assessment  leviable  under   this  Act,  such  fine  not  exceeding  two  thousand rupees as the Collector  may  subject  to  rules  made under  this  Act,   direct. (c) Where, on receipt of the notice of   the date or purchase for the use of land   for  a bonafides industrial  purpose and  other particulars sent by the purchaser   under  clause  (a),  the  Collector,  after   making such inquiry as he deems fit— (i) is  satisfied  that  the  purchaser  of   such  land  has  validly  purchased  the   land for a bonafide industrial purpose in   conformity  with  the provisions  of  sub- section (1), he shall  issue a certificate   to that effect to the purchaser in such  form and with in such time as may be  prescribed. (ii) is  not  so satisfied,  he shall,  after   giving the purchaser an opportunity of   being  heard,  refuse  to  issue  such  certificate and on such refusal, the sale   of  land  to  the  purchaser  shall  be  deemed  to  be  in  contravention  of   section 89. (d)  (i) The purchaser aggrieved by the  refusal  to  issue  a  certificate  by  the  Collector under sub-clause (ii) of clause  (c)  may  file  an  appeal  to  the  State  Government or such officer, as it may,   by an order in writing, authorise in this   behalf.  

13

14

Page 14

(ii) The  State  Government  or  the  authorised officer shall, after giving the  appellant  an  opportunity  of  being  heard, pass such order on the appeal as   it or he deems fit.

(4) The purchaser to whom a certificate is   issued under sub-clause (i) of clause (c)   of  sub-section  (3),  shall  commence  industrial  activity  on  such  land  within   three  years  from  the  date  of  such  certificate and commence production of   goods  or  providing  of  services  within   five years from such date:

Provided that the period of three years or, as   the  case  may  be,  five  years  may,  on  an   application  made  by  the  purchaser  in  that   behalf,  be extended from time to  time,  by  the State Government or such officer, as it   may, by an order in writing authorise in this   behalf,  in  such  circumstances  as  may  be  prescribed.

(5) Where the Collector, after making such  inquiry as he deems fit and giving the  purchaser  an  opportunity  of  being  heard, comes to a conclusion that the  purchaser  has  failed  to  commence  industrial  activity  or  production  of   goods  or  providing  of  services  within   the period specified is clause (b) of sub- section  (4),  or  the  period  extended  under  the  proviso  to  that  clause,  the   land shall vest in the State Government   free from all encumbrances on payment   to the purchaser of such compensation   as the Collector may determine, having   regard  to  the  price  paid  by  the  purchaser  and  such  land  shall  be  

14

15

Page 15

disposed of by the State Government,   having regard to the use of land.”

The pleadings of the parties before the High Court:-

11. The appellants  had contended in  paragraph 6 of  

their Writ Petition that the permission given to Indigold to sell  

the  land  was  contrary  to  the  provisions  and  restrictions  

imposed  under  the  law,  and  contrary  to  the  original  

permission granted to them by the Deputy Collector, Bhuj, on  

1.5.2003. The market value of the land in question goes into  

crores of rupees, and such an act will result in huge loss to  

the public exchequer.  They had contended that the decision  

was malafide. The decision was alleged to have been taken  

for a collateral purpose, which was apparently neither legal  

nor in the interest of the administration and public interest.  

Inasmuch as it  was concerning disposal of public property,  

the  only  mode  to  be  adopted  was  a  fair  and  transparent  

procedure  which  would  include  holding  a  public  auction  

inviting bids, and thereby providing equal opportunity to all  

interested or capable industries, in order to promote healthy  

competition and to fetch the right market price.  The decision  

has  been  taken  at  the  instance  of  the  Hon’ble  Revenue  

15

16

Page 16

Minister.  It was also submitted that, there were possibilities  

that  the  directors  /  promoters  and  the  management  of  

Indigold and Alumina are the same, and if that is so, it would  

be  a  design  to  defraud  the  Government.   Alumina  had  

contended  that  it  had  signed  an  MOU  with  the  State  

Government  during  the  Vibrant  Gujarat  Investors’  Summit,  

2009.  The appellants had submitted that the same cannot be  

a  ground  to  grant  the  permission  to  sell,  contrary  to  the  

mandatory provisions of law. Section 89A makes a contingent  

provision in case the land is not used for industrial activity  

within the time provided, and such mandatory provisions of  

the Act cannot be bypassed merely upon the endorsement  

made by the Hon’ble Revenue Minister.   The action on the  

part of the State is absolutely arbitrary.  The State or a public  

authority which holds the property for the public, and which  

has  the  authority  to  grant  the  largesse,  has  to  act  as  a  

trustee  of  the  people,  and  therefore  to  act  fairly  and  

reasonably.   The  holders  of  pubic  office  are  ultimately  

accountable  to  the  public  in  whom the  sovereignty  vests.  

16

17

Page 17

The  action  of  the  Government  is  arbitrary,  and  therefore  

violative of Article 14 of the Constitution of India.

12. Respondent No.5 was the first to file a reply to this  

petition in the High Court which was affirmed by Mr.  Nitin  

Patel on 11.7.2009.  In this reply he principally submitted that  

it was not correct to say that the land was being given away  

at  a  throwaway  price,  causing  great  loss  to  the  public  

exchequer  to  the  tune  of  Rs.250  crores,  as  alleged.   The  

State Authorities and the Revenue Minister have not acted in  

violation of any mandatory provisions of law.  The affidavit  

further narrated the various events in the matter leading to  

the  sale  deed  dated  19.1.2010  by  Indigold  in  favour  of  

Alumina, and the permission of the Industries Commissioner  

dated 8.3.2010.  It was also pointed out that permission had  

been granted by the Collector, Bhuj on 5.1.2011.  Thereafter,  

it was contended that the land has been purchased by the  

respondent No.5 way back in January 2010, and the petition,  

making frivolous and baseless allegations, has been filed two  

years after the said transaction.

17

18

Page 18

13. Then, it was pointed out that the respondent No.5  

was incorporated under the Companies Act in the year 2008,  

and  that  the  company  is  promoted  by  Earth  Refining  

Company  Pvt.  Limited.   Respondent  No.5  wanted  to  

manufacture  high  value  added  products  from  bauxite  ore  

available  in  Kutch  district  which  ore  was  currently  sold  or  

exported as it is without any value addition.  The intention of  

respondent  No.5  was  in  line  with  and  supported  by  

Government of Gujarat Industries and Mines Policies, 2009.  

The  project  was  to  be  first  of  its  kind  in  Gujarat,  with  

technology supplied to it by National Aluminum Company Ltd.  

(shortly known as NALCO), a Government of India Enterprise.  

A  share  holding  agreement  dated  30.11.2011  had  been  

entered into between GMDC and Earth Refining Company Ltd.  

whereby GMDC had agreed to be joint venture partner, and  

to subscribe to 26% of the equity share capital of the new  

company.  NALCO has provided advanced technology for the  

project.  

14. It was further submitted in para 15 (g) of the reply  

that,  the  opinions  of  all  the  subordinate  officers  are  

18

19

Page 19

“inconsequential and not binding on the Revenue Minister”.  

The decision of the Minister cannot be faulted on the basis of  

certain notings of a lower authority.

15. One  Mr.  Hemendera  Jayantilal  Shah,  Additional  

Secretary, Revenue Department filed the reply on behalf of  

the  respondent-State.   In  paragraph  3.4  it  was  contended  

that the notings from the Government files reflect only the  

exchange of views amongst the officers of the departments.  

The decision of the State Government to grant permission for  

sale of the land could not be said to be arbitrary, malafide or  

in  the  colourable  exercise  of  power.   Three  reasons  were  

given in support thereof:-

(i) If the land had been directed to be vested in the State  

Government,  State  would  have  been  required  to  pay  

compensation to M/s Indigold under Section 89A(5) which is  

otherwise a long-drawn process involving Chief Town Planner  

and  State  Level  Valuation  Committee,  for  the  purpose  of  

determining  the  valuation  of  the  land,  and  thereafter  for  

finding the suitable and interested party to set up an industry  

on the land in question.

19

20

Page 20

(ii) In  the  sale  to  Alumina,  the  State  Government’s  own  

interest  through  its  public  sector  undertaking  had  been  

involved,  and  therefore  there  has  been  a  substantial  

compliance of the spirit flowing from the provisions of Section  

89A(5).

(iii) The price of  the land in question was around Rs.4.35  

crores as per the Jantri (i.e. official list of land price) at the  

relevant time, and it had come down to Rs.2.08 crores, as per  

the revised Jantri rated of 2011.  Thus, apart from time being  

consumed in the process, perhaps there would have been a  

loss  to  the  public  exchequer.  Thereafter,  it  was  stated  in  

paragraph 4 of the reply as follows:-

“I  further  respectfully  say  that  the  action of the State Government was bonafide   and taking into consideration all the aspects   of the matter, viz. (i) the land is being used  for the industrial purpose, (ii) a dire need for   industrialization  in  the  Kutch  District;  (iii)   MoU arrived at  during the Vibrant  Summit,   2009, whereby, a ready and interested party   was  available  to  start  the  industry   immediately on the land in question; and (iv)   GMDC possessing 26% of the share in such   interested  party,  i.e.  M/s  Alumina  Refinery  Pvt. Ltd.”

20

21

Page 21

It  is  relevant  to  note  that  no  reply  was filed  on behalf  of  

Indigold.  

Additional pleadings of the parties in this Court:-

16. As  far  as  this  Court  is  concerned,  a  counter  

affidavit was filed on behalf of the State Government by one  

Mr. Ajay Bhatt, Under Secretary, Land Reforms.  In his reply,  

he stated that in any event in the present process the State  

is the beneficiary in permitting this transaction with GMDC  

which is a Government Undertaking.  It will have 26% stock in  

respondent No.5.  In paragraph 4(E)(e)(ii) he stated that since  

the Government’s own interest was involved, there has been  

a  substantial  compliance  of  the  spirit  flowing  from  the  

provisions of Section 89A(5) of the Act.

17. A counter was also filed in this Court by one Mr.  

Deepak Hansmukhlal Gor, Vice President of respondent No.5-

Alumina.   He pointed out that although the petition in the  

High Court was moved as a PIL, the petitioner No.1 was in  

fact a leader of the opposition party in the State.  In order to  

mislead the Court it was stated in the petition that the land  

was worth Rs.250 crores.  It was further submitted that to  

21

22

Page 22

seek an interim relief a false statement had been made in the  

writ petition that no activity had been initiated by respondent  

No.5 on the  concerned land by the time writ  petition was  

filed.  The respondent No.5 had made substantial investment  

and construction on the land, and photographs in that behalf  

were  placed  on  record.   It  was  also  submitted  that  the  

decision of the State Government was in tune with Mineral  

Development Policy,  2008 of  the Government of  India and  

Gujarat Mineral Policy, 2003.  It was then pointed out that  

apart from other controversies, the present controversy has  

also been included for the consideration of Hon’ble Mr. Justice  

M.B. Shah, Former Judge of this Court.  The sale of land in the  

present case was rightly considered as a special one, and the  

challenge thereto was highly unjustified and impermissible.  

