Suzlon Energy Ltd. vs. Jayanthi: Supreme Court Ruling on Compensation for Land Use in Power Infrastructure

The case of Suzlon Energy Ltd. vs. Jayanthi & Others addresses a critical legal issue surrounding the use of private land for power infrastructure projects under the Indian Telegraph Act, 1885. The Supreme Court examined whether affected landowners were entitled to greater compensation and whether their agricultural activities would be unduly hampered by the project.

Background of the Case

Suzlon Energy Ltd., a company involved in renewable energy projects, was granted permission under Section 16(1) of the Indian Telegraph Act, 1885, to enter upon the land of certain individuals for the purpose of erecting electric towers. The affected landowners challenged this permission in the Madras High Court, raising concerns about the placement of towers, the route taken for transmission lines, and the adequacy of compensation.

The High Court’s Single Judge dismissed their claims, upholding Suzlon’s permission to proceed. However, the Division Bench of the High Court issued certain directions, including conducting an inquiry under Section 17 of the Act, which allows landowners to request a relocation of infrastructure if it affects their use of the land. Aggrieved by these directions, Suzlon Energy Ltd. approached the Supreme Court.

Read also: https://judgmentlibrary.com/assa-singh-vs-shanti-parshad-supreme-court-rules-on-ejectment-and-civil-court-jurisdiction/

Arguments by the Petitioner (Suzlon Energy Ltd.)

• The petitioner argued that they had acted in accordance with Section 16(1) of the Indian Telegraph Act, which allows public utility companies to install power transmission lines with government approval.
• They contended that the Division Bench’s order directing an inquiry under Section 17 was unnecessary since the landowners had already been given due notice and compensation.
• The company also expressed willingness to increase the compensation offered to the landowners, initially proposing a 300% increase, which was later raised to 500% more than the determined amount.
• They assured the Court that no underground cables would be laid and that agricultural operations on the land would remain largely unaffected except at the locations where poles or towers were installed.

Arguments by the Respondents (Landowners)

• The landowners contended that the erection of electric towers significantly impacted their ability to cultivate the land.
• They argued that the process followed by Suzlon Energy Ltd. was not transparent and that they were inadequately compensated for the disruption caused.
• The respondents requested that an alternative route for the transmission lines be considered to minimize the impact on agricultural activities.
• They welcomed the offer of increased compensation but insisted that their right to contest the location of the towers should not be curtailed.

Supreme Court’s Judgment

The Supreme Court bench, comprising Uday Umesh Lalit and S. Ravindra Bhat, examined the relevant provisions of the Indian Telegraph Act and the impact of the infrastructure project on landowners.

The Court observed:

“The petitioner is willing to pay 500 per cent more compensation to the affected parties. The agricultural operations of the affected parties will not in any way be prejudiced except to the extent of erection of poles or posts to carry overhead wires.”

Based on the assurances given by Suzlon Energy Ltd., the Supreme Court ruled as follows:

• The Division Bench’s order directing an inquiry under Section 17 was set aside.
• The company’s assurance to increase compensation by 500% was recorded and made binding.
• The competent authority was directed to determine the exact compensation in accordance with the law within two months.
• Suzlon Energy Ltd. was ordered to pay the increased compensation within six weeks of the final determination.
• The company was bound by its assurance that only poles and overhead wires would be used, without underground cables.

Impact of the Judgment

The ruling in this case has several important implications:

• Clarity on Land Acquisition for Infrastructure Projects: The judgment reaffirms that companies utilizing private land for power projects must ensure fair compensation and minimize disruption to landowners.
• Increased Compensation as a Precedent: The Court’s acceptance of a 500% increase in compensation may influence future cases involving similar disputes between private landowners and infrastructure companies.
• Balancing Development and Property Rights: The decision strikes a balance between public interest in power infrastructure and private landowners’ rights to fair compensation and continued use of their land.
• Binding Corporate Assurances: The ruling reinforces that companies making commitments in court must adhere to them, ensuring accountability.

Conclusion

The Supreme Court’s ruling in Suzlon Energy Ltd. vs. Jayanthi & Others establishes a crucial precedent for infrastructure projects that impact private landowners. By ensuring fair compensation and upholding legal safeguards, the judgment reaffirms that development must be carried out with due regard for the rights of affected individuals.

Read also: https://judgmentlibrary.com/eviction-rights-of-non-resident-indian-landlords-supreme-court-upholds-nri-landlords-right-to-recover-possession/

Petitioner Name: Suzlon Energy Ltd..
Respondent Name: Jayanthi & Others.
Judgment By: Justice Uday Umesh Lalit, Justice S. Ravindra Bhat.
Place Of Incident: Tamil Nadu.
Judgment Date: 18-11-2021.

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