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Power Grid Corporation of India Ltd. v. Century Textiles & Industries Ltd. & Ors.

Civil Appeal · 2016 INSC 1128Decided 14 Dec 2016
Civil Appeal No. 10951 of 2016
Justice A.K. Sikri · Justice R. Banumathi

Background

Century Textiles held a mining lease for limestone (used in cement manufacturing) in Chhattisgarh. Power Grid, a central government transmission utility, needed to erect electricity transmission towers that passed through part of the leased mining area as part of a long-distance 400 KV transmission line already mostly built. Century Textiles objected, arguing the towers would force it to stop blasting operations near the towers (for safety reasons) and cripple its mining operations, and went to the High Court seeking relocation of the towers. The High Court refused to order relocation but directed the District Collector to work out compensation for Century Textiles and possibly the State Government; both sides appealed to the Supreme Court. Two similarly-themed appeals from Bihar and Jharkhand (involving different landowners objecting to transmission towers on their land) were heard together.

Decision Breakdown

The Supreme Court held that Power Grid, as a deemed licensee vested with Telegraph Authority powers under the Electricity Act, 2003 and Indian Telegraph Act, 1885, did not need the landowner's prior consent to lay transmission lines: it only needed to avoid causing unnecessary damage and to pay compensation for any damage caused. The Court found Power Grid had already obtained the required government approval, and that relocating the towers at that late stage (hundreds of the project's towers already built) was neither required by law nor arbitrary. Century Textiles' appeal challenging the towers' location was dismissed. However, the Court also held the High Court had no power to direct the District Collector to assess compensation, under the Telegraph Act, only a District Judge can determine compensation disputes, so it set aside that part of the High Court's order and left Century Textiles free to file a civil suit before the District Judge if it wanted compensation. The two connected appeals (Bihar and Jharkhand landowners) were decided the same way, with Power Grid's appeal allowed in the Bihar case.

Lesson Learnt

A licensee exercising statutory telegraph/transmission authority does not need a private landowner's consent to lay power lines across their land, but must pay fair compensation for any damage, and that compensation dispute must go through the correct forum (a District Judge under the Telegraph Act), not an ad hoc administrative process set up by a court.

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

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