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Gregory Patrao & Ors. vs. Mangalore Refinery and Petrochemicals Limited & Ors.

Civil Appeal · 2022 INSC 693Decided 11 Jul 2022
Civil Appeal Nos. 4105-4107 of 2022
M.R. Shah · B.V. Nagarathna

Background

Landowners' property was acquired under the Karnataka Industrial Areas Development Act (KIAD Act) for an industrial area later allotted to Mangalore Refinery and Petrochemicals Ltd. (MRPL). After the Reference Court enhanced the landowners' compensation, MRPL, as the eventual lessee/allottee of the land, appealed the enhancement, claiming it should have been heard as a "person interested" since it would bear the cost. The Karnataka High Court agreed with MRPL, set aside the Reference Court's award, and remanded the case for a fresh decision with MRPL's participation, prompting the landowners to appeal to the Supreme Court.

Decision Breakdown

The Supreme Court held that under the KIAD Act's specific scheme (as opposed to the general Land Acquisition Act, 1894), an allottee company like MRPL, which received the land only after the state acquired it through the Karnataka Industrial Areas Development Board (KIADB), is neither a "beneficiary" nor a "person interested" entitled to be heard on the amount of compensation. It relied on its own earlier binding precedent (Peerappa Hanmantha Harijan) which had specifically distinguished the KIAD Act from the general acquisition law relied on by the High Court, and held that the High Court had erred in law by not following this binding precedent, contrary to Article 141 of the Constitution. Accordingly, the Court set aside the High Court's order and restored the Reference Court's judgment enhancing compensation to the landowners.

Lesson Learnt

A private company that later receives land allotted after government acquisition (e.g., as a lessee of an industrial development board) generally has no right to be heard on, or to challenge, the compensation fixed for the original landowners: that is a matter between the landowners and the acquiring authority, and the specific statute governing the acquisition determines who counts as a "person interested."

Official source (sci.gov.in)View Judgment (PDF)

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