Facts
The petitioners, Khatangpani Tea Estate and one of its co-owners, challenged the payment by Oil India Limited (“OIL”) of rehabilitation/surface compensation to Respondent No. 4 in relation to approximately 40 bighas of land forming part of Khatangpani Tea Estate.
Source reference: pp. 10–12, paras. 2–4OIL had entered into an agreement for sale concerning the land, but formal land-acquisition proceedings had not been initiated by the District Collector, Tinsukia.
Source reference: pp. 10–12, paras. 2–4OIL relied on its Office Memorandum dated 5 July 2021, which provided minimum compensation for land acquired for oil exploration, and on a profit-sharing agreement dated 5 February 2019 between the HUF managing Khatangpani Tea Estate and Respondent No. 4.
Source reference: pp. 10–12, paras. 3, 5–6OIL also relied upon a communication dated 23 March 2017 authorising certain persons to manage the tea estate and a letter dated 10 January 2022 from Shri Shekhar Sarma expressing no objection to payment of crop compensation, while specifically requesting that land-value compensation not be released to anyone other than the recorded landowner.
Source reference: pp. 12–13, para. 7During the hearing, OIL and Respondent No. 4 referred to a bipartite settlement and an MoU allegedly authorising Respondent No. 4 to collect compensation.
Source reference: pp. 13–16, paras. 9–14Issues
1. Whether OIL could pay rehabilitation/surface compensation in respect of the land without initiation and completion of the statutory land-acquisition process under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (“2013 Act”).
Source reference: pp. 11–12, para. 42. Whether Respondent No. 4 was legally authorised to receive compensation relating to the land on behalf of the recorded landowners or Khatangpani Tea Estate.
Source reference: pp. 12–15, paras. 7–133. Whether OIL, as a Government of India enterprise, could release compensation without proper documentary authority, including the alleged bipartite settlement and MoU.
Source reference: pp. 13–16, paras. 9–14Law Applied
The Court applied the statutory scheme of the 2013 Act, under which acquisition involves notification under Section 11, declaration under Section 19, determination of compensation through an award by the Collector, and thereafter taking of possession, upon which the land vests in the acquiring authority for being handed over to the requiring body.
Source reference: pp. 11–12, para. 4The Court also considered OIL’s Office Memorandum dated 5 July 2021, which prescribed minimum compensation for land acquired for oil exploration and purportedly provided benefits beyond Schedule I of the 2013 Act.
Source reference: p. 11, para. 3The governing legal principle applied was that compensation concerning land must be paid only to the recorded owner or a person supported by clear and valid authority; a distinction must also be maintained between the owners of the tea estate and the HUF or entity managing its business.
Source reference: pp. 12–15, paras. 5–7, 12–13Reasoning
The Court accepted that the Office Memorandum could prescribe enhanced compensation, but held that payment of compensation did not itself constitute or replace the statutory acquisition process under the 2013 Act.
Source reference: p. 11, para. 3; p. 12, para. 4It therefore found it difficult to justify payment of surface compensation when no acquisition proceedings had been initiated by the Collector.
Source reference: p. 12, para. 4The Court further observed that the 5 February 2019 agreement was a profit-sharing arrangement involving the HUF managing the tea-estate business and Respondent No. 4; it did not, on its face, establish that Respondent No. 4 was the owner of the land or authorised by all landowners to receive land compensation.
Source reference: pp. 12–13, paras. 5–6The letter dated 10 January 2022, relied upon by OIL, expressly restricted payment of land-value compensation to the recorded landowner, thereby undermining OIL’s justification for paying Respondent No. 4.
Source reference: p. 13, para. 7The Court also rejected, at least prima facie, the submission that the payment was merely crop compensation, observing that the submission appeared to have been made without proper instructions.
Source reference: p. 14, para. 8In view of the references to a bipartite settlement and an MoU, and the absence of material showing Respondent No. 4’s authority to claim compensation for all landowners, the Court required OIL to produce the documents and explain the basis of the payment.
Source reference: pp. 14–16, paras. 9–14Holding
The Court did not finally adjudicate the petition but recorded serious prima facie concerns regarding the legality of paying rehabilitation/surface compensation to Respondent No. 4 without completed acquisition proceedings and without clear authority from the recorded landowners.
OIL was directed to produce the alleged bipartite settlement and Respondent No. 4’s MoU with Babul Sonowal on the next date.
Source reference: pp. 14–15, paras. 9–10Respondent No. 2 was directed to appear through video conference, file an affidavit addressing the Court’s queries, and explain the basis for the payment.
Source reference: pp. 15–16, paras. 11–14The matter was listed for 9 September 2026 at 10:30 a.m.
Source reference: p. 16, para. 15The Court also clarified that documents referred to in the petitioners’ reply but not placed on record could not be relied upon.
Source reference: p. 16, para. 16Acts & Sections Cited
2 provisions across 1 statute referred to in this judgment. Each provision opens on LawLens.
Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 20132
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Khatangpani Tea Estate And AnrvsOil India Limited And Ors
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