IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 03.06.2008 C O R A M THE HONOURABLE Mr.JUSTICE P.JYOTHIMANI W.P.Nos.1964 of 2006 & 5365 of 2007 M/s.Southern Industrial Corporation Ltd., (now a division of South India Corporation (Agencies) Ltd., 73, Armenian Street, Chennai 600 001. Rep. by its Chief Human Resources Officer Mr.S.Rajappan .. Petitioner in W.P.No.1964/06 M/s.India Radiators Ltd., Principal Office at 39/1 G.N.Chetty Street, 1st Floor, Mylapore, Chennai 4, rep. by its Director. .. Petitioner in W.P.No.5365/07 -Vs- The Government of Tamil Nadu, Rep. by its Secretary to Government, Revenue Department, Fort St. George, Chennai 600 009. .. Respondents in both the WPs.
Prayer in W.P.No.1964 of 2006: Writ Petition filed under Article 226 of the Constitution of India for the issuance of a Writ of Mandamus directing the respondent Government to dispose of the representation dated 22.02.2003, within the time limit, as may be fixed by this Court.
Prayer in W.P.No.5365 of 2007: Writ Petition filed under Article 226 of the Constitution of India for the issuance of a Writ of Mandamus directing the respondent Government to issue orders pursuant to the directions of this Court in Contempt Petition No.46 of 2006 in W.P.No.26745 of 2004 within a time limit as may be stipulated by this Court.
For Petitioners : Mr.T.R.Rajagopalan
Senior Counsel for Mr.G.Raghavendran.
For Respondent : Mr.G.Masilamani, Advocate General,
Assisted by Mr.D.Srinivasan, AGP
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C O M M O N O R D E R
The writ petition in W.P.No.1964 of 2006 is for a direction against the Government to dispose of the representation dated 22.02.2003, filed by Southern Industrial Corporation Ltd., which is now a division of South India Corporation (Agencies) Ltd., represented by its Chief Human Resources Officer.
2. The writ petition in W.P.No.5365 of 2007 is filed by M/s.India Radiators Ltd., for a direction against the respondent Government to issue orders pursuant to the direction of this Court in Contempt Petition No.46 of 2006 in W.P.No.26745 of 2004.
3. The factual matrix relating to these cases is that the Government has assigned a total extent of 37.39 acres of land in S.No.459/2 at Puzhal Village (Redhills) on market value to M/s.Southern Industrial Corporation Ltd., Madras, the petitioner in W.P.No.1964 of 2006 in G.O.Ms.No.2240, Revenue Department, dated 31.05.1957. The said assignment was for expansion of its factory. Out of the said total extent of land, land measuring 7.10 acres was transferred by the M/s.Southern Industrial Corporation Ltd., to M/s.India Radiators Ltd., which is its sister concern, the writ petitioner in W.P.No.5365 of 2007. On the basis that the said transfer is in contravention of the assignment of land, the Government ordered resumption of land in G.O.Ms.No.1786, Revenue Department, dated 07.08.1975. As against the said resumption order, writ petitions were filed by both the writ petitioners. W.P.Nos.5004 & 5192 of 1979 were filed by M/s. Southern Industrial Corporation Ltd., and W.P.Nos.5173 & 5279 of 1979 were filed by M/s. India Radiators Ltd. The said writ petitions were disposed of by an order dated 05.09.1986, by appointing Mr.A.L.Somayaji, Advocate as arbitrator for the purpose of determining the market value of the lands, subject matter in dispute and on said determination, the State shall reassign the lands concerned to the assignee on their paying the market value as per the determination.
