The Tata Power Company Ltd. And Anr vs The State Of Maharashtra And Ors
- Court
- Bombay High Court
CNR No : HCBM010261462025
2026:BHC-AS:45243-DB
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 6215 OF 2025
The Tata Power Company Ltd. & Anr. … Petitioners
Versus
The State of Maharashtra & Ors. … Respondents
Mr. D. J. Khambata, Senior Advocate a/w Mr. Prateek Seksaria, Senior
Advocate, Mr. Bhushan Deshmukh, Mr. Venkatesh, Mr. Karan
Rukhana, Mr. Rohit Agarwal, Mr. H. N. Vakil, Mr. Samkit Shah,
Mr.Farad Vakil, Mr. Ashutosh Srivastava, Mr. Syresth Sharma,
Mr.Siddharth Nigotia, Mr. Ashirwad Sapre, Ms. Megha Chandu i/by
Mulla and Mulla and Craigie Blunt & Caroe, for the Petitioners.
Mr. Shrihari G. Aney, Special Counsel (through V.C.) a/w Smt. Shruti D.
Vyas, Addl. Govt. Pleader and Smt. G. R. Raghuwanshi, AGP, for
Respondent Nos.1 to 4-State.
Mr. Chetan Kapadia, Senior Advocate a/w Mr. Yuvraj Singh and
Ms.Shraddha Dube Patil i/by Jay & Co. for Respondent No.5-MIDC.
Mr. Anil Anturkar, Senior Advocate a/w Mr. Abhishek Salian,
Ms.Srushti Thorat, Mr. Mayuresh Ingale, Ms. Kinnari Raut and
Ms.Ayesha Dhorajiwala i/by Vidhi Partners for Respondent No.6.
Mr. Nitin Katore, Law Officer, MIDC, present.
CORAM : MANISH PITALE AND
SHREERAM V. SHIRSAT, JJ.
st
RESERVED ON : 1 SEPTEMBER 2026
th
PRONOUNCED ON : 5 NOVEMBER 2026
JUDGEMENT ( Per Manish Pitale, J. )
. The petitioner-Tata Power Company Limited (TPCL) has
filed this writ petition aggrieved by notification issued by
respondent-State under the provisions of the Maharashtra
Industrial Development Act, 1961 (MID Act), declaring certain
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portion of the land forming part of Thokarwadi Dam and
Reservoir concerned with the existing Bhivpuri Hydro Station of
75 MW and the proposed Bhivpuri Pumped Storage Project of
1000 MW of the petitioner-TPCL in District Pune, as an Industrial
area. The declaration of the industrial area covering a part of the
said land of the petitioner-TPCL and proposed acquisition of the
same is for the benefit of respondent No.6-Maharishi
Vedoddharak Foundation (MVF). The said respondent is already
allotted about 126 hectares of land adjacent to the water body of
the reservoir and by the impugned notification, a further area of
about 84 hectares is sought to be allotted, which includes two land
outcrops in the reservoir, concerning the said dam.
2. It is the case of the petitioner-TPCL that when the subject
land was acquired and handed over to it more than a century ago
for the specific public purpose of establishment of the hydro
electric project, acquisition of a part of the same solely for the
benefit of the respondent No.6-MVF, a private company, amounts
to colourable exercise of power. It is alleged that the provisions of
the statute for acquisition of land i.e. the Right to Fair
Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013 (Act of 2013) have
been bypassed by deliberately taking recourse to the provisions of
the MID Act and an ingenious ‘pass through’ method of
acquisition has been undertaken, solely to benefit the respondent
No.6-private company in a mala fide manner, while interfering
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with the land allotted to the petitioner-TPCL for the public
purpose of the said hydro electric project. It is emphasized that the
hydro electric station has been functioning for more than a
century and recently, a more elaborate pumped storage project of
1000 MW is being established, which will be hampered by the
proposed acquisition pursuant to the impugned notification issued
by the respondent-State.
3. The respondent-State as well as the Maharashtra Industrial
Development Corporation (MIDC) and the respondent No.6-
MVF, on the other hand, claim that the portions of land that were
allotted to the petitioner-TPCL, that remained unutilized, are
sought to be acquired for the purpose of the ‘Ultra Mega Project’
of the respondent No.6-MVF. It is emphasized that the activity
proposed to be undertaken by the respondent No.6-MVF is an
industrial activity encompassing various activities, such as
establishment of a wellness centre, an ayurvedic college and other
infrastructure, which is for public good and in the process,
employment for at least 1000 persons in the local area would be
generated. It is submitted that in this scenario, the respondent-
State has taken recourse to the statutory mechanism provided
under the MID Act, in respect of which no mala fide can be
alleged. It is submitted that all statutory safeguards have been
followed, further indicating that the writ petition itself is pre-
mature, as the proceedings are at the stage of the respondent
No.3-Sub-Divisional Officer and Special Land Acquisition Officer
(SDO), considering objections raised by the petitioner-TPCL in
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pursuance of notice issued under Section 32(2) of the MID Act.
The objections raised by the petitioner-TPCL have been considered
and the SDO has closed the matter for orders. In this situation, it
is contended on behalf of the respondents that, the writ petition
ought not to be entertained and that no case is made out in favour
of the petitioner-TPCL.
4. In the light of the competing claims made by the petitioner-
TPCL on the one hand and the respondents on the other, before
considering the rival submissions on facts and law raised on behalf
of the parties, it would be appropriate to refer to the chronology
of events, leading to filing of the present writ petition.
CHRONOLOGY OF EVENTS
5. Between 1911 and 1930, 5 principal agreements and 9
separate Deeds of Conveyance were executed by the Secretary of
State of India in Council and the predecessor of the petitioner i.e.
the Tata Hydro Electric Power Supply Company Limited. These
agreements and conveyance deeds were executed for transferring
huge portions of lands, including the subject land, to the
predecessor of the petitioner, for the purpose of construction of
reservoir and dam, in order to collect and store supply of water,
leading to execution of the hydro power project for generation of
hydro electric power. Before undertaking the said act of
acquisition of land for the hydro electric project and establishment
of the Bhivpuri Hydro Station, statutory enquiry under Section 40
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of the Land Acquisition Act, 1894 (LA Act) was undertaken and
the lands were acquired for the predecessor of the petitioner, for
the said public purpose of generating hydro electricity.
6. The said agreements contained a clause that if at any time,
any part or parts of the acquired land were not actually utilized or
intended to be utilized for the said works, and if the State was of
the opinion that such unutilized part or parts of acquired land
were necessary for revenue administration or purposes connected
with public health, safety or necessity, the State being the sole
judge of such a necessity, such parts would be transferred to the
State upon payment of compensation to the predecessor of the
petitioner as per the provisions of the Land Acquisition statute.
The lands forming subject matter of the 5 principal agreements
and the 9 separate deeds of conveyance, including the land which
is subject matter of the dispute in the present writ petition, were
handed over to the predecessor of the petitioner and subsequently,
came in possession of the petitioner-TPCL, wherein the hydro
power project was executed.
7. The petitioner-TPCL emphasized on declaration of the said
Thokarwadi Dam, on 23.05.1963, as a protected place under Rule
7 of the Defence of India Rules, 1962, preventing entry of
unauthorized persons. Reliance was also placed on a notification
dated 15.01.1972, whereby the said area in possession of the
petitioner-TPCL was declared as a prohibited place under the
provisions of the Official Secrets Act, 1923. This includes the
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Bhivpuri Hydro Station of petitioner-TPCL of 75 MW. On the
basis of such declarations and notifications, the petitioner-TPCL
claims that the subject lands are a security concern and that the
respondents could not have casually taken recourse to the
provisions of the MID Act, to acquire parts of the said lands,
which according to the petitioner-TPCL are utilized for the
existing Bhivpuri Hydro Power Station of 75MW and the
proposed Bhivpuri Pumped Storage Project of 1000 MW. On the
other hand, the respondents claim that such declarations and
notifications are wholly irrelevant for the purposes of deciding the
validity of the steps taken by the respondent-State and MIDC
under the provisions of the MID Act.
8. The respondent-MIDC under the provisions of the MID Act
carries out development on land acquired by the respondent-State
Government and transferred to the MIDC. It then disposes of the
same to persons as it considers expedient for achieving the
purposes of the MID Act, or the MIDC disposes of such land,
even without undertaking or carrying out any development
thereon. In order to address situations wherein such land declared
as an industrial area, acquired by the State and transferred to
MIDC is to be allocated to a single industrial unit for a large
industrial project, on 22.11.1993, the Board of Directors of the
MIDC passed a Resolution, specifying the manner in which such
allotment would be made on ‘as is where is basis’. On 18.01.1994,
the MIDC issued a Circular in the backdrop of the aforesaid
Resolution passed by the Board of Directors on 22.11.1993. This
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became the basis for allotment of entire acquired piece of land to a
single industrial unit. A Cabinet Sub-Committee was established
comprising of the Chief Minister, Deputy Chief Minister, Minister
of Finance and Planning and Minister of Industries, for taking
decisions on matters regarding industrialisation in the State of
Maharashtra.
9. On 27.12.2016, the respondent-State issued a Government
Resolution (GR) prescribing a procedure for development of an
integrated industrial area. The said GR stipulated that such
proposals for development of integrated industrial areas, including
allotment thereof to industrial units, should be submitted to a
High Power Committee (HPC) for approval. The constitution of
the HPC was specified and the procedure specified that only upon
approval granted by the HPC, could a notification be published in
the Government Gazette, declaring such land as an industrial area.
The rival parties have addressed elaborate submissions on the said
GR, particularly on the question as to whether such an approval
could be said to be mandatory.
10. On 19.07.2017, the respondent No.6-MVF, a private
company, sent a letter to the then Chief Minister of the State of
Maharashtra, seeking various benefits for its proposed mega
project, concerning a ‘Centre for Perfect Health’. The respondent
No.6-MVF claimed that the proposed project would be one of its
kind where the knowledge of ancient vedas would be applied for
an Ayurveda Medicine manufacturing facility, aroma oil
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manufacturing, a wellness centre with treatments and therapies, a
training center for paramedical staff, an ayurveda college and
hospital, research and development, organic agriculture, etc., all
under one roof. It was claimed that the cost of all the said
components of the project would work out to about Rs. 1000
crores and a request was made to give the project the status of
Ultra Mega Project. The respondent No.6-MVF specifically sought
permission for construction activity beyond 50 meters of the High
Flood Line (HFL) of the said dam of the petitioner-TPCL.
11. On 08.03.2018, the respondent-State issued a GR,
prescribing norms for carrying out development activities in and
around dams, which provide downstream areas. The petitioner-
TPCL relies on clause 2 of the said GR that prescribes prohibited
zone of 500 meters from the HFL for industrial township
development. On the other hand, the respondents rely upon clause
1(a) of the said GR to claim that the proposed project of
respondent No.6-MVF is permissible as per the norms.
12. On 15.03.2018, the respondent-State granted the status of
‘Ultra Mega Project’ to the proposed integrated project of Centre
for Perfect Health of respondent No.6-MVF, on the basis of fixed
capital investment of Rs.500 crores. In this backdrop, on
02.04.2018, respondent No.6-MVF sent a letter to the petitioner-
TPCL with regard to its intention of establishing the said project.
Respondent No.6-MVF claimed that Thokarwadi lake/Dam of the
petitioner-TPCL provided one of the most beautiful sites for the
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proposed centre, indicating that the waters of the lake were of
special value for the proposed centre.
13. On 10.04.2018, a meeting was called under the
Chairmanship of the Finance Minister of the respondent-State,
with the representatives of the petitioner-TPCL and respondent
No.6-MVF attending the meeting. The parties discussed various
issues, particularly those concerning the said reservoir at
Thokarwadi Dam owned by the petitioner-TPCL. On 05.05.2018,
the respondent-State sent a letter to the petitioner-TPCL, making
enquiries about the action taken on the issues discussed in the said
meeting dated 10.04.2018 and called upon the petitioner to
submit compliance report.
14. On 24.07.2018, the petitioner-TPCL responded to the letter
dated 02.04.2018 of respondent No.6-MVF and expressed the
need for detailed investigation and scrutiny of the status of the
land outcrops and reservoir. It was indicated that the said outcrops
were ecologically fragile and that they would fall within
‘Ecologically Sensitive Zone’.
15. The petitioner-TPCL stated that it may not be advisable to
permit any activity on the land outcrops, as it may affect the
ecological integrity and biological diversity of the same. In
response, on 18.08.2018, the respondent-MVF addressed a letter
to the petitioner-TPCL, stating that for establishing the proposed
project of the said respondent, large area of land overseeing
Thokarwadi Dam was required along with the land outcrops in the
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reservoir. It was stated that the subject land was not declared as
Ecologically Sensitive Zone by the Union of India and in this
backdrop, respondent No.6-MVF requested the petitioner-TPCL
to reconsider its stand in the matter. In the year 2018 itself, the
Chief Minister of the respondent-State sent a letter to Late Mr.
Ratan Tata, stating that the land outcrops (islands) on the
reservoir/lake of Thokarwadi Dam being vacant, could be ideal for
allowing vedic chanting by Pandits.
16. In the years 2018 and 2019, the petitioner-TPCL addressed
communications to the concerned department of the Union of
India for declaring the subject land as ecosensitive land, in order to
prohibit any tourism activities. This was particularly in the
backdrop of respondent No.6-MVF indicating that it was
intending to undertake the exercise of boating in the lake waters as
part of its project. On 09.08.2019, the respondent-State granted
status of integrated industrial area to about 75 hectares of land
and the respondent-MIDC was directed to take action as Special
Planning Authority in respect of the said land under the provisions
of the MID Act. The said piece of land had nothing to do with the
subject land of the petitioner-TPCL, including the land outcrops /
islands in the reservoir / lake.
17. The respondent-State constituted HPC for large and mega
projects to consider individual cases for recommendation to the
Cabinet Sub-Committee for providing concessions and incentives,
where large investments were proposed. On 04.03.2021, the
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respondent-MIDC issued a notification introducing changes in the
establishment of the Site Visit Committee for acquisition for
industrial areas. On 14.10.2021, the respondent-State issued a
notification declaring an additional area of about 53 hectares of
land adjacent to the said Thokarwadi Dam of the petitioner-TPCL,
as integrated industrial area. It is relevant to note that even this
additional piece of land did not adversely affect the land of the
petitioner-TPCL.
18. On 08.08.2023, the respondent-State executed a
Memorandum of Understanding (MOU) with the petitioner-TPCL
for establishing Bhivpuri Pumped Storage Project for generating
1000 MW electricity. This was in line with the initiative of the
respondent-State to encourage non-conventional energy sources
and for providing clean energy. This project is covered under the
Pumped Storage Policy, 2023 (PSP) of the respondent-State.
According to the petitioner-TPCL, since such a PSP Project
requires an upper level and a lower level, wherein water released
from upper reservoir to the lower reservoir is pumped back to the
upper reservoir, the proposed acquisition of part of the lands of
the petitioner-TPCL, including the said land outcrops in the
reservoir, would adversely affect the PSP Project.
19. It is claimed by the petitioner-TPCL that while on the one
hand, the respondent-State has entered into MOU with it for the
Bhivpuri Pumped Storage Project of 1000 MW, but on the other
hand, it has arbitrarily granted approval to handing over of part of
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land of the petitioner-TPCL to respondent No.6-MVF for its
private project.
20. On 01.11.2023, the HPC held a meeting to specifically
consider the demands of respondent No.6-MVF in respect of the
said integrated mega project. One of the requests of the said
respondent was that the specific parcels of land, including the land
outcrops in the reservoir be arranged to be purchased from the
petitioner-TPCL or appropriate instructions be given for
acquisition of the lands through the Act of 2013 or by the ‘pass
through’ method of the MIDC. The HPC rejected the request of
the said respondent, stating that the Government did not have a
policy to purchase land from a private company and to make it
available for other projects. The petitioner heavily relies upon the
said decision of the HPC.
21. In this backdrop, on 14.02.2024, the Cabinet Sub-
Committee for the Department of Industries met under the
Chairmanship of the Chief Minister, to discuss the said project of
respondent No.6-MVF. It was decided that acquisition by ‘pass
through’ method under the MID Act should be undertaken for
acquiring portion of land-locked property of the petitioner-TPCL,
adjacent to the project site along with two outcrops (islands) in the
reservoir and the compensation cost be recovered from respondent
No.6-MVF.