The  respondent  No.5  filed  various  documents  thereafter,  

including  the  various  permissions  obtained  by  respondent  

No.5 for  the project and the technology supply agreement  

entered  into  between  NALCO  and  M/s  Earth  Refining  

Company Ltd.  It was submitted that the Respondent No. 5 is  

a bona-fide purchaser of the land, and in any case it should  

22

23

Page 23

not  be  made  to  suffer  for  having  invested  for  industrial  

development. It is claimed that Respondent No. 5 has made  

an investment to the tune of Rs 6.85 crores as on 31.3.2012  

on the project, and moved in some machinery on the site.   

18. The appellant No.1 has filed his rejoinder to both  

these counters.  He has stated that he has not suppressed  

that he is a political activist,  which is what he has already  

stated  in  the  petition.   He  has  maintained  his  earlier  

submissions in the writ petition, and denied the allegations  

made in the two counter affidavits.

19. As stated earlier, GMDC has applied for joining as  

respondent No.6.  In its application it has stated that Alumina  

was selected through transparent evaluation.  Then, it was  

short-listed for setting up the project in Kutch at the Vibrant  

Gujarat Summit in 2009.  It also defended the Government’s  

decision on the ground that it is going to have 26% equity in  

respondent No.5.  

Points for consideration before this Court:

20. It, therefore, becomes necessary for this Court to  

examine whether the decision taken by the Government to  

23

24

Page 24

permit the transfer of the agricultural land from respondent  

No. 4 to respondent No. 5, was legal and justified.  For that  

purpose one may have to consider the developments in this  

matter chronologically as disclosed from the above pleadings  

of the parties, as well as from the material available from the  

Government  files  placed  for  the  perusal  of  the  Court.  

Thereafter,  one  will  have  to  see  the  scheme  underlying  

Sections 89 and 89A, and then examine whether there has  

been any breach thereof, and if it is so what should be the  

order in the present case?

Material on record and the material disclosed from the  files of the Government and the Collector:-

21. The  respondents  have  contended  that  the  sale  

transaction  between  respondent  Nos.4  and  5  took  place  

because of the financial constraints faced by respondent No.4  

Indigold Refinery Limited, and that is reflected in their letter  

dated 16.6.2009 addressed to the Collector, Bhuj.  The letter-

head of the respondent No.4 shows that it claims to have a  

gold refinery at Chitradurg in State of Karnataka.  This letter  

refers to their earlier letter dated 6.12.2008, and letter dated  

24

25

Page 25

12.6.2009  from  respondent  No.5  Alumina.   The  relevant  

paragraph of letter dated 16.6.2009 reads as follows:-

“…….. • With regret  we have hereby to  inform you  

that due to financial constraints on our part   we  are  unable  to  execute  our  proposed  refinery  project  on  the  said  land.   We are   well aware of the fact that sufficient amount   of  time  has  passed  from  the  date  of   permission granted by the office of Deputy   Collector-Bhuj  to  set  up  the  project.   We  have tried our level best to set up the  industry on the land in question.”

• M/s  Alumina  Refinery  (P)  Ltd.  having  their   registered office in Mumbai has shown keen  interest to set their Alumina Refinery Project   on our above mentioned ownership land.

• A copy  of  consent  letter  dated 12.06.2009  has already been sent to your office by M/s   Alumina Refinery (P) Ltd., whereby they have  applied to avail the permission to purchase   our above ownership land u/s 89.

• We appreciate and are thankful to your office   and Government of Gujarat for giving us an   opportunity  to  purchase and set  up  of  our   then proposed refinery project on the above  mentioned agricultural land.

• We would like to confirm that we had a clear   intention  to  set  up  industry  on  the  above  mentioned land, it is only because of non  availability of monetary fund we are not  in a position to set up our industry on  the above mentioned agricultural land.  Further, we are also not having any intention  to  take  any  undue  advantage  in  form  of   booking any profit by sale of ownership land   to M/s Alumina Refinery (P) Ltd.

25

26

Page 26

We, hereby request your office to kindly grant   the permission to sale all the above land and   allow  us  to  execute  the  Sale  Deed  for   registration with the competent authority…..”

  (emphasis supplied)

22. The  earlier  letter  dated  6.12.2008  mentioned  in  

this  letter  of  16.6.2009,  however,  nowhere  mentions  that  

respondent  No.4  had  any  financial  constraints  because  of  

which it could not set up the industry and thefore it wanted to  

sell the particular land.  This letter is seen in the file of the  

Collector.  This letter reads as follows:-

“INDIGOLD REFINERIES LIMITED 6th December 2008

To, Collector of Kutch, Bhuj, State of Gujarat

Sub:-  Permission for  the sale  of  agricultural  land   admeasuring 39 acres 25 gunthas at Moti  Reladi   Kukama,  Taluka  Bhuj,  District  Kutch,  State  of   Gujarat.

Dear Sir, Reference to above, we have to respectfully inform  your good self that we had purchased land as per   details  here  below  for  setting  up  of  Industrial   project:- Sr.no. Name of Village Survey No. Measurement

    Acres  and  

gunthas  

26

27

Page 27

1. Kukama 94/1 4/14 2. Kukama 94/2 2/16 3. Moti Reladi 101/1 9/30 4.     “ 106 6/10 5.     “ 100/1 2/20 6.      “ 107 4/15 7.      “ 105/4          5/21 8.      “ 110/2/3 4/16 Total       39 acres 25 gunthas

The above piece of land was purchased with the   permission  granted  by  Deputy  Collector,  Bhuj,   Kutch,  wide  letter  no.  LND/VC/1169/03  dated  2nd  May  2003.   We  further  respectfully  inform  yourself  that we are no more interested to  put any industrial project in the said land and  therefore we are disposing off entire piece of  land  as  per  aforesaid  details  to  our  prospective client.  We, therefore, request your   good self to kindly give us your permission for sale,   so as to enable us to register the sale deed with   the concern competent authority. We  hope  you  will  extend  your  maximum  corporation  and  assistances  in  this  regard  and   oblige. Thanking you Yours faithfully Sd/- Indigold Refineries Ltd. Hanumantrao V. Kharat”

(emphasis supplied)

23. As stated earlier, the File notings of the Revenue  

Department, were obtained through an RTI inquiry, and were  

placed  on  record  alongwith  the  Writ  Petition.  The  learned  

counsel for the State of Gujarat was good enough to produce  

27

28

Page 28

the original files for our perusal.  In the file of the Revenue  

Department, there is an Email dated 1.7.2009 from Shri Nitin  

Patel,  Chairman  &  MD  of  respondent  No.5  forwarding  his  

letter dated 30.6.2009 addressed to Smt. Anandiben M. Patel,  

Hon’ble  Minister  of  Revenue  recording  the  minutes  of  the  

meeting  held  in  her  office  on  29.6.2009.   Immediately  

thereafter,  the respondent No.5 has written a letter to the  

Chief  Minister  of  Gujarat  seeking  permission  to  purchase  

these lands.  The Secretary  to  the  Chief  Minister,  Shri  A.K.  

Sharma has then sent a letter on 2.7.2009 to the Principal  

Secretary, Revenue Department informing him that Shri Nitin  

Patel,  of respondent No.5, had approached them with their  

representation dated 18.6.2009. It had inked an MOU during  

the  Vibrant  Gujarat  Global  Summit  for  establishing  an  

Alumina Refinery, and they had identified a land suitable for  

that purpose.  This letter further stated:

“On verification of the issue, necessary   action may kindly be taken at the earliest.  In   the  meantime,  a  brief  note  indicating  the  possible course of action may please be sent   to this office.”

28

29

Page 29

24. In view of this note from the Secretary to the Chief  

Minister, the Revenue Department sought the factual report  

from the Collector by their letter dated 6.7.2009.  What we  

find however, is that instead of sending a factual report, the  

Collector fowarded the original proposal of respondent No.5  

itself to the Department, and sought their decision thereon in  

favour  of  Alumina  through  his  letter  dated  31.7.2009.  

Thereafter,  we  have  the  note  dated  7.8.2009  in  the  

Government file which is signed by then Section Officer and  

Under Secretary, Land Revenue.  This note refers to the fact  

that  a  letter  dated  2.7.2009  had  been  received  from  the  

Secretary to the Chief  Minister.   Thereafter,  a  letter  dated  

31.7.2009  had  been  received  from  the  Collector,  Kutch  

stating that respondent No.4 had purchased the concerned  

land admeasuring 39 acres and 25 guntas, but no industrial  

use had been made, and that the respondent No.5 had shown  

his willingness to purchase the land.   Thereafter,  the note  

records what the Collector had stated viz.

“Taking into consideration the reasons  shown in the submission of Alumina Refinery   Company  addressed  to  the  Hon’ble  C.M.,   

29

30

Page 30

dated  18.6.2009,  it  is  submitted  to  grant   permission for purchasing land”.   

25. The  departmental  note  thereafter  states  in  sub-

paragraph A, B, C of paragraph 4, that under the relevant law  

the purchaser  of  the land should  commence the industrial  

activity within a period of 3 years from date of the certificate  

of  purchase,  and  within  5  years  start  the  manufacture  of  

goods and provide the services.  Where the purchaser fails to  

commence the industrial activity, the Collector has to initiate  

an  enquiry  as  to  whether  the  purchaser  has  failed  to  

commence industrial activity or production, as mentioned in  

clause  (b)  of  sub-section  4.  Thereafter,  if  on  giving  the  

purchaser an opportunity to be heard, the Collector comes to  

a conclusion that the purchaser has failed to do so, he has to  

determine the payment of compensation, and pass an order  

that the land shall vest in the State Government.  Thereafter  

the note records:-

“ …..Taking  into  consideration  the  above  provisions,  whatever  action  required   to  be  taken,  is  to  be  taken  by  Collector,   Kutch, means there is no question at all  of   the authority for a period of more than five   years.   Further  vide  letter  dated  6.7.2009,   Collector  was  informed  to  submit  factual   

30

31

Page 31

report.   Instead  of  the  same,  proposal  is   submitted  by  him.   Vide  order  dated  1.5.2003  Deputy  Collector  has  granted  permission  to  Indigold  Refinery  Company  under Section-89 of the T.A. with regard to   the lands in question.  The time limit of this   permission  has  come  to  an  end.   Now  another  company,  Alumina  Refinery  Co.   wants to purchase land of this company and   establish  a  project.   Looking  to  the  same,   taking  into  consideration  the  above  provisions, whatever action is required to  be taken, the same is to be taken at his   (Collector)  level  only.  This  is  submitted  for consideration whether to inform Collector   accordingly or not?