4. As against the said order, the State Government has filed Writ Appeal in W.A.Nos.1236 to 1239 of 1986 in which by an order dated 09.08.1989, while dismissing the appeal, it was made clear that arbitrator could continue, directing him to fix the market value of the property as on 28.10.1981, the date on which the Government has resolved to reassign the lands to the individual purchasers from the original assignee viz., Southern Industrial Corporation. The Award of the arbitrator dated 18.03.1991, was received by this Court in O.P.No.217 of 1991 and by an order dated 13.08.1991, the market value of the land in question was fixed at the rate of Rs.2,500/- per ground as on 28.10.1981. Therefore, according to the petitioners, on passing of the said decree based on the arbitration Award, the entire matter has become final and therefore, the Government should have annulled the earlier order for resumption and reassigned the lands to the extent of 25.18 acres to the petitioner in W.P.No.1964 of 2006 M/s. Southern Industrial Corporation Ltd., and 6.86 acres to the petitioner in W.P.No.5365 of 2007 M/s.India Radiators Ltd., who is the transferee from the original assignee viz. M/s.Southern Industrial Corporation Ltd., who has filed writ petition in W.P.No.26745 of 2004 for a direction against the Government to dispose of the representation made between 25.02.1998 to 28.07.2004 for reassignment of lands. By an order dated 20.09.2004, this Court has disposed of the said writ petition directing the respondent to consider the said representations and pass orders on merit and in accordance with law within a period of eight weeks. Since no order was passed, M/s. India Radiators Ltd, filed contempt petition No.46/2006, which was disposed of by this Court taking into consideration that the Government needed two months time due to the intervening General Elections to the Tamil Nadu Assembly, directed the Government to pass orders immediately after the elections and with that direction, the contempt petition was closed. In spite of the said order, the respondent Government has not passed any orders, which necessitated the petitioners to file the above said writ petitions for directions as stated above.
5. The Government has filed counter affidavit in W.P.No.5365 of 2007. It is the case of the respondent Government that an extent of 39.94 acres of land comprised in S.No.459/2 and 460/2 at Puzhal Village were assigned to M/s.Southern Industrial Corporation Ltd., with conditions under Revenue Standing Order 15 and 24 as per G.O.Ms.No.2240, Revenue Department, dated 31.05.1957 and G.O.Ms.No.4947, Revenue Department, dated 16.11.1961. However, M/s. Southern Industrial Corporation Ltd., has sold an extent of 14.76 acres against the assignment condition to the following three organisations viz.,
Name of company
Date of Sale
Extent of acres
Tube Suppliers Ltd.
02.03.1962
5.00
India Radiators Ltd.
18.07.1963
4.76
Popli Raja High School
14.10.1970
5.00
Total
14.76
It is also stated by the respondent that subsequently, Tube Suppliers Ltd to whom M/s. Southern Industrial Corporation Ltd., has sold 5.00 acres, has sold to:
(1) M/s.Tokushu Menon Papers Ltd., an extent of 2.90 acres on 14.10.1977 and
(2) M/s. India Radiators Limited an extent of 2.10 acres on 17.01.1972.
Therefore, M/s. India Radiators Ltd., petitioner in W.P.No.5365 of 2007 have purchased 6.86 acres out of the total assigned lands. Since that was in violation of the assignment condition, by G.O.Ms.No.1786, Revenue Department, dated 07.08.1975, the Government ordered resumption of the entire land measuring 39.94 acres assigned to M/s.Southern Industrial Corporation Ltd.,
6. While the said cases were pending it was informed by the Government to the Court that the Government has decided to reassign the lands to the companies concerned on collection of double the market value. Therefore, this Court has appointed Mr.A.L.Somayaji, Advocate as arbitrator to determine the market value of the lands. Writ Appeals filed by the Government was dismissed and the arbitrator has fixed the market value at the rate of Rs.2,500/- per ground as on 28.10.1981, without any further particulars as to which basis the amount was fixed. The petitioners have contended that the land value is Rs.1,500/- per ground while the Government has placed claim of Rs.3,400/- per ground. The Award of the arbitrator dated 18.03.1991, was sent to the Government on 12.04.1991 and direction was issued to take necessary action to set aside the Award, but no action has been taken by the District Administration. In those circumstances, O.P.No.217 of 1991 filed by the Arbitrator has been allowed and decree was passed on 13.08.1997, in terms of the Award.
7. It is the case of the respondent Government that guideline value as on date in respect of S.No.459/2 works out to Rs.12,48,000/- per ground and Rs.5,08,800/- per ground in respect of S.No.460/2. It is also stated by the respondent in the Counter affidavit that in February 1998, M/s.Southern Industrial Corporation Ltd., and M/s. India Radiators Limited represented to the Government to reassign the lands of 25.18 acres and 6.86 acres respectively in S.Nos.460/2 and 459/2. In the meantime, M/s.Tokushu Menon Papers Ltd., who purchased 2.90 acres from M/s.Tube Suppliers Ltd., filed writ petition in W.P.No.14963 of 2001 with request to reassign the lands and the said writ petition was dismissed on 02.08.2001, leaving it open to the petitioner to pursue his remedies before the revenue authorities. On M/s. India Radiators Ltd., filing writ petition in W.P.No.26745 of 2004, direction was issued by this Court on 20.09.2004, to consider the representation and pass orders. In the meanwhile in the Contempt Application filed by M/s. India Radiators Ltd in Contempt Petition No.46 of 2006, basing reliance on the letter of the Government dated 10.03.2006, addressed to the then Additional Government Pleader, the contempt petition was closed with a direction to the Government to pass orders immediately after the elections are over.