22. On 24.07.2024, in the light of the said decision of the
Cabinet Sub-Committee dated 14.02.2024, the Land Selection
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Committee submitted a report and directed the respondent-MIDC
to take further action for purchasing land from the petitioner-
TPCL for the benefit of respondent No.6-MVF. The said
Committee specifically recorded that it was necessary to obtain
No Objection Certificate (NOC) from the petitioner-TPCL and it
was indicated that the proposal for acquisition was being treated
as acquisition by ‘pass through’ method.
23. In this backdrop, when the HPC held a meeting on
13.09.2024, it discussed the said report of the Land Selection
Committee and granted in-principle approval to acquire the
subject land of the petitioner-TPCL, subject to obtaining NOC
from the petitioner-TPCL. But on 26.12.2024, when the
respondent-MIDC submitted a proposal to the respondent-State
for acquisition of lands by ‘pass through’ method, it was recorded
that under the MID Act, there was no requirement to obtain
consent or NOC from the land owners whose land was to be
acquired.
24. It is in this backdrop that on 03.03.2025, the respondent-
State, through the Department of Industries, exercised power
under Section 1(3) of the MID Act, to issue the impugned
notification, whereby 04.03.2025 was stipulated as the appointed
date for declaring the subject lands in various villages of District
Pune as ‘industrial area’.
25. On 04.03.2025, the respondent-State, through Department
of Industries, issued the impugned notification / GR authorizing
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the initiation of land acquisition proceeding for respondent No.6-
MVF, whereby about 84 hectares of land of the petitioner-TPCL in
the villages of Kiwale, Inglun and Vahangaon, was covered.
Consequently, on 06.03.2025, the Collector, Pune issued a letter
to the Sub-Divisional Officer (SDO), Maval-Mulshi, Sub-division
Pune, authorizing the SDO to proceed further in the matter.
Immediately, the respondent-MIDC issued a public notice on the
notice board of respondent No.3-Land Acquisition Officer,
regarding the proposed acquisition under Section 32 of the MID
Act.
26. On 07.03.2025, the said respondent issued the impugned
notices under Section 32(2) of the MID Act to the petitioner-TPCL
to show cause in writing on or before 28.03.2025, as to why the
lands of the petitioner-TPCL specified in the schedules appended
to the notice, should not be acquired. The total area of the
proposed acquisition was 84 hectares equivalent to about 208
acres.
27. In response, the petitioner-TPCL submitted its preliminary
representation and sought personal hearing in the matter. In this
backdrop, on 05.05.2025, the present writ petition was filed,
challenging the said impugned notifications issued by the
respondents. On 07.05.2025, a statement was made on behalf of
respondent No.5 before this Court that while hearing before the
concerned officer would continue, no decision would be taken in
pursuance of the aforesaid show cause notice till the next date of
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hearing.
28. It is an admitted position that the said statement has
continued to operate during the pendency of this petition. The
said officer completed the hearing on 17.06.2025 and closed the
matter for orders. This is the stage at which the proceedings
remained during the pendency of this petition. The pleadings in
the writ petition were completed and in the light of urgency
projected on behalf of respondents, the petition was taken up for
hearing and disposal.
SUBMISSIONS
29. Mr. Khambata, learned senior counsel appearing for the
petitioner-TPCL submitted that the impugned notification issued
with the intention of acquiring the subject land to the extent of 84
hectares belonging to the petitioner-TPCL, including the two lands
outcrops in the reservoir/lake of Thokarwadi Dam, amounted to
colourable exercise of power by the respondents. It was submitted
that the subject lands are still being utilized for the public purpose
of hydro electric project of the petitioner-TPCL, including the
latest Bhivpuri Pumped Storage Project of 1000 MW. It was
submitted that in such a situation, the respondent-State authorities
and the respondent-MIDC could not be permitted to acquire the
subject land of the petitioner-TPCL for handing it over to
respondent No.6-MVF for the said project. It was emphasized that
the utility of subject land for the petitioner-TPCL, in order to
satisfy the public purpose of the hydro electric projects, was still
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alive and in such a situation, the impugned notifications deserve to
be quashed.
30. In order to buttress the said submissions, the learned senior
counsel for the petitioner-TPCL invited attention of this Court to
the 5 principal agreements and 9 Deeds of Conveyance executed
with the petitioner-TPCL between 1911 and 1940. Reliance was
placed on recitals and various clauses of the said agreements to
submit that the said lands handed over to the petitioner-TPCL
were specifically for the said hydro electric power plants.
31. It was submitted that the relevant clauses in the said
agreements and Deeds of Conveyance stipulated that in the event
any part or parts of the lands acquired and handed over to the
petitioner-TPCL for the public purpose of hydro electric power
plants and projects, were not actually utilized or intended to be
utilized for such public purpose, the respondent-State would be
entitled to call upon the petitioner-TPCL in writing to transfer
such unutilized parts of lands, if required by the State or by a local
authority for the purpose of making a new public road or for any
purpose related to public health, safety or necessity, with the
Government being the sole Judge of such necessity. It was further
stipulated that in the event such transfer was necessitated, the
State would pay compensation to the petitioner-TPCL.
32. It was submitted that in the present case, as a matter of fact,
there was no part of land of the petitioner-TPCL which had
remained unutilized for the public purpose of hydro electric plants
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and projects. Therefore, the impugned action of the respondent-
State authorities and respondent-MIDC is clearly in the teeth of
the solemn agreements and Deeds of Conveyance executed in
favour of the petitioner-TPCL. It was submitted that on this short
ground, the writ petition deserved to be allowed.
33. It was further submitted that the proposed acquisition of
land of petitioner-TPCL is ultra vires the provisions of the MID
Act. It was emphasized that the said Act provides for acquisition of
lands only for developing industrial areas for industrial purpose. It
was submitted that since the petitioner-TPCL had already
developed the subject lands and the same were being used for the
hydro electric power plants, acquisition of such land of petitioner-
TPCL, which could be said to be already utilized for industrial
purpose or public purpose, amounted to an action violating the
provisions of the MID Act.
34. Thereupon, the learned senior counsel appearing for the
petitioner-TPCL referred to various provisions of the MID Act,
including Section 2(g) defining industrial area, Section 2(h)
defining industrial estate, Section 3 pertaining to the establishment
of MIDC and power under Section 32 of the MID Act for
acquiring lands in furtherance of the object of the said statute.
35. By referring to further provisions of the MID Act, such as
Sections 36 and 39 thereof, it was stated that there was no
provision in the said statute for acquisition of land for the benefit
of and at the cost of a private company like respondent No.6-
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MVF. Reliance was placed on judgement of the Constitution
Bench of the Supreme Court in the case of Shri Ramtanu Co-
operative Housing Society Limited and another vs. State of
Maharashtra and others , (1970) 3 SCC 323, to contend that under
the MID Act, there was no procedure or provision for acquiring
land for a company, in contradistinction to the provisions
contained in the LA Act. It was emphasized that in the present
case, since the acquisition is solely for the benefit of respondent
No.6-MVF, which is a private company, recourse to MID Act was
not available, thereby showing that the impugned notifications
issued by the respondent-State deserved to be quashed.
36. It was further submitted that while the LA Act provided for
a separate set of provisions under Part VII for acquisition of land
for companies, even in the Act of 2013, specific provisions apply
for acquisition of land for companies. Such provisions require a
particular procedure to be followed. As opposed to this, the object
of acquisition under the MID Act is for the purpose of developing
industrial estates or industrial areas by the MIDC and land cannot
be acquired for a company for private purpose. It was submitted
that in any case, land already acquired for a public purpose cannot
be acquired again by recourse to the provisions of the MID Act. In
support of the said contentions, reliance was placed on judgement
of the Supreme Court in the case of V.K.M. Kattha Industries
Private Limited Vs. State of Haryana , (2013) 9 SCC 338 and
judgement of the Madras High Court in the case of Godrej &
Boyce Mfg. Co. Private Limited Vs. SLAO , (1968) SCC OnLine
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Mad.23.
37. It was highlighted that in none of the notices issued in the
present case, was an assertion made that the subject lands acquired
for and in possession of the petitioner-TPCL were unutilized. Yet
in the reply affidavits to the writ petition, it was claimed that the
subject land was unutilized. It is in this context that the learned
senior counsel appearing for the petitioner-TPCL referred to
Section 42A of the MID Act, which concerns acquisition of
unutilized surplus lands in industrial areas for allotment to other
industries. It was contended that if the case of the respondents was
that the subject land had remained unutilized, the procedure under
Section 42A of the MID Act ought to have been followed. In this
context, it was submitted that with the MoU dated 08.08.2023
executed between the respondent-State and the petitioner-TPCL
for establishing Bhivpuri Pumped Hydro Project of 1000 MW, the
hydro electricity project had reached a stage of expansion,
demonstrating that the entire land with the petitioner-TPCL,
including the two lands outcrops in the reservoir / lake of
Thokarwadi Dam, are very much required for the purpose of
generating hydro electricity. Since renewable energy sources are
the need of the present times, there is no question of the purpose
for which the land was acquired and handed over to the petitioner-
TPCL, being satisfied and in that context, the subject lands being
branded as ‘unutilized ‘ or ‘not required’. Reference was made to
the pleadings on record of the writ petition and the rejoinder
affidavit supporting the said submissions.
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38. It was submitted that by taking recourse to the provisions of
the MID Act and seeking to acquire the land for respondent No.6-
MVF, a private company, for a private purpose, amounts to
colourable exercise of power by the respondent-State and the
MIDC. By referring to the repeated communications sent by the
respondent No.6-MVF to the petitioner-TPCL as well as various
authorities of the respondent-State, it was submitted that the
respondent No.6-MVF requires the land only for aesthetic
purposes. Merely because the said respondent claims that about
1000 jobs would be created, that in itself cannot be the basis to
claim that the project of respondent No.6-MVF is for ‘public
purpose’. It was submitted that the said respondent did not even
claim that the subject land of 84 hectares is so crucial that in the
absence of the same, the project of the said respondent would fail.
In this context, it was highlighted that land to the extent of 126
hectares adjacent to the Thokarwadi dam, is already handed over
to the respondent No.6-MVF.
39. It was submitted that the respondents are not justified in
relying upon Section 39(1)(a) of the MID Act to claim that
acquisition for respondent No.6-MVF was being undertaken by
the ‘pass through’ method. In this context, extensive reference was
made to the provisions of the LA Act and the Act of 2013 to
demonstrate as to the manner in which rigorous procedure was to
be followed before acquiring land for a private company and the
manner in which the compensation amount was to be arranged by
such a company. As opposed to this, under the MID Act, no such
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provision exists and therefore, the respondents have illegally taken
recourse to the ‘pass through’ method to benefit the respondent
No.6-MVF, thereby showing colourable exercise of power.
40. On the aspect of ‘eminent domain’ forcefully argued on
behalf of the respondent-State, it was submitted that the power of
eminent domain is not absolute and whenever it is to be exercised,
public purpose is to be demonstrated. In this context, the learned
senior counsel appearing for the petitioner-TPCL referred to the
judgements of the Supreme Court in the cases of Charanjit Lal
Chowdhury Vs. Union of India , (1950) SCC 833; Jilubhai
Nanabhai Khachar Vs. State of Gujarat , (1995) Supp (1) SCC 596
and Sooraram Pratap Reddy Vs. Collector , (2008) 9 SCC 552.
41. On the proposition that the underlying purpose of land
acquisition must be primarily public, with private interest being
merely incidental, reliance was placed on judgements of the
Supreme Court in the cases of K. T. Plantation Private Limited Vs.
State of Karnataka , (2011) 9 SCC 1, Dev Sharan Vs. State of UP ,
(2011) 4 SCC 769 and Kolkata Municipal Corporation Vs. Bimal
Kumar Shah , (2024) 10 SCC 533. On the proposition that when
State machinery is utilized for acquisition of land to benefit private
entities, such exercise of power is rendered colourable and illegal,
reliance was placed on judgements of the Supreme Court in the
cases of Rameshwar Vs. State of Haryana , (2018) 6 SCC 215;
Patasi Devi Vs. State of Haryana , (2012) 9 SCC 503; Greater
Noida Development Authority Vs. Devendra Kumar , (2011) 12
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SCC 375 and Uddar Gagan Properties Limited Vs. Sant Singh ,
(2016) 11 SCC 378.
42. In support of the proposition that the power of eminent
domain can be exercised for private entity only if necessary
procedure prescribed in law is followed, reliance was placed on
judgement of the Supreme Court in the case of Royal Orchid
Hotels Limited and another Vs. G. Jayarama Reddy and others ,
(2011) 10 SCC 608. On this basis, it was submitted that even if
power of eminent domain were to be exercised for a company, it
must be demonstrated that the same is for public purpose. In the
present case, the respondent No.6-MVF intends to set up a Vedic
centre with ancillary activities and it already has 126 hectares of
land for the said purpose and yet, it is insisting on having 84
hectares of land already being utilized by the petitioner-TPCL for
the public purpose of hydro electric projects. On this basis, it was
submitted that the power of eminent domain, in the facts of the
present case, is being exercised in a mala fide manner, and
therefore, the writ petition ought to be allowed.
43. It was further submitted that in the present case, the HPC
had rejected the proposal. Although clearance from the HPC was
mandatorily required as per GR dated 27.12.2016, the
respondent-State continued to push for the said proposal in favour
of respondent No.6-MVF, thereby demonstrating the arbitrary and
mala fide manner in which the procedural safeguards devised by
the State itself were violated, only to benefit respondent No.6-
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MVF. It was submitted that the respondent-State cannot claim that
the Cabinet Sub-Committee could overrule the rejection by the
HPC, as the same would render nugatory the requirements of GR
dated 27.12.2016. It was also submitted that even the report of
the Land Selection Committee of the MIDC dated 24.07.2024,
which mandated a NoC to be obtained from the petitioner-TPCL,
was violated in a most arbitrary manner, only to benefit
respondent No.6-MVF.
44. It was further submitted that the respondents cannot claim
that the present petition is either premature or that the grounds
raised in this petition could be raised before the SDO in the
proceedings pursuant to notice issued under Section 32(2) of the
MID Act. This is because the SDO would not have the power to
consider and pronounce upon the constitutional challenges raised
on behalf of the petitioner-TPCL. In any case, when the Cabinet
Sub-Committee had overruled the opinion of HPC itself, in the
teeth of the mandatory requirement of GR dated 27.12.2016, an
officer of the level of SDO would hardly be expected to consider
the objections raised by the petitioner-TPCL.
45. In support of the proposition that in such cases, an authority
like the SDO would proceed with a pre-determined mind and the
hearing would be rendered an empty formality, reliance was
placed on the judgements of the Supreme Court in the cases of
Siemens Limited Vs. State of Maharashtra , (2006) 12 SCC 33;
Techno Prints Vs. Chattisgarh Textbook Corporation and another ,
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2025 SCC OnLine SC 343 and Kedar Nath Yadav Vs. State of
West Bengal , (2017) 11 SCC 601. On this basis, the learned senior
counsel appearing for the petitioner-TPCL submitted that the writ
petition deserved to be allowed.
46. Mr. Aney, learned senior counsel appearing for the
respondent-State authorities raised a preliminary objection with
regard to the maintainability of the petition, stating that the same
was premature as hearing before the SDO was completed and the
matter was closed for orders. Statutory process was sought to be
interdicted by the petitioner TPCL by rushing to the Writ Court.
The learned senior counsel appearing for the respondent-State
authorities submitted that the State has a sovereign power
recognized in the Doctrine of Eminent Domain, which indicates a
superior title of the State in respect of lands. Reliance was placed
on the Superior Title Doctrine or the Paramount Lord Doctrine to
claim that all land ultimately vests in the State.
47. It was submitted that in respect of lands, various recognized
doctrines support the said concept of the ‘superior title of the
State’ such as the Doctrine of Radical Title, Jura Regalia / Regalian
Doctrine, Doctrine of Occupancy / Terra Nullius, Doctrine of
Public Trust, Doctrine of Power of Takings and the Public Purpose
Theory. By relying upon the said doctrines, it was submitted that
the power of eminent domain can be exercised even without
reference to specific legislations and that Statutes such as the MID
Act, concerning acquisition of land merely display the power,
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while such Statutes cannot be the source of the power. It was
emphasized that the inherent power of the State is never
diminished and that, in any case, the State retains the power to
acquire land for public purpose, including social purpose such as
land reform, urban planning etc. On this basis, it was submitted
that the petitioner-TPCL was wrongly seeking to limit the power
of the respondent-State. In the context of the said submissions,
reliance was placed on judgements of the Supreme Court in the
cases of Sooraram Pratap Reddy Vs. Collector (supra) , Kedar Nath
Yadav Vs. State of West Bengal (supra) and State of Bihar Vs. Sri
Kameshwar Singh , (1952) 1 SCC 528.
