Supreme Court Allows Electricity Transmission Line Construction Subject to Compensation: Century Rayon vs. IVP Limited (2019)

Date of the Judgment: 27 November 2019

Citation: (2019) INSC 1157

Judges: N.V. Ramana, J., Sanjiv Khanna, J., Krishna Murari, J.

Can a landowner prevent the construction of electricity transmission towers on their property, even if the necessary permissions have been granted by the District Magistrate? The Supreme Court of India recently addressed this question in a case involving Century Rayon Limited and IVP Limited. This case clarifies the balance between private property rights and the public interest in infrastructure development. The judgment was delivered by a three-judge bench comprising Justices N.V. Ramana, Sanjiv Khanna, and Krishna Murari, with the opinion authored by Justice Sanjiv Khanna.

Case Background

The first respondent, IVP Limited, owns land in villages Vadavali and Mohane. They filed a suit for a permanent injunction against the Maharashtra State Electricity Distribution Company Limited (MSEDC) and Century Rayon Limited. IVP Limited claimed that MSEDC’s contractors were excavating their land to erect electricity transmission towers without prior approval. Century Rayon Limited, the appellant, had applied to MSEDC for a Line In Line Out (LILO) connection on the 100 KV Mohane-Ambernath line. The MSETCL sanctioned this on 24 May 2017, stipulating that Century Rayon Limited would resolve right-of-way issues at their own cost.

Timeline

Course of Proceedings

The trial court and the first appellate court restrained Century Rayon Limited and MSEDC from “making holes for erecting poles on any part of the suit lands without following due process of law” through a temporary injunction. The Bombay High Court dismissed Writ Petition (Stamp) No. 19175 of 2018, thereby upholding the lower courts’ orders. The interim order passed by the first appellate court on 25 April 2018, was set aside by the Bombay High Court on 17 May 2018. However, the Supreme Court noted that the electricity transmission towers had already been constructed on IVP Limited’s land.

Legal Framework

The Supreme Court referred to the Indian Telegraph Act, 1885, and the Electricity Act, 2003. Specifically, the court examined:

• Section 10 of the Telegraph Act, 1885: This section empowers the telegraph authority to place and maintain telegraph lines and posts on any immovable property. It also stipulates that the authority should cause as little damage as possible and pay full compensation for any damage sustained. The section states:
  
  “The telegraph authority may, from time to time, place and maintain a telegraph line under, over, along or across, and posts in or upon, any immovable property: Provided that: – (d) in the exercise of the powers conferred by this section, the telegraph authority shall do as little damage as possible, and, when it has exercised those powers in respect of any property other than that referred to in clause (c), shall pay full compensation to all persons interested for any damage sustained by them by reason of the exercise of those powers.”
• Section 16 of the Telegraph Act, 1885: This section deals with the exercise of powers conferred by Section 10 and disputes regarding compensation. It allows the District Magistrate to permit the telegraph authority to exercise its powers if there is resistance or obstruction. It also provides for the determination of compensation by the District Judge. It states:
  
  “(1)If the exercise of the powers mentioned in section 10 in respect of property referred to in clause (d) of that section is resisted or obstructed, the District Magistrate may, in his discretion, order that the telegraph authority shall be permitted to exercise them. (3) If any dispute arises concerning the sufficiency of the compensation to be paid under Section 10 clause (d), it shall, on application for that purpose by either of the disputing parties to the District Judge within whose jurisdiction the property is situate, be determined by him.”
• Section 164 of the Electricity Act, 2003: This section allows the appropriate Government to confer powers of the telegraph authority under the Telegraph Act, 1885, to any public officer, licensee, or person engaged in the business of supplying electricity.

These provisions, read together, allow for the laying of electricity transmission lines while ensuring that affected parties receive compensation for any damages.

Arguments

IVP Limited’s Arguments:

• IVP Limited argued that the construction on their land was illegal as it was carried out without their prior consent and without following due process of law.
• They claimed that the excavation and erection of towers were causing damage to their property.
• They sought a permanent injunction to restrain the construction activities.

Century Rayon Limited’s Arguments:

• Century Rayon Limited contended that the District Magistrate, Thane, had granted permission for the erection of towers and setting up of the transmission line on 28 August 2018.
• They argued that the transmission line was essential for their operations and was in the larger public interest.
• They highlighted that the majority of the work was already completed and that the balance of convenience was in their favor.
• They relied on the judgment of the Supreme Court in Power Grid Corporation of India Limited v. Century Textiles and Industries Limited and Others, which recognized the importance of unobstructed access for laying down electricity transmission lines.

MSETCL’s Arguments:

• MSETCL stated that the installation of transmission lines for High Voltage Electricity is a policy decision of the Government and for the public benefit at large.
• They clarified that the service line is not exclusive and they would be entitled to tap the said service line for providing electricity to other consumers.