8. It is the case of the respondent Government in the counter affidavit that any reassignment of lands could be based only on the market value prevailing on the date of reassignment and therefore the market value as on 28.10.1981, cannot be legitimately considered to be the value of the land. It is also the case of the respondent that assignment of the said land at the old rate would be prejudicial to public interest. By applying the same, heavy financial loss will accrue to the Government and therefore, fresh Arbitrator has to be appointed to fix the correct market value. Therefore, according to the respondent after a lapse of 25 years, it is improper to assign the land on the value which was in existence as on 28.10.1981.
9. it is the case of the respondent Government that by letter dated 03.05.2007, the Government was prepared to reassign the land on the fresh market value and without challenging the said order, present writ petition is filed and therefore the same is not maintainable especially in the changed circumstances. It is also stated that there was some dispute in respect of employees of M/s.India Radiators Ltd. Employees numbering 143 out of whom many were terminated and few were given re-employment and again terminated and subsequently the company was closed between 16.11.1999 to 06.07.2000 and the matter was referred to the Commissioner of Labour and the matter is pending and no activities are going on in the factory premises.
10. It is also stated that the problem was referred to Board for Industrial and Financial Restructure (BIFR) in which there was a direction to liquidate the company and to declare it as a sick industry. In such circumstances, reassignment of the said lands to the petitioner company will only pave way to the sick company to use the land as real estate value to mitigate the company’s liabilities and not for industrial purpose. Therefore, the company no longer requires land to carry out the business in radiator industry, which was the object of the Government and therefore in the changed circumstances there is no possibilities for reassignment of land on the value fixed on 28.10.1981.
11. Mr.T.R.Rajagopalan, learned senior counsel appearing for the petitioner would submit that in as much as under the Arbitration Act, 1940, the Award passed by the Arbitrator has become a decree which has become final, it is the duty of the respondent Government to act as per the decree passed in terms of the Arbitration Award. The conduct of the respondent Government in claiming the market value as on today is only a gross violation of the decree passed by this Court on the original side. The learned senior counsel would also submit that if the apprehension of the Government is that the petitioner company in W.P.5365 of 2007 being declared as a sick industry, any reassignment will only pave way not to use such land for industrial purpose, the petitioner in the said writ petition is prepared to file affidavit to the effect that such land will be used only for industrial purpose. In fact, such an affidavit was also filed on behalf of M/s. India Radiators Ltd., giving an undertaking that after the assignment, the petitioner company will use the said property only for industrial purpose. It is also stated in the said affidavit of March 2008 that BIFR directed winding up of the company against which the company has filed an appeal before AAIFR. It is also stated that AAIFR has directed the company to file rehabilitation scheme and the same has already been submitted and it is pending. As per the rehabilitation scheme a joint venture arrangement for production and manufacture of Automobile components and accessories including Oil Coolers and Exhaust System from the factory situate in the property were made and revised rehabilitation scheme would be submitted by the company before the AAIFR. The said petition is filed without prejudice to the right of the petitioner company.
12. However, subsequently, on instructions from the Government, the learned Advocate General has submitted that the Government was not willing for any assignment. It is the contention of the learned Advocate General that in so far as the petitioner in W.P.No.5365 of 2007, the circumstance in existence as on today is totally different from what was in existence earlier. Admittedly, the company has become sick and BIFR has passed order of winding up and the company remained closed from 1999 and simply because the rehabilitation scheme is pending before AAIFR, it does not mean that there will be revival of industrial activities by the petitioner company especially in the circumstances that 143 workers are also making a claim against the company and therefore it cannot be said that there should be any assignment to such company.
13. I have heard Mr.T.R.Rajagopalan, learned senior counsel appearing for the petitioners and Mr.G.Masilamani, learned Advocate General appearing for the respondent and gave my anxious thoughts to the issues involved in this case.
