Compensation requires proof that the property was damaged or rendered unusable by the project.

Respondent No. 5 claimed compensation for his dwelling house situated in Village Ghonti, Tehri Garhwal, above Reservoir Level (R.L.) 835 metres, on the ground that the house had become unusable after his family migrated to Pathri Bagh, Haridwar, pursuant to the rehabilitation process for the Tehri Dam Project.

The Grievance Redressal Cell of the Tehri Dam Project directed the Directorate of Rehabilitation to assess the value of the house and pay compensation to respondent No. 5 within three months.

THDC India Ltd. challenged the Cell’s order dated 08.09.2017, the consequential demand dated 17.02.2018, and the communication dated 05.03.2018.

It contended that the property was neither acquired nor directly affected by the project and that respondent Nos. 5, 6, 7 and 8 had already received admissible rehabilitation benefits, including agricultural land and residential plots.

The petitioner also argued that the Grievance Redressal Cell had been constituted pursuant to an interim order of the Supreme Court in N.D. Jayal v. Union of India, SLP No. 22894 of 2005, and ceased to have authority after dismissal of the SLP on 19.02.2016.

Whether the Grievance Redressal Cell could validly direct payment of compensation for a house situated above R.L. 835 metres and not shown to have been acquired or directly affected by the Tehri Dam Project?

Whether mere non-use of the house following the family’s migration to Haridwar entitled respondent No. 5 to compensation under the applicable Rehabilitation Policy?

Whether the Grievance Redressal Cell’s order was legally sustainable in the absence of a finding that the house had been damaged or rendered unusable by the project, and without addressing ownership after payment of full compensation?

The Court applied the Rehabilitation Policy governing compensation to project-affected persons, under which compensation is available for property shown to be directly affected, damaged, or rendered unusable by the project; mere abandonment or non-use of property is insufficient.

The Court further applied the principle that an authority granting compensation must establish the legal basis and factual entitlement for such payment, and must address the consequences of transferring full compensation for property, including the question of ownership.

The Court also noted the petitioner’s reliance on the Supreme Court’s interim order in N.D. Jayal v. Union of India, SLP No. 22894 of 2005, and the subsequent dismissal of that SLP on 19.02.2016, although the decision was ultimately resolved on the substantive deficiencies in the compensation order.

The Court held that the Grievance Redressal Cell’s reasoning was unsustainable because it treated the respondent’s migration and consequent non-use of the house as sufficient grounds for compensation.

Under the applicable legal standard, compensation could be justified only upon a finding that the house had been damaged or rendered unusable because of the Tehri Dam Project; no such finding existed.

The impugned order also failed to identify the relevant provision of the Rehabilitation Policy authorising compensation for property situated above R.L. 835 metres and did not address ownership of the property after payment of full compensation.

These omissions rendered the Cell’s direction legally deficient.

The writ petition was allowed, and the complaint of respondent No. 5 was remitted to the Director, Rehabilitation, for fresh decision in accordance with law.

No order was made as to costs.