New Delhi: Justice M.R. Shah’s judgment in Anil Agarwal Foundation Etc. Etc. vs State of Orissa and Others, delivered on April 12, will doubtless be a key highlight of his 4.5-year tenure at the Supreme Court, as he prepares to retire on May 15. Presiding over the two-judge bench also comprising Justice Krishna Murari, who retires on July 8, Justice Shah brought the curtains down on the 13-year-old appeal pending in the apex court against the Orissa high court’s decision, rendered by its then Chief Justice V. Gopala Gowda (who was later elevated to the Supreme Court) on November 16, 2010, by upholding it with the help of legal doctrines in defence of public interest and public trust, and by relying on clear legal precedents.The high court had quashed the land acquisition proceedings including the notifications under Section 4(1) and 6 of the Land Acquisition Act, 1894 (LAA), and the awards passed for acquisition of lands in favour of the company, and directed that the possession of the acquired lands be restored to the respective landowners.Before the high court, two writ petitions were filed by the original landowners whose lands had been acquired and one writ petition was filed by way of a public interest litigation on behalf of the small landholders who could not approach the court and also on behalf of the people of the locality.The dispute was with respect to the acquisition of about 6,000 acres of land belonging to about 6,000 families, affecting approximately 30,000 people. A Memorandum of Understanding was signed between the Government of Orissa and Vedanta Foundation on July 19, 2006. The Government of Orissa confirmed the availability of contiguous land of about 8,000 acres and said it would try to provide additional contiguous land and other facilities as required by the Foundation.The petitioners contended before the high court that the real purpose of requiring such a vast extent of property could not be only for the purpose of the University; the real purpose sought to be achieved had been masked, they alleged. There was some hidden agenda for the beneficiary company, they claimed. It was the case of the petitioners that 80% of the lands sought to be acquired was agricultural land and the owners of the land and their family members depend on the said land for their livelihood. As the company was not a public company, the declaration by the company as well as the authorities was nothing but a colourable exercise of power with the mala fide intention to grab the agricultural properties of the land owner petitioners and other land owners, it was contended before the high court.Ani Agarwal Foundation (AAF), a company registered under the Companies Act, did not fall under any of the categories of the authorities for whom a valid land acquisition process could be launched to acquire land for serving the aforesaid public purpose. Therefore, the acquisition of land for the Foundation for setting up a university directly fell foul of the legal stipulations in Section 3(f)(vi) of the LAA. Section 3(f) of the LAA said that public purpose did not include acquisition of land for companies.The state government, in utter disregard to the relevant provisions of the LAA and the Rules, 1963, had acquired a huge tract of land to the extent of approximately 7,000 acres of agricultural lands belonging to the various landowners, the bench found.Lands in question were acquired for the proposed university in a prime location just adjacent to a wildlife sanctuary and from the lands in question acquired, two small rivers, Nuanai and Nala, belonging to the state/acquired by the state are passing.On Wednesday, the Shah-Murari bench questioned the manner in which the state government acquired the agricultural lands belonging to 6,000 families. The entire initiation of the land acquisition proceedings was by the beneficiary company and not by the state government. There is an utter non-compliance of Rule 4 of the Rules, 1963, it held.High court’s findingsIn its 2010 judgment, the Orissa high court found that the AAF had only three directors on its board and less than seven members, which was less than what was required for a public limited company under Section 12 (b) of the Companies Act, 1956. The AAF had not furnished a certified copy of the memorandum and articles of association as required under the Act, and therefore, did not acquire the status of a public company, the high court had found.The high court concluded that AAF was a Section 25 company, and therefore, not a public limited company. The ceiling/maximum of liability of any member of the company registered under Section 25 of the Companies Act was Rs 5,000 only. Sterlite Foundation first altered its name to Vedanta Foundation, and still later altered its name again to AAF. The conversion of a company, registered under Section 25 of the Companies Act to a so-called public limited company, is not legally permissible under the Acts and Regulations.The bench noted on Wednesday that subsequent alleged conversion from private company to public company was an attempt to get out of the statutory provision under the Act, 1894. The Law Department specifically observed that the land cannot be acquired by a private company for the purposes for which the lands were sought to be acquired; only thereafter did the appellant change the status of the company from private company to public company. This was a mala fide exercise on the part of the appellants, the bench held, agreeing with the high court’s findings.The high court had also found that acquisition of lands for a private company was not permissible except for the purpose mentioned in Section 40(1)(a) of the LAA, and therefore, the acquisition was declared illegal.Thus when the company was a private company, in view of the bar under Section 44-B of LAA, the lands in question could not