48. It was submitted that the contention of the petitioner-TPCL
about colourable exercise of power is based on submissions
pertaining to malice in law and malice in fact. It was submitted
that the contentions pertaining to the subject acquisition being
outside the scope of the provisions of the MID Act; it being
particularly contrary to Section 42A of the MID Act and subject
land already allotted to the petitioner-TPCL for industrial or
public purpose, were based on misunderstanding of the concept of
acquisition under the MID Act. It was further submitted that the
MID Act is a special Statute, which expressly gives power to the
MIDC to acquire lands for the purposes of the Act for establishing
or expanding industrial areas. In the present case, the respondent
No.6-MVF proposed an ultra mega project with investment of
more than Rs.500 crores to set up its project. This clearly qualifies
as an industrial project with all attendant benefits, including
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generation of substantial employment in the region. The State is
clearly entitled to take a decision on the nature of public purpose
served by the proposed project of respondent No.6-MVF and in
that context, recourse to the provisions of the MID Act is clearly
justified. In such a situation, the petitioner-TPCL cannot insist that
the object of public purpose will be achieved only if the State takes
recourse to the general Statute for land acquisition like the Act of
2013. The State is well within its powers to take recourse to the
MID Act, because the source of the power is not the Statute but
the underlying sovereign power under the Doctrine of Eminent
Domain.
49. It was submitted that the opinion of one of the learned
Judges (Arun Mishra, J.) in the judgement of the Supreme Court
in the case of Kedar Nath Yadav Vs. State of West Bengal (supra)
clearly put an end to the debate as to whether industry could be
said to be public purpose. Reliance was also placed on judgement
of the Supreme Court in the case of Hindustan Petroleum Vs.
Darius Shapur , (2005) 7 SCC 627. It was submitted that
acquisition under the MID Act for a private company like the
respondent No.6-MVF was clearly valid if the project to be
undertaken by such a private company served public purpose. The
infrastructure development along with generation of employment
due to the huge investment being made by the respondent No.6-
MVF clearly demonstrate the public purpose and hence, the
contentions raised on behalf of the petitioner-TPCL in this context
deserve to be rejected.
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50. Reliance was also placed on the observations made by the
Supreme Court in the case of Sooraram Pratap Reddy Vs.
Collector (supra) in this context. It was further submitted that
even the Act of 2013 provides for acquisition for private
companies as also for Public Private Partnership projects, while the
entire emphasis in the MID Act is on industrial undertakings in the
public, private and Government sectors. On this basis, it was
submitted that the contentions raised on behalf of the petitioner-
TPCL regarding colourable exercise of power and malice in law
deserve to be rejected. As regards the contention of the petitioner-
TPCL on malice in fact, it was submitted that the said submissions
were based on a misunderstanding of the role of the HPC in the
context of GR dated 27.12.2016. It was submitted that the
opinion of the HPC was only recommendatory in nature and
certainly not mandatory. The Cabinet Sub-Committee, being a
superior authority in the hierarchy of the State, correctly noted
that the opinion of the HPC was based on a misunderstanding of
the position of law. Hence, the same was corrected and the
notifications were issued.
51. It was submitted that the petitioner-TPCL was clearly not
justified in referring to Section 42A of the MID Act, because
Section 32 thereof is a complete Code in itself and it provides,
both, the power and the procedure for acquisition of land. It was
asserted that this was not a case of surplus land of the petitioner
being acquired and hence, Section 42A of the MID Act does not
apply to the facts of the present case. It was further submitted that
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since all necessary clearances were obtained for the proposed
project of the respondent No.6-MVF, the contentions regarding
fragile ecology of the subject land, particularly the two land
outcrops in the reservoir / lake of Thokarwadi Dam, are wholly
misplaced and do not deserve any consideration.
52. As regards the criticism of the ‘pass through’ method, it was
submitted that the said method or mode is used only when the
State does not retain the acquired land for its own use, but the
power of eminent domain is exercised to acquire private land, to
be given to a third party, which could be a statutory corporation
or a private company or a Public Private Partnership entity. Such
an acquisition is undertaken through an agency like the MIDC
under the MID Act. It was submitted that so long as the procedure
prescribed under the MID Act is followed, no illegality can be
attributed to the said ‘pass through’ method. On this basis, it was
submitted that the writ petition deserved to be dismissed.
53. Mr. Kapadia, learned senior counsel appearing for
respondent No.5-MIDC supported the contentions raised by the
learned senior counsel appearing for respondent-State authorities.
He made detailed submissions with regard to the statutory scheme
under the MID Act, particularly pertaining to the definitions of
terms like ‘Industrial Area’ and ‘Industrial Estate’. Reference was
also made to Sections 32, 39 and 41-1B of the MID Act, read with
the Maharashtra Industrial Policy 2013 and the Package Scheme of
Incentives 2013. It was submitted that under the said policy, mega
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projects were being encouraged so as to generate employment and
to bring about large scale development through establishment of
industrial areas in the State of Maharashtra. The role of the
respondent No.5-MIDC being pivotal to the same, acquisition of
lands was undertaken to meet the goals of such policy.
54. It was submitted that in this backdrop, the proposed project
of the respondent No.6-MVF was granted status of ultra mega
project. It was submitted that in the light of the said project being
declared as ultra mega project and particularly, in the light of the
said industrial policy of the State, the decision of the HPC,
rejecting the proposal, was obviously incorrect and the subject
land could certainly be acquired for industrial activity. It was for
this reason that the Cabinet Sub-Committee took a decision for
acquisition of the subject land by the ‘pass through’ method under
the MID Act. The Land Selection Committee of respondent No.5-
MIDC conducted site inspection and submitted its report. It was
submitted that since the respondent-State, in conjunction with the
respondent No.5-MIDC, took necessary steps permitted under the
said policy and the provisions of the MID Act, there was no
question of colourable exercise of power as alleged by the
petitioner. It was specifically submitted that Section 39(1)(a) of the
MID Act was the statutory basis of the ‘pass through’ method.
55. It was submitted that in such cases, where a particular public
purpose is identified in furtherance whereof lands are proposed to
be acquired, the satisfaction of the State is the only relevant factor
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for declaring a particular land as required for public purpose.
Reliance was placed on judgement of the Supreme Court in the
case of Smt. Somawanti & Ors. vs. The State of Punjab & Ors.,
1962 SCC OnLine SC 23. It was submitted that the petitioner-
TPCL is not justified in alleging that the ‘pass through’ method
adopted in the present case is nothing but a colourable exercise of
power, inter alia , for the reason that such a method was adopted
for acquiring land for the benefit of the petitioner-TPCL itself. A
challenge was raised to the same before this Court, but eventually
the writ petition was dismissed in the case of Pravin Kashinath
Bhagat & Ors. vs. Collector, District Raigad & Ors., 2012 SCC
OnLine Bom 524. The petitioner was respondent in the said writ
petition. Thus, the petitioner itself having been a beneficiary of
such a ‘pass through’ method, cannot be heard to say that the
method is illegal or unconstitutional.
56. On the question of acquisition of private land for another
private company like the respondent No.6-MVF, it was submitted
that since proper procedure was followed for the proposed ultra
mega project by the respondent No.6-MVF and necessary
statutory requirements were satisfied, no fault can be found with
the said acquisition. It was submitted that the allegations of
arbitrariness, discrimination and bias in favour of respondent
No.6-MVF, cannot be alleged on vague submissions. Reliance was
placed on the judgement of the Supreme Court in the case of
Girias Investment Private Limited & Anr. vs. State of Karnataka &
Ors., (2008) 7 SCC 53, to contend that mala fide could be made
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out only if the impugned action was taken with the specific object
of damaging the interest of the petitioner or such action was
aimed at helping respondent No.6-MVF, resulting in damage to
the petitioner. It was submitted that in the present case, no such
material was placed on record and in the light of the proposed
ultra mega project of respondent No.6-MVF, being in public
interest and for public purpose, the allegation of mala fide ought
to be rejected.
57. In order to counter the submissions made on behalf of the
petitioner-TPCL, the learned senior counsel appearing for
respondent No.5-MIDC submitted that the subject lands are not
being used by the petitioner-TPCL for any specific purpose. No
material is placed on record that the said land, including two land
outcrops in the reservoir/lake of the Thokarwadi Dam are either
purposely kept vacant or that they are indeed being utilized for the
hydro electric project. No material has been placed on record on
behalf of the petitioner-TPCL to demonstrate how the functioning
of its hydro electric project would be hampered by handing over
of the subject land to the respondent No.6-MVF. It is an admitted
position that there are no installations of the petitioner-TPCL
concerned with its hydro electric projects on the subject land,
including the two land outcrops. On this basis, it was submitted
that there is no case made out by the petitioner-TPCL in its favour.
58. As regards the Thokarwadi Dam being declared a protected
place under Defence of India Rules, 1962 or a prohibited zone, it
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was submitted that such notification, if any, had expired and in
any case, the Defence of India Act and the Rules framed
thereunder being temporary enactment, there was no question of
such notifications holding the field and in any manner prohibiting
exercise of statutory power by the State and the respondent No.5-
MIDC under the provisions of the MID Act.
59. As regards the subject land being part of Ecologically
Sensitive Zone, it was submitted that the contentions raised in this
regard on behalf of the petitioner-TPCL were vague and general.
The petitioner-TPCL had failed to demonstrate any statutory
declaration in this regard, that would prohibit the proposed ultra
mega project of respondent No.6-MVF.
60. On the aspect of applicability of Section 42A of the MID
Act, it was submitted that the said provision is wholly inapplicable
because the subject land was never declared an industrial area in
the first place. In such a situation, there would be no question of
the subject land first being shown as unutilized or surplus land in
industrial area, thereby showing inapplicability of Section 42A of
MID Act. On the basis of the aforesaid submissions, the learned
senior counsel appearing for respondent No.5-MIDC submitted
that the writ petition deserved to be dismissed.
61. Mr. Anturkar, learned senior counsel appearing for
respondent No.6-MVF submitted that the proposed ultra mega
project of respondent No.6-MVF is an integrated ayurveda and
traditional knowledge industrial project, wherein multifarious
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activities would be undertaken. These include manufacturing and
processing of ayurvedic medicines, herbal/organic products and
wellness products; research and development concerning the
ayurveda, medicinal plants, vedic sciences and traditional
knowledge; health care facilities, including ayurvedic hospital,
kaya kalpa rejuvenation and holistic healing; medical and wellness
tourism, including development of an integrated destination for
ayurveda, yoga and traditional Indian systems of medicines; and
supporting education by developing training infrastructure,
including institutions for dissemination, training and preservation
of knowledge system.
62. On this basis, it was submitted that the proposed ultra mega
project of respondent No.6-MVF is obviously in public interest,
apart from the fact that it would generate employment for about
1000 persons, with investment to the tune of about Rs.1500
crores. Thereupon, the learned senior counsel appearing for
respondent No.6-MVF submitted that the land of petitioner-TPCL
that is proposed to be acquired for the ultra mega project is
necessary for the said project, due to its unique location adjacent
to the reservoir/lake of the Thokarwadi Dam, as also two land
outcrops in the reservoir. The subject land would enhance the
functional capability of the ultra mega project and therefore, it is
necessary to be acquired and handed over to the respondent No.6-
MVF. The petitioner-TPCL is not entitled to oppose the
acquisition of the subject land only on the ground that about 126
hectares of land is already with the respondent No.6-MVF for the
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said ultra mega project.
63. The learned senior counsel appearing for respondent No.6-
MVF also relied upon the policies of the State, including industrial
policy, tourism policy, as also the industrial investment and service
policy, to contend that the ultra mega project is in line with such
policies and therefore, reference to the provisions of the MID Act
for acquisition of the subject land is fully justified. It was further
submitted that the provisions of the MID Act, including Sections
14, 32 and 39 thereof, sufficiently demonstrate a statutory scheme
for acquisition of lands to be handed over to a company for public
purpose. It was submitted that the ‘pass through’ method has to be
understood in this context. Since, the petitioner-TPCL refused to
part with the said lands on requests made by the respondent No.6-
MVF, the subject lands could not be directly transferred and the
‘pass through’ method had to be adopted. Such a method cannot
be said to be illegal for the reason that in the process of industrial
development under a statute like the MID Act, acquisition can be
undertaken for even a single identified private company or a
project proponent. On this ground itself the acquisition cannot be
labelled as a colourable exercise of power. In this context, reliance
was placed on the judgement of the Supreme Court in the case of
P. Narayanappa & Anr. vs. State of Karnataka & Ors., (2006) 7
SCC 578.
64. It was further submitted that GR dated 27.12.2016 was
being misinterpreted by the petitioner-TPCL to claim mandatory
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requirement of approval by the HPC. A proper reading of the said
GR would show that it is concerned with the establishment and
grant of status as an integrated industrial area. In the present case,
the respondent No.6-MVF, was already granted such status and
therefore, the GR to that extent had worked itself out in the
context of respondent No.6-MVF. The process of acquisition of
the land is through the statutory mechanism under the MID Act,
as per Sections 1(3) and 32 thereof. The same cannot be
interdicted, in any manner, by a GR, much less the GR dated
27.12.2016, which concerns a completely different subject. On the
basis of this distinction, it was submitted that the petitioner-TPCL
cannot harp upon mandatory clearance or approval by the HPC,
as per GR dated 27.12.2016.
65. It was further submitted that the petitioner-TPCL is not
justified in contending that a land already acquired for public
purpose cannot be acquired again. It was asserted that in the
present case, the acquisition was being undertaken under MID
Act, which has a specific object and the State is effectively only
altering the user of land. It was emphasized that the only relevant
factor in such a case is, as to whether the acquisition itself is for
public purpose. By relying upon the aforementioned goals to be
achieved through the ultra mega project, it was submitted that in
the present case, the acquisition was clearly for public purpose and
hence, the contention raised on behalf of the petitioner-TPCL
deserved to be rejected.
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66. In this regard, reliance was placed on judgement of the
Supreme Court in the case of R.L. Arora vs. State of Uttar Pradesh
& Ors., 1964 SCC OnLine SC 19. It was further submitted that
the Court would not enter into the relative significance or
importance of two competing public purposes. This would be
beyond the scope of jurisdiction being exercised under Article 226
of the Constitution of India. By placing reliance on the judgement
of the Supreme Court in the case of Gandhi Grah Nirman Sahkari
Samiti Ltd. & Ors. vs. State of Rajasthan & Ors. , (1993) 2 SCC
662, it was submitted that the Supreme Court held that the Court
cannot go into comparative utility of the public purposes, once it
is found that the acquisition is for public purpose.
67. It was further submitted that the petitioner-TPCL failed to
place on record any material to support its contention that the
subject land was required for future projects, concerning hydro
electric power. General and vague statements were made on behalf
of the petitioner-TPCL, which cannot be the basis to interfere with
the statutory process of acquisition under Section 32 of the MID
Act. It was further submitted that the apprehensions regarding
security of the hydro electric projects of the petitioner-TPCL are
wholly misplaced and the said apprehensions were duly addressed
in a joint meeting held on 06.05.2025, wherein it was indicated
that all necessary steps would be taken to ensure security in the
area. As regards environmental concerns raised on behalf of the
petitioner-TPCL, it was submitted that the same were again based
of vague assertions. In any case, despite the petitioner-TPCL
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addressing number of communications to authorities for declaring
the area as an Ecologically Sensitive Zone, it was asserted on
behalf of the respondent No.6-MVF that the proposed ultra mega
project is clearly in public interest and for public purpose, as it
would also generate large scale employment for residents of the
local area, thereby ensuring over all development in the said area.
On this basis, it was submitted that the writ petition deserves to be
dismissed, so that the SDO can proceed to pass an appropriate
order on the objections raised by the petitioner-TPCL and the
statutory process can be taken forward.