Submissions Table:

Issues Framed by the Supreme Court

The Supreme Court did not frame specific issues but considered the following core questions:

• Whether the High Court was correct in upholding the interim injunction order passed by the lower courts.
• Whether the District Magistrate’s order granting permission for the erection of towers should be given due consideration.
• Whether the balance of convenience favored the grant of an injunction or the completion of the transmission line.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues:

Authorities

The Supreme Court considered the following authorities:

• Power Grid Corporation of India Limited v. Century Textiles and Industries Limited and Others [(2017) 5 SCC 143] – Supreme Court of India: This case was cited to emphasize the importance of unobstructed access for laying down electricity transmission lines in the larger public interest. The court noted that this case held that the appropriate government could confer powers of the telegraph authority to entities engaged in supplying electricity.
• Section 10 of the Indian Telegraph Act, 1885: This provision empowers the telegraph authority to place and maintain telegraph lines and posts on any immovable property, subject to causing minimal damage and paying full compensation.
• Section 16 of the Indian Telegraph Act, 1885: This section outlines the procedure for dealing with resistance or obstruction to the exercise of powers under Section 10 and for resolving disputes regarding compensation.
• Section 164 of the Electricity Act, 2003: This provision allows the appropriate Government to confer powers of the telegraph authority under the Telegraph Act, 1885, to any public officer, licensee, or person engaged in the business of supplying electricity.

Authority Consideration Table:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Supreme Court relied on Power Grid Corporation of India Limited v. Century Textiles and Industries Limited and Others [(2017) 5 SCC 143] to emphasize the importance of unobstructed access for laying down electricity transmission lines in the larger public interest. The court observed that the said judgment held that the appropriate government could confer the powers of the telegraph authority to entities engaged in supplying electricity.
• The Court explained and applied the provisions of Section 10 of the Indian Telegraph Act, 1885, stating that the telegraph authority has the power to place and maintain telegraph lines and posts on any immovable property, subject to causing minimal damage and paying full compensation.
• The Court also explained and applied the provisions of Section 16 of the Indian Telegraph Act, 1885, which provides the procedure for dealing with resistance or obstruction to the exercise of powers under Section 10 and for resolving disputes regarding compensation.
• The Court also explained and applied the provisions of Section 164 of the Electricity Act, 2003, which allows the appropriate Government to confer powers of the telegraph authority under the Telegraph Act, 1885, to any public officer, licensee, or person engaged in the business of supplying electricity.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• Public Interest: The Court emphasized the larger public interest in the development of infrastructure like electricity transmission lines. It noted that these lines are essential for the growth and development of the country.
• District Magistrate’s Order: The Court gave due consideration to the order of the District Magistrate, Thane, which granted permission for the erection of towers and setting up of the transmission line, subject to payment of compensation to IVP Limited.
• Status of Construction: The Court noted that 80% of the work of laying the transmission line was already completed and that the line would have been operationalized but for the injunction order.
• Balance of Convenience: The Court held that the balance of convenience did not justify the continuation of the injunction order in favor of the first respondent.
• Compensation: The Court directed Century Rayon Limited to make an ad hoc payment of Rs. 20,00,000/- (rupees twenty lakhs only) in addition to the payments already made, subject to the outcome of the civil suit or the proceedings under the Telegraph Act for quantifying the compensation payable to IVP Limited.

Sentiment Analysis of Reasons:

Fact:Law Ratio:

Logical Reasoning:

The Court considered the alternative interpretation of the law, that is, the lower court’s interpretation of the law, which was in favour of the injunction. However, the Supreme Court rejected the same as not being in the larger public interest.

The Supreme Court concluded that the continuation of the injunction was not warranted and justified in law. The Court set aside the impugned order and the injunction order, subject to the appellant making an ad hoc payment of Rs. 20,00,000/- to the first respondent, in addition to the payments already made. The Court stated that the payment made would be subject to the outcome of the civil suit or the proceedings under the Telegraph Act for quantifying the compensation payable to the first respondent.

The court quoted the following from the judgment:

“Clearly, therefore, the balance of convenience does not justify passing of an interim injunction order in favour of the first respondent.”

“The decision highlights the imperative and the need for unobstructed access for laying down the electricity transmission lines in the larger public interest as these are essential requirements for growth and development of the country, economy and well-being of the citizens.”

“Continuation of injunction is not warranted and justified in law.”

Key Takeaways

• ✓ The Supreme Court has clarified that the laying of electricity transmission lines is a matter of public interest and should not be obstructed by private landowners.
• ✓ The District Magistrate’s order granting permission for the erection of towers is to be given due consideration.
• ✓ The balance of convenience, especially when a substantial portion of the work is already completed, should favor the completion of the transmission line.
• ✓ Landowners are entitled to compensation for any damage caused due to the erection of towers and laying of transmission lines.
• ✓ The court has emphasized that the larger public interest outweighs the private interests of the landowner in matters of infrastructure development.

Directions

The Supreme Court directed the following:

• Century Rayon Limited is to make an ad hoc payment of Rs. 20,00,000/- (rupees twenty lakhs only) to IVP Limited, in addition to the payments already made.
• On the said payment being made, the MSEDC and their contractors would be entitled to continue and complete the work of erection of the electricity transmission towers on the land of IVP Limited.
• The payment made would be subject to the outcome of the civil suit or the proceedings under the Telegraph Act for quantifying the compensation payable to IVP Limited.

Development of Law

The ratio decidendi of the case is that in matters of public interest, such as the laying of electricity transmission lines, the balance of convenience favors the completion of such projects, subject to payment of compensation to affected landowners. This judgment reinforces the principle that private property rights must be balanced with the larger public interest. This judgment does not change the previous position of the law.

Conclusion

In conclusion, the Supreme Court allowed the appeal, setting aside the injunction order and permitting the completion of the electricity transmission line, subject to the payment of an ad hoc compensation. The judgment emphasizes the importance of infrastructure development in the public interest and clarifies the legal framework for laying transmission lines, while ensuring that affected landowners receive fair compensation.