As  Collector  is  required  to  take  action as per the legal provisions, any  action  on  proposal  of  Collector  is  not  required  to  be  taken  by  this  office.   Therefore, proposal of the Collector be  sent back.

Submitted respectfully…”      (emphasis supplied)

26. Since, the Secretary of the Hon’ble Chief Minister  

had sought a note indicating the possible course of action,  

the  Deputy  Secretary,  Land  Revenue  made  a  note  on  

25.8.2009, and at the end thereof, he stated as follows:-

“..……

Under  these  circumstances,  looking  to   legal  provisions,  there  is  a  provision  that   either the company carries out the industrial   activity  or  the  State  Government  resumes  the land.   There is  no provision for  mutual   transfer by the parties.

31

32

Page 32

As  suggested  by  the  Secretary  to  the  Hon’ble  C.M.,  note  indicating  the  above   position be sent separately.”

27. A  note  was,  thereafter,  made  by  the  Principal  

Secretary, Land Revenue, which recorded that as per existing  

policy such sale was not permissible.  In para 2 of his note he  

stated:

“as per rules, the land is to be resumed  by Collector  in  case of  failure to  utilize  for   industrial use”. In para 5 thereof he however  suggested  “that  in  such  case,  as  in  cases   under the Land Acquisition Act,  50% of the   unearned  income  being  required  to  be  charged  by  the  State  Government  can  be  introduced as a policy measure”.  

The Principal Secretary, Revenue Department marked para 2  

above as “A” and then remarked on 29.8.2009 as follows:-  

“We  may  resume  as  “A”  of  pre-page  and allot as per the existing policy on land   price”.   

The Chief Secretary wrote thereon on 1.9.2009 –  

“We  should  take  back  the  land.   Allotment may be separately examined”.   

What is relevant to note is that the Minister of Revenue Smt.  

Anandiben Patel thereafter put a remark on 10.9.2009:-

“Land is of private ownership.  As a  special case, permission be granted for   sale”.

32

33

Page 33

28. Thereafter, it is seen from this file that in view of  

this  direction  by  the  Minister,  the  matter  was  further  

discussed.  A note was then made by the Principal Secretary,  

Revenue Department on 21.9.2009 -  “Discussed.  We may  

resubmit to adopt a procedure for such cases”.  The Principal  

Secretary, Land Revenue made a detailed note thereafter on  

14.10.2009 referring to the amendment brought in by Gujarat  

Act No.7 of 1997 incorporating Section 63AA in the Bombay  

Tenancy  and  Agricultural  Lands  Act,  1948,  and  the  

developments in the present matter up to the noting made  

by the Minister, that the land may be permitted to be sold as  

a  special  case.   Thereafter,  he  sought  an  opinion  as  to  

whether or not an action similar to a provision under the Land  

Acquisition Act on the occasion of sale of land providing for  

taking  of  50%  amount  of  unearned  income  by  the  State  

Government,  be  taken  in  the  present  case.   The  Chief  

Secretary made a note thereon as follows:-  

“It would be proper to give land to the   new  party  provided  industry  department   recommends as per the laid down rules.  As   indicated in page 9/D note (marginal).  Let us  

33

34

Page 34

take back land under 63AA and then re-allot   to the new party”.  15.10

The Minister still made a note thereon on 4.11.2009:-  

“As  a  special  case  as  suggested  earlier, permission for sale be given”.  

In view of this direction by the minister, the department has,  

thereafter, taken the decision that the permission be given as  

a special case but not to be treated as precedent. Thus, the  

opinion of the Principal Secretary, Land Revenue that 50% of  

the unearned income be taken by the Government was not  

accepted.  Similarly, the opinion of the Chief Secretary that  

the  land  be  resumed,  and  then  be  re-allotted  to  the  new  

party was also not accepted.

29. This has led to the communication from the State  

Government  to  the  Collector  dated  18.12.2009  that  the  

Government  had  granted  the  necessary  permission  to  

respondent No.5 to purchase the land, treating it as a special  

case. The said letter reads as follows:-

“  Urgent/RPAD   Sr. No.: GNT/2809/2126/Z State of Gujarat

Revenue Department 11/3 Sardar Bhavan Sachivalay

34

35

Page 35

Gandhinagar Date: 18/12/2009

To, The Collector Kutch-Bhuj

Subject: Shri  Nitin  Patel  c/o  M/s  Indigold  Refinery/Alumina Representation qua the  land of Kukma and Moti Reldi

Reference:  Your  letter  dated 31/9/09 bearing no.   PKA-3- Land- Vs.  2083/2009

Sir, In  connection  with  your  above referred  and   

subject  letter,  the land of  Kukma and Moti  Reldi   admeasuring Acre 39 Guntha 25 was purchased by   Indigold Refinery as per the provisions of Bombay   Tenancy and Agricultural Lands (Vidharbha Region   and Kutch Area) Act, 1958; Section 89.  However   due  to  financial  incapability,  the  Company  is   unable  to  establish  industry  and  other  company   M/s  Alumina  Refinery  Pvt.  Ltd.  being  ready  to   purchase the said land, upon careful consideration   the Government on the basis of treating the case   as  “A  special  case  and  not  to  be  treated  as   precedent” has granted the permission. 2. Papers containing pages 1 to 89 are returned   herewith.

Encl:  As above

Yours sincerely Section Officer Revenue  

Department State of Gujarat

Copy to: Select File/Z Branch Select File/Z Branch/N.S.A”

35

36

Page 36

30. Thereafter,  the  Deputy  Collector  has  issued  an  

order dated 15.1.2010 granting permission to sell the land for  

industrial purpose under Section 89A of the Act. He, however,  

added that the action of issuing the certificate can be taken  

only after the submission of a project report and technical  

recommendation  letter  of  Industries  Commissioner  by  

respondent No.5. The above referred order dated 15.1.2010  

of the Deputy Collector granting permission to sale the land  

reads as follows:-

No. Jaman Vashi/218/09

Office of Deputy Collector Bhuj, Date-15/01/2010

To Shri Hanumantrav V. Kharat Indi Gold Refineries Limited 201-212, EMCS House 289 SBSL, Fort Mumbai-400 001

Subject:- Regarding getting the approval for sale of   the  agricultural  land  of  village  Kukma  and  Moti   Reldi,  Taluka  Bhuj  purchased  for  industrial   purpose, under Section-89-A of the Tenancy Act. Read:-  Letter  No.  Ganat/2809/2126/Z  dated  18/12/2009  of  the  Revenue  Department  of  the  Government, Gandhinagar.

Sir,

36

37

Page 37

With reference to the above subject it is to be   informed  that  vide  this  office  certificate  No.   Land/Vasi/1169/03  dated  01/05/2003  you  have  been granted permission under Section-89-A of the   Tenancy  Act  for  purchasing  agricultural  land  for   industrial purpose as under:-

In  the  above  lands  as  the  company due to   financial  circumstances  is  not  in  a  position  to   establish  any  industry,  with  reference  to  your   application  dated  06/12/2008  seeking  the  permission for sale of the above land for industrial   purpose  to  Shri  Alumina  Refinery  (Pvt.)  Limited,   Mumbai for the Alumina Refinery project, vide the   above  referred  letter  of  the  R.D.  of  the   Government  as  a  “special  case  and  with  a   

37

Sr.No .

Name of Village Survey No. Acre/Guntha

1 Kukma 94/1 4.14 2 Kukma 94/2 2.16 3 Moti Reldi 101/1 9.30 4 Moti Reldi 106 6.10 5 Moti Reldi 100/1 2.20 6 Moti Reldi 107 4.15 7 Moti Reldi 105/4 5.21 8 Moti Reldi 110/2/3 4.19

Total 39.25

38

Page 38

condition  not  to  treat  as  the  precedent”  the   permission is granted, which may be noted.

As the above land is admeasuring more than  25 Acres, in this case on submission of the Project   Report and the Technical recommendation letter of   Industries Commissioner, G.S., Gandhinagar by the   party  desirous  to  purchase  the  land  Alumina   Refinery (Pvt.) Ltd., Mumbai, further action can be  taken by this office for issuing the certificate under   Section-89  of  the  Tenancy  Act,  which  may  be  noted.

Sd/- Deputy Collector, Bhuj

Copy to  Alumina Refinery (Pvt.) Ltd. 1501-1502 Shiv Shankar Plaza- Near HDFC Bank, Sector-8 Airoli, New Mumbai-400 708”

31.  This led to the sale deed between respondent No.4  

and 5 for sale of the lands at Rs.1.20 crores.  It is, however,  

interesting to note that the sale deed is signed for Indigold by  

Nitin Patel on the basis of the power of attorney from them,  

and for Alumina by his brother Nilesh Patel.   Subsequently  

the  permission  from  the  Industries  Commissioner  was  

obtained on 8.3.2010, and the certificate under Section 89A  

(3)  (c)  (i)  of  purchase  for  bona-fide  industrial  purpose  on  

21.5.2010.    

The submissions on behalf of the appellants:-

38

39

Page 39

32. The decision of the State Government to permit the  

transfer of the concerned agricultural lands was challenged  

by  the  appellants  on  various  grounds.   Firstly,  it  was  

submitted  that  Section  89  basically  bars  transfer  of  

agricultural land to the non-agriculturists.  Section 89A makes  

an exception only in favour of a bonafide industrial user.  The  

industry is required to be set-up within three years from the  

issuance of necessary certificate issued by the Collector for  

that purpose, and the production of the goods and services  

has  to  start  within  five  years.   If  that  is  not  done,  the  

Collector  has  to  take  over  the  land  after  holding  an  

appropriate  enquiry  under  sub-section  (5)  of  89A,  and the  

land  has  to  vest  in  the  Government  after  paying  the  

compensation to the purchaser which has to be determined  

having regard to  the price paid  by the purchaser.   In  the  

instant case, it is very clear that the respondent No. 4 had  

expressed their inability to develop the industry way back on  

6.12.2008.  The Collector was, therefore, expected to hold an  

enquiry  and  pass  appropriate  order.   This  was  a  power  

coupled  with  a  duty.   A  judgment  of  this  Court  in  Indian  

39

40

Page 40

Council  for  Enviro-Legal  Action Vs.  Union of  India &  

Ors.  reported  in  1996 (5)  SCC 281,  was  relied  upon  to  

submit that a law is usually enacted because the legislature  

feels  that  it  is  so  necessary.   When  a  law  is  enacted  

containing some provisions  which prohibit  certain  types of  

activities, it is of utmost importance that such legal provision  

are effectively enforced.  In Section 89A there is no provision  

for  a  further  transfer  by  such  a  party  which  has  not  

developed the industry, and therefore, the Collector ought to  

have acted as required by Section 89A (5). In that judgment  

it  was  observed  “enacting  of  a  law,  but  tolerating  its   

infringement, is worse than not enacting a law at all.”  It was  

submitted that in the instant case the state itself has issued  

an order in violation of the law.