CONSIDERATION & FINDINGS
68. In order to consider the elaborate submissions made on
behalf of the petitioner-TPCL, the respondent-State authorities,
the respondent- MIDC and the respondent No.6-MVF, it would
be appropriate to first take into consideration the nature of right
claimed by the petitioner-TPCL, in the backdrop of the agreements
and conveyances executed in its favour between the years 1911
and 1940, in respect of the subject lands. The agreements and
conveyances with which we are concerned date back to more than
a century. The contents thereof are identical and they pertain to
different parcels of land in respect of which the Hydro Electric
Project was initiated by the predecessor of the petitioner-TPCL i.e.
the Tata Hydro Electric Power Supply Company Limited.
69. A perusal of the agreements and the conveyances shows the
exercise undertaken under the provisions of the LA Act before the
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possession of the lands was handed over to the predecessor of the
petitioner, of which the subject land admeasuring 84 hectares was
also a part. A reference to the relevant clauses of one such
agreement and a conveyance deed would be appropriate, to
understand the exercise of statutory power under the LA Act for
acquiring specific lands from villages in District Pune for the
Hydro Electric Project. The relevant portions of agreement dated
07.07.1911, executed between the predecessor of the petitioner
and the Secretary of State for India in Council read as follows:-
“ An Agreement made this Seventh day of July One
thousand nine hundred and eleven BETWEEN THE TATA
HYDRO-ELECTRIC POWER SUPPLY COMPANY
LIMITED (hereinafter called "the Company" which
expression shall unless excluded by or repugnant to the
context be deemed to include The Tata Hydro-Electric
Power Supply Company Limited and their successors and
assigns) of the one part and THE SECRETARY OF STATE
FOR INDIA IN COUNCIL (hereinafter called "the
Secretary of State" which expression shall unless excluded
by or repugnant to the context be deemed to include the
Secretary of State for India in Council and his successors
and assigns) of the other part WHEREAS in connection
with the undertaking and business of the Company for the
purpose of the construction of certain reservoirs and dams
for collecting and storing a supply of water and of
acqueducts canals and headraces for water carriage
therefrom and engine houses and buildings and other
works connected therewith (hereinafter referred to
collectively as "the said works") on certain land situated
within the villages of Lonavla, Bhushi, Kurvanda, Jevre,
Nandgaon, Pangloli, Budheli, Varsole, Walwhan, Tungarli,
Khandalla, Warpa, Nagargaon, Avandhe Budruk, Torne,
Valvandhe, Umbre (Taraf Nane Maval) and Shiravte in the
Maval Taluka of the Poona District and of the villages of
Khopoli, Bhanaj and Devalad in the Karjat Taluka of the
Kolaba District the Company have applied to the
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Government of Bombay to put in force the provisions of
the Land Acquisition Act, 1894 (hereinafter referred to as
"the said Act") in order to acquire for the Company all land
situated within the said villages which is needed for the
construction of the said works AND WHEREAS the
Government of Bombay having caused an enquiry to be
held in conformity with the provisions of Section 40 of the
said Act and being satisfied on the report of the result of
such enquiry that the acquisition of land within the said
villages is needed for the construction of the said works of
the Company and that the said works are likely to prove
useful to the public has consented to the provisions of the
said Act being put in force in order to acquire land for the
purposes of the Company and has pursuant to Section 41
of the said Act required the Company to enter into such
agreement with the Secretary of State as is herein
contained NOW THESE PRESENTS WITNESS and it is
hereby agreed between and by the Company on the one
hand and the Secretary of State on the other hand as
follows:-
*
5. If at any time or times any part or parts of the said
acquired land not actually utilized or intended to be
utilized as a site for any of the said works shall in the
opinion of the said Government be necessary to be
possessed by the said Government for purposes of revenue
administration or for purposes connected with public
health safety or necessity (of which matters the said
Government shall be the sole judge) the Company on being
thereunto required by the said Government shall transfer
to the Secretary of State such part or parts of the said
acquired land as the said Government shall specify to be
necessary for any of the purposes aforesaid and in
consideration of such transfer the Secretary of State shall
pay to the Company a sum equal to the amount of the
compensation awarded under the said Act and paid by the
Company in respect of the land the subject of the transfer
upon the acquisition thereof for the Company including
the amount awarded in respect thereof under Section 23
(2) of the said Act.
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6. Subject to Clause 5 hereof any of the said acquired
land or any part thereof which shall no longer be used or
required for the purposes of the undertaking and business
of the Company or which shall not be used for the
purposes of the undertaking and business of the Company
within the period prescribed by Clause 7 hereof for the
construction of the said works shall subject to the rents
payable for the time being in respect thereof to the said
Government by the terms of these presents and to the
Local Fund Cess payable in respect thereof for the time
being be offered through the said Government for sale to
the respective persons or to the heirs or the legal
representatives of the respective persons from whom the
same had been actually acquired or to the occupants of
adjoining lands at a price not exceeding the price which
the Company shall fix as their minimum limit for such sale
and in the event of such sale being declined may be sold
subject to the said rents and the said Local Fund Cess by
the Company at their discretion.”
70. The relevant portions of one such conveyance dated
27.04.1938 read as follows:-
“AND WHEREAS by another Agreement (hereinafter
called "the First Supplemental Agreement") and made
between the Company of the one part and the Secretary of
State of the other part bearing date the 16th day of
February 1921 and expressed to be supplemental to the
Principal Agreement after reciting that certain further lands
were needed for the said works and that the Company had
applied to the Government of Bombay to put in force the
provisions of the said Act in order to acquire such lands for
the Company it was (inter alia) agreed that the Government
of Bombay on being satisfied that the acquisition of such
lands was necessary in connection with the said works
should put in force the provisions of the said Act and that
after the Company should have paid the entire monics
compensation interest costs charges expenses payable in
respect thereof under the Principal Agreement the said
lands should be transferred to the Company subject as
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therein mentioned and that all the conditions stipulations
and provisions of the Principal Agreement (except Clauses
12, 13 and 14 relating to the Aerial transmission land and
Clause 17) should apply to any land acquired for the
Company in the villages mentioned in the Schedule thereto
as if the said villages had been included in the villages
mentioned in the Principal Agreement and that the rights
obligations and liabilities of the Company in respect of any
such land should in all respect be similar to the rights
obligations and liabilities of the Company in respect of any
land acquired under the Principal Agreement.”
71. A bare perusal of the above-quoted portions of the
agreement and the conveyance sufficiently demonstrate that the
State authority took recourse to Part VII of the LA Act, specifically
pertaining to acquisition of land for companies, consisting of
Sections 38 to 44-B. The above-quoted portion of the agreement
dated 07.07.1911 specifically refers to the enquiry conducted
under Section 40 of the LA Act and Section 41 thereof, pertaining
to agreement with the Appropriate Government for acquisition of
specific piece of land. The agreement as well as the conveyance
record the specific purpose for which the lands were acquired and
handed over to the predecessor of the petitioner-TPCL. This
pertained to construction of a reservoir and dam for collecting and
storing supply of water in order to establish the Hydro Electric
Power Generation Project. A perusal of the agreement as well as
the conveyance would show the public purpose for which the
lands, including the subject land admeasuring 84 hectares, were
acquired. Clause 5 of the above-quoted agreement specified that if
at any time or times, any part or parts of the said acquired lands
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were not actually utilized or intended to be utilized for the said
works pertaining to the Hydro Electric Project, the State
Government had the power to transfer the same to itself if such
part or parts were required for the purposes of revenue
administration or for purposes connected with public health safety
or necessity and that the Government was to be the sole judge of
such requirement.
72. Thus, the contents of the agreements as well as the
conveyances executed between the predecessor of the petitioner
and the then Sovereign Government contemplated taking over of
certain part or parts of the lands made over to the company,
subject to the condition that such part or parts of the land were
unutilized for the Hydro Electric Project. The taking over of the
land by the Government was also to be obviously for public
purpose.
73. In this context, a significant aspect in the present case
pertains to the question as to whether the subject land of 84
hectares in the villages in District Pune specified in the impugned
notification, admeasuring about 84 hectares were / are unutilized
for the Hydro Electric Project. The petitioner has asserted that the
subject land admeasuring about 84 hectares continues to be
utilized for the Hydro Electric Project i.e. the Thokarwadi Dam
and the Bhivpuri Hydro Project of 75 MW and that it is crucial for
the Bhivpuri Pump Hydro Project of 1000 MW, in the context of
which the said MoU has been executed between the petitioner-
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TPCL and the respondent-State of Maharashtra on 08.08.2023. It
is asserted on behalf of the petitioner that the subject land adjacent
to the reservoir / lake of the Thokarwadi dam as well as the two
land outcrops in the reservoir, being part of the said 84 hectares
land of the petitioner-TPCL, is very much utilized as it is part of
the catchment area of the Thokarwadi dam. The utility of the said
land is emphasized on the part of the petitioner-TPCL, particularly
taking into account the huge 1000 MW Bhivpuri Pumped Hydro
Project being established in the light of the said MoU dated
08.08.2023. The petitioner-TPCL also heavily relied upon the
primacy being given by the Central Government as well as the
respondent-State of Maharashtra to such Pumped Storage Projects
as per the Pumped Storage Policy 2023 of the respondent-State of
Maharashtra. Such non-conventional energy sources are the need
of the present times and on this basis, the petitioner-TPCL asserts
that there is no question of the subject land of 84 hectares being
labelled as 'unutilized land' for its Hydro Electric Projects.
74. On this basis, we find substance in the contention raised on
behalf of the petitioner-TPCL that the subject land cannot be
categorised as ‘unutilised’ for the public purpose of its Hydro
Electric Projects. Hence, the State could not have taken any step
for acquisition of the subject land as the pre-condition for taking
recourse to the above-quoted relevant clauses and portions of the
agreements and conveyances did not exist. We find that once the
lands, that were subject matter of such solemn agreements and
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conveyances, included the said portion of 84 hectares, any step for
transferring the land by the State either to itself or the respondent-
MIDC could have been taken only if the said portion of 84
hectares was unutilized for the Hydro Electric Projects of the
petitioner-TPCL.
75. In this context, it is significant to note that neither the
impugned Notification dated 03.03.2025 issued under Section
1(3) of the MID Act nor the Government Resolution dated
04.03.2025 issued by the State Government, stating the intention
of acquiring the said 84 hectares of land for respondent No.6-
MVF and not even the notices dated 07.03.2025 issued under
Section 34(2) of the MID Act even remotely refer to the said 84
hectares of land, as remaining 'unutilized' for the Hydro Electric
Projects of the petitioner-TPCL. Thus, the very substratum for
exercising power by the respondent- State Government in terms of
the said agreements and conveyances did not exist when the
impugned Notification, Government Resolution and Notices were
issued by the respondent-State, purportedly exercising power
under the provisions of the MID Act. Such an action is found to be
in the teeth of the relevant clauses and portions of the agreements
and conveyances.
76. It is surprising to note that in the affidavits filed on behalf of
the respondent-State authorities and the respondent- MIDC, it is
claimed that the subject land admeasuring 84 hectares, proposed
to be acquired by recourse to the provisions of the MID Act, had
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remained unutilized by the petitioner-TPCL for its Hydro Electric
Projects. In other words, what is not stated in the impugned
Notification, Government Resolution and Notices issued under
the MID Act, is claimed to be a ground for initiating the process of
acquisition of the subject land. It is settled position of law as per
judgement of the Supreme Court in the case of Mohinder Singh
Gill and another Vs. Chief Election Commissioner, New Delhi ,
(1978) 1 SCC 405, followed subsequently in a number of
judgements, that State authorities cannot substitute or state
reasons in affidavits, which are not stated in the orders /
notifications etc. issued by such State authorities, purportedly in
the exercise of statutory power. But, contrary to the said position
of law, the respondent-State authorities as well as the respondent-
MIDC have sought to state the ground of 'unutilized land' of the
petitioner-TPCL for justifying the acquisition of the subject 84
hectares of land. Admittedly, no enquiry was conducted by the
respondent to come to a conclusion in that regard.
77. It is for this reason that the petitioner-TPCL has raised
grounds of challenge by referring to Section 42A of the MID Act,
which pertains to acquisition of unutilized surplus land in
industrial area and allotment to other industries. The respondent-
State authorities and the respondent-MIDC have opposed the said
ground by stating that since the subject land of 84 hectares does
not form part of an industrial area under the MID Act, the
petitioner cannot rely upon Section 42A thereof to challenge the
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action of the respondents in the present case. We find that since
the said respondents relied upon purported non-utilisation of the
subject land by the petitioner-TPCL in their reply affidavits as a
ground for justifying the acquisition, while disputing the same, the
petitioner-TPCL has referred to Section 42A of the MID Act. It is
obvious that since the acquisition under Part VII of the LA Act was
undertaken as far back as in the years 1911 to 1940, much before
the MID Act was enacted in the year 1961, there would be no
question of the subject land being an industrial area under the
provisions of the MID Act. But, it is because of the allegation
levelled by the said respondents about the subject land not having
been utilized by the petitioner-TPCL for its Hydro Electric Projects
that the petitioner has been constrained to take such a stand. It is
also taken in conjunction with the above-quoted relevant clauses
and portions of the agreements and conveyances through which
the land was made over to the predecessor of the petitioner-TPCL
between the years 1911 and 1940.
78. It is in this backdrop that the contention raised by the
petitioner-TPCL, in the context of Section 42A of the MID Act,
needs to be appreciated. A perusal of the said provision shows that
if a portion of land, which is an industrial area, remains unutilized
and becomes surplus, it can be acquired and allotted to other
industries. The said provision requires a particular procedure of
enquiry to be undertaken and only thereupon, can the MIDC
proceed to allot such unutilized surplus lands to another industry.
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The petitioner has taken the same analogy forward by referring to
the above-quoted relevant clauses and portions of the agreements
and conveyances to counter the stand taken by the said
respondents. We find substance in the contention of the petitioner-
TPCL that the impugned Notification, Government Resolution
and Notices issued under the MID Act should have been preceded
by an enquiry for reaching a conclusion that the subject land of 84
hectares had remained ‘unutilized’ for the Hydro Electric Projects
of the petitioner-TPCL. In the absence of any such enquiry or
reasoning leading upto issuance of the impugned Notification,
Government Resolution and Notices under the MID Act, a strong
ground is made out in favour of the petitioner-TPCL to seek
quashing of the same. We find that the respondent-State
authorities and the respondent-MIDC cannot have it both ways,
meaning thereby that they cannot in the same voice claim that an
enquiry into the aspect of non-utilization of the subject land of 84
hectares by the petitioner-TPCL was not required to be undertaken
and at the same time, claim that since the subject land was
unutilized by the petitioner-TPCL, it was being acquired for the
respondent No.6-MVF. We find substance in the challenge raised
on behalf of the petitioner-TPCL in this regard.
79. In this backdrop, it would be necessary to refer to the
relevant provisions of the LA Act, the Act of 2013 as well as the
MID Act, to examine the rival contentions with regard to the
manner in which the respondent-State has exercised power while
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issuing the impugned Notification dated 03.03.2025.
80. It is the case of the petitioner-TPCL that under the
provisions of the MID Act, the State cannot acquire land for a
private company. It is further asserted that in the present case,
even if the respondent No.6-MVF i.e. the private company claims
that its activities could be said to be beneficial to the public,
acquisition for its benefit cannot be undertaken under the
provisions of the MID Act. In this context, reliance is placed on
judgements that refer to Part VII of the LA Act, which exclusively
pertains to acquisition of lands for companies, in order to
highlight the distinction between the nature of acquisition under
the general law for land acquisition on the one hand and
acquisition under the MID Act on the other. Reference is also
made to the relevant provisions of the Act of 2013 to contend that
specific procedure is contemplated before land can be acquired for
a company. In contrast, under the MID Act, there is no provision
for acquisition of land for a private company.
81. In this context, although LA Act has been repealed, a perusal
of Part VII of the LA Act pertaining to acquisition of lands for
companies shows that detailed procedure is contemplated therein,
including enquiry under Section 40 and execution of agreement
with Appropriate Government under Section 41 thereof. The
other Sections of the said Part VII of the LA Act specify the limited
purposes for which acquisition could be undertaken for a
company.
