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Synopsis

In a major development, Steel behemoth ArcelorMittal has recently informed the Supreme Court that it was willing to return over 2643 acres of land, acquired for it to set up a plant at Ballari in Karnataka and forfeit Rs 267 crore paid by it.

Senior advocate A M Singhvi, appearing for the petitioner-company submitted that in view of the changed scenario, ArcelorMittal was not desirous of keeping the land and would return the entire land of 2643 acres. 

The amount paid of Rs 267 crores can also be forfeited by the Karnataka Industrial Areas Development Board, he said.

A bench of Justices Sanjay Kishan Kaul and Sudhanshu Dhulia issued notice to the Karnataka Industrial Areas Development Board (KIADB) on a writ petition filed by ArcelorMittal India Pvt Ltd.

The court also asked the board to clarify if it would retain the land after payment of compensation to the landowners or return it back to them.

The bench scheduled the matter for hearing on October 30, 2023.

On January 31, 2023, acting on a plea by a group of farmers, the Supreme Court had ordered ArcelorMittal to pay enhanced compensation of more than Rs 30 lakh each for about 300 acres of land acquired by KIADB in 2010 for setting up a steel plant of the company at Ballari. 

"Surprisingly, four days after this judgement, KIADB issued a show-cause notice on February 04, 2023, and then on March 03, 2023, purporting to terminate the lease cum sale Agreement of November 14, 2018 executed between the petitioner and KIADB. By way of the said notice issued under Section 34-B (1) of the 1966 Act, the KIADB has threatened to resume the possession of the allotted land," the plea filed by the petitioner-company stated.

Terming the decision as "completely illegal and arbitrary and violative of Articles 14, 19(1)(g) and 21 of the Constitution, the company said that the direct effect of the show-cause notice threatening resumption of the land was that the KIADB was seeking to unjustly enrich itself at the cost of the petitioner-company.

"On one hand, the petitioner risks to lose substantial amount of money running into hundreds of crores. On the other, the KIADB will resume the lands causing irreparable and irreversible damage and prejudice to the Petitioner. KIADB being a statutory board formed under the 1966 Act and a State under Article 12 of the Constitution of India cannot resort to such arbitrary and illegal methods," it said.

The petitioner-company said that in these peculiar circumstances, the acquired lands ought to be directed to be returned to the original landowners instead of resumption by the KIADB. 

It added that it had paid the entire compensation as originally awarded to the landowners.

"The landowners have been claiming that the value of the land is substantially higher than the acquisition value. Therefore, upon the acquisition being set aside, to balance equities, the high-value lands may be returned to the landowners and the petitioner should be allowed to seek refund of the compensation already paid from KIADB, ArcelorMittal asserted. 

The petitioner-company also said that the KIADB failed to allot the promised 136.33 acres of lands, the central piece that could make the entire land contiguous. 

"The lack of availability of contiguous land rendered the petitioner unable to obtain the sanctions and permissions for the commencement of construction. The petitioner could not utilise the said lands due to the continued uncertainty over the compensation costs which are still pending in various litigations before different Courts in Karnataka," the company's plea said.

It also claimed that the State too caused considerable delay in issuing requisite mining leases, which were essential for setting up the steel plant of the petitioner.

Notably, the court's January 31 judgment pertained only to 234.40 acres of land. However, there are several litigations pending at the behest of the landowners before the reference court, Karnataka High Court for enhancement of compensation in respect of about another 242 acres of land. 

"This also has led to the entire project of the petitioner being engulfed with uncertainty. The petitioner's interests have been jeopardized completely as there are no financial certainties," the plea moved by ArcelorMittal said.

The company sought a direction from the court to quash the show cause notice issued by KIADB on February 4 and March 3, 2023 and return the entire land upon cancellation to the landowners without any liability upon it.

In the alternative, it asked the court to use Article 142 of the Constitution to quash the entire acquisition and the land measuring 4865.64 acres be returned to the landowners with liberty to seek refund of compensation already paid.

Case Title: ArcelorMittal Vs KIADB