33. It  was  then  submitted  that  the  Collector  was  

expected to dispose of the land by holding an auction.  The  

judgment  of  this  court  in  Centre  for  Public  Interest  

Litigation and Ors. Vs. Union of India and Ors. reported  

in 2012 (3) SCC 1 was relied upon in support, wherein it has  

been held that natural resources are national assets and the  

40

41

Page 41

state acts as trustee on behalf of its people.  Public Interest  

requires that the disposal of the natural resources must be by  

a fair, transparent and equitable process such as an auction.  

The same having not been done,  the State exchequer has  

suffered.  Reliance was also placed on the judgment in Noida  

Entrepreneurs Association Vs. Noida and ors.  reported  

in 2011 (6) SCC 508 to submit that whatever is provided by  

law  to  be  done  cannot  be  defeated  by  an  indirect  and  

circuitous contrivance.  

34.  In the instant case, the transfer of the land has  

been  permitted  because  respondent  No.  5  directly  

approached the Chief  Minister  and thereafter  the Revenue  

Minister.   It was submitted that such an act of making of a  

special case smacks of arbitrariness.  The judgment of this  

Court in Chandra Bansi Singh Vs. State of Bihar reported  

in 1984 (4) SCC 316 was relied upon in this behalf.  In that  

matter  the  state  of  Bihar  had  released  a  parcel  of  land  

acquired by it for the benefit of one particular family which  

had  alleged  to  have  exercised  great  influence  on  the  

Government of the time.  The action of the State was held to  

41

42

Page 42

be a clear act of favouritism.  Another judgment of this Court  

in  Manohar  Joshi  Vs.  State  of  Maharashtra  and Ors.  

reported  in  2012  (3)  SCC  619  was  also  relied  upon  to  

criticise a direct approach to the ministers rather than going  

through the statutory authorities.  Reliance was also placed  

on the judgment in Bhaurao Dagdu Paralkar Vs. State of  

Maharashtra  reported  in  2005  (7)  SCC  605  which  has  

explained  the  concept  of  ‘fraud’  from  paragraph  9  to  12  

thereof.  In paragraph 12 amongst others it has referred to an  

earlier  judgment  in  Shrisht  Dhawan  Vs.  Shaw  Bros  

reported in 1992 (1) SCC 534 which relies upon the English  

judgment in Khawaja Vs. Secy. of State for Home Deptt.  

reported  in  1983  (1)  All  ER  765.  In  para  20  of  Shrisht  

Dhawan (supra) this Court has observed:-

“ If a statute has been passed for some  one particular purpose, a court of law will not   countenance  any  attempt  which  may  be   made to extend the operation of the Act to   something else which is quite foreign to its   object  and  beyond  its  scope.’  Present  day  concept of fraud on statute has veered round   abuse  of  power  or  mala  fide  exercise  of   power. It may arise due to overstepping the  limits of power or defeating the provision of   statute by adopting subterfuge or the power   may  be  exercised  for  extraneous  or   

42

43

Page 43

irrelevant considerations. The colour of fraud   in  public  law or  administrative law,  as it  is   developing,  is  assuming  different  shades……”  

35. The learned senior counsel for the appellants Mr.  

Huzefa Ahmadi submitted that the appellants’  writ  petition  

should not have been dismissed only on the ground of delay,  

in as much as the environmental clearance to the project was  

granted on 19.2.2012 and the writ petition was filed in March  

2012.  He submitted that similarly the appellant cannot be  

criticised  for  suppression  of  any  information  about  the  

investment made by respondent No. 5, since the appellant  

cannot be aware of the same.  In any case he submitted that  

in as much as there has been an immediate interim order,  

the plea of large investment having been made is untenable.  

As far as the objection to the appellant No 1 being a person  

belonging to a rival political party is concerned, he submitted  

that he has specifically accepted that he is a political activist.  

In any case, he submitted that the Collector did not act in  

accordance with law at any point of time.  Similarly, the order  

passed by the Government is not a reasoned order and is  

undoubtedly arbitrary.  The power in the Collector implied a  

43

44

Page 44

duty in him to act in accordance with law.  He relied upon a  

judgment  of  this  Court  in  Deewan  Singh  &  Ors.  Vs.  

Rajendra Pd. Ardevi & Ors. reported in 2007 (10) SCC 528  

in this behalf.

Submissions on behalf of the State Government:-  

36 . The  defence  of  the  Government  has  principally  

been that because Indigold was not in a position to set up the  

industry,  and Alumina had given a proposal  in the Vibrant  

Gujarat summit to set up its project on the very land,  the  

proposal  was  accepted.   It  had entered into  an  MOU with  

GMDC which was to have 26% equity therein.  While looking  

into the proposal, initially there was some hesitation on the  

part of the Government as can be seen from the notings of  

the  officers  in  the  Government  files.   However,  ultimately  

looking into the totality of the factors, the Government took  

the  decision  to  permit  the  transfer  of  the  land.   It  is  not  

mandatory that the land must be resumed under Section 89A  

(5) of the Tenancy Act, if the initial purchaser does not set up  

the industry.  Section 89A (5) does not operate automatically.  

Besides, the permission to Indigold to sell  the land can be  

44

45

Page 45

explained  with  reference  to  the  authority  of  the  Collector  

available to him under the first proviso to Section 89(1) read  

with  condition  No.  (4)  of  the  permission  dated  1.5.2003  

granted to Indigold to purchase the concerned lands.  This  

condition No. (4) reads as follows:-

“4. These  lands  cannot  be  sold,   mortgaged,  gifted  or  transferred  in  any   manner  etc.  without  obtaining  prior   permission of the competent officer.”

Last but not the least, Section 126 of the Tenancy Act was  

relied  upon  to  submit  that  the  State  Government  has  an  

overall  control  which  permits  it  to  issue  the  necessary  

directions.   This Section 126 reads as follows:-

“126. Control- In all matters connected  with  this  Act,  the  State  Government  shall   have the same authority and control over the   [Mamlatdar] and the Collectors acting under   this Act as [it has and exercises] over them in   the general and revenue administration.”

37. The  learned  senior  counsel  Mr.  Andhyarujina  

appearing for the State, submitted that the Collector had the  

authority to grant such a permission to sell under Rule 45 (b)  

of the Bombay Tenancy and Agricultural Lands Rules, 1959.  

This rule reads as follows:-

45

46

Page 46

“45.Circumstances in  which permission  for sale, etc. of land under section 89 may be   granted -  The Collector or any other officer   authorised under the proviso to sub-section  (1)  of  section 89 may grant  permission  for   sale, gift exchange, lease or mortgage of any   land  in  favour  of  a  person  who  is  not  an   agriculturists or who being an agriculturists,   cultivates personally land not less than three  family holdings whether as tenure holder or   tenant or partly as tenure holder and partly   as  tenant  in  any  of  the  following  circumstances:- (a) such  a  person  bona  fide  requires  the  

land for a non-agricultural purpose; or (b) the land is required for the benefit of an   

industrial or commercial undertaking or   an educational or charitable institution” …..

Submissions on behalf of the other respondents:-

38. Since it  was the respondent No.4 Indigold,  which  

had initially  purchased the land for  industrial  purpose,  the  

stand of  Indigold was of  significance.   It  is,  however,  very  

relevant to note that Indigold had neither filed any affidavit in  

the High Court, nor in this Court, and their counsel Mr. Trivedi  

stated that he has no submissions to make.  It is the failure of  

the  respondent  No.  4  to  set  up  the  industry,  and  the  

subsequent justification on the basis of financial  difficulties  

for  the same which has led to the sale  of  the land.   It  is  

strange that  such a party had nothing to state before the  

46

47

Page 47

Court.  This is probably because it had already received its  

price after selling the land.  The respondent No. 4 appeared  

to be very much disinterested in as much as even the sale  

documents were signed on their behalf by Mr. Nitin Patel, the  

Managing Director of Alumina.  Mr. Ahmadi, learned counsel  

for  the  appellant  therefore  alleged  collusion  amongst  all  

concerned.

39. The  respondent  No.  5,  however,  contested  the  

matter vigorously.   Mr.  Krishnan Venugopal,  learned senior  

counsel appearing for respondent No. 5 pointed out that the  

respondent  No.  5  had entered into  a  correspondence with  

GMDC  earlier,  and  thereafter  participated  in  the  Vibrant  

Gujarat Summit.  He pointed out that the respondent No. 5  

had previous experience in dealing in Alumina products, and  

therefore was interested in setting up the plant in Kutch.  It  

intended  to  use  the  bauxite  available  in  that  district,  and  

finally it  was going to have a production of 25,000 metric  

tonnes of Alumina per-annum.  It was being set up with an  

investment of Rs. 30 crores.  The project was being set up in  

furtherance of the Industrial Policy of the State of Gujarat and  

47

48

Page 48

with  the  technical  know-how  from  NALCO.   He  drew  our  

attention to the project report and the photographs showing  

the work done so far.   

40. It was submitted that the respondent No.5 had also  

entered into an MOU with GMDC whereunder GMDC was to  

supply bauxite for 25 years, and it was to have 26% equity  

participation.  It is however, material to note that there are 3  

MOUs placed on record.  The first MOU is dated 13.1.2009  

between  Alumina  Refinery  Pvt.  Ltd.  and  GMDC  which  is  

basically like a declaration of intent to set up the plant, and it  

contains the assurance of support from the Government of  

Gujarat.  The second MOU between them is dated 9.9.2009,  

and it   records that  Government of  Gujarat  has agreed to  

support  this  refinery,  and  that  the  GMDC  had  agreed  to  

supply, on priority basis, the plant-grade bauxite to this plant.  

It is this document which states that GMDC will invest in the  

equity of Alumina Refinery to an extent not exceeding 26%.  

It  contains  the  promise  to  supply  bauxite.   Mr.  Krishnan  

Venugopal,  fairly  accepted  that  this  document  cannot  be  

construed as a contract, and that it can at best be utilised as  

48

49

Page 49

a defence to insist on a promissory estoppel.  The third MOU  

is dated 30.11.2011 which is an agreement between Earth  

Refinery Pvt. Ltd. which the holding company of Respondent  

No. 5 and GMDC.  In clause 2.1 of this agreement they have  

agreed to set up a joint venture Company by name Alumina  

Refinery Ltd. Clause 6.2 of this agreement states that equity  

participation of GMDC in this company shall  be 26%.  The  

obligation of GMDC has been spelt out under clause 4.2 to  

supply bauxite.

41. The  principal  submission  of  respondent  No.  5  is  

that it is a bonafide purchaser of land of respondent No. 4, it  

has a serious commitment for industrial development, and it  

is acting in accordance with the industrial policy of the State.  