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82. Since the Act of 2013 is now in vogue, it would be
appropriate to refer to the relevant provisions thereof to indicate
as to the procedure to be followed when land is to be acquired for
a company. In this context, Section 2 along with proviso added by
way of Maharashtra Amendment to sub-section (2) thereof, read
with Section 10A added by way of Maharashtra Amendment and
Section 3(j) defining 'company', need to be appreciated. The said
provisions read as follows:-
2. Application of Act.- (1) The provisions of this Act
relating to land acquisition, compensation, rehabilitation
and resettlement, shall apply, when the appropriate
Government acquires land for its own use, hold and
control, including for Public Sector Undertakings and for
public purpose, and shall include the following purposes,
namely:-
(a) for strategic purposes relating to naval,
military, air force, and armed forces of the Union,
including central paramilitary forces or any work vital to
national security or defence of India or State police, safety
of the people; or
(b) for infrastructure projects, which includes the
following, namely:-
(i) all activities or items listed in the
notification of the Government of India in the
Department of Economic Affairs
(Infrastructure Section) number 13/6/2009-
INF, dated the 27th March, 2012, excluding
private hospitals, private educational
institutions and private hotels;
(ii) projects involving agro-processing,
supply of inputs to agriculture, warehousing,
cold storage facilities, marketing infrastructure
for agriculture and allied activities such as
dairy, fisheries, and meat processing, set up or
owned by the appropriate Government or by
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a farmers' cooperative or by an institution set
up under a statute;
(iii) project for industrial corridors or
mining activities, national investment and
manufacturing zones, as designated in the
National Manufacturing Policy;
(iv) project for water harvesting and water
conservation structures, sanitation;
(v) project for Government administered,
Government aided educational and research
schemes or institutions;
(vi) project for sports, heath care, tourism,
transportation or space programme;
(vii) any infrastructure facility as may be
notified in this regard by the Central
Government and after tabling of such
notification in Parliament;
(c) project for project affected families;
(d) project for housing for such income groups, as
may be specified from time to time by the appropriate
Government;
(e) project for planned development or the
improvement of village sites or any site in the urban areas
or provision of land for residential purposes for the weaker
sections in rural and urban areas;
(f) project for residential purposes to the poor or
landless or to persons residing in areas affected by natural
calamities, or to persons displaced or affected by reason of
the implementation of any scheme undertaken by the
Government, any local authority or a corporation owned
or controlled by the State.
(2) The provisions of this Act relating to land
acquisition, consent, compensation, rehabilitation and
resettlement, shall also apply, when the appropriate
Government acquires land for the following purposes,
namely:-
(a) for public private partnership projects, where
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the ownership of the land continues to vest with the
Government, for public purpose as defined in sub-section
(1);
(b) for private companies for public purpose, as
defined in sub-section (1):
Provided that in the case of acquisition for-
(i) private companies, the prior consent of at least
eighty per cent. of those affected families, as defined in
sub-clauses (i) and (v) of clause (c) of section 3; and
(ii) public private partnership projects, the prior consent
of at least seventy per cent. of those affected families, as
defined in sub-clauses (i) and (v) of clause(c) of section 3,
shall be obtained through a process as may be prescribed
by the appropriate Government:
Provided further that the process of obtaining the consent
shall be carried out along with the Social Impact
Assessment study referred to in section 4:
Provided also that no land shall be transferred by way of
acquisition, in the Scheduled Areas in contravention of any
law (including any order or judgement of a court which
has become final) relating to land transfer, prevailing in
such Scheduled Areas.
(3) The provisions relating to rehabilitation and
resettlement under this Act shall apply in the cases where,-
(a) a private company purchases land, equal to or
more than such limits in rural areas or urban areas, as may
be prescribed by the appropriate Government, through
private negotiations with the owner of the land in
accordance with the provisions of section 46;
(b) a private company requests the appropriate
Government for acquisition of a part of an area so
prescribed for a public purpose:
Provided that where a private company requests the
appropriate Government for partial acquisition of land for
public purpose, then, the rehabilitation and resettlement
entitlements under the Second Schedule shall be applicable
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for the entire area which includes the land purchased by
the private company and acquired by the Government for
the project as a whole.
Maharashtra.- In its application to the State of
Maharashtra, in sub-S.(2) of S.2, after the second proviso,
the following proviso shall be added, namely:-
“Provided also that, the acquisition of land for the projects
listed in section 10-A and the purposes specified therein,
shall be exempted from the provisions of the first proviso
to this sub-section.
3. Definitions.- In this Act, unless the context otherwise
requires,-
(j) ‘company’ means -
(i) a company as defined in section 3 of the
Companies Act, 1956 (1 of 1956), other than a
Government company;
(ii) a society registered under the Societies
Registration Act, 1860 (21 of 1860) or under any
corresponding law for the time being in force in a State;
10A. Power of State Government to exempt certain
projects - The State Government may, in the public interest,
by notification in the Official Gazette, exempt any of the
following projects from the application of the provisions of
Chapter II and Chapter III of this Act, namely:-
(a) such projects vital to national security or defence
of India and every part thereof, including preparation for
defence or defence production;
(b) rural infrastructure including irrigation and
electrification;
(c) affordable housing and housing for the poor
people;
(d) industrial area or industrial estate set up by the
State Government and its undertaking;
(e) industrial corridor set up by the State
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Government and its undertaking (in which case the land
shall be acquired up to one kilometre on both sides of
designated railway line or roads for such industrial
corridor); and
(f) infrastructure projects including projects
under public-private partnership where the ownership of
land continues to vest with the Government:
Provided that, the State Government shall, before
issue of notification, ensure the extent of land for the
proposed acquisition keeping in view the bare minimum
land required for such project.
83. A perusal of the above-quoted provisions of the Act of 2013
would show that if land is to be acquired for private companies, it
has to be acquired for 'public purpose' as defined in sub-section (1)
of Section 2. As per the third proviso to sub-section (2) of Section
2 of the Act of 2013, the projects listed in Section 10A and the
purposes specified therein, stand exempted from the provisions of
first proviso to the said sub-section. The first proviso pertains to
the process of obtaining consent of 80% affected families etc. But,
a perusal of Section 10A of the Act of 2013, quoted hereinabove,
would show that the State Government, in public interest, is
required to first issue a notification in the Official Gazette,
exempting specific project from application of the provisions of
Chapter II concerning Social Impact Assessment Study and
Chapter III pertaining to Provisions to Safeguard Food Security.
The nature of such projects is specified in clauses (a) to (f) of
Section 10A of the Act of 2013. None of the clauses refer to the
beneficiary being a private company. Clause (d) refers to industrial
area or industrial estate set up by the State Government and its
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undertaking, while clause (f) refers to infrastructure projects
including projects under Public-Private Partnership where the
ownership of the land continues to vest with the Government. In
the present case, since the respondent-State will be handing over
the land to the respondent No.6-MVF, which is a private
company, there is no question of applicability of clause (f). In any
case, it cannot apply because the proposed activities of respondent
No.6-MVF do not qualify to be either infrastructure projects or
projects under Public-Private Partnership where the ownership of
the land continues to vest with the Government. As regards clause
(d) pertaining to industrial area or industrial estate set up by the
Government and its undertaking, in the present case, there is no
question of the respondent-State intending to set up an industrial
area or an industrial estate because the subject land upon
acquisition is admittedly being handed over to respondent No.6-
MVF, which is a private company.
84. This is quite apart from the fact that the subject land in the
present case is already part of the total land in possession of the
petitioner-TPCL for utilization for the public purpose of Hydro
Electric Projects. The respondent-State, in the present case, has
taken recourse to the provisions of the MID Act to claim that
power under Section 1(3) thereof could be exercised in the facts
and circumstances of the present case to declare that the subject
land of 84 hectares could be made amenable to Chapter VI of the
MID Act pertaining to acquisition and disposal of land. Before
proceeding further, it would be appropriate to refer to the relevant
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provisions of the MID Act, which read as follows:-
“1. Short title, extent and commencement.- (1) This Act
may be called the Maharashtra Industrial Development Act,
1961.
(2) It extends to the whole of the State of Maharashtra.
(3) This Act, except Chapter VI, shall come into
force at once; Chapter VI shall take effect in such area,
from such date as the State Government may, from time to
time, by notification in the Official Gazette, appoint in that
behalf:
Provided that, if in the opinion of the State
Government any area or any part thereof, where Chapter
VI has been brought into force, is not required or is not
likely to be required for the purposes of development as an
industrial area, the State Government may, by like
notification, direct that Chapter VI shall cease to be in
force in that area or in any part thereof on such date as
may be specified in the notification, except as respects
things done or omitted to be done before such date:
Provided further that, no notification shall issued by
the State Government under the first proviso after the
expiry of such period from the date of bringing into force
of Chapter VI as may be prescribed; and different periods
may be prescribed for the areas in which Chapter VI has
been brought into force before the commencement of the
Maharashtra Industrial Development (Amendment) Act,
1974 and for the areas in which that Chapter may be
brought into force after such commencement.
2. Definitions.- In this Act, unless the context otherwise
requires,-
(g) ‘industrial area’ means any area declared to be an
industrial area by the State Government by notification in
the Official Gazette, which is to be developed and where
industries are to be accommodated;
(h) ‘industrial estate’ means any site selected by the State
Government, where the Corporation builds factories and
other buildings and makes them available for any industries
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or class of industries;
32. Compulsory acquisition. - (1) If at any time in the
opinion of the State Government, any land is required for
the purpose of development by the corporation, or for any
other purpose in furtherance of the objects of this act, the
State Government may acquire such land by publishing in
the Official Gazette a notice specifying the particular
purpose for which such land is required, and stating therein
that the State Government has decided to acquire the land
in pursuance of this section.
(2) Before publishing a notice under sub-section (1), the
State Government shall by another notice call upon the
owner of the land and any other person who in the opinion
of the State Government may be interested therein, to show
cause, within such time as may be specified in the notice,
why the land should not be acquired. The State
Government shall also cause public notice to be given in
the manner laid down in section 53 and in the Official
Gazette.:
Provided that, if the land proposed to be acquired
falls within a scheduled Area then the State Government
shall before such acquisition consult,-
(i) the Gram Sabha and the Panchayat concerned if
the land is falling within the area of one
Panchayat;
(ii) the concerned Gram Sabhas and the Panchayat
Samiti if the land falling within the area of more
than one Panchayats in the Block concerned;
(iii) the concerned Gram Sabhas and theZilla
Parishadif the land is falling within the area of
more than one Block in the district concerned;
such consultation shall be carried out in the manner
as may be !aid down by the State Government by issuing a
general or special order in this behalf:
Provided that the decision taken by the majority of
the Gram Sabhas concerned by passing a resolution in the
above matters shall be binding on the concerned Panchayat
Samiti or the Zila Parishad as the case may be.
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Explanation . - For the purposes of these provisos,-
(i) the expressions "Gram Sabha" or "Panchayat"
and "Scheduled Areas" shall have meanings,
respectively, assigned to them in the Bombay
Village Panchayats act, 1958;
(ii) the expressions "Panchayat Samiti" and "Zilla
Parishad" shall have the meaning, respectively,
assigned to them in the Maharashtra Zilla
Parishads and Panchayat Samitis Act, 1961.
(3) After considering the cause, if any, shown by the
owner of the land and by any other person interested
therein, and after giving such owner and person an
opportunity of being heard, the State Government may pass
such orders as it deems fit.
(4) When a notice under sub-section (1) is published in
the Official Gazette, the land shall, on and from the date of
such publication, vest absolutely in the State Government
free from all encumbrances:
Provided that, if, before actual possession of such
land is taken by or on behalf of the State Government, it
appears for the State Government that the land is no more
required for the purposes of this Act, the State Government
may, by like notice, withdraw the land from acquisition and
on the publication of such notice in the Official Gazette,
the land shall revest with retrospective effect in the person
in whom it was vesting immediately before the publication
of the notice under sub-section (1) subject to such
encumbrances, if any, as may be subsisting at that time. The
owner and other persons interested shall be entitled to
compensation for the damage, if any, suffered by them in
consequence of the acquisition proceedings as determined
in accordance with the provisions of section 33.
(5) Where any land is vested in the State Government
under sub-section (4) the State Government may, by notice
in writing, order any person who may be in possession of
the land to surrender or deliver possession thereof to the
State Government or any person duly authorised by it in
this behalf within thirty days of the service of the notice.
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(6) If any person refuses or fails to comply with an order
made under sub-section (5), the State Government may
take possession of the land and may for that purpose use
such force as may be necessary.
(7) Where the land has been acquired for the
corporation or any local authority, the State Government
shall, after it has taken possession thereof, by notification
published in the Official Gazette, transfer the land to the
Corporation or that local authority, as the case may be, for
the purpose for which it was acquired, and the provisions
of section 43-1A shall apply to any land so transferred;
39. Disposal of land by the Corporation. (1) Subject to
any directions given by the State Government under this
Act, the Corporation may dispose of -
(a) any land acquired by the State Government and
transferred to it, without undertaking or
carrying out any development thereon; or
(b) any such land after undertaking or carrying out
such development as it thinks fit,
to such person in such manner and subject to such
terms and conditions, as it considers expedient for securing
the purposes of this Act.
(2) The powers of the Corporation with respect to the
disposal of land under sub-section (1) shall be so exercised
as to secure, so far as practicable, that-
(a) where the Corporation proposes to dispose of
by sale any such land without any development
having been undertaken or carried out thereon,
the Corporation shall offer the land in the first
instance to the persons from whom it was
acquired, if they desire to purchase it, subject to
such requirements as to its development and use
as the Corporation may think fit to impose;
(b) persons who are residing or carrying on business
or other activities on any such land shall, if they
desire to obtain accommodation on land
belonging to the Corporation and are willing to
comply with any requirements of the
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Corporation as to its development and use, have
an opportunity to obtain thereon
accommodation suitable to their reasonable
requirements on terms settled with due regard
to the price at which any such land has been
acquired from them.
(3) Nothing in this Act shall be construed as enabling the
Corporation to dispose of land by way of gift, mortgage or
charge, but subject as aforesaid reference in this Act to the
disposal of land shall be construed as reference to the
disposal thereof in any manner, whether by way of sale,
exchange or lease or by the creation, of any easement, right
or privilege or otherwise.”
85. A perusal of the above-quoted provisions of the MID Act
would show that while the respondent-State is empowered to issue
notification in the Official Gazette under Section 1(3) thereof to
apply Chapter VI pertaining to acquisition and disposal of land, it
necessarily pertains to such acquisition for establishing an
industrial area or an industrial estate. The same has to be done in
furtherance of the object of the MID Act. In this context, the
judgement of the Constitution Bench of the Supreme Court in the
case of Shri Ramtanu Co-operative Housing Society Limited and
another Vs. State of Maharashtra ( supra ) assumes significance. In
the said case, the constitutional validity of the MID Act was
examined. The Supreme Court took into consideration the object
of enactment of the MID Act and found that the same pertained to
orderly establishment of industrial areas and industrial estates in
the State of Maharashtra and for the purpose of establishment of
the MIDC for promoting and assisting the rapid development of
industries in the State of Maharashtra. The Supreme Court held in
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the said judgement that the true character of the MIDC under the
provisions of the MID Act was that of an architectural agent for
the development and growth of industrial towns by establishing
and developing industrial estates and industrial areas in the State
of Maharashtra. In paragraph 21 of the said judgement, the
Supreme Court held as follows:-
“21. Counsel on behalf of the petitioners contended that
there was procedural discrimination between the Land
Acquisition Act and the Act in the present case. It was said
that there was a special procedure designed by the Land
Acquisition Act for acquisition of land for the companies
whereas in the present case the State was acquiring land for
companies without adopting the procedure of the Land
Acquisition Act. It is to be remembered that the Act in the
present case is a special one having the specific and special
purpose of growth, development and organisation of
industries in the State of Maharashtra. The Act has its own
procedure and there is no provision in the Act for
acquisition of land for a company as in the case of Land
Acquisition Act. In the present case, acquisition under the
Act is for the purpose of development of industrial estates
or industrial areas by the Corporation or any other purpose
in furtherance of the objects of the Act. The policy
underlying the Act is not acquisition of land for any
company but for the one and only purpose of development,
organisation and growth of industrial estates and industrial
areas. The Act is designed to have a planned industrial city
as opposed to haphazard growth of industrial areas in all
parts of the State. The Act is intended to prevent growth of
industries in the developed parts of the State. Industries are
therefore to be set up in the developing or new parts of the
State where new industrial towns will be brought into
existence. The object of the Act is to carve out planned
areas for industries. On one side there will be engineering
industries and on the other there will be chemical
industries. There will be localisation of industries with the
result that the residents and dwellers of towns and cities
will not suffer either from the polluted air or obnoxious
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chemicals of industries or the dense growth of industries
and industrial population, within and near about the
residential areas. The Land Acquisition Act is a general Act
and that is why there is specific provision for acquisition of
land by the State for public purpose and acquisition of land
by the State for companies. The present Act on the other
hand is designed for the sole purpose of development of
industrial areas and industrial estates and growth and
development of industries within the State. Industrial
undertakings or persons who are engaged in industries all
become entitled to the facilities on such industrial growth.
