In a major relief to Mukesh Ambani-led Reliance Gas Transportation and Infrastructure, the Supreme Court on Wednesday dismissed a batch of appeals filed by more than 50 landowners of Surat seeking higher compensation for acquisition of their land being used by the company for laying pipelines to transport gas from the Krishna-Godavari basin to Gujarat.
Asking the government to rehabilitate them adequately by allotting alternative plots for total deprivation of their land for the pipelines, the farmers from Surat had challenging the constitutional validity of the Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act, 1962 on the ground that the compensation provisions in the Act were “arbitrary” and “illusory”. The bench comprising justices V Gopala Gowda and UU Lalit rejected their pleas that the firm had snatched their livelihood and an illusory compensation of just 10% of the market value is provided under Section 10 (4) of the Act.
The judges said “the measure for determining such compensation is given with sufficient clarity”.
According to the judges, over and above compensation for actual damage, loss or injury, additional compensation @ 10% of the market value of the land is given to the owner/occupier for taking over the right of user to lay the pipelines.
“This element of additional compensation is independent of any actual loss or damage and is purely linked to the value of the land for the purposes of computation,” the judgment said, adding that “the principles of compensation as detailed in the Act are reasonable and cannot in any way be termed as illusory”.
Agreeing with the government’s contention that the pipeline in question was designed to sub-serve public interest, Justice Lalit, writing for the bench, observed that the element of public interest is present all through even when the activity is undertaken through an entity in private sector.
“Considering the nature of activity where entities in private sector are encouraged to participate, it would be incorrect to put any restricted meaning as regards the expression ‘Corporation’. The definition of ‘Corporation’ under Section 2(b) of the Act is wide enough to include entities and the private sector…the definition of ‘Corporation’ is wide enough to take within its sweep entities in private sector as well,” the apex court stated.
Landowners had said “the difference between acquisition of the land and acquisition of the right to use the land is a statutory fiction created only with a view to intentionally reduce the compensation, which should be paid to the land owner”. Under Section 9 of the Act, no construction or agricultural activity is allowed on the land under which pipelines are laid as they may cause damage to the pipeline, they added.