There is nothing wrong if the Minister directs the transfer of  

the unutilized land of respondent No. 4 to respondent No. 5  

for  industrial  purpose,  and  this  should  be  accepted  as  

permissible. The minister’s action cannot be called malafide  

since it is in the interest of the industrial development of the  

State.  Mr.  Krishnan Venugopal submitted that the right to  

transfer  is  incidental  to  the  right  of  ownership,  and  relied  

49

50

Page 50

upon  paragraph  36  of  the  judgment  of  this  Court  in  DLF  

Qutab Enclave Complex Educational  Charitable  Trust  

Vs. State of Haryana and Ors. reported in 2003 (5) SCC  

622.  He further submitted that unless the possession of the  

unutilized area is taken over by the State, the landlord’s title  

to it is not extinguished.  There is no automatic vesting of  

land in the instant case.  He relied upon the judgment of this  

Court in Ujjagar Singh Vs. Collector reported in 1996 (5)  

SCC 14 in this behalf.  

42. It was then submitted that notings cannot be made  

a  basis  for  an  inference  of  extraneous  consideration,  and  

reliance was placed upon the observations of this Court in  

paragraph  35  in  Jasbir  Singh  Chhabra  Vs.  State  of  

Punjab reported in 2010 (4) SCC 192.  He pointed out that  

the law laid down in Centre for Public Interest Litigation  

and Ors. Vs. Union of India and Ors.  (supra)  had been  

clarified by a Constitution Bench in the matter of  Natural  

Resources Allocation,  In  Re:  Special  Reference (1)  of  

2012 reported in 2012(10) SCC 1.  He referred to paragraph  

122  of  the  judgment  which  quotes  the  observations  from  

50

51

Page 51

Katuri Lal Lakshmi Reddy Vs. State of J&K  reported in  

1980 (4) SCC 1 as follows:-

”  122. In  Kasturi Lal Lakshmi Reddy v.  State of J&K, while comparing the efficacy of   auction  in  promoting  a  domestic  industry,   P.N. Bhagwati, J. observed: (SCC p. 20, para   22)

“22.  …  If  the  State  were  giving  a  tapping contract simpliciter there can be no  doubt that the State would have to auction or   invite tenders for securing the highest price,   subject,  of  course,  to  any  other  relevant   overriding considerations of public wealth or   interest,  but  in  a  case  like  this  where  the  State is allocating resources such as water,   power, raw materials, etc. for the purpose of   encouraging  setting  up  of  industries  within   the State, we do not think the State is bound  to advertise and tell the people that it wants   a particular industry to be set up within the   State and invite those interested to come up   with  proposals  for  the  purpose.  The  State   may choose to do so, if it thinks fit and in a   given situation, it  may even turn out to be   advantageous for the State to do so, but if   any private party comes before the State and  offers to set up an industry, the State would   not  be  committing  breach  of  any  constitutional  or  legal  obligation  if  it   negotiates  with  such  party  and  agrees  to   provide resources and other facilities for the  purpose of setting up the industry…..”  

 He  also  referred  to  paragraph  146  of  the  judgment  (Per  

Khehar J), therein, where the learned Judge has observed that  

the court cannot mandate one method to be followed in all  

51

52

Page 52

facts and circumstances, and auction and economic choice of  

disposal of natural resources is not a constitutional mandate.  

It was therefore submitted that, it was not necessary that the  

Collector ought to have opted for auction of the concerned  

parcel of land.  

43. The  learned  senior  counsel  Mr.  Krishnan  

Venugopal, lastly drew our attention to the Jantri prices of the  

land in 2008. He pointed out that at the highest, the State  

would have sold this land, as per the Jantri price, for Rs. 4.35  

crores.  Assuming  that  the  State  was  also  to  pay  Rs.  1.20  

crores  as  compensation  to  Indigold,  the  loss  to  the  State  

would come to Rs 3.15 crores. He submitted that if it comes  

to that, the respondent No. 5, alongwith Indigold, could be  

asked  to  compensate  the  state  for  this  difference  of  3.15  

crores  or  such  other  amount  as  may  be  directed,  but  its  

project must not be made to suffer.  

44. GMDC was represented by learned senior counsel  

Mr. Giri.  He defended the action of the State as something in  

furtherance of the industrial policy of the State.  If the land  

was to be sold and compensation was to be given, it may not  

52

53

Page 53

have resulted into much benefit to the state.  He relied upon  

Section 7 of the Transfer of Property Act, to submit that every  

person competent  to  contract,  and entitled to  transferable  

property can transfer such property, and under S 10 of the  

said  Act  any  condition  restraining  alienation  was  void.  He  

relied  on  paragraph  20  of  the  judgment  in  Prakash  

Amichand Shah Vs. State of Gujarat reported in 1986 (1)  

SCC 581,  to submit that divesting of title takes place only  

statutorily, and which had not happened in the instant case.   

Examination  of  the Scheme  underlying  Sections  89  and 89A above:-

45. Before we examine the submissions on behalf of all  

the parties,  it  becomes necessary  to  examine the scheme  

underlying the relevant sections 89 and 89A.  As can be seen,  

Section 89 essentially bars the transfers of agricultural lands  

to non-agriculturists. The said section is split into four parts.  

(a) Sub-section (1) provides that no sale or mortgage, gift,  

exchange or lease of any land, or no agreement in that behalf  

shall be valid in favour of a non-agriculturist. The first proviso  

to Section 89 (1) makes an exception viz. that the Collector  

or  an  officer  authorised  by  the  State  Government  in  this  

53

54

Page 54

behalf  may grant permission for  such sale,  gift,  exchange,  

lease or mortgage for that purpose, in such circumstances as  

may be prescribed.  The second proviso of course provides  

that no permission is required where the land is being sold to  

a  person  who  is  not  an  agriculturist,  but  it  is  sold  for  

agricultural purpose.  

(b) Sub section (2) provides that the above restriction will not  

apply to a sale etc. in favour of an agricultural labourer or an  

artisan  

(c)  Sub-section  (3)  similarly  provides  that  the  above  

restriction  will  not  apply  to  a  mortgage  in  favour  of  a  

cooperative society, to secure a loan therefrom.  

(d)  Sub-section  (4)  lays  down  that  the  restriction  under  

Section 90 with respect to the reasonable price for the land  

to be sold will not apply to the sale under Section 89(1).  

46. Section 89A creates an exception to Section 89 for  

sale of land for bona-fide industrial purposes in certain cases.  

This section is split into five sub-sections. Sub-section (1) of  

Section 89A deals with those lands for which no permission is  

required under sub-section (1) of Section 65B of the Bombay  

54

55

Page 55

Land  Revenue  Code,  1879,  i.e.  lands  such  as  those  in  

industrial zone etc.  It lays down that nothing in Section 89  

will prohibit the sale or the agreement of sale of such zonal  

land in favour of any person for use of such land by such  

person for  a  bona-fide  industrial  purpose.  Section  89A,  

creates an exception to Section 89 by allowing a sale of land  

for  bonafide  industrial  purpose  in  certain  cases  as  

contemplated under the said section.   These requirements  

are laid down in the provisos (a) to (d) of sub-section (1) and  

in sub-section (2) to (4) of Section 89A.  They are as follows:-

(i) That  the  land  is  not  situated  within  an  urban  

agglomeration,

(ii) A prior permission of the Industries Commissioner of the  

State is to be obtained where the area of the land proposed  

to be sold exceeds ten hectares,

(iii) The land proposed to be sold shall not exceed four times  

the area on which the construction of the industry is to be put  

up excluding the additional land for pollution measures,

(iv) If the land belongs to a tribal, it shall be subjected to  

certain additional restrictions,

55

56

Page 56

(v) Within 30 days the purchaser has to inform the Collector  

of such purchase failing which he is liable to a fine,

(vi) The  Collector  has  thereafter  to  make  an  enquiry  

whether  the  land  is  purchased  for  a  bonafide  industrial  

purpose and issue a certificate to that effect.  In case he is  

not  satisfied  of  the  bonafide  industrial  purpose,  he has  to  

hear the purchaser, and thereafter he may refuse issuance of  

such  certificate  against  which  an  appeal  lies  to  the  State  

Government.   

(vii) Lastly,  the purchaser  has to  commence the industrial  

activity within three years from the date of certificate, and  

start the production of goods and services within five years  

from the date of issuance of certificate.

47. Where  the  purchaser  fails  to  start  the  industrial  

activity  as  stipulated  above,  Section  89A  (5)  requires  the  

Collector  to  hold  an  enquiry,  wherein  he  has  to  give  the  

purchaser  an opportunity  of  being heard.  Thereafter,  if  he  

confirms such a view, he is expected to pass an order that  

the land shall vest in the Government which will, however, be  

done after determining appropriate compensation payable to  

56

57

Page 57

the purchaser,  which has to be done having regard to the  

price paid by the purchaser. Then the land shall be disposed  

of by the Government having regard to the use of the land.  

Thus, the only authority contemplated under the section is  

the Collector, and the decision is to be taken at his level. It is  

only  in  the event  of  his  refusing  to  give the  certificate  of  

purchase for bonafide industrial purpose that an appeal lies  

to  the  State  Government.   Thus,  where  one  wants  to  

purchase agricultural land for industrial purposes, one has to  

first  obtain the permission of  the Industries Commissioner.  

The  purchaser  has  also  to  inform the  Collector  about  the  

purchase  within  30  days  of  such  purchase,  and  obtain  a  

certificate that the land is purchased for a bonafide industrial  

purpose.  He has to see to it that the industrial activity starts  

in  three  years  from  the  date  of  such  certificate,  and  the  

production of goods and services also starts within five years  

thereof,  which  period  can  be  extended  by  the  State  

Government,  in  an  appropriate  case.   In  the  event  the  

purchaser  fails  to  commence  such  industrial  activity,  the  

Collector  has  to  make an  enquiry,  and thereafter  pass  an  

57

58

Page 58

appropriate order of resumption of the land on determining  

the compensation.  Thus, the entire authority in this behalf is  

with the Collector and none other.

Have  the  provisions  of  Sections  89  and  89A  been  complied in the present case:-  

48. Now,  we  may  examine  the  developments  in  the  

present matter on the backdrop of these statutory provisions.  