Under the Land Acquisition Act acquisition is at the
instance of and for the benefit of a company, whereas under
the present Act acquisition is solely by the State for public
purposes. The two Acts are dissimilar in situations and
circumstances.
(emphasis supplied)”
86. A bare perusal of the above-quoted portion of the
Constitution Bench judgement of the Supreme Court in the case of
Shri Ramtanu Co-operative Housing Society Limited and another
Vs. State of Maharashtra ( supra ) shows that while the MID Act has
its own procedure for acquisition, there is no provision therein for
acquisition of land for a company as in the general law pertaining
to acquisition of lands. This is a clinching observation in favour of
the petitioner-TPCL.
87. A perusal of the affidavits filed on behalf of the respondent-
State authorities and the respondent-MIDC, as well as the stand
orally taken before this Court, show that the acquisition of the
subject 84 hectares land in the present case, is exclusively for the
respondent No.6-MVF, which is a private company. The said
respondents have clearly stated that the compensation amount is
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to be paid by the respondent No.6-MVF and it is not from the
funds of the State or the MIDC. This has a crucial bearing on the
line of judgements upon which the respondent State as well as the
respondent MIDC have placed reliance. The said judgements have
been rendered in the context of acquisitions undertaken either
under Part II or under Part VII of the LA Act, which at the relevant
time was the general law for acquisition of land till the Act of
2013 was enacted. As a matter of fact, even the petitioner-TPCL
has specifically referred to the said judgements to emphasize the
manner in which acquisition of lands was undertaken in those
cases, when it was for the benefit of a company. While stoutly
stating its own case regarding continued utilization of the subject
land of 84 hectares for the public purpose of the Hydro Electric
Projects, the petitioner-TPCL referred to and relied upon the said
judgements, to contend that when the acquisition in the present
case, was being projected by the respondent-State authorities and
the respondent-MIDC, as for the benefit of the respondent No.6-
MVF, a private company, it was a sine qua non to demonstrate that
such acquisition was based on legitimate exercise of power of
acquisition under the general law and that too for 'public purpose'.
It is in this context that the petitioner-TPCL has alleged colourable
exercise of power by the respondent-State in taking recourse to
the provisions of the MID Act for acquisition of the subject 84
hectares of land, in order to by-pass procedural requirements and
rigours specified in the general law of acquisition. On this ground,
it is alleged that the acquisition is not only an instance of
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colourable exercise of power, but it is also mala fide , as the
requirements of law are sought to be ignored only to benefit a
private entity i.e. respondent No.6- MVF.
88. The respondent State has sought to counter the said
contentions of the petitioner-TPCL by relying upon the principle
of eminent domain, claiming that the source of the power to
acquire land cannot be the provisions of specific Statutes, but a
general and inherent power of the Sovereign. The principle of
eminent domain has also been discussed in the context of
colourable exercise of power, but it would be appropriate to first
refer to judgements that have considered the said principle in the
Indian context.
89. The rival parties have referred to the judgement of the
Supreme Court in the case of Sooraram Pratap Reddy Vs. District
Collector (supra) in the context of the principle of eminent
domain. The relevant portion of the said judgement reads as
follows:-
“43. “Eminent domain” may be defined as the right or
power of a sovereign State to take private property for
public use without the owner's consent upon the payment
of just compensation. It means nothing more or less than
an inherent political right, founded on a common necessity
and interest of appropriating the property of individual
members of the community to the great necessities and
common good of the whole society. It embraces all cases
where, by the authority of the State and for the public
good, the property of an individual is taken without his
consent to be devoted to some particular use, by the State
itself, by a corporation, public or private, or by a private
citizen for the welfare of the public ( American
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Jurisprudence , 2d, Vol. 26, pp. 638-39, Para 1; Corpus
Juris Secundum , Vol. 29, p. 776, Para 1; Words and
Phrases , Permanent Edition, Vol. 14, pp. 468-70).
44. “Eminent domain” is thus inherent power of a
governmental entity to take privately owned property,
especially land and convert it to public use, subject to
reasonable compensation for the taking (vide P. Ramanatha
Aiyar's Advanced Law Lexicon , Vol. 2, p. 1575).
45. The term “eminent domain” is said to have originated
by Grotius, legal scholar of the seventeenth century. He
believed that the State possessed the power to take or
destroy property for the benefit of the social unit, but he
believed that when the State so acted, it was obligated to
compensate the injured property owner for his losses. In
his well-known work De Jure, Belli et Pacis , the learned
author proclaimed:
‘The property of subject is under the eminent
domain of the State, so that the State or he who
acts for it may use, alienate and even destroy such
property, not only in the case of extreme necessity,
in which even private persons have a right over the
property of the other, but for the ends of public
utility, to which ends those who founded civil
society must be supposed to have intended the
private ends should give way.’
46. Blackstone too believed that the State had no general
power to take private property of landowners, except on
the payment of a reasonable price. The right of the State or
the sovereign to its or his own property is absolute while
that of the subject or citizen to his property is only
paramount. The citizen holds his property subject always
to the right of the sovereign to take it for a public purpose.
The power of eminent domain is merely a means to an end
viz. larger public interest.
47. The power of eminent domain does not depend for its
existence on a specific grant. It is inherent and exists in
every sovereign State without any recognition thereof in
the Constitution or in any statute. It is founded on the law
of necessity. The power is inalienable. No legislature can
bind itself or its successors not to exercise this power when
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public necessity demands it. Nor can it be abridged or
restricted by agreement or contract.
48. Nichols in his classic book Eminent Domain defines it
(eminent domain) as “the power of sovereign to take
property for public use without the owner's consent”.
49. Another constitutional expert (Cooley) in his treatise
on the Constitutional Limitations , states:
‘More accurately, it is the rightful authority which
must rest in every sovereignty to control and
regulate those rights of a public nature which
pertain to its citizens in common and to
appropriate and control individual property for
the public benefit, as the public safety, convenience
or necessity may demand.’
50. Willis in his well-known work Constitutional Law
discusses two viewpoints as to exercise of power of
eminent domain. The older and stricter view was that
unless the property was dedicated for user by the public at
large or a considerable section thereof, it would not be for
public use or for public purpose. The modern and more
liberal view, however, is that it is not an essential condition
of public use that the property should be transferred to
public ownership or for public user and it is sufficient that
the public derives advantage from the scheme.
51. In Fallbrook Irrigation District v. Bradley [41 L Ed 369
: 164 US 112 (1896)] an Act of California provided for the
acquisition of lands whenever fifty landowners or a
majority of them in a particular locality required it for
construction of a watercourse, the object of the legislation
being to enable dry lands to be brought under wet
cultivation. The validity of the Act was challenged on the
ground that the acquisition would only benefit particular
landowners who could take water from the channel and
the public as such had no direct interest in the matter and
consequently there was no public user. The contention was
right if narrow view was to be accepted but was not well
founded if liberal view was to be adopted. Rejecting the
contention, the Court observed: (L Ed pp. 389-90)
‘To irrigate and thus to bring into possible
cultivation these large masses of otherwise
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worthless lands would seem to be a public purpose
and a matter of public interest, not confined to the
landowners, or even to any one section of the
State. The fact that the use of the water is limited
to the landowners is not, therefore, a fatal
objection to this legislation. It is not essential that
the entire community, or even any considerable
portion thereof, should directly enjoy or
participate in an improvement in order to
constitute a public use. … It is not necessary, in
order that the use should be public, that every
resident in the district should have the right to the
use of the water .
(emphasis supplied)’”
90. Reference was also made in the said judgement to a number
of decisions of foreign jurisdictions and thereafter, the following
observations were made:-
“61. The above principles have been accepted and applied
in India also. Immediately after the Constitution came into
force, this Court had an occasion to consider the power of
eminent domain in the leading case of Charanjit Lal
Chowdhury v. Union of India [1950 SCC 833 : AIR 1951
SC 41 : 1950 SCR 869] . Referring to the doctrine of
eminent domain in the American legal system, Mukherjea,
J. (as His Lordship then was) stated: ( Charanjit Lal case
[1950 SCC 833 : AIR 1951 SC 41 : 1950 SCR 869] , AIR
pp. 53-54, para 48)
‘48 . It is a right inherent in every sovereign to
take and appropriate private property belonging
to individual citizens for public use. This right,
which is described as eminent domain in
American law, is like the power of taxation, and
offspring of political necessity, and it is supposed
to be based upon an implied reservation by
Government that private property acquired by its
citizens under its protection may be taken or its
use controlled for public benefit irrespective of
the wishes of the owner.’
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62. In Commr. & Collector v. Durganath Sarma [AIR 1968
SC 394 : (1968) 1 SCR 561] drawing distinction between
police power and power of eminent domain , this Court
observed: (SCC p. 399, para 9)
‘9 . … In the exercise of its eminent domain
power the State may take any property from the
owner and may appropriate it for public
purposes. The police and eminent domain
powers are essentially distinct. Under the police
power many restrictions may be imposed and the
property may even be destroyed without
compensation being given, whereas under the
power of eminent domain, the property may be
appropriated to public use on payment of
compensation only.’
63. In Coffee Board v. CCT [(1988) 3 SCC 263 : 1988
SCC (Tax) 308] referring to American authorities,
Mukharji, J. (as His Lordship then was) stated: (SCC p.
282, para 29)
‘29 . … It is trite knowledge that eminent domain
is an essential attribute of sovereignty of every
State and authorities are universal in support of
the definition of eminent domain as the power
of the sovereign to take property for public use
without the owner's consent upon making just
compensation.’
64. In Scindia Employees' Union v. State of Maharashtra
[(1996) 10 SCC 150] this Court observed: (SCC p. 152,
para 4)
‘4 . … The very object of compulsory acquisition
is in exercise of the power of eminent domain by
the State against the wishes or willingness of the
owner or person interested in the land.
Therefore, so long as the public purpose subsists
the exercise of the power of eminent domain
cannot be questioned. Publication of declaration
under Section 6 is conclusive evidence of public
purpose. In view of the finding that it is a
question of expansion of dockyard for defence
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purpose, it is a public purpose.’
65. In Sharda Devi v. State of Bihar [(2003) 3 SCC 128]
this Court said: (SCC p. 144, para 27)
‘27 … The power to acquire by the State the
land owned by its subjects hails from the right of
eminent domain vesting in the State which is
essentially an attribute of sovereign power of the
State. So long as the public purpose subsists, the
exercise of the power by the State to acquire the
land of its subjects without regard to the wishes
or willingness of the owner or person interested
in the land cannot be questioned.’
91. The respondent-State has heavily relied upon the portions of
the said judgement, wherein the inherent power of the State or the
Sovereign to acquire land of its subjects, has been recognized. But,
we find substance in the contention of the petitioner-TPCL that
such inherent power to take private property is necessarily
hemmed in by the requirement of such acquired property being
put to public use. In the present case, the subject property is
already put to use by the petitioner-TPCL for the public purpose
of hydro electric projects, which was the purpose for which it was
acquired under the LA Act in the first place and handed over to it.
In the guise of exercising the power of eminent domain, the State
cannot arbitrarily and whimsically take away the subject property
of petitioner-TPCL. The Supreme Court in its judgement in the
case of Kolkata Municipal Corporation Vs. Bimal Kumar Shah
(supra) has recognized seven sub-rights in the right to property
under Article 300-A of the Constitution of India. Paragraph 30 of
the said judgement reads as follows:-
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“30. What then are these sub-rights or strands of this
swadeshi constitutional fabric constituting the right to
property? Seven such sub-rights can be identified, albeit
non-exhaustive. These are:
( i ) The duty of the State to inform the person that it
intends to acquire his property — the right to
notice,
( ii ) The duty of the State to hear objections to the
acquisition — the right to be heard ,
( iii ) The duty of the State to inform the person of its
decision to acquire — the right to a reasoned
decision,
( iv ) The duty of the State to demonstrate that the
acquisition is for public purpose — the duty to
acquire only for public purpose,
( v ) The duty of the State to restitute and rehabilitate
— the right of restitution or fair compensation,
( vi ) The duty of the State to conduct the process of
acquisition efficiently and within prescribed
timelines of the proceedings — the right to an
efficient and expeditious process , and
( vii ) The final conclusion of the proceedings leading
to vesting — the right of conclusion .”
92. Clause (iv) as one of the sub-rights recognized by the
Supreme Court in the said judgement casts a duty on the State to
demonstrate that the acquisition of land is for public purpose and
the duty is to acquire only for public purpose. This is a very
significant aspect sought to be given short shrift by the State while
emphasizing only on the inherent power of the State to acquire. It
is obvious that the power has to be exercised in accordance with
law and for public purpose. In the present case, it is an admitted
position that the subject land was already acquired for public
purpose of the hydro electric project of petitioner-TPCL.
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93. In this context, the observations made by the Supreme court
in the case of Royal Orchid Hotels Limited and another Vs. G.
Jayarama Reddy and others (supra) are relevant. They read as
follows:-
“38. The courts have repeatedly held that in exercise of its
power of eminent domain, the State can compulsorily
acquire land of the private persons but this proposition
cannot be overstretched to legitimise a patently illegal and
fraudulent exercise undertaken for depriving the
landowners of their constitutional right to property with a
view to favour private persons. It needs no emphasis that if
land is to be acquired for a company, the State Government
and the company is bound to comply with the mandate of
the provisions contained in Part VII of the Act. Therefore,
the Corporation did not have the jurisdiction to transfer
the land acquired for a public purpose to the companies
and thereby allow them to bypass the provisions of Part
VII. The diversification of the purpose for which land was
acquired under Section 4(1) read with Section 6 clearly
amounted to a fraud on the power of eminent domain. This
is precisely what the High Court has held in the judgment
under appeal and we do not find any valid ground to
interfere with the same more so because in Annaiah v. State
of Karnataka , the High Court had quashed the notifications
issued under Sections 4(1) and 6 in their entirety and that
judgment has become final.”
94. Similarly in the case of Devinder Singh Vs. State of Punjab ,
(2008) 1 SCC 728, the Supreme Court found that the acquisition
for a private company was bad in law, for the reason that the
procedure under Part VII of the LA Act was not followed, even
when the compensation amount was being arranged by the said
private company. The Court found that during the pendency of
the writ petition, the State came forward and claimed that it
would contribute Rs.100/- towards the fund for compensation,
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which in turn, would render the acquisition legal and valid under
Part II of the LA Act. But, the Supreme Court found that the
acquisition was for a company and not for public purpose, thereby
holding that the acquisition was clearly bad in law. Thus, when the
Court found that the acquisition was only for the purpose of
benefiting a private entity and such acquisition was undertaken by
exercising the sovereign and inherent power of eminent domain, it
was held to be bad in law. In this context, the respondents are not
justified in relying upon the judgement of the Supreme Court in
the case of Smt. Somawanti & Ors. vs. The State of Punjab & Ors.
(supra) , to claim that declaration of public purpose by impugned
notification declaring the subject property as industrial area cannot
be challenged. This is for the reason that when it is based on
colourable exercise of power and there is a specific allegation of
benefiting respondent No.6-MVF, a private company, this Court
can certainly exercise jurisdiction. Reliance placed on behalf of
respondent No.6-MVF on judgement in the case of Gandhi Grah
Nirman Sahkari Samiti Ltd. & Ors. vs. State of Rajasthan & Ors.
(supra) is also misplaced. In the said case, it was argued on behalf
of a private landowner that since there was a Polo ground in the
land proposed to be acquired, which was used by public for
tournaments, it should not be acquired. In that context, the Court
held that it could not go into comparative utility of public
purposes. But, in the present case, the subject land was specifically
acquired more than a century ago for the public purpose of hydro
electric power projects, which is still being used for the said
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purpose by the petitioner-TPCL. Hence, the question of enquiring
into comparative utility does not arise.