14. As it is seen in the counter affidavit, the extent of lands assigned/transferred, which stood non-controverted by the writ petitioners are as follows:
(i) The assignment to M/s. Southern Industries Corporation Ltd., writ petitioner in W.P.No.1964 of 2006 an extent of 39.94 acres under G.O.Ms.No.2240, Revenue Department, dated 31.05.1957 and G.O.Ms.No.4947, Revenue Department, dated 16.11.1961.
(ii) M/s. Southern Industrial Corporation Ltd., sold 14.76 acres out of 39.94 acres to three companies viz.,
Name of company
Date of Sale
Extent of acres
Tube Suppliers Ltd.
02.03.1962
5.00
India Radiators Ltd.
18.07.1963
4.76
Popli Raja High School
14.10.1970
5.00
Total
14.76
(iii) M/s. Tube Suppliers Ltd who purchased 5 acres from M/s. Southern Industrial Corporation Ltd., as stated above has sold to two companies viz.,
Name of company
Date of Sale
Extent of acres
Tokhusu Menon Private Ltd
14.10.1970
2.90
India Radiators Ltd.
19.01.1972
2.10
Total
5.00
(vi) The extent of land stood as follows:
(a) M/s. Southern Industrial Corporation Ltd,
writ petitioner in W.P.No.1964 of 2006 – 25.18 acres
(b) M/s. India Radiators Ltd., writ petitioner
in W.P.No.5365 of 2007 (4.76 + 2.10) – 6.86 acres
(c) M/s.Tokhusu Menon Private Ltd., – 2.90 acres
(d) M/s. India Radiators Ltd., – 5.00 acres
the other two companies are not parties before this Court.
15. A reference to the said Government orders shows that assignments are subject to usual conditions of assignment in Board Standing Order (BSO) 15, special condition prescribed in para 6 of BSO 24 and the said assignment is also on payment of single market value of Rs.1,000/- per acre. The assignment as per the Government Order is for the expansion of factories and the lands assigned are registered as grazing ground poramboke. Under the BSO 15 which deals with the disposal of land, while Clause 1 speaks about the general principles, Clause 1.A deals with various conditions regarding the assignment, alienation, lease etc., which is as follows:
1.A. (i) Grant of land by the Government in the form of assignment, alienation, lease, etc., is governed by the provisions of the Government Grants Act (Central Act). According to the provisions in the Government Grand Act, grant of Government land will not be governed by the provisions of the Transfer of Property Act, unless specific provisions are made in the order of grant by the Government that title to the property will pass on to the assignee subject to complying with the conditions of grant or after the expiry of a certain period. The grantee of the land, therefore, does not acquire title, simply under the orders of grant of land by the Government.
(ii) The land may be assigned for private purpose, such as for cultivation, for house site and for industrial purposes free of land value or on payment of land value, subject to the conditions imposed in order of grant. The land would be available with the grantee, so long as the conditions of grant are satisfied. The question of acquisition of title to the land will be governed only by the conditions of grant and not otherwise.
(iii) Assignment of land free of value:- If the land was assigned for cultivation or house site purpose, free of land value, and if there was a condition that the land should be utilised within a specific period and it could be alienated after expiry of the specific period, then the assignee acquires title to the property, only after the land was utilised for the purpose for which it was granted and only after expiry of the specific period. The land can be resumed, if the land is alienated, before the expiry of period specified, even if the land was utilised within the period specified for the purpose for which it was granted.
(iv) Assignment of land free of value:- If, on the other land condition was imposed when land was assigned, free of land value to the effect that the assignee should not be disposed of the property, then the title to the land does not pass on to the assignee at any length of time. He can utilise the land, as long as the conditions are satisfied. If the conditions of grant are violated then the land can be resumed.
(v) Assignment of land on payment of value:- In case, the land is assigned, on payment of land value and a condition was imposed in the order of grant, to the effect that the assignee could not dispose of the property, then the land could be resumed, if the land was either not utilised for the purpose for which it was granted, within the specified period or alienated to others, even after utilising the land.
(vi) Payment of compensation on resumption:- Regarding the payment of compensation of the land or improvements made therein or towards structures erected, in the case of lands assigned, on payment of land value, if a condition was imposed to the effect that no compensation would be paid towards the land value or improvements made therein or towards structures erected, and if the land is resumed for violation of the conditions of grant, then the land could be resumed, without payment of compensation to land value or improvements made or structure constructed. If the condition imposed relates only to the non-payment of compensation to the improvements made or structures erected, then it should be taken for granted that no compensation should be made to the land value also.