It is relevant to note that in their first letter dated 6.12.2008,  

the  respondent  No.4  has  not  referred  to  any  financial  

constraint.   The letter  merely  states  that  respondent  No.4  

wanted to dispose off the entire piece of land since they were  

no more interested in putting up any industrial project in the  

said land.  As can be seen from Section 89A, the object of the  

section is to permit transfer of agricultural land, only for a  

bonafide  industrial  purpose.   Where  the  land  exceeds  ten  

hectares,  such a purchaser has to obtain,  to begin with,  a  

previous permission of  the  Industries  Commissioner  before  

any  such  sale  can  be  given  effect  to.  Thereafter,  the  

purchaser has to send a notice to the Collector within 30 days  

of the purchase, and the Collector has to be satisfied that the  

land  has  been  validly  purchased  for  a  bonafide  industrial  

58

59

Page 59

purpose, in conformity with the provisions of sub-section (1),  

and then issue a certificate to that effect.  There is a further  

requirement  that  the  purchaser  has  to  commence  the  

industrial  activity  within  three  years,  and  has  to  start  the  

production within five years from the date of issuance of the  

certificate.  Admittedly no such steps were taken by Indigold,  

nor was any affidavit in reply filed by them, either before the  

High Court or before this Court.  Mr. Trivedi, learned counsel,  

appeared for  Indigold,  and he was specifically  asked as to  

what were the attempts that had been made by respondent  

No.4 to set up the industry,  and what were the difficulties  

faced  by  it.   He  was  asked as  to  whether  there  was  any  

material  in  support  of  the  following  statement  made  in  

Indigold’s letter dated 16.6.2009 i.e. ‘we have tried our level  

best  to  set  up  the  industry  on  the  land  in  question.’  Mr.  

Trivedi stated that he had nothing to say in this behalf.  All  

that he stated was that the respondent No.4 purchased the  

land, it was unable to set up its unit, and it sold the land to  

respondent No.5.  

59

60

Page 60

49.  What is, however, material to note in this behalf is  

that whereas the land is supposed to have been purchased in  

2003 at a price of Rs.70 lakhs, it is said to have been sold at  

Rs.1.20 crores in 19.1.2010.  It is very clear that even before  

the  letter  of  16.6.2009  proposing  to  sell  the  land  to  

respondent No.5, in December 2008 itself respondent No.4  

had  written  to  the  Collector  that  they  were  no  more  

interested in putting up the industrial project, and therefore  

they  wanted  to  dispose  off  the  piece  of  land  to  their  

prospective  clients.   That  being  the  position,  it  was  

mandatory for the Collector at that stage itself to act under  

sub-Section  5  of  Section  89A to  issue notice,  conduct  the  

necessary enquiry, determine the compensation and pass the  

order vesting the land in the State Government.  It is very  

clear that Collector has done nothing of the kind.  In any case  

he should have taken the necessary steps in accordance with  

law at least after receiving the letter dated 16.6.2009.  Again  

he did not take any such steps.

50.  It has been pointed out by the respondents that the  

representative of respondent No.5 participated in the Vibrant  

60

61

Page 61

Gujarat Global Investors Summit on 31.1.2009, and signed an  

MOU with respondent No.6 for setting up a specialty alumina  

plant  in  Kutch.   The  MOU stated  that  the  Government  of  

Gujarat was assuring all necessary permissions to respondent  

No.5.  The respondent No.5 will be investing an amount of  

Rs.30  crores  in  the  proposed  plant,  and  it  will  provide  

employment to  80 persons.  Thereafter,  the above referred  

letter  dated  12.6.2009  was  addressed  by  the  respondent  

No.5  to  the  Deputy  Collector  Bhuj.  The  letter  sought  

permission to purchase land belonging to Indigold.  It referred  

to the letter of respondent No.4 dated 6.12.2008. It stated  

that the respondent No.5 would like to purchase the land for  

a bonafide industrial purpose, for setting up their upcoming  

project, Alumina Refinery Limited, on the land admeasuring  

39 acres and 25 gunthas, situated in villages Kukma and Moti  

Reladi.  It  then  sought  the  permission  from the  competent  

authority,  under  Section  89  of  the  Tenancy  Act,  1958  to  

register the sale in their favour.   

51. After writing to the Collector on 16.6.2009, without  

waiting for any communication from him, Alumina wrote to  

61

62

Page 62

the Chief Minister on 18.6.2009. Directors of Alumina had a  

meeting with the Minister of Revenue Smt. Anandiben Patel  

on  29.6.2009,  which  was  recorded  by  Mr.  Nitin  Patel  on  

30.6.2009.  The  Chief  Minister’s  Secretary  wrote  to  the  

Principal  Secretary,  Revenue  Department  on  2.7.2009  

seeking  a  note  on  the  possible  course  of  action.   The  

Revenue  Department  sought  a  factual  report  from  the  

Collector, who instead of furnishing the same, forwarded the  

proposal of Alumina itself to the Department for granting the  

permission  for  the  sale.  The  Department  looked  into  the  

statutory provisions, and then recorded on 7.8.2009 that the  

Collector  is  required  to  take  an  action  at  his  level  in  the  

matter, and the proposal be sent back to him.  After looking  

into  the  legal  position,  the  Principal  Secretary,  Revenue  

Department and the Chief Secretary of the State wrote that  

the land be taken back, and thereafter the issue of allotment  

be examined separately.

52. The  matter  could  have  rested  at  that,  but  the  

Minister of Revenue put a remark that permission be granted  

as a special case, since the land is of private ownership.  The  

62

63

Page 63

matter  was  again  discussed  thereafter,  and  then  a  

suggestion was made by the departmental officers that 50%  

of the unearned income may be sought from the seller.  The  

Chief  Secretary  noted that  land may be given to  the new  

party provided Industries Department recommends it as per  

the laid down rules.  He maintained that the land be taken  

back, and then be re-allotted to the new party.  The Minister,  

however, again passed an order that as suggested earlier by  

her,  permission  be  given  and,  therefore,  the  Collector  

ultimately  granted  the  permission  as  directed  by  the  

Government.   Thus,  as  can  be  seen,  that  instead  of  the  

statutory  authority  viz.  the  Collector  acting  in  accordance  

with  the  statutory  mandate,  only  because  a  direction  was  

given  by  the  Minister  that  the  statutory  authority  was  

bypassed, and even the enquiry as contemplated under sub-

section 5 of Section 89A was given a go-by.  Thus, as can be  

seen from the above narration what emerges from the record  

is that whereas Sections 89 and 89A contemplate a certain  

procedure and certain requirements, what has been done in  

the present matter is quite different. We may refer to Lord  

63

64

Page 64

Bingham’s work titled ‘Rule of Law’ where in the Chapter on  

exercise of power, he observes that:  

‘Ministers and public officers at all level must   exercise  the  powers  conferred  on  them in  good   faith, fairly, for the purpose for which the powers   were  conferred,  without  exceeding  the  limits  of   such powers and not unreasonably’ .  

He  quotes  from  R v.  Tower  Hamlets  London  Borough  

Council [1988] AC 858, which states:

‘Statutory  power  conferred  for  public   purposes is  conferred as  it  were upon trust,  not   absolutely,  that  is  to  say,  it  can validly  be used   only  in  the  right  and  proper  way  which  the  parliament,  when  conferring  it,  is  presumed  to   have intended.’   

53. It is well settled that where the statute provides for  

a thing to be done in a particular manner, then it has to be  

done in that manner and in no other manner.  This proposition  

of  law  laid  down  in  Taylor  Vs.  Taylor  (1875)  1  Ch  D  

426,431 was first adopted by the Judicial Committee in Nazir  

Ahmed Vs. King Emperor reported in AIR 1936 PC 253 and  

then followed by a bench of three Judges of this Court in Rao  

Shiv  Bahadur  Singh  Vs.  State  of  Vindhya  Pradesh  

reported in  AIR 1954 SC 322.  This proposition was further  

explained  in  paragraph  8  of  State  of  U.P.  Vs.  Singhara  

64

65

Page 65

Singh by a bench of three Judges reported in  AIR 1964 SC  

358 in the following words:-

“8.  The  rule  adopted  in  Taylor v.  Taylor is well recognised and is founded on  sound principle. Its result is that if a statute   has conferred a power to do an act and has   laid  down the  method in  which  that  power   has to be exercised, it  necessarily prohibits   the doing of the act in any other manner than   that which has been prescribed. The principle  behind the rule is that if this were not so, the   statutory  provision  might  as  well  not  have   been enacted….”

This  proposition  has  been  later  on  reiterated  in  Chandra  

Kishore Jha Vs. Mahavir Prasad reported in 1999 (8) SCC  

266, Dhananjaya Reddy Vs. State of Karnataka reported  

in 2001 (4) SCC 9 and Gujarat Urja Vikas Nigam Limited  

vs. Essar Power Limited reported in 2008 (4) SCC 755.  

54. (i) Therefore, when Indigold informed the Collector on  

6.12.2008 that they were ‘no more interested’ to put up any  

industrial project, and were disposing of the entire piece of  

land to their prospective client, the Collector was expected to  

hold the necessary enquiry.  This was the minimum that he  

was  expected  to  do.  After  holding  the  enquiry,  if  he  was  

convinced that the industrial activity had not been started, he  

65

66

Page 66

was expected to pass an order that the land will vest in the  

State  which  will  have  to  be  done  after  determining  the  

compensation payable having regard to the price paid by the  

purchaser.  In the instant case, the respondent No.4 claims to  

have purchased the land for Rs.70 lakhs.  As pointed out by  

Mr. Krishnan Venugopal himself, as per the jantri price of the  

lands at that time, i.e. even at the Government rate in 2008,  

the  land  was  worth  Rs.4.35  crores.   The  collector  was  

expected  to  dispose  of  the  land  by  auction  which  is  the  

normal  method for  disposal  of  natural  resources which  are  

national  assets.   Out  of  that  amount,  the  compensation  

payable  to  the  respondent  no.4  would  have  been  around  

Rs.70 lakhs having regard to the amount that the respondent  

No.4  had  paid.  This  is  because  respondent  no.  4  had  

purchased agricultural land to put up an industry, and they  

had taken no steps whatsoever for over five years to set up  

the industry. They were not expected to purchase the land,  

and thereafter  sell  it  for  profiteering.  The Jantri  price is  an  

official price.  In actual auction the State could have realised a  

66

67

Page 67

greater  amount.  In  permitting the sale inter-se parties,  the  

State exchequer has positively suffered.   

(ii) On the other  hand,  in  the event,  the Collector  was to  

form an opinion after receiving the bids or otherwise that it  

was not worth disposing of the land in that particular way, he  

could have divested Respondent No. 4 of the land by paying  

compensation, and re-allotted the same to the Respondent No  

5 at an appropriate consideration.  The statute required him  

to act in a particular manner and the land had to be dealt in  

that particular manner only, and in no other manner, as can  

be  seen  from  the  legal  position,  accepted  in  various  

judgments based on the proposition in Taylor vs. Taylor.  

55. Thus  inspite  of  the  Secretaries  repeating  their  

advice,  the  Minister  of  Revenue  Smt.  Anandiben  Patel  has  

insisted on treating this case as a special case for which she  

has recorded no justifiable reasons whatsoever,  and orders  

were  issued  accordingly.   Under  Section  89A(3),  the  

Government  is  the  appellate  authority  where  the  Collector  

does not grant a certificate for purchase of bonafide industrial  

purpose.  Thus what has happened, thereby is that the powers  

67

68

Page 68

of  the  statutory  authority  have  been  exercised  by  the  

Government which is an appellate authority.  