have been sought to be acquired by the appellant company dehors Section 44B read with Section 40 (1)(a) of LAA. The high court has rightly held that the acquisition was illegal on the aforesaid ground, the Supreme Court found.The high court also found the university non-existent, as the state government only promulgated an ordinance to establish a university, which was untenable in law.The high court found procedural irregularities, such as that the district collector had not caused public notice by way of beating drums, of the substance of notification to acquire lands, to be given in convenient places in the locality. The high court found that no notice was issued to the land owners/interested persons of the acquired lands and, therefore, the question of filing of objections by them under Section 5A of the LAA did not arise.The Supreme Court noted the submission that it was absolutely critical for the collector to have properly heard the objections from the affected people in accordance with Section 5A in relation to desirability of the proposed project, irrespective of the number of objections received and should have made a report in accordance thereof. But he didn’t.In defence of PIL On Wednesday, the Supreme Court bench examined in detail the arguments advanced in defence of the original PIL petitioners in the case before the high court The bench held that a PIL is intended to promote and vindicate public interest which demands that violation of constitutional or legal rights of large number of people who are poor, ignorant or in a socially or economically disadvantaged position should not go unnoticed and unredressed. That would be destructive of the rule of law which forms one of the essential elements of public interest in any democratic form of government, it reasoned.The rule of law does not mean that the protection of the law must be available only to a fortunate few or that the law should be allowed to be prostituted by the vested interests for protecting and upholding the status quo under the guise of enforcement of their civil and political rights. The poor too have civil and political rights and the rule of law is meant for them also, though today it exists only on paper and not in reality, the bench approvingly cited from the court’s earlier judgment in People’s Union for Democratic Rights vs Union of India (1982).In view of the clear pronouncement of law in a catena of cases by the apex court, the bench justified its decision to interfere with the acquisition proceedings and grant of government lands in favour of the AAF to protect public interest.The bench held that the petitioners in the PIL writ petitions before the high court had established that they were bona fide public-spirited persons who were very much interested in protecting the public interest and see that the state government discharged its responsibilities and fundamental duties towards the public of the locality keeping in view the doctrine of public trust upon the public properties.If the PIL petitions are not allowed there will be a continuing wrong of the state government and the beneficiary company, which would violate the human rights of the residents of the locality where the lands are acquired and land owners/ interested persons, the bench pointed out. They are small holders of the lands who belong to the marginalised sections of the society and therefore, they have no access to the justice for which they have got constitutional right under Article 39A of the Constitution and hundreds of acres of government lands granted in favour of the company is utter violation of law, the bench observed.The initiation of the acquisition proceedings in favour of the beneficiary company, on the requisition made by the Vedanta Foundation by misrepresenting fact and playing fraud on the state government, has vitiated the entire acquisition proceedings, the bench held, while agreeing with the high court’s findings.The petitioners have pleaded on behalf of small land holders who have no sustenance to approach the court to fight litigation, it suggested.The Supreme Court held that prior approval of the government is required under Section 44-A of the LAA but as the same had not been followed, the entire acquisition proceedings were quashed as per the previous judgment in H.M.T. House Building Cooperative Society v Syed Khader, (1995). The court also held that the lands shall be restored to the respective land owners irrespective of the fact whether they had challenged the acquisition of their lands or not.If the lands in question are continued to be acquired by the beneficiary company, the control of the rivers would be with the private company, which would violate the Doctrine of Public Trust. Even requiring the beneficiary company to maintain the flow of the two rivers may affect the residents of the locality at large. The large-scale construction for the establishment of the proposed university will also adversely affect the wildlife sanctuary, entire ecosystem and the ecological environment in the locality, the bench found.In Common Cause, A Registered Society vs Union of India (1999), the Supreme Court held that natural resources such as air, water, forest, lakes, rivers and wildlife are public properties entrusted to the government for their safe and proper use and proper protection and the doctrine enjoins upon the government to protect the resources for the enjoyment of the general public rather than to permit their use for private ownership or commercial purposes. Even vast tract of lands belonging to the state government including Gochar lands, on the basis of requisition made for Vedanta Company, had been de-reserved and divested from the purpose for which it was reserved and had been made available for grant in favour of the beneficiary company by way of lease, the bench noted with concern.