95. Much emphasis is placed on behalf of the State on the
opinion of one of the learned Judges (Arun Mishra, J.) in the
judgement of the Supreme Court in the case of Kedar Nath Yadav
Vs. State of West Bengal ( supra ), to contend that merely because
acquisition was for a private company i.e. respondent No.6-MVF,
it could not be held to be bad in law. But, we find that a proper
analysis of the said opinion reveals that even if the acquisition is
for a private company, it has to satisfy the test of 'public purpose'.
We are unable to agree with the submission made on behalf of the
respondent-State that once the State has exercised the power of
eminent domain for acquiring the land and handing it over to a
private entity like respondent No.6-MVF, no further examination
of the same can be undertaken. This approach goes against the
settled position of law that the inherent and sovereign power of
eminent domain is not unbridled, but it must satisfy the
requirements of law. As noted hereinabove, since the provisions of
the MID Act cannot be taken recourse to for acquisition of land
purely for a private company, the said stand taken on behalf of the
respondent-State deserves to be rejected.
96. If there was any confusion in the matter, the same was
cleared by the observations of the Constitution Bench of the
Supreme Court in the case of Pandit Jhandu Lal and others vs.
State of Punjab and another , 1960 SCC OnLine SC 331. The
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relevant observations in the said judgement read as follows:
“8. Having cleared the ground, it now remains to
consider the terms of Section 6, on which great reliance
was placed on behalf of the appellants. There is no doubt
that, as pointed out in the recent decision of this Court (1),
the Act contemplates acquisition for a public purpose and
for a company, thus conveying the idea that acquisition for
a company is not for a public purpose. It has been held by
this Court, in that decision, that the purposes of public
utility, referred to in Sections 40-41 of the Act, are akin to
public purpose. Hence, acquisition for a public purpose as
also acquisitions for a company are governed by
considerations of public utility. But the procedure for the
two kinds of acquisitions is different, insofar as Part VII
has made substantive provisions for acquisitions of land for
companies. Where acquisition is made for a public
purpose, the cost of acquisition for payment of
compensation has to be paid wholly or partly out of public
revenues, or some fund controlled or managed by a local
authority. On the other hand, in the case of an acquisition
for a company, the compensation has to be paid by the
Company. But, in such a case, there has to be an
agreement, under Section 41, for the transfer of the land
acquired by the Government to the Company on payment
of the cost of acquisition, as also other matters not material
to our present purpose. The agreement contemplated by
Section 41 is to be entered into between the Company and
the appropriate Government only after the latter is
satisfied about the purpose of the proposed acquisition,
and subject to the condition precedent that the previous
consent of the appropriate Government has been given to
the acquisition. The “previous consent” itself of the
appropriate Government is made to depend upon the
satisfaction of that Government that the purpose of the
acquisition was as laid down in Section 40. It is, thus, clear
that the provisions of Sections 39-41 lay down conditions
precedent to the application of the machinery of the Land
Acquisition Act, if the acquisition is meant for a company.
Now, Section 6 itself contains the prohibition to the
making of the necessary declaration under that section in
these terms—
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‘Provided that no such declaration shall be made unless
the compensation to be awarded for such property is to
be paid by a company, or wholly or partly out of public
revenues or some fund controlled or managed by a local
authority.’
Section 6 is, in terms, made subject to the provisions of
Part VII of the Act. The provisions of Part VII, read with
Section 6 of the Act, lead to this result that the declaration
for the acquisition for a company shall not be made unless
the compensation to be awarded for the property is to be
paid by a company. The declaration for the acquisition for
a public purpose, similarly, cannot be made unless the
compensation, wholly or partly, is to be paid out of public
funds. Therefore, in the case of an acquisition for a
company simpliciter, the declaration cannot be made
without satisfying the requirements of Part VII. But, that
does not necessarily mean that an acquisition for a
company for a public purpose cannot be made otherwise
than under the provisions of Part VII, if the cost or a
portion of the cost of the acquisition is to come out of
public funds. In other words, the essential condition for
acquisition for a public purpose is that the cost of the
acquisition should be borne, wholly or in part, out of
public funds. Hence, an acquisition for a company may
also be made for a public purpose, within the meaning of
the Act, if a part or the whole of the cost of acquisition is
met by public funds. If, on the other hand, the acquisition
for a company is to be made at the cost entirely of the
Company itself, such an acquisition comes under the
provisions of Part VII. As in the present instance, it appears
that part at any rate of the compensation to be awarded for
the acquisition is to come eventually from out of public
revenues, it must be held that the acquisition is not for a
company simpliciter. It was not, therefore, necessary to go
through the procedure prescribed by Part VII. We,
therefore, agree with the conclusion of the High Court,
though not for the same reasons.”
97. In the present case, the respondents have clearly taken a
stand that the amount of compensation for the proposed
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acquisition of the subject land would be arranged by respondent
No.6-MVF, which is a private company. This factor assumes
significance and takes the wind out of the argument of the
respondents that the acquisition is for public purpose.
98. The respondents have relied upon the ‘pass through’ method
employed in the present case for acquiring the subject land. The
respondent-MIDC has specifically contended that the statutory
basis for acquisition by such ‘pass through’ method, is found in
Section 39(1)(a) of the MID Act. A perusal of the said provision,
quoted hereinabove, would show that it pertains to the power in
respondent-MIDC to dispose of any land acquired by the State
Government and transferred to it, without undertaking or carrying
out any development thereon. But, a perusal of clause (a) of sub-
section 2 of the said Section would show that where the MIDC
proposes to dispose of by sale any such land without any
development being undertaken or carried out thereon, it shall
offer the land in the first instance to the persons from whom it
was acquired, if they desire to purchase it, subject to such
requirements as to its development and use as MIDC may think fit
to impose.
99. This statutory condition is completely ignored by the
respondent-MIDC, when it specifically relied upon Section 39(1)
(a) of the MID Act, to claim that it can be a statutory basis for the
‘pass through’ method of acquisition and handing over the subject
land to respondent No.6-MVF, which is a private company. Clause
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(b) of sub-section 2 of Section 39 of the MID Act also assumes
significance in this context. But, the entirety of the aforesaid
provision and the interplay between its sub-sections has been
ignored by respondent-MIDC, while asserting that the ‘pass
through’ method has its statutory basis in Section 39(1)(a) of the
MID Act. In this regard, much was said by the respondents about
the petitioner-TPCL itself being beneficiary of such ‘pass through’
method. Reliance was placed on judgement of this Court in the
case of Pravin Kashinath Bhagat & Ors. vs. Collector, District
Raigad & Ors. (supra) . In the first place, that case did not concern
a situation where land already utilized for public purpose was
sought to be acquired through ‘pass through’ method. In any case,
it concerned acquisition for establishing a 1600 MW power
project, which was obviously ‘public purpose’.
100. Hence, this Court finds substance in the contention of the
petitioner-TPCL that the impugned actions undertaken by the
respondent-State and the respondent-MIDC, amount to colourable
exercise of power. The respondent-State has sought to achieve its
object of acquiring the subject land exclusively for the respondent
No.6-MVF under the provisions of the MID Act, which it could
not have done in terms of the position of law discussed
hereinabove. The respondent-State undertook the impugned
actions to avoid acquisition for the respondent-MVF, a private
company, under the general law of acquisition i.e. the Act of 2013.
An appreciation of the chronology of events referred to
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hereinabove in detail, further strengthens the case of the
petitioner-TPCL in this regard.
101. The respondent No.6-MVF identified the land near
Thokarwadi Dam, its reservoir and lake as ideal for its purpose
and then, set out to claim the same for its purposes. The said
exercise started by approaching the Chief Minister of the State of
Maharashtra in July 2017, claiming that its project was a mega
project concerning a Centre for Perfect Health and it could be
treated as an integrated project by the State Government.
102. Thereafter, the continuous interaction between respondent
No.6-MVF and the State authorities at the highest level, led to the
proposed project being given the status of ultra mega project in
March, 2018. In the meanwhile, the respondent-State acquired
and handed over the land to the extent of 126 hectares to
respondent No.6-MVF for the said project.
103. It is relevant to note that respondent No.6-MVF continued
to pursue its claim for acquisition of land of petitioner-TPCL and
in that process, even the Chief Minister of the State of
Maharashtra sent a letter to Late Mr. Ratan Tata for the said land.
This culminated in a meeting between the officials of the
petitioner-TPCL, respondent No.6-MVF and the officials of the
State of Maharashtra. But, the petitioner-TPCL did not agree to
part with the subject 84 hectares of land. This has to be
appreciated in the backdrop of MOU dated 08.08.2023 executed
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between the petitioner-TPCL and the respondent-State for
establishing the Bhivpuri Pumped Storage Project of 1000 MW, in
line with the policy of the State to promote such projects for clean
energy in the State of Maharashtra, for which the Central
Government was also enthusiastic.
104. It is crucial to note that in this backdrop, when the proposal
of respondent No.6-MVF labelled as an ultra mega project, was
considered on 01.11.2023 by the HPC, the same was specifically
rejected on the ground that the Government did not have a policy
to purchase land from a private company and make it available for
other projects. The petitioner-TPCL has heavily relied upon GR
dated 27.12.2016 to contend that the approval of HPC was
mandatory in such cases, even as per the policy of the State. On
the other hand, the respondents contended that the approval by
HPC under the said GR, was only recommendatory in nature and
that it would obviously not bind the authorities of the State
Government high up in the hierarchy.
105. It is an admitted position that the Cabinet Sub-Committee
took up the said proposal and indicated that acquisition of land
could take place by ‘pass through’ method under the provisions of
the MID Act. In furtherance thereof, when the Land Selection
Committee of the respondent-MIDC prepared a report on
24.07.2024 and the discussion was on the question as to whether
the proposed acquisition of the area was in the best interest of the
Corporation, even the Land Selection Committee opined that an
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NOC from petitioner-TPCL was necessary, even if the acquisition
was to be undertaken by the ‘pass through’ method under the
MID Act.
106. But within 5 months of the said report of the Land Selection
Committee, on 26.12.2024, the respondent-MIDC recommended
to the respondent-State that upon reviewing the provisions and
procedures under Chapter VI of the MID Act and ‘pass through’
method of land acquisition, there was no requirement for
obtaining NOC from the petitioner-TPCL. Immediately thereafter
on 03.03.2025, the impugned notification was issued under
Section 1(3) of the MID Act applying Chapter VI thereof to the
subject land admeasuring 84 hectares belonging to the petitioner-
TPCL, declaring it as an ‘industrial area’. This was immediately
followed on the next day by Government Resolution dated
04.03.2025 and the impugned notices dated 07.03.2025 under
Section 32(2) of the MID Act.
107. The aforesaid chronology of events indicates the manner in
which the respondent-State authorities and respondent-MIDC
proceeded to attempt to acquire the subject land, purely for the
benefit of a private entity like respondent No.6-MVF, while
ignoring the fact that the subject land of petitioner-TPCL is part of
the hydro electric projects. We find that the fact that the subject
land of 84 hectares is already being used for public purpose of
Hydro Electric Projects of the petitioner-TPCL demonstrates that
the respondents have failed to justify acquisition of the same again
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for the respondent No.6-MVF to establish its project. In this
context, the petitioner-TPCL is justified in relying on judgement of
the Supreme Court in the case of V.K.M. Kattha Industries Private
Limited Vs. State of Haryana (supra) and that of Madras High
Court in the case of Godrej & Boyce Mfg. Co. Private Limited Vs.
SLAO (supra) .
108. Even if the contention raised on behalf of the respondents
that the opinion of HPC under the GR dated 27.12.2016, could
be treated to be only recommendatory in nature, is to be accepted
for the sake of arguments, it clearly indicates that respondent-State
authorities and respondent-MIDC had already reached the
conclusion in a pre-determined manner to handover the subject 84
hectares land to respondent No.6-MVF, a private entity. The
recommendations of its own HPC were overruled. Even the
necessity of obtaining an NOC from the petitioner-TPCL was
given a go-by and hurriedly the impugned notification, GR and
notices were issued in March 2025. The entire focus of the said
actions of respondent-State authorities and respondent-MIDC was
to benefit the respondent No.6-MVF, thereby giving credence to
the contention of the petitioner-TPCL that this was an instance of
colourable exercise of power and that the said actions smacked of
mala fide . In this context, the petitioner-TPCL is justified in
relying on judgements of the Supreme Court in the cases of Patasi
Devi Vs. State of Haryana (supra) , Greater Noida Development
Authority Vs. Devendra Kumar ( supra ) and Uddar Gagan
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Properties Limited Vs. Sant Singh (supra) .
109. Even though in the present case, we have found hereinabove
that respondent-State authorities gave a go-by to the requirement
of acquisition of land under the general law i.e. the Act of 2013
and wrongly took recourse to the provisions of the MID Act,
thereby vitiating the acquisition, since it was vehemently argued
that the respondent No.6-MVF required the subject land for
public purpose, it would be necessary to examine the said aspect
of the matter also.
110. A perusal of the letter dated 02.04.2018 sent by respondent
No.6-MVF to the petitioner-TPCL would show as to the manner
in which the said respondent made its demand to the petitioner-
TPCL. The relevant portion of the said letter reads as follows:
“We therefore request for the following support:
1) To kindly allow our foundation to use boats/ such
other means of water transportation for the patients
and visitors in the lake waters, including use of boats
to go from one location to the other of the project.
2) To kindly allow lease / sub lease of lands comprised
in island in the villages of Borivally and Sindhewadi.
We will utilize these islands for cultivation of specific
medicinal herbs and also for meditation by visitors.
3) To allow lease / sub lease of the foreshore land
appertaining the land parcels owned by the company.
We will maintain and beautify these land.
4) Shifting of electrical poles in the land affecting the
health and well-being of the master planning.
5) Supply of 2 MW power for the project.”
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111. Thereafter, when the Chief Minister of the respondent-State
sent a letter to the Late Mr. Ratan Tata, promoting the project of
respondent No.6-MVF, it was stated in the said letter dated
25.06.2018 that the outcrops of land (islands) in the reservoir of
the Thokarwadi Dam and the hydro electric project of the
petitioner-TPCL ‘could be ideal for allowing vedic pandits to take
up vedic chanting’.
112. Thereafter, during the course of proceedings in this writ
petition, the respondent No.6-MVF gave up its claim for using the
reservoir waters and the land outcrops therein for boating.
Instead, the said respondent started claiming that it could build
bridges from the main land to the said land outcrops, as a part of
its ultra mega project. Thereafter, in the affidavit-in-reply filed on
behalf of respondent No.6-MVF in the present writ petition, it
was elaborated as to what could be the features of the ultra mega
project. The relevant portion of the affidavit-in-reply reads as
follows:
“ 14. The Project inter-alia comprises of the following;
14.1 Ayurveda Product Manufacturing:
a. Manufacturing of a wide range of Ayurvedic
products, including herbal supplements for
digestion, mental health, emotional balance,
cardiovascular health, bone and joint health,
detoxification, women's health, and immunity.
b. Production of wellness formulations such as
therapeutic cils, aroma oils, and herbal remedies
based on ancient Vedic knowledge.
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c. Setting up of manufacturing units for organic
products, herbal extracts, and health supplements,
Vedic Honey.
14.2. Wellness Centres and Therapeutic Facilities:
a. Establishment of wellness centres offering
authentic Maharishi Ayurveda therapies such as
Panchakarma, detoxification treatments, light
therapy, and anti-aging treatments.
b. Development of integrated health and rejuvenation
centres based on traditional Ayurvedic principles.
c. Facilities for residential wellness programs,
therapeutic retreats, and preventive healthcare.
14.3. Ayurvedic College and Research Institutions:
a. Establishment of a full-fledged Ayurvedic college
for education, training, and research in Ayurveda
and related fields.
b. Research and development facilities for promoting
traditional knowledge systems, clinical trials, and
formulation of new Ayurvedic medicines.
c. Research and implementation of Kaya Kalp so as
to support the reversal aging process.
14.4. Organic Agriculture and Medicinal Plantations:
a. Cultivation of medicinal plants, herbs, and organic
agricultural produce in dedicated farming zones.
b. Promotion of sustainable and organic farming
practices aligned with Ayurvedic principles.
c. Manufacturing of organic product from the produce
of farmer
14.5. Agro-Tourism and Educational Tourism:
a. Development of agro-tourism zones to provide
experiential learning on organic farming,
medicinal plants, and Ayurveda.
b. Creation of Vedic- educational theme parks,
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museuns, and interactive exhibits showcasing Vedic
sciences and traditions.
c. Facilities for cultural and heritage tourism, including
bonsai gardens, meditation centres, and the Tower
of Invincibility.