(vii) Payment of compensation on resumption:- In case of land assigned to a person, on payment of land value with usual conditions and also another condition that the assignee could dispose of the property, after expiry of a specific period, then only, he acquires title to the property under the Transfer of Property Act, after the expiry of the time limit specified therein and only after the conditions of the grant are satisfied.
(viii) Payment of compensation on resumption:- If, on the other hand, a condition was imposed to the effect that the assignee could not alienate the land after expiry of the specific period, within which the land should be utilised then the land could be resumed, without payment of compensation to the land or for the improvements made or the structures constructed, if the land is alienated, at any time, notwithstanding the fact that the conditions of grant are complied with
16. For the purpose of the present case and on the reading of the Government orders by which assignment was made to M/s.Southern Industrial Corporation Ltd., it has to be taken as assignment of land on payment of value which is covered under Clause 1.A(i) and 1.A(v). The said condition enables the Government to resume the land if it is not used for the purpose for which it was assigned. Likewise, BSO 24 which deals with the placing State land at the disposal of a person, an institution etc., para (6) imposes condition for grant of State land which is as follows:
6. Condition for grant of State land-
(i) Lands at the disposal of Government:- A grant of State land whether for religious, educational or other public purpose should always contain the following conditions:-
(1) The land shall be used……….. and for no other purpose.
(2) The Government may resume the land wholly or in part with any buildings thereon, in the event of the infringement of any of the conditions of the grant. In the event of such resumption no compensation shall be payable for any improvements that may have been effected, or other works that may have been executed on the land by the grantee and the grantee shall not be entitled to the repayment of any amount that may have been paid to the Government for the grant. If there are buildings on the land the Government may direct the grantee to remove them.
The land, if utilised for commercial purpose, when the grant is made free of land value, the beneficiary shall be liable to pay the market value of the land either totally or for the portion converted into commercial purpose as decided by the Government.
(3) The Government may resume the land wholly or in part, with any buildings thereon, if in the opinion of the Government the land is required for a public purpose or for conducting mining operations. In the event of such resumption or in the event of the acquisition of the land for any reason, the compensation payable for the land and trees, shall in no case exceed the amount paid for them by the grantee or their value at the time of resumption or acquisition whichever may be less.
(4) In the event of resumption under condition (3), if there are buildings on the land, the Government shall pay compensation for them in accordance with the provisions of condition (5).
(5) In the event of the resumption of land under condition (3) or in the event of the acquisition of the land for any reason the compensation payable for buildings or other improvements shall in no case exceed the amount paid for them by the grantee at the time of grant or their value at the time of resumption or acquisition whichever may be less, together with the initial cost or the value at the time of resumption or acquisition, whichever may be less of any buildings erected or other improvements effected on the land by grantee in accordance with the terms of the grant. The amount of any grant made by the Government towards the cost of the buildings or other improvements shall be deducted from the compensation payable under this condition.
(6) In the event of the grantee refusing to remove the buildings, when so directed under condition (2), the Government may remove them and realise the cost of the removal by the sale of the materials.
(7) In the event of the voluntary relinquishment of the land by the grantee no compensation shall be payable for any improvements that may have been effected or for works that may have been executed on the land by the grantee but the grantee shall be entitled to the repayment of any amount that may have been paid to the Government, for the grant, or the value of the land at the time of relinquishment, whichever may be less.
(8) The Government reserve to themselves the right to all sandalwood trees and their branches and roots which exist at the time of grant as well as those which may grow subsequently on the land and the Government shall be at liberty to cut or dig out any such trees or their roots and branches and remove them from the land and dispose of them at their pleasure. The grantee shall not be entitled to cut or remove them or cause them to be cut or removed without permission of the Collector of the district.
(9) The grantee shall take all reasonable measures to the satisfaction of the Collector of the district for the protection of the sandalwood trees from theft or damage and for the careful protection of the immature trees growing on the land.
(10) The grantee shall take steps to see that the marks made by the officers of the Government on the sandalwood trees are preserved and are not tampered with.
