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Supreme Court Directs ArcelorMittal to pay compensation for land acquired for Ballari Steel Plant

A group of farmers from Ballari had appealed to the Supreme Court against a decision to re-examine their appeal for enhanced compensation. In 2010, the Karnataka Industrial Areas Development Board purchased approximately 300 acres of land for the construction of ArcelorMittal’s steel plant at Kudatini in the Ballari district. It ordered ArcelorMittal to pay enhanced compensation of more than Rs 30 lakh each.

A group of farmers filed an appeal with the Supreme court after it rejected their request for increased compensation for the land out of 4865.64 acres in Ballari that had been acquired for the construction of a steel mill.

The appeal filed by B. Ravi Prakash and others was accepted by a bench of Justices Sanjay Kishan Kaul and Abhay S. Oka, who also ordered the beneficiary business to pay the owners the full amount due in accordance with the reference court’s judgment within three months.

The Karnataka High Court’s ruling that a notification must be sent to the Board was overturned by the Supreme court as “totally erroneous,” noting that a special land acquisition officer had already testified before the reference court.

Senior attorneys Devdatt Kamat and Sanjay M. Nuli represented the petitioners, and senior attorney Mukul Rohatgi led KIADB. The compensation, in this case, was set by the special land acquisition officer at Rs. 1.5 lakh per acre. The reference court increased the compensation in response to an appeal.

As a result of KIADB’s appeal, the Karnataka High Court overturned the award and remanded the case to the reference court to hear the appellant.

In their argument before the Supreme court, the landowners argued that because the beneficiary firm was the one for whose benefit the transaction was made, the KIADB was neither a necessary nor a proper party to the reference proceedings. The award had never been contested by the corporation. The court pointed out that the Board, which argued that it was a statutory body, could not contest the fact that the acquisition was made deliberately to benefit the company.

It also noted that a contract between the firm and the board, dated June 2, 2012, had a clause requiring the beneficiary company to pay an increase in land compensation in accordance with the ruling of the appropriate court.

The agreement further stated that the corporation had already deposited the initial compensation sum with the Board.

“According to the case’s facts, the beneficiary corporation is the one that received notice of the land’s impending acquisition and was responsible for paying the owners’ original compensation as well as additional compensation. Because of this, the High Court had no basis for concluding that the notice had to be sent to the Board in addition to the firm. In the circumstances of the case, there was no necessity to give notice to the Board “said the bench.

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