LPG pipeline laid illegally on private land to stay, but GAIL must acquire the land and pay compensation, Gujarat HC rules

The petitioners claimed ownership of Revenue Survey No. 140, subsequently renumbered as Survey No. 174, situated at Village Moti Khavdi, Jamnagar. In 1998, the Union of India issued a notification under Section 6 of the Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act, 1962 (“1962 Act”) acquiring the right of user over several adjoining survey numbers for the Jamnagar–Loni Pipeline Project, but the petitioners’ land was not included in that notification. Compensation was paid to the concerned landowners and corresponding revenue entries were made.

GAIL (India) Ltd. nevertheless laid a six-inch LPG pipeline over the petitioners’ land in 2007–2008 without acquiring the right of user or issuing a notification in respect of that land. The petitioners claimed that they became aware of the pipeline only in 2016, after applying for non-agricultural permission. A survey by the District Inspector of Land Records confirmed that the pipeline passed through their land.

Subsequently, preliminary and final notifications dated 02 July 2018 and 06 December 2018 were issued for acquisition of the right of user for laying a parallel pipeline. GAIL informed the petitioners on 04 January 2019 about the acquisition and compensation process.

In its affidavit, GAIL admitted that the original pipeline had been laid in 2007–2008, although the relevant land had not been notified for acquisition, and explained that the wrong land had allegedly been used because constructions had come up on the notified land during the intervening period.

The petitioners sought removal of the pipelines, quashing of the 2018 acquisition notification, and compensation, mesne profits and damages of ₹86,00,000.

Whether GAIL’s utilisation of the petitioners’ land and laying of the original pipeline in 2007–2008, without acquisition of the right of user under the 1962 Act, was illegal and violative of the petitioners’ constitutional property rights.

Whether the Court should direct removal of the operational LPG pipeline despite its having been laid without due process of law.

Whether the acquisition notifications dated 02 July 2018 and 06 December 2018, issued for laying the parallel pipeline, were liable to be quashed.

What compensation and consequential relief were payable to the petitioners for the unauthorised use of their land.

The Court applied the Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act, 1962, under which the State or an authorised entity must follow the statutory notification and acquisition process before acquiring a right of user in private land for laying petroleum pipelines; the relevant notifications under Sections 3 and 6 provide the statutory basis for such acquisition.

The Court further applied Article 300A of the Constitution, which protects a person from deprivation of property except by authority of law. Consequently, unauthorised occupation or use of private land for laying a pipeline cannot be retrospectively regularised merely because the project is of public or national importance; lawful acquisition and payment of compensation are required.

Where physical removal of an essential public utility is impracticable, the Court may mould relief by directing a lawful acquisition and payment of compensation, including applicable interest and statutory benefits.

GAIL’s affidavit amounted to an admission that the original pipeline had been laid over the petitioners’ land in 2007–2008, although no acquisition notification covered that land.

The Court rejected GAIL’s explanation that the wrong land had been used because permanent constructions had subsequently arisen on the notified land, holding that the consequences of the intervening delay were attributable to GAIL. If the originally notified alignment had become impracticable, GAIL was required to initiate fresh acquisition proceedings before using the petitioners’ land.

Such unauthorised use deprived the petitioners of the full enjoyment of their property and violated Article 300A.

Although the pipeline had been illegally laid, the Court declined to order its removal because it was an operational LPG pipeline forming part of a project supplying LPG across substantial parts of the country; removal was considered technically and practically infeasible and would adversely affect a project of national importance.

To balance the public interest with the petitioners’ property rights, the Court directed GAIL to commence acquisition proceedings under the 1962 Act for the original pipeline and treated 27 March 2019, the date of filing of the petition, as the relevant date for determining market value. The Court also directed inclusion of interest from the date of dispossession until payment.

As to the parallel pipeline, the Court found no sufficient ground to invalidate the 06 December 2018 notification. The petitioners were permitted to seek payment under the award and to pursue the statutory appellate remedy if dissatisfied with the determination of compensation.

However, it declined to direct removal of the pipeline. GAIL was directed to undertake acquisition proceedings for the right of user relating to the original pipeline within three months, with market value determined as on 27 March 2019, and with interest from the date of dispossession until payment, along with all other lawful compensation benefits.

The challenge to the 06 December 2018 notification for the parallel pipeline was rejected, while the petitioners were left free to claim the awarded compensation and invoke the statutory appellate remedy regarding its computation.

There was no order as to costs, with liberty granted to the petitioners to approach the Court in case of non-compliance with the directions.