56. The  State  Government  gave  three  additional  

reasons when it defended its decision. (i)The first reason was  

that if the land had been directed to be vested in the State  

Government,  State  would  have  been  required  to  pay  

compensation  to  Indigold,  and  it  would  have  been  a  long-

drawn process for determining the valuation of the land, and  

thereafter for finding the suitable and interested party to set  

up an industry.  As stated earlier, this plea is not tenable.  If  

the law requires something to be done in a particular manner,  

it has got to be done in that way and by no other different  

manner. (ii) The second reason given was that the action was  

in  State’s  own  interest  because  through  its  public  sector  

undertaking i.e. GMDC, it was involved in the transaction viz.  

that is it is going to have 26% equity.  As far as this part is  

concerned  again  it  is  difficult  to  accept  this  reason  also  

because one does not know what will be the value of shares of  

the new company.  (iii) Third reason given was that the land  

was worth Rs.4.35 crores as per the Jantri in 2008, and as per  

68

69

Page 69

the revised Jantri in 2011 it had come down to Rs.2.08 crores.  

This is a situation which was brought about by the State itself  

and this cannot be a ground for the State to submit that it  

would not have gained much in the process.   

57.  That  apart  it  has  to  be  examined  whether  the  

Government  had  given  sufficient  reasons  for  the  order  it  

passed, at the time of passing such order.  The Government  

must defend its action on the basis of the order that it has  

passed, and it cannot improve its stand by filing subsequent  

affidavits  as  laid  down  by  this  Court  long  back  in  

Commissioner  of  Police,  Bombay  vs.  Gordhandas  

Bhanji reported in AIR 1952 SC 16 in the following words:-  

“Public  orders,  publicly  made,  in   exercise of  a  statutory  authority  cannot  be   construed  in  the  light  of  explanations  subsequently given by the officer making the  order of what he meant, or of what was in his   mind,  or  what  he  intended  to  do.  Public   orders made by public authorities are meant   to  have  public  effect  and  are  intended  to   affect  the  actings  and  conduct  of  those  to   whom  they  are  addressed  and  must  be  construed  objectively  with  reference  to  the  language used in the order itself.”

This proposition has been quoted with approval in paragraph  

8 by a Constitution Bench in Mohinder Singh Gill vs. Chief  

69

70

Page 70

Election  Commissioner  reported  in  1978  (1)  SCC  405  

wherein Krishna Iyer, J. has stated as follows:-

“8. The second equally relevant matter   is  that when a statutory functionary makes   an  order  based  on  certain  grounds,  its   validity  must  be  judged  by  the  reasons  so   mentioned and cannot be supplemented by  fresh  reasons  in  the  shape  of  affidavit  or   otherwise.  Otherwise,  an  order  bad  in  the   beginning may, by the time it comes to court   on account of a challenge, get validated by   additional grounds later brought out.”

In this context it must be noted that the Revenue Minister’s  

direction  merely  states  that  it  is  a  private  land,  and  the  

Governments letter dated 18.12.2009 speaks of the financial  

incapability of Inidgold.  Neither the letter dated 18.12.2009  

from the Government to the Collector, nor the order passed  

by  the  Deputy  Collector  on  15.1.2010  mention  anything  

about:  

1. the mineral policy of the Government of Gujarat.

2. the time taking nature of the process of acquiring the  land and re-allotting it.

3. That  the  second  sale  was  under  the  authority  of  the  

Collector  available  to  him  under  the  first  proviso  to  

Section  89(1)  read  with  condition  no.  (4)  of  the  

70

71

Page 71

permission  dated  1.5.2003  granted  to  Indigold  to  

purchase the concerned lands.

In the absence of any of these factors being mentioned in the  

previous orders, it is clear that they are being pressed into  

service  as  an  after-thought.  The  Government  can  not  be  

allowed to improve its stand in such a manner with the aid of  

affidavits.   

58. As  noted  earlier,  the  State  Government  is  an  

Appellate Authority under sub-section 3 of Section 89A, and it  

could  not  have given a  direction to  the Collector  who was  

supposed to take the decision under his own authority.  We  

may profitably refer to a judgment of a Constitutional Bench  

in  State of Punjay vs. Hari Kishan  reported in  AIR 1966  

SC 1081.  In that matter, the respondent desired to construct  

a cinema at Jhajhar.  He submitted an application and under  

the  orders  of  the  State  Government  all  applications  were  

directed to be referred to the State Government. Therefore,  

though  his  application  was  initially  accepted,  the  SDO  

informed him that the application was rejected.  He appealed  

to the State Government and the appeal was rejected which  

71

72

Page 72

has led to the petition in the High Court.  The Punjab High  

Court framed the question as to whether the State of Punjab  

was justified in assuming the jurisdiction which was conferred  

on the licensing authority by the act.  The Supreme Court held  

in paragraph 4 of the judgment, that the course adopted by  

the  State  of  Punjab  had  resulted  in  the  conversion  of  the  

appellate authority into the licensing authority. That was not  

permissible, and so it is in the present case.  The reliance by  

the  State  Government  on  the  overall  control  of  the  State  

under Section 126 of the Tenancy Act cannot be used when in  

the  instant  case  the  power  is  with  the  Collector  and  the  

appellate power is  with the State Government.   The power  

under  Section  126  can  be  utilized  for  giving  general  

guidelines,  but  not  for  interference  or  giving  directions  in  

individual cases.

59. The  submission  that  condition  No.4  of  the  

permission to purchase, obtained by respondent No.4 in 2003  

permits  the  Collector  to  pass  such  an  order  is  equally  

untenable.  There  is  nothing  in  the  statutory  scheme  to  

suggest that a second sale, inter se parties, after the failure of  

72

73

Page 73

a purchaser to set up an industry is permissible. In such an  

event, the statute requires an enquiry to be conducted by the  

collector. If he is satisfied that there is a failure to set up the  

industry,  the  compensation  to  be  paid  to  the  purchaser  is  

determined.  After  this  stage  the  land  vests  in  the  

Government.  It  is thus clear that the condition No 4 in the  

permission obtained by Respondent No. 4 is bad in law, not  

having its  basis in any statutory provision.   Even assuming  

that  the  Collector  had  that  power  to  lay  down  such  a  

condition,  the  authority  to  permit  the  sale  as  per  the  said  

condition  had  to  be  exercised  by  him  in  the  manner  

contemplated under Section 89 A (5)  viz.  after  holding the  

enquiry as prescribed.  Here the enquiry itself was dispensed  

with.  Rule  45(b)  of  the  Bombay  Tenancy  and  Agricultural  

Lands Rules, 1959 also cannot be pressed into service for the  

reason that, neither under Section 89 nor under Section 89A,  

a sale inter-se parties is contemplated or permitted.  

60. Now,  what  is  to  be  noted  is  that  wherever  an  

agriculturist is in possession of a land, either as an owner or  

as a tenant protected by the statute, transfer of his land for  

73

74

Page 74

industrial purposes is subject to the conditions regulated by  

the  Act.  It  is  for  the  protection  and  preservation  of  the  

agricultural  land that  the bar  against  conversion is  created  

under Section 89. Thereafter, as an exception, only a bonafide  

use for industrial  purpose is permissible under section 89A.  

Ownership of respondent No.4 was subject to the conditions  

of utilization for bonafide industrial purpose, and it was clear  

on record that respondent No.4 had failed to utilize the land  

for  bonafide  industrial  purpose.  The reliance on  Sections  7  

and 10 of the Transfer of Property Act is also misconceived in  

the  present  case,  since  the  Tenancy  Act  is  a  welfare  

enactment, enacted for the protection of the agriculturists. It  

is a special statute and the sale of agricultural land permitted  

under  this  statue will  have to be held  as  governed by the  

conditions  prescribed  under  the  statute  itself.  The  special  

provisions made in the Tenancy Act will therefore prevail over  

those in the Transfer of Property Act to that extent.  

61. Besides, the  present  case  is  clearly  a  case  of  

dictation  by  the  State  Government  to  the  Collector.  As  

74

75

Page 75

observed  by  Wade  and  Forsyth  in  Tenth  Edition  of  

Administrative Law:-  

“if the minister’s intervention is in fact   the effective cause, and if the power to act   belongs  to  a  body  which  ought  to  act   independently, the action taken is invalid on   the ground of external dictation as well as on   the obvious grounds of bad faith or abuse of   power”.   

The observations by the learned authors to the same effect in  

the  Seventh  Edition  were  relied  upon by  a  bench of  three  

judges of  this  Court  in  Anirudhsinhji  Karansinhji  Jadega  

and anr. vs. State of Gujarat  reported in  1995 (5) SCC  

302.  In this matter the appellant was produced before the  

Executive Magistrate, Gondal, on the allegation that certain  

weapons were recovered from him.  The provisions of TADA  

had been invoked.  The appellant’s application for bail  was  

rejected.   A specific  point was taken that the DSP had not  

given prior approval and the invocation of TADA was non-est.  

The DSP, instead of granting prior approval, made a report to  

the Additional  Chief Secretary,  and asked for  permission to  

proceed under TADA.  The Court in para 13, 14, 15 has held  

75

76

Page 76

this to be a clear case of ‘dictation’, and has referred to Wade  

and Forsyth on ‘Surrender Abdications and Dictation’.   

62. The respondent No.5 had the courage to state that  

the  notings  of  the  Secretaries  were  inconsequential.   As  a  

beneficiary  of  the  largesse  of  the  Government,  respondent  

No.5 could say that, but it is not possible for us to accept the  

same.   In  Trilochan  Dev  Sharma  vs.  State  of  Punjab  

reported in AIR 2001 SC 2524 what is observed by this Court  

is relevant for our purpose

“In  the  system  of  Indian  Democratic   Governance,  as  contemplated  by  the  constitution,  senior  officials  occupying  key   positions  such  as  Secretaries  are  not   supposed to mortgage their  own discretion,   volition and decision making authority and be   prepared to give way or being pushed back   or  pressed  ahead  at  the  behest  of   politications,  for  carrying  out  commands   having no sanctity in law.”

A higher civil servant normally has had a varied experience  

and the ministers ought not to treat his opinion with scant  

respect. If Ministers want to take a different view, there must  

be compelling reasons, and the same must be reflected on  

the  record.  In  the  present  case,  the  Secretaries  had given  

advice in accordance with the statute and yet the Minister has  

76

77

Page 77

given a direction to act contrary thereto and permitted the  

sale which is clearly in breach of the statute.    