(11) In the event of the infringement of, or failure to observe, any of the conditions (8) to (10), the grantee shall pay to the Government such compensation as is determined by the Collector of the district for any loss or damage caused by such infringement or failure on his part. The Government shall also be at liberty to resume the land and re-enter on it and the whole land shall thereupon vest absolutely in the Government. In that case the grantee shall not be entitled to any compensation whatever.
(12) In cases where the land granted is more than 50 cents in extent, the grantee shall plant and maintain at least 5 suitable trees per acre within one year from the date of grant.
Therefore, a combined reading of BSO 15 and para 6 of BSO 24 subject to which assignment has been made in this matter makes it clear that assignee should use only for industrial expansion failing which the said assignment could be resumed.
17. In this case, it is not in dispute that due to the conduct of the assignee M/s. Southern Industrial Corporation Ltd., in transferring the assigned lands, the Government has ordered resumption of lands as per the BSO and conditions of assignment and that was by G.O.Ms.No.1786, Revenue Department, dated 07.08.1975.
18. The order of resumption as well as the actions of the Government including the District Revenue Officer and Thasildar in reassigning the lands as per the then existing market value in the year 1979, where under challenge by the writ petitioners in W.P.Nos.5004 and 5192 of 1979 by M/s. Southern Industries Corporation Ltd., and writ petitioner in W.P.Nos.5173 and 5279 of 1979 by M/s. India Radiators Ltd. While disposing of the said writ petitions, by a common order dated 05.09.1986, this Court has clearly observed as follows:
On the ground that the transfers violated the terms of the assignments steps were taken to resume the lands covered by the assignments. However the Authorities were prepared to make reassignments irrespective of the contraventions taken note of earlier. This has obliged the assignee and M/s. India Radiators Ltd., one of the transferees to come to this Court, seeking to quash the order of resumption and restrain reassignments are notified by issuing writs of Certiorari and Mandamus respectively.
19. A compete reading of the order of this Court makes it clear that when representations have been made to the Government the Government was willing to reassign the land on the value fixed on the date of such reassignment and for that purpose writ petition stood adjourned to various dates and it has been the stand of the Government that the reassignment would be possible if the value of the land is fixed at the time of actual reassignment by the Government, which will be double the market value. Ultimately after many adjournments, this Court has passed the final order on 05.09.1986, which is as follows:
To-day, Mr.P.Chandrasekharan, learned Government Advocate informs me the Government are not willing to appoint an agreed arbitrator by the parties or an arbitrator by the Court for fixing the land value, he has received a letter No.96204/A1?85-18, dated 01.09.1986 to that effect from the Joint Secretary to Government, Revenue Department, Madras. The orders passed by this Court earlier and the implications thereof cannot be lost sight of. Writ regard to reassignment, the State has not changed its stand, equally so, the petitioners have not expressed a different opinion on this aspect. Hence the question of reassignment stands settled and the question which requires resolution relates only to the fixing of the value for reassignment. The order of Sathiadev,J., dated 13.02.1986, has clearly contemplated that with regard to determination of the market value, that could be either by an agreed arbitrator or an arbitrator appointed by the Court. It is only on that accepted basis, further orders were passed by me to find out as to whether there could be consensus between the parties on the question of the appointment of an arbitrator to determine the market value. Today,
As stated above, the stand of the State with regard to an agreed arbitrator has been made known and the State is not willing for an agreed arbitrator. It is too late in the day for the State to make a further qualification that is not willing to have an arbitrator appointed by the Court for fixing the land value. Already this Court, by order dated 13.12.1986, has expressed the view that the value shall be fixed either through an agreed arbitrator or by an arbitrator to be appointed by the Court. Since there is no consensus between the parties with regard to appointment of an arbitrator, this Court is obliged to appoint an arbitrator for determination of the market value on which determination, the State shall reassign the lands to the assignee and such of the transferees who are willing to have the reassignment on payment of the value so determined. Mr.A.L.Somayaji, Advocate of this Court is appointed as the Arbitrator for the purpose of determining the market value of the lands, subject matter in dispute, as on date, after giving due notice to the parties concerned and affording them an opportunity to place materials in substantiation of their stand on the question of the market value, within a period of three months from the date of the service of copy of this order on him, which shall be done by the office of this Court. On such determination, the State shall reassign the lands concerned to the assignee or such of the transferees, who desire such reassignment on their paying the market value as per the said determination. The arbitrator will be entitled to remuneration at 1% of the market value of the lands as per his determination, which shall be paid by the petitioners alone. The arbitrator shall be paid an initial renumeration of Rs.5,000/- within a period of one week from today, to be adjusted out of the ultimate disbursement towards his renumeration. These four writ petitions are ordered in the above terms. No costs. If any of the parties have got any grievance with regard to the determination of the market value by the Arbitrator, that could be the subject matter of an independent review by independent proceedings and not by way of supplemental proceedings in these writ petitions. However, if the arbitrator requires any extension of time, he can approach this Court for that purpose. (emphasis supplied)
20. Even though it is clear that the State was not willing for an agreed arbitrator, ultimately, this Court has appointed Mr.A.L.Somayaji as Arbitrator for determining the market value of the lands for the purpose of reassignment of lands to the petitioners. This Court has also directed that on such determination of value, the State has to reassign the lands to the assignee / transferee. On an appeal filed by the Government against the above said order, while dismissing the same the Hon’ble Division Bench of this Court has held as follows:
3. However, we make it clear that Mr.A.L.Somayaji could continue to be the arbitrator and he will fix the market value of the property as on 28.10.1981, the date on which the Government resolved to reassign the lands to the individual purchasers (namely, the writ petitioners) from the original assignee, viz., Southern Industrial Corporation, Madras and not the market value as on the date of the actual reassignment which are yet to take place.
