Vedanta University: Supreme Court Reserves Judgement On Land Acquisition Dispute
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The Supreme Court on Wednesday reserved its judgment on appeals filed by the Orissa government and Anil Aggarwal Foundation against Orissa High Court's 2010 decision of quashing the land acquisition for establishment of Vedanta University. Aggarwal, who plans to establish the university, is Chairman of Vedanta Resources, the mining company The bench of Justices M. R. Shah and Krishna Murari...
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The Supreme Court on Wednesday reserved its judgment on appeals filed by the Orissa government and Anil Aggarwal Foundation against Orissa High Court's 2010 decision of quashing the land acquisition for establishment of Vedanta University. Aggarwal, who plans to establish the university, is Chairman of Vedanta Resources, the mining company
The bench of Justices M. R. Shah and Krishna Murari heard Advocate Prashant Bhushan for the land owners and Senior Advocate C. A. Sundaram for the Foundation.
In its November, 2010 decision, the division bench of the High Court had ruled that taking over of possession of the lands was in flagrant violation of the statutory provisions of Sections 4, 5A, 6, 9, 10, 11, 12 (2), 23, 24, read with the provisions under Part-VII of the Land Acquisition Act, 1894". The court had quashed the impugned land acquisition proceedings including the notifications under Sections 4(1) and 6 and the awards passed in the Land Acquisition Proceedings for acquisition of land in favour of the beneficiary company. It had further directed that the possession of the acquired lands shall be restored to the respective land owners irrespective of the fact whether they have challenged the acquisition of their lands or not.
On Wednesday, Bhushan argued, "Rs. 1.25 lakhs per acre is the average compensation claim that has been given for this land! 1.25 lakhs per acre for somebody who is losing his livelihood, somebody who is effectively deprived of his livelihood by the loss of the only land that he owns and he is given 1.25 lakhs! That is nothing! They were all small land-holders!"
"And this land is not even contiguous, it is all in patches. First, they (Foundation) said that they need 15,000 acres for establishing a world-class university. And they are somebody which is a three-person family company, limited by guarantee of Rs.5000, which has never set up any educational institution! Now they are saying that even if it is 2000-2500 acres, give it to us, even if it is in patches! Why? They said we need 15,000 acres to create a world-class university that would accommodate 1 lakh students. Now they say give us even this 2500 acres which is in patches and we will establish a university here? This is absolute farce! This area is full of minerals also. This area has sand minerals also. We don't know what they intend to do. They probably intend to use this land, whatever is given to them, whether it is 2500 acres etc, essentially for mining for various minerals!", he continued.
Bhushan further said that when the MOU was signed between the foundation and government, the former was admittedly a private company. The government signed the MOU with a private company knowing full well that for a private company, the government cannot acquire any land. Anil Aggarwal Foundation required the previous approval of the central government in writing to convert it into a public company but no such approval has been received, he submitted.
"That conversion did not happen because they did not submit their altered memorandum of association etc. So a three-member family company enters into an MOU with the government where the government says that we will acquire this 8000 to 10,000 acres of contiguous land and we will give it to you, knowing full well everything," added Bhushan.
Continuing on the aspect, Bhushan said the foundation was referring to a letter from the Ministry of Corporate Affairs in 2006 and relying on it to say that "look, we became a public company before the Section 4 notification (under the 1894 LA Act) and before the Section 41 agreement (under the LA Act)'."
"But it merely says that 'Vedanta's request for permission under Section 25(8) of the Companies Act is hereby considered for conversion of the status of the company from private to public company' and it adds that the provisions of so-and-so sections are to be complied with...Section 44B has to be given a purposive interpretation. There is a reason for it. It does not mean a three-member family company, where the public cannot purchase shares, should be treated as a public company, apart from the fact that it never even became a public company!", argued the counsel
Bhushan also submitted that the people who land was being acquired are all dependent on the farming for their livelihood. He referred to various provisions and procedures under the relevant law and argued that same was not followed in the process.
"When we asked under RTI whether there was any enquiry under the Land Acquisition (Companies) Rules, 1963 by the collector, Puri, we found there was no such enquiry. So anybody comes and say that we will establish a world-class university for one lakh students and the government agrees to that claim? It is a mining company. It is a three member family company, what experience do they have of educational institutions?" Bhushan said while concluding his arguments.
In response, Sundaram submitted that the Foundation was a public company.
"Let me get out of the way this issue of public-private company. The letter dated 22 November 2006 (of the MCA) reads 'your request for permission is hereby considered for conversion of the status of the company from private to public company'. As regards the provisions of the companies act to be complied with, All these provisions were satisfied on 23.11.2006 itself. Prior approval as required under my memorandum was given. Section 31 of the companies act requires an EGM and a special resolution. That was on 23.11.2006. That was one condition. Then form 23 was uploaded on 25.11.2006. Sections 23,31, 199 etc stood complied with on 25.11. 2006 itself. The permission given on 23.11.2006 saying yes, but comply with these three. They were complied with and uploaded and sent to the ROC. You will find that it is a public company," he submitted.
The senior counsel further submitted that Anil Agarwal foundation has nothing to do with the Vedanta Corporation.
"They say they have done nothing till today, that Vedanta has done nothing. It is the Anil Agarwal Foundation which is in operation and has donated about $2 billion. Till date, it has made contributions to primary education, homes for people, it is the largest foundation today and all through this man's individual contribution. They are saying it is going to a mining company. It is not! That is why we are saying there is an Anil Agarwal foundation which is completely different. Vedanta colleges are under the Vedanta Shiksha. There are three community colleges, located in mobile Maharashtra, Rajasthan, Kolkata, West Bengal. They are being run by the Anil Agarwal foundation founded with his personal funds!"
Justice Shah: "Was this was stated before the High Court? You might be doing anything, but whether the state government was satisfied? Is there any record before the High Court that we are satisfied with the activities of this Anil Agarwal foundation and the credentials and therefore deem it proper to acquire this land for a company, public or private?"
Sundaram said, "[the] government said that this 5000 acres is what we have identified. And then in the MOU, I say that I am willing to do it there. The state says it is on national Highway, on the proposed state highway…on the top is the emblem of the state of Orissa, this is all from them. Then they say 'land profile', that all this is being given by them, they say continuous patch of 5000 acres, they say no forest land. I have not selected this land, that they have selected. This is the government's presentation, not mine"
Justice Shah pointed to a note of the erstwhile Chief Minister and principal secretary, reading that Vedanta Resources is interested in setting up a university.
Replying, Sundaram said, "Yes, because at that time, we had said 'yes, we are interested in putting up a university, undergraduate and post graduate etc'. But we had seen lands in Rajasthan, Andhra Pradesh, Gujarat, West Bengal, not Orissa. Then this land was shown to us and we said 'alright, we will do it here'. There were three different sites which they presented to us. It is not that we went to various sites in Odisha and then we said that alright, we will do it on this site. They have identified the site!"
Justice Shah pointed out from the record, "All 15,000 acres may not have been given to you, 3,600 acres might have been given to you, but it is part of the land which was suggested by you"
"There is a purpose behind this project. 75% of his capital he is giving to this project. This is a personal foundation out of his personal earnings that he has founded", stressed Mr. Sundaram
Case Title: ANIL AGARWAL FOUNDATION v. STATE OF ORISSA