63. Now, the effect of all that is stated above is that the  

land which was purchased by respondent No.4 for Rs.70 lakhs  

is permitted by the Government of Gujarat to be sold directly  

to respondent No.5 at Rs.1.20 crores to set up an industry  

which could not have been done legally.  It is undoubtedly not  

a  case  of  loss  of  hundreds  of  crores  as  claimed  by  the  

appellants,  but  certainly  a positive case of  a  loss of  a  few  

crores by the public exchequer by not going for public auction  

of the concerned property.  It is true as pointed out by Mr.  

Venugopal,  learned senior counsel  that in a given case the  

state may invite an entrepreneur and give an offer.  However,  

in the instant case, the sale of the land for industrial purpose  

is controlled by the statutory provisions, and the State was  

bound to  act  as per  the requirements  of  the statute.   The  

minister’s direction as seen from the record clearly indicates  

an arbitrary  exercise  of  power.   The orders  passed by  the  

Government cannot therefore be sustained. As seen earlier,  

there is neither a power nor a justification to make any special  

77

78

Page 78

case, in favour of the Respondent No 5. Such exceptions may  

open  floodgates  for  similar  applications  and  orders,  even  

though the Gujarat Government is contending that this order  

is purportedly not to be treated as a precedent.

64. In our view, considering the scheme of the act, the  

process  of  industrialization  must  take  place  in  accordance  

therewith.  As stated earlier if  the law requires a particular  

thing should be done in a particular manner it must be done  

in  that  way and none other.   The State cannot  ignore the  

policy intent and the procedure contemplated by the statute.  

In the instant case, the State could have acquired the land,  

and then either by auction or by considering the merit of the  

proposal  of  respondent No.5 allotted it  to respondent No.5.  

Assuming that the application of the Respondent No 5 was for  

a bona-fide purpose,  the same had to be examined by the  

industrial  commissioner,  to  begin  with,  and  thereafter  it  

should have gone to the collector. After the property vests in  

the  Government,  even  if  there  were  other  bidders  to  the  

property, the collector could have considered the merits and  

the bona-fides of the application of Respondent No.  5,  and  

78

79

Page 79

nothing would have prevented him from following the course  

which is permissible under the law. It is not merely the end  

but the means which are of equal importance, particularly if  

they are enshrined in the legislative scheme. The minimum  

that was required was an enquiry at the level of the Collector  

who  is  the  statutory  authority.   Dictating  him  to  act  in  a  

particular manner on the assumption by the Minister that it is  

in the interest of the industrial development would lead to a  

breach  of  the  mandate  of  the  statute  framed  by  the  

legislature.   The  Ministers  are  not  expected  to  act  in  this  

manner  and  therefore,  this  particular  route  through  the  

corridors of the Ministry,  contrary to the statute, cannot be  

approved. The present case is clearly one of dereliction of his  

duties by the Collector and dictation by the Minister, showing  

nothing but arrogance of power.    

65. The High Court has erred in overlooking the legal  

position. It was expected to look into all the earlier mentioned  

aspects.   The  impugned  judgment  does  not  reflect  on  the  

issues raised in the petition.   It  could not be said that the  

petition  was  delayed  and  merely  because  investment  had  

79

80

Page 80

been made by the respondent No.5, the court would decline  

to look into the important issues raised in the PIL.  

Epilogue:-

66. Before we conclude, we may observe that India is  

essentially  a  land  of  villages.  Although,  urbanization  and  

industrialization  is  taking  place,  the  industry  has  not  

developed sufficiently, and large part of our population is still  

required to depend on agriculture for sustenance. Lands are,  

therefore,  required to be retained for  agricultural  purposes.  

They are also required to be protected from the damage of  

industrial  pollution.   Bonafide  industrial  activity  may  mean  

good income to the entrepreneurs, but it should also result  

into good employment and revenue to the State, causing least  

pollution  and  damage  to  the  environment  and  adjoining  

agriculturists.   While granting the permission under Section  

89A (5) the Collector has to examine all these aspects.  This is  

because  the  only  other  exception  for  conversion  of  

agricultural  lands  to  non-agricultural  purpose  is  for  those  

lands which are in an industrial zone.  As far as the conversion  

of  lands  otherwise  than  those  in  the  industrial  zone  is  

80

81

Page 81

concerned,  all  the aforesaid precautions are required to be  

taken when a decision is to be arrived at as to whether the  

application is for a bonafide industrial purpose. In the instant  

case,  there  were  newspaper  reports  of  apprehensions  and  

protest of the adjoining farmers.  The Revenue Secretary and  

the  Chief  Secretary  had placed the statutory  provisions  on  

record.  It was expected of the Government and the Revenue  

Minister  to  take  cognizance  of  these  apprehensions  of  the  

farmers  as  well  as  the  statutory  provisions  brought  to  her  

notice by the secretaries.  She has simply brushed aside the  

objections  of  the  secretaries  merely  because  the  Chief  

Minister’s secretary had written a letter, and because she was  

the  minister  concerned.  While  over-ruling  the  opinion  of  

secretaries  to  the  concerned  department,  the  Minister  was  

expected to give some reasons in support of the view she was  

taking. No such reason has come on record in her file notings.  

She has ignored that howsoever high you may be, the law is  

above you.

67. Development  should  not  be  measured  merely  in  

terms of growth of gross domestic product, but it should be in  

81

82

Page 82

terms of utility to the community and the society in general.  

There is a certain inbuilt wisdom in the statute which is the  

mandate of the legislature which represents the people. The  

Minister has clearly failed to pay respect to the same.

Hence, the following decision:-

68.  Having  noted  the  legal  position  and  the  factual  

scenario,  the impugned judgment and order  passed by the  

High Court will have to be set aside.  The prayers in the PIL  

will have to be entertained to hold that the direction of the  

State  Government  dated  18.12.2009  and  the  consequent  

order  issued  by  the  Collector  of  Kutch  on  15.1.2010  is  

arbitrary, and bad in law for being in violation of the scheme  

and the provisions of Sections 89 and 89A of the Tenancy Act.  

The direct sale of land by Indigold to Alumina is also held to  

be bad in law, and inoperative.

69. (i)  In normal circumstances, the order hereafter would  

have been to direct the Collector to proceed in accordance  

with Section 89A(5) viz., to hold an enquiry to decide whether  

the  purchaser  viz.  Indigold  had  failed  to  commence  the  

industrial  activity and the production of goods and services  

82

83

Page 83

within the period specified.  In the instant case, there is no  

need of any such direction to hold an enquiry, in view of the  

letter of  Indigold itself,  dated 6.12.2008, wherein,  it  clearly  

stated that they were no more interested in putting up any  

industrial project in the said land.   

(ii) Consequently, there will be an order that the land shall  

vest  in  the  State  Government  free  from all  encumbrances.  

This  vesting  order,  however,  has  to  be  on  payment  of  

appropriate compensation to the purchaser as the Collector  

may  determine.   In  the  instant  case,  there  is  no  need  of  

having  this  determination,  for  the  reason that  Indigold  has  

received from Alumina Rs. 1.20 crores as against the amount  

of  70 lakhs,  which it  had paid to the agriculturists  when it  

bought those lands in 2003. Neither Indigold nor Alumina is  

making  any  grievance  towards  this  figure  or  the  payment  

thereof.  In fact, it is the case of both of them that the direct  

sale by Indigold to Alumina for this amount as permitted by  

the  State  Government  be  held  valid.   That  being  so,  this  

amount  of  Rs.  1.20  crores  would  be  set-off  towards  the  

compensation  which  would  be  payable  by  the  State  

83

84

Page 84

Government  to  the  purchaser  Indigold,  since  the  land  was  

originally  purchased by Indigold,  and is  now to vest  in  the  

State Government.   

(iii) The third  step in  this  regard is  that  the land is  to  be  

disposed off by the State Government, having regard to the  

use of the land.  The land was supposed to be used for the  

industrial  activity  on  the  basis  of  the  utilization  of  bauxite  

found in Kutch, and respondent No. 5 has proposed a plant  

based  on  use  of  bauxite.  The  disposal  of  the  land  will,  

however, have to be at least as per the minimum price that  

would be receivable at the Government rate.  In the facts and  

circumstances of this case, having noted that the respondent  

No.5 claims to have made some good investment, and that  

the  Respondent  No.5  has  also  offered  to  pay,  without  

prejudice, the difference between Rs.4.35 crores and Rs.1.20  

crores  i.e.  Rs.3.15  cores  to  the  State,  the  land  will  be  

permitted  to  be  disposed  of  by  the  State  Government  to  

Alumina provided Alumina pays this amount of Rs. 3.15 crores  

to the State Government.  This particular order is being made  

having further noted that, Alumina has acted on the basis of  

84

85

Page 85

the commitment made to it by the Government of Gujarat in  

the  Vibrant  Gujarat  Summit,  and  in  furtherance  of  the  

industrial development policy of the State. It is also relevant  

to note that the respondent No.5 had made an application to  

the Collector in the year 2009 for permitting the purchase of  

the land, and has been waiting to set up its industry for the  

last four years. Mr. Ahmadi, learned senior counsel appearing  

for the appellants has also submitted that, as such, appellants  

are not against the development of Kutch area, but they do  

want the state to follow the law and exchequer not to suffer.  

In the circumstances, although we do not approve the action  

of the State Government, and hold it to be clearly arbitrary  

and untenable, we are of the view that the aforesaid order will  

be appropriate to do complete justice in the matter.

70. In the circumstances, we pass the following orders:-

(a) The appeal is allowed in part;

(b) The impugned judgment and order passed by the High  

Court is set-aside;

(c) The PIL No.44 of 2012 filed by the appellants is allowed  

by holding that  the order  dated 18.12.2009 passed by the  

85

86

Page 86

Government  of  Gujarat  and  by  the  Collector  of  Kutch  on  

15.1.2010, are held to be arbitrary and bad in law;  

(d) In the facts and circumstances of this case, the sale of  

the concerned land by Indigold to Alumina is held to be bad in  

law.  The land involved in the present case is held to have  

vested in the State of Gujarat  free from all encumbrances,  

and the amount of Rs. 1.20 crores paid by Alumina to Indigold  

is treated as full payment towards the compensation payable  

by the State  to Indigold.   

(e) If Alumina is interested in their proposed project, it shall  

pay  an  amount  of  Rs.  3.15  crores  to  the  Government  of  

Gujarat within three months hereafter.  On such a payment  

being made, an order of allotment of the land to Alumina will  

be issued by the State Government.  The further activities of  

Alumina on the concerned parcel of land will start only after  

this payment is made, and in the event the amount is not so  

paid  within  three  months  hereafter,  the  Government  will  

proceed to take further steps to dispose of the land having  

regard to the use of the land.

86

87

Page 87

(f) In the facts of the present case, there shall be no order  

as to costs.  

…………………………………..J.  [ H.L. Gokhale  ]

……………………………………J. [ J. Chelameswar ]

New Delhi Dated: January 23, 2014

87