As per the said order of the Division Bench the date of fixation of market value was fixed as 28.10.1981, that is admittedly the date on which the Government has decided to reassign the land. The order of the Division Bench has become final.
21. Therefore, the necessary implication is that when once the Arbitrator has fixed the value as on 28.10.1981, there is a duty on the part of the Government in reassigning the lands however, subject to the willingness of the petitioners to pay the amount as fixed by the Arbitrator. It is not in dispute that the petitioners are willing to pay the value as fixed by the Arbitrator.
22. The said Arbitrator who was appointed as per the Indian Arbitration Act, (Act X of 1940) has passed the Award on 18.03.1991, fixing the market value of land in question at Rs.2,500/- per ground as on 28.10.1981 and this Court in O.P.No.217/91 has also passed a decree in terms of the Award which is as follows:
That the Market value of the lands in question be and is hereby fixed at the rate of Rs.2,500/- (Rupees Two thousand and five hundred only) per ground as on 28.10.1981.
The decree passed by this Court on the original side under the Arbitration Act, even though fixing market value of the lands in question at Rs.2,500/- per ground as on 28.10.1981, the same has to be read along with the order passed in W.P. Nos.5004, 5173, 5192 and 5279 of 1979 and subsequent Judgment of the Division Bench in W.A.Nos.1236 to 1239 of 1986, by which it means clearly that on fixing of the market value by the Arbitrator, the State shall reassign the lands to the petitioners. Therefore, the contention raised by the learned Advocate General that the decree passed pursuant to the Award passed by the Arbitrator only fixes the market value of the land and there is no direction to the State Government to reassign the lands has no meaning at all. The purpose of referring to the Arbitrator by this Court while exercising power under Article 226 of the Constitution of India was for the purpose of fixing the market value so as to make it obligatory on the part of the Government to reassign the lands to the petitioners. Reading of the decree passed in terms of the Award in isolation will become meaningless, since, direction given by the Division Bench was in no uncertain terms that the Government has already decided the reassignment of land to the individual purchasers namely the writ petitioners and it is for the purpose of reassignment, the Arbitrator was directed to fix the market value. It is pertinent to note at this point of time that both the orders in the writ petitions and writ appeals as well as the decree passed in terms of the Arbitration Award have become final and therefore, it is not open to the Government to raise any other issue including any change in the circumstances. On the principle of judicial discipline, it is not only the respondent Government which is bound by the order passed in the writ petitions as confirmed in the writ appeals, apart from the Award passed in the form of a Decree, but this Court also cannot go beyond the decision already arrived at in concrete terms by the Division Bench.
23. Therefore, it is not possible to construe as if there is no obligation on the part of the State Government in reassigning the property in favour of the petitioners on the ground that there has been subsequent development regarding the petitioner in W.P.No.5365 of 2007 M/s. India Radiators Ltd., that the said company has become sick due to various reasons and that BIFR has ordered winding up and matter is pending before AAIFR and therefore, the obligation of the Government as per the orders of this Court come to an end. Such contention would be antithesis to the very concept of binding precedents of the orders passed by the Courts between the parties which is the very basis of the judicial system.
