'Vitiated with mala fide, favouritism': SC confirms HC order quashing land acquisition for Vedanta University

New Delhi, April 12 The Supreme Court on Wednesday confirmed the 2010 Orissa High Court decision to quash acquisition of 6,000 acres of land in 2006 for Anil Agrawal-led Vedanta Resources Ltd to establish a university there.

A bench of Justices M.R. Shah and Krishna Murari said: "It is not appreciable why the government offered such an undue favour in favour of one trust/company. Thus, the entire acquisition proceedings and the benefits, which were proposed by the state government were vitiated by favourism and violative of Article 14 of the Constitution of India."

It said the most important aspect, which is required to be considered is the non-application of mind by the state government on environmental aspects and passing of two rivers from the acquired lands in question.

It is not in dispute that from the lands in question two rivers, namely Nuanai and Nala are flowing, which as such were acquired by the state government, it added.

"How the maintenance of the rivers etc. can be handed over to the beneficiary company. If the lands in question are continued to be acquired by the beneficiary company, the control of the rivers would be with the said private company, which would violate the Doctrine of Public Trust," said the bench.

It added that the large-scale construction for the establishment of the proposed university as observed by the high court will also adversely affect the wildlife sanctuary, entire ecosystem, and the ecological environment in the locality. "It is a duty of the state to protect the wildlife sanctuary and it may affect the entire ecosystem and the ecological environment in the locality," said the bench.

It further added that merely because the Balukhand Wildlife Sanctuary is separated from the proposed site by a highway - Pthe uri-Konark Marine Drive, cannot be a ground to acquire the huge lands for the proposed university and as rightly observed by the high court, the same will adversely affect the wildlife sanctuary and the entire ecosystem and the ecological environment in the locality.

"The aforesaid aspects have not at all been considered by the state government and/or the Collector and/or the appropriate authority even while considering the proposal and/or even the objections under Section 5A of the Act, 1894," said the bench.

The top court dismissed the appeal filed by the Anil Agrawal Foundation against the judgment of the high court and also imposed a Rs 5 lakh cost. The bench said initially, 15,000 acres was proposed to be acquired, which is now reduced to 3,837 acres, meaning thereby, the proposal was for exaggerated demand and this was mala fide intention on the part of the appellant company/foundation.

The bench observed that it is required to be noted that the lands were proposed to be acquired at the instance of one foundation/company and the state government was dealing with the lands belonging to the agricultural landowners.

"It is required to be noted that the government is holding a public trust and has to deal with the lands belonging to private landowners, more particularly, agricultural landowners in accordance with law. The state government could not have considered the proposal from only one beneficiary/trust. There may be other public trusts/companies, who might be interested in establishing such a university. Even no proper inquiry seems to have been initiated by the government/Collector while considering the proposal by the beneficiary company," said the bench, in its 103-page judgment.

The bench noted that the lands to be acquired are agricultural lands belonging to 6,000 families and their only source of livelihood is on the agricultural lands, which cannot be compensated in terms of money, therefore, the proposal made now has to be rejected outright.

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