SC slams Gujarat minister for illegal sale of agricultural land

Gujarat government had gone out of its way to allow Mumbai-based company to sell land to bauxite processing unit

By Anupam Chakravartty
Published: Friday 24 January 2014

The Supreme Court has slammed the decision of Gujarat revenue minister, Anandiben Patel, to allow resale of agricultural land in Kutch district, saying it was arbitrary and in violation of the law. The case relates to transfer of 39 acres (15.7 hectares) in Bhuj area in 2010, when a district collector allowed a metals company to sell prime agricultural land, subverting provisions of Land Tenancy Act that prohibits diversion of agricultural land for non-agricultural purposes. What's more, the transfer of land allegedly happened between two companies owned by the same family.

The Supreme Court bench of justices H L Gokhale and Kurian Joseph said said the transaction was illegal while hearing an appeal filed by Congress leader, Dipak Babaria, from Bhuj who said the land resale was a clear case of dereliction of duty on part of the collector and that it happened at the behest of the minister. Babaria had filed a petition before the Gujarat High Court in 2012. The high court dismissed the petition, saying there was no illegality in the sale of  land in Kukma and Moti Reldi villages of Bhuj taluka. However, according to the documents presented in court, it was established that the district collector, under pressure from the minister, allowed a Mumbai-based metals manufacturing company, Indigold, to sell the land to an alumina processing company, Alumina Limited. 

Let off with fine
Although the court did not order action against the minister or the district collector, it ordered Alumina Limited to pay Rs 3.15 crore fine to the state government for causing a loss to the exchequer. The court referred to the provisions of Land Tenancy Act. Under some special provisions, the government can allow sale of  agricultural land to bonafide industrial companies, but in this case, the Gujarat government allocated land to one company in 2003 and allowed it to sell it to another. The court said in such a situation, the district collector should have taken possession of the land when Indigold Limited said that it was facing losses and, therefore, unable to develop it and should have put it up for auction. According to Babaria's petition, by not opting for the auction route, the state exchequer lost Rs 250 crore if one takes into consideration market rates that are prevailing in Bhuj and surrounding areas. The court, however, did not take market rates into consideration, and has allowed the company to continue by paying the fine to the state government. 

Dubious ownership
The petitioner questioned the sale of land for another reason. The justification given for the sale was that Indigold was running in losses, but then it was sold to a company held by the same family, says the petition. The sale deed for the land transfer, which amounts to about Rs 1.21 crore, is signed for Indigold by Nitin Patel and for Alumina Ltd by his brother, Nilesh. The petitioner also contended that while Nitin is managing director of Alumina Limited, his brother, Nilesh is the company's director for legal and human resources. Documents show a person named Hanuman Rao Kharat from Mumbai as the chairperson-cum-managing director of Indigold when the company was allotted the land in 2003. Nitin took over the company at a later stage. Neither Alumina Limited nor Indigold officials were available to comment on the case.

Irregularities in allotment
Government records in form of file notings of revenue department and RTI documents presented by petitioner in the court reveal several discrepancies in the allotment followed by sale of land to these companies. Barely a few months after the Vibrant Gujarat summit of 2009, Alumina Limited's managing director, Nitin, approached minister Anandiben in June 2009. Alumina Limited had signed a memorandum of understanding with Gujarat government to set up an alumina processing refinery in the state. In July 2009, Nitin wrote to Chief Minister Narendra Modi, seeking to purchase the land from Indigold. When the chief minister's secretary, A K Sharma, sought a factual report from the collector of Bhuj, he sent Alumina Limited's proposal along with a note which stated: “Taking into consideration the reasons shown in the submission of Alumina Refinery Company addressed to the honourable chief minister, dated 18.6.2009, it is submitted to grant permission for purchasing land.” 

In September that year, the revenue minister gave her approval. “Land is of private ownership. As a special case, permission be granted for sale,” she said while approving the sale. This happened despite chief secretary of the state and revenue secretary asking the collector to follow the due procedure of retaining the land for the state government and then make the necessary allotment as per rules. 

JVC with state corporation 
The Rs 30 crore-project is said to be the first of its kind in Gujarat, with technology supplied to it by National Aluminum Company Ltd. (NALCO), a  Government  of  India  enterprise.  Gujarat Mineral Development Corporation (GMDC) is Alumina Limited's joint venture partner, and has 26 per cent of the equity share capital in it. According to the MoU signed with GMDC, it will supply to refinery 25,000 tonnes of bauxite ore locally mined from Kutch district. According to the industries department of Gujarat, the refined alumina chemicals produced from this unit will help the state in getting better revenues as compared to revenue from raw ore. The company will be manufacturing alumina chemicals such alumina trihydrate, calcined alumina and sodium aluminate.

Farmers from nearby villages have been protesting against the plant since 2011, saying pollution from the plant would harm agricultural production. The area supports dryland agriculture; farmers produce tissue culture-based  dry-dates, says the petition. Besides, over the years these villages have planted thousands of kesar variety of mango trees, and have been cultivating papaya, wheat, cotton, groundnut, among a wide variety of crops.




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