24. The apprehension of the Government which is raised at this point of time that writ petitioner in W.P.No.5365 of 2007 which is a sick company, is likely to use the land if it is reassigned, for any other purpose other than industrial purpose has also no basis especially in the circumstances that the petitioner therein viz., M/s. India Radiators Ltd., has filed an affidavit before this Court giving an undertaking which is as follows:
3…..I am referring to the above factors only to bring to the notice of the Hon’ble Court that the Petitioner Company will use the property only for industrial purpose and will not use it for any real estate development as submitted on behalf of the State Government. I, on behalf of the Petitioner Company, give an undertaking that the property in question will be used only for industrial purpose in a phased manner producing auto components, like finned tube, cooling systems, as also logistics, warehousing and distribution of two-wheeler and four-wheeler components and not for any other purpose…..
Therefore, the apprehension of the Government in that regard is not well founded. Even otherwise the State cannot raise such a ground in respect of the petitioner in W.P.No.1964 of 2007 M/s. Southern Industrial Corporation Ltd., which is not a sick company.
25. One another factor which is relevant as to what transpired in Contempt Petition No.46 of 2006 filed by M/s.India Radiators Ltd for disobedience of order passed in W.P.No.26745 of 2004 dated 20.09.2004, when this Court has directed the State to pass orders on the representation of the petitioner within eight weeks. In the contempt petition, the learned Additional Government Pleader has in fact produced a letter addressed to him by the Secretary to Government dated 01.03.2006, in which the Secretary to Government has required two months time to process the reassignment in view of the intervening General Elections to the Tamil Nadu State Assembly. Thus recording the said letter, the contempt petition was disposed of by this Court on 13.03.2006, with a direction to pass final orders immediately after the Elections are over. The following are the relevant paragraph:
3. Today, the learned Additional Government Pleader produced a copy of the D.O.Letter No.6022/LD.I (i)/98-34 dated 10.03.2006 from the Secretary to Government, Revenue Department, wherein it is stated as follows:
As per the advice of the Hon’ble Court the matter of adding interest to the land value fixed has been discussed between this department and the Counsel appearing for M/s.India Radiators. Accordingly, the Company has accepted to add interest to the basic land value at simple rate of 12% from 28.10.1981 till the date of re-assignment. The company has given a written consent to this effect only on 01.03.2006. Thereafter the matter is being processed as per the rules. However, the Government needs at least two months time to issue the final order particularly in view of the General Elections to the Tamil Nadu Assembly having been announced. In fact, the final clearance from the Election Commission has to be obtained as the Model Code of Conduct is in force.
I will therefore be grateful if you could kindly place the facts before the Hon’ble Court and obtain two months time so that the final order can be issued immediately after the Elections.
4. Considering the above, I am not inclined to pursue the Contempt Petition any further. Accordingly the Contempt Petition is closed. However, the respondent shall pass final orders immediately after the elections are over.
26. The Government having taken such concrete stand for grant of time in that proceeding agreeing for reassignment is not expected to act in such a manner to defeat the effect of Court orders. When directions were given to the Government in the contempt application to pass final orders, it means the Government has to pass orders based on the final decision in the earlier writ petitions which has been culminated into final order passed in Writ Appeals and decree passed in terms of the Award of the Arbitrator. It does not mean that the Government can pass orders by taking a totally different stand in the order stated to have been passed on 03.05.2007, by which the Government has in effect refused to follow the earlier decision as stated above. It is certainly not open to the Government to take it lightly as if the petitioner has a remedy available by challenging the order of the Government dated 03.05.2007. The Government being the largest litigant in the Country should certainly make itself as a standing example to others in respecting the rule of Law and follow the order of Courts which have become final and binding.
27. Unfortunately, in the present case, the inconsistent and unfair stand taken by the Government is not appreciable. It is not as if the respondent had no remedy available from the earlier orders which have become final and for any fault on the part of the respondent one cannot expect the Government machinery to go against the orders of the Court.
28. In view of the same, the writ petitions stand allowed, with direction to the respondent Government to pass appropriate orders of reassigning the lands in question on the basis of the market value already arrived at and approved by this Court in the form of a decree and such order shall be passed within a period of four weeks from the date of receipt of a copy of this order. No costs.
kk
To
The Secretary to Government,
Revenue Department,
Fort St. George,
Chennai 600 009.