14.6. Healthcare Infrastructure:
a. Setting up an Integrated Hospital offering holistic
healthcare based on Ayurveda and modern medical
systems.
b. Facilities for in-patient and out-patient care,
including specialty Ayurvedic treatments.
14.7. Supporting Infrastructure:
a. Development of convention centres, research labs,
university facilities, restaurants, shopping markets,
and ancillary units to support the ecosystem.
b. Green infrastructure, landscaping, and
sustainability-focused amenities. ”
113. It was further claimed that the project would generate
employment for over 1000 persons. In the oral arguments made
before this Court on behalf of respondent No.6-MVF, much
emphasis was placed on the Industrial Policy of the State of
Maharashtra to encourage such projects that would generate
employment.
114. We are of the opinion that when an examination is to be
carried out to ascertain the ‘public purpose’ of a proposed project,
the focus has to be on examining as to whether the primary object
of the proposed project is for public purpose or not. Any activity
undertaken by a private company is likely to generate
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employment. But, the question is, as to whether that in itself
would be enough.
115. In the case of K. T. Plantation Private Limited Vs. State of
Karnataka ( supra ), a Constitution Bench of the Supreme Court, in
the context of the concept of public purpose, held that the power
of eminent domain, which applies when a person is deprived of his
property, postulates that the purpose must be primarily public and
not primarily of private interest and merely incidentally beneficial
to the public. In the present case, the above-quoted features of the
proposed project of respondent No.6-MVF indicate the primary
purpose to be private interest and only incidentally beneficial to
the public. This has to be appreciated in the backdrop of the fact
that the subject 84 hectares land of the petitioner-TPCL is part of
the hydro electric projects.
116. In August 2023 itself, the respondent-State executed the
aforesaid MOU with the petitioner-TPCL for the 1000 MW
Bhivpuri Pumped Storage Project. The subject 84 hectares of land,
including the two land outcrops in the reservoir of the
Thokarwadi Dam concerning the Bhivpuri Hydro Electric
Projects, continues to be a part of the public purpose for which the
said piece of land along with the other lands, was handed over to
the predecessor of the petitioner-TPCL more than a century ago.
The aforesaid Pumped Storage Policy of the respondent-State
itself, with active encouragement from the Central Government
for providing clean energy and non-conventional sources of
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energy, clearly indicates the primary public purpose for which the
subject 84 hectares land is being utilized by the petitioner-TPCL.
117. It is an admitted position that respondent No.6-MVF is
already a beneficiary of 126 hectares of land for its ‘ultra mega
project’ and yet, it is insisting upon acquisition of the aforesaid 84
hectares of land of the petitioner-TPCL and that too, in the teeth
of the aforesaid recommendations and opinions of the HPC of
respondent-State and the Land Selection Committee of
respondent-MIDC. The facts of the present case indicate that
recourse to the provisions of the MID Act and the aforesaid
manner in which the higher authorities of respondent-State and
respondent-MIDC have sought to acquire the subject piece of land
of 84 hectares, is more for benefiting the private entity,
respondent No.6-MVF, for its private enterprise at the expense of
the aforesaid activity for public purpose i.e. generating hydro
electric power of the petitioner-TPCL. We find that the judgement
in the case of Girias Investment Private Limited & Anr. vs. State of
Karnataka & Ors. (supra) , relied upon by respondent No.5-
MIDC, as a matter of fact inures to the benefit of the petitioner-
TPCL because the impugned actions of the said respondent and
the State are found to be aimed at benefiting the respondent No.6-
MVF, resulting in damage to the petitioner-TPCL.
118. There is absolutely no material brought to the notice of this
Court to indicate why the subject 84 hectares of land is so crucial
for the ‘ultra mega project’ of respondent No.6-MVF, or that the
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126 hectares of land it already has, is not sufficient. It is
undisputed that even the 126 hectares land is near and
overlooking the reservoir/lake of the Thokarwadi Dam. The
communications addressed by respondent No.6-MVF show that it
is insisting on the 84 hectares of land of the petitioner-TPCL,
including the two land outcrops in the reservoir, for aesthetic
purposes only. It is also not shown why the ultra mega project of
respondent No.6-MVF will fail if the subject 84 hectares of land is
not acquired. Although the proposed project of the respondent
No.6-MVF is not covered under Section 10A (Maharashtra
amendment) of the Act of 2013, even it were to apply for the sake
of argument, the proviso to the same mandates that before issuing
notification under the said provision, the State Government shall
ensure the extent of land for proposed acquisition keeping in view
the bare minimum land required for such project. The respondents
have failed on this score also. As per the said respondent, the said
84 hectares of land is required for aesthetic purposes and ‘vedic
chanting’, for which purpose bridges are proposed to connect the
two land outcrops. Can this be at the expense of the hydro-electric
projects of the petitioner-TPCL and its catchment area? We find
that in such a situation, the petitioner-TPCL has made out a case
to successfully challenge the impugned action of the respondents.
119. The respondents also raised an objection regarding the
maintainability of the writ petition, on the ground that the show
cause notice was issued by respondent No.3-SDO under Section
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32(2) of the MID Act, to which the petitioner-TPCL had
responded and even the hearing was completed. In such a
situation, the proceeding before the said respondent ought not to
be interdicted and the objections would certainly be considered in
the subject proceedings. It was submitted that the writ petition
could be said to be pre-mature.
120. In this context, we are inclined to accept the contention
raised by the petitioner-TPCL, by placing reliance on the
judgements of the Supreme Court in the cases of Siemens Limited
Vs. State of Maharashtra ( supra ) and Techno Prints Vs.
Chattisgarh Textbook Corporation and another ( supra ).
121. In the case of Siemens Limited Vs. State of Maharashtra
(supra), the Supreme Court observed as follows:
“9. Although ordinarily a writ court may not exercise its
discretionary jurisdiction in entertaining a writ petition
questioning a notice to show cause unless the same inter
alia appears to have been without jurisdiction as has been
held by this Court in some decisions including State of U.P.
v. Brahm Datt Sharma, Special Director v. Mohd. Ghulam
Ghouse and Union of India v. Kunisetty Satyanarayana , but
the question herein has to be considered from a different
angle viz, when a notice is issued with premeditation, a
writ petition would be maintainable. In such an event, even
if the court directs the statutory authority to hear the
matter afresh, ordinarily such hearing would not yield any
fruitful purpose. (See K.I. Shephard v. Union of India ) It is
evident in the instant case that the respondent has clearly
made up its mind. It explicitly said so both in the counter-
affidavit as also in its purported show-cause notice.”
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122. In the case of Techno Prints Vs. Chattisgarh Textbook
Corporation and another ( supra ), the Supreme Court
acknowledged the fact that ordinarily, a writ court should not
entertain a petition seeking to challenge a show cause notice,
unless the same was issued by an authority without jurisdiction or
if the same was tainted with mala fide . But, the Supreme Court
went on to observe as follows:
“36. In the overall view of the matter more particularly in
the peculiar facts of the case, we have reached the
conclusion that asking the appellant herein to file his reply
to the show cause notice and then await the final order
which may perhaps go against him, leaving him with no
option but to challenge the same before the jurisdictional
High Court will be nothing but an empty formality. Even
otherwise, issuing of show cause notice if not always then
at least most of the times is just an empty formality because
at the very point of time the show cause notice is issued the
Authority has made up its mind to ultimately pass the final
order blacklisting the Contractor. In other words, the show
cause notice in most of the cases is issued with a
predetermined mind. It has got to be issued because this
Court has said that without giving an opportunity of
hearing there cannot be any order of blacklisting. To meet
with this just a formality is completed by the Authority of
issuing a show cause notice.”
123. We have already found that in the present case, higher
authorities of the State of Maharashtra, including the Cabinet Sub-
Committee, over ruled the opinion of the HPC of the State and
Land Selection Committee of respondent-MIDC to virtually direct
the respondent-MIDC to propose that recourse should be taken to
Chapter VI of the MID Act, in the context of the subject land
admeasuring about 84 hectares. On such a ‘proposal’ sent by the
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respondent-MIDC, the respondent-State issued the impugned
notification, Government Resolution and notices. In such a
situation, it is obvious that an officer of the level of Sub-divisional
Officer, would be in no position to consider the objections raised
by the petitioner-TPCL, which have been specifically raised in the
present writ petition.
124. The objections raising Constitutional challenges are also
beyond the jurisdiction of the SDO and in any case, the pre-
determined nature of the proceedings before the SDO is obvious
and the result of the said proceeding can be said to be a foregone
conclusion. Therefore, in the facts of the present case, the writ
petition is clearly maintainable and the said ground raised on
behalf of the respondents is rejected.
125. At a point in time, a submission was sought to be made by
the learned senior counsel appearing for respondent No.6-MVF,
to the effect that since declaration of industrial area under
Section1(3) of the MID Act, amounted to subordinate legislation,
no ground of mala fide could be raised in the context of such a
legislative act. The said contention is stated only to be rejected, for
the reason that when the State exercises the power under such a
delegated legislation, it cannot be immune to examination by
Court as to whether it amounts to colourable exercise of power or
whether it is actuated by malice. In the facts of the present case,
both the factors are obvious and there is no substance in the said
contention.
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126. Apart from this, there were certain other issues debated
during the course of arguments, including the effect on
environment and ecology concerning Thokarwadi Dam and its
catchment area, as also the security of the said establishment. We
find that since the said area has not been declared as an
ecologically sensitive area, the said issue may not require detailed
examination and in any case, if the project of respondent No.6-
MVF is to go ahead, it will certainly require environmental
clearances.
127. But, we do find substance in the contention of the petitioner-
TPCL that the proposal of respondent No.6-MVF of building
bridges from the main land to the land outcrops (islands) in the
reservoir/lake of Thokarwadi Dam concerning the hydro electric
project, could be a security risk and it may even violate the norms
laid down by the respondent-State itself. In this context, a perusal
of the Government Circular dated 08.03.2018 shows that it
pertains to norms to be followed, while carrying out development
activity in the vicinity of dams and their catchment areas.
128. We find substance in the contention of the petitioner-TPCL
that clause 2(1) of the said Circular would be applicable to the
present case, which mandates that any such development activity
cannot be undertaken within 500 metres of the high-flood line of
the dam. This indicates that the subject land admeasuring 84
hectares, which includes the two land outcrops (islands) in the
reservoir and a strip adjoining the reservoir, can certainly not be
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utilized for development activity. This further indicates why the
proposed acquisition cannot be undertaken in the facts and
circumstances of the present case.
129. The rival contentions raised on the aspect of the subject land
being a ‘prohibited’ or a ‘protected’ place, need not be considered
in the light of the detailed findings rendered hereinabove on the
arguments addressed on behalf of the rival parties in the present
case.
130. As regards the judgements upon which the respondents have
placed reliance, we find that the said judgements pertain to the
aspect of eminent domain [Sooraram Pratap Reddy Vs. Collector
( supra ), Kedar Nath Yadav vs. State of West Bengal ( supra ),
Jilubhai Nanabhai Khachar Vs. State of Gujarat ( supra ) and State
of Bihar Vs. Sri Kameshwar Singh (supra) ]. But, in the light of the
findings rendered hereinabove, we find that the said judgements
cannot inure to the benefit of the respondents, as the inherent
power of eminent domain is not unbridled but it has to be
exercised for public purpose and not for the benefit of a company,
without any reference to such a purpose. The respondents are also
not justified in relying on the judgement of the Supreme Court in
the case of Hindustan Petroleum Vs. Darius Shapur ( supra) , for
the proposition that industry is public purpose, for the reason that
acquisition in the said case was for a corporation owned and
controlled by the State. In the present case, the acquisition is
purely for a private company. Similarly reliance placed by the
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respondents on the judgement of the Supreme Court in the case of
P. Narayanappa & Anr. vs. State of Karnataka & Ors. (supra) , for
the proposition that acquisition can be for a single company or
industry, is also misplaced. This is for the reason that in the said
case, the State owned Corporation acquired the land, with the
same vesting in it, and thereupon it was given to a single company
for a limited lease of 11 years and subject to strict conditions. But,
in the present case, the land is being made over to the respondent
No.6-MVF, a private entity on it depositing the amount for
compensation.
131. On the other hand, we find that the petitioner-TPCL is
justified in relying upon a recent judgement of Karnataka High
Court in the case of Mukesh Kumar vs. State of Karnataka and
others , 2026 SCC OnLine Kar 4019, wherein the Court was
concerned with a similar situation of acquisition of land under the
provisions of Karnataka Industrial Area Development Act, 1966.
The acquisition in the said case was undertaken for the benefit of a
company by recourse to under the provisions of the said Act. The
High Court held that the said Act did not contemplate acquisition
of land for an individual entity and that such an acquisition cannot
be said to be for public purpose. It was specifically held that if the
land was not acquired either for the Board constituted under the
said Act, or for any other purpose in furtherance of the object of
the Act, such acquisition was mala fide , illegal and amounted to
colourable exercise of power.
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132. The High Court took into consideration the activities of the
private entity in whose favour the acquisition was undertaken and
held that acquisition for such a private interest, which merely
incidentally benefited the public, was against the foundational
principle of the Constitution, as also the mandate of Article 300A
thereof and the Rule of law. It was found that such an acquisition
was merely a device to transfer land into private hands, which
could not be permitted.
133. It was brought to the notice of this Court that a challenge
raised to the said judgement of Karnataka High Court in SLP
(Civil) No.23769-23780 of 2026, was rejected and the special
leave petitions were dismissed. The only remark made by the
Supreme Court while dismissing the special leave petitions, was
that the observation made by the High Court that a fraud on
Statute was committed in the process of acquisition of land, would
not operate as a precedent. In our opinion, the said remark does
not take away the position of law elaborated in the said judgement
of Karnataka High Court, which indeed has persuasive value.
134. In view of the above discussion, we find that the petitioner-
TPCL has made out a strong case in its favour, while challenging
the impugned actions of respondent-State authorities and
respondent-MIDC. The manner in which the subject land
admeasuring 84 hectares, which is still a part of the hydro electric
projects of the petitioner-TPCL, is sought to be acquired and
handed over to respondent-MVF, which is a private entity, cannot
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be sustained and therefore, the writ petition deserves to be
allowed.
ORDER
135. Accordingly, the writ petition is allowed in terms of prayer
clauses (a) to (c), which read as follows:
“a) That this Hon'ble Court be pleased to issue a writ of
Certiorari or any other appropriate writ, order, or
direction under Article 226 of the Constitution of
India calling for the records and proceedings of
issuance of Impugned Notification No. IDC
2025/(C.R.01)/Ind. 14 dated 03.03.2025 (Exhibit 'O')
issued by Respondent No. 2 and after going through
the legality, validity and propriety of the same, the
same be quashed and set aside;
b) that this Hon'ble Court be pleased to issue a writ of
Certiorari or any other appropriate writ, order, or
direction under article 226 of the Constitution of
India calling for the records and proceedings of
issuance of Impugned Notification No. IDC 2025/(Sr.
No. 01/U-14 dated 04.03.2025 issued by Industries,
Energy, Labour And Mining Department/ Respondent
No. 2 (Exhibit 'P') and after going through the legality,
validity and propriety of the same, the same be
quashed and set aside;
c) that this Hon'ble Court be pleased to issue a writ of
Certiorari or any other appropriate writ, order, or
direction under article 226 of the Constitution of
India calling for the records and proceedings of
issuance of Impugned Show Cause Notices dated
07.03.2025 (Exhibit 'R') issued by the Respondent No.
3 and after going through the legality, validity and
propriety of the same, the same be quashed and set
aside;”
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136. Consequently, the proposed acquisition proceedings for the
subject 84 hectares land of the petitioner-TPCL are quashed and
the proceedings pending before respondent No.3-SDO stand
disposed of. Pending applications in this writ petition, if any, also
stand disposed of.
(SHREERAM V. SHIRSAT, J.) (MANISH PITALE, J.)
MINAL
SANDIP
PARAB
Digitally signed
by MINAL
SANDIP PARAB
Date: 2026.11.05
17:01:01 +0530
Bipin / Priya / Minal
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