Rule of Law is one of the basic structures of Indian Constitution. Equality before law is a principle of Rule of Law. Constitution is the supreme law of the land as sovereignty lies in the people of India.
However, the Rule of Law often faces challenges due to Austinian ideology which states that Law is the command of sovereign backed by sanction. Still, Rule of Law including its principle of equality is mostly litigated concepts of Judiciaries of the world. Thus, the principle invoked in the judgment of Anil Agarwal Foundation Etc. Etc. vs State of Orissa is relevant and prevalent as it is the key principle of law, which originated from English common Laws and followed by democracies of the world.
Case Summary
In the Supreme Court of India
(Before M.R. Shah and Krishna Murari, JJ.) [1]
Parties to the Case
Appellant
Respondents
Anil Agarwal Foundation Etc. Etc.
State of Orissa and Others [2]
Case Details
Civil Appeal Nos. 1144–1146 of 2011 [3]
Decided on April 12, 2023 [4]
Facts
Anil Agarwal Foundation altered its name from Private company to Public company, that is, from Vedanta Foundation to Anil Agarwal Foundation, respectively. It is notable that demand for land required was highly exaggerated. Thus, huge tract of Agricultural land is acquired by Anil Agarwal Foundation.
The land acquired by Anil Agarwal Foundation was adjacent to Wildlife Sanctuary, with two rivers passing from acquired land, and is owned by the State. Thus, undue advantage is gained by Anil Agarwal Foundation from Odisha Government.
Issues
The case concerned acquisition and requisition of land by Anil Agarwal Foundation. A company which changes its name for acquiring huge tracts of land. Accordingly, the company was held liable by Court for the same.
Hence, the central issue was that:
Whether the Anil Agarwal Foundation, the Beneficiary Company, is a public company in terms of the definition under Section 3(1)(IV) of the Companies Act, 1956 and can the private guarantee limited company be converted to public company under Section 25 of the Companies Act? [5]
The Hon’ble High Court answered the same. However, whether the statutory provisions are vitiated by mala fides and favouritism or not, this is a major point of concern in this case. There are other things as well but the entire proceeding revolves around these issues and concerns.
Ruling
The Supreme Court stated that the High Court was justified in setting aside the entire acquisition proceedings due to non-compliance of the statutory provisions, by Anil Agarwal Foundation and State Government, under the Land Acquisition Act of 1894 and the Land Acquisition (Companies) Rules, 1963.
These statutory provisions were vitiated by mala fides and favouritism of Odisha Government. The entire acquisition proceedings are violative of Article 14 of the Constitution of India [6]. Thus, there is non-application of mind on relevant aspects.
The Supreme Court, by completely agreeing with the view of the High Court, held that all appeals shall be dismissed and Anil Agarwal Foundation has to deposit Rs. 5 lakhs [7] as compensation.
Rationale
The Odisha government had extended undue benefits and undue largesse to the Vedanta Foundation. The Supreme Court listed the reasons behind its conclusion, which includes following arbitrary actions of the State Government:
Immunity from reservation laws of the State
Four-lane road from Bhubaneswar to the proposed site
Exemption from all state levies, taxes, and duties
No-objection certificate for the project from the State Pollution Control Board
All clearances from the Central Government as well as environmental clearances [8]
These extended undue benefits and undue largesse is in accordance with the MoU, which is signed by the Vedanta Foundation and the Odisha government in July 2006 for setting up the university. The following arbitrary actions are unconstitutional as well as not in accordance with Land Acquisition Act 1894 as the proposed university is a private company.
The land is not a disputed land as the land is acquired by the State government under the concept or Doctrine of Public Trust. The government was required to deal with the lands belonging to private landowners, particularly, agricultural landowners in accordance with law, thus Supreme Court observed that there is non-application of mind.
The judges in their judgment took note of Wildlife century which is adjacent to that land and has two rivers “Nala” and “Nuanai”: large scale construction of proposed university was adversely affecting the sanctuary, the entire ecosystem, and the ecological environment. [9]
Conclusion
In general, the Anil Agarwal Foundation case remains predominant and continues to reinforce Rule of Law including its principle of equality. In this case, mala fides and favouritism violates Rule of Law, Principle of Natural Justice, Article 14 of the Indian Constitution [10] and Doctrine of Public Trust.
Updates
Update on Legal Significance
The judgment in Anil Agarwal Foundation Etc. Etc. v. State of Orissa and Others continues to be cited in constitutional and land acquisition jurisprudence for reaffirming that acquisition of land for companies must strictly comply with statutory requirements and constitutional mandates. Courts have relied upon this decision to emphasize that merely changing the name or status of a company cannot be used as a device to secure public land.
Update on Rule of Law and Article 14
Subsequent judicial discussions have reiterated that mala fides, favouritism, and arbitrary exercise of executive power in land acquisition directly violate Article 14 of the Constitution of India. The principles highlighted in this case have strengthened judicial scrutiny over State actions involving public resources.
Update on Environmental and Public Trust Concerns
The observations regarding the proximity of the acquired land to a wildlife sanctuary and the presence of rivers “Nala” and “Nuanai” have gained relevance in later environmental litigation. The case is frequently referred to while applying the Doctrine of Public Trust and sustainable development principles, especially where large-scale projects threaten ecological balance.
Update on Governance and Policy Impact
The ruling has had a deterrent effect on State Governments entering into Memorandums of Understanding with private entities without due diligence. Policy discussions now increasingly stress transparency, public interest, and compliance with land acquisition laws before granting exemptions, incentives, or special privileges to private foundations or companies.
Continuing Relevance
As of today, the Anil Agarwal Foundation case remains a guiding precedent on misuse of State power, reinforcing the supremacy of the Constitution, the Rule of Law, and equality before law. It continues to serve as a cautionary example against arbitrary acquisition of land under the guise of public purpose.
End Notes
SCC OnLine SC 407.
Ibid.
Ibid.
Ibid.
Ibid.
The Constitution of India Act, 1950.
SCC OnLine SC 407.
Ibid.
Ibid.
The Constitution of India Act, 1950.
Award-Winning Article Written By: Ms.Anamika Tyagi
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ANAMIKA TYAGI
Anamika is pursuing her PhD in Environmental Law (specifically Water Law) under the guidance of Prof. (Dr.) Madhuri Parikh at the esteemed Institute of Law, Nirma University, Ahmedabad. She is an independent researcher and an Advocate enrolled at the Bar Council of Gujarat. She has been practicing at the Principal City Civil Court, Gandhinagar. She has also completed her L.L.M in Constitutional and Administrative Laws from Nirma University. She has a B.B.A L.L.B. (5 year integrated) from Gujarat University.
She has interests in different aspects of Law including Constitutional and Administrative Law, Environment and Cyber Law, Human Rights Law, etc. She has 8 years of research experience in multidisciplinary fields: Law, Sociology, Psychology, etc. She has done internships, conferences, workshops, etc. in different fields of Law.
Her work “Reiterating the Principle of Absolute Liability in the Light of Oleum Gas Leakage Case” was posted on Social Science Research Network (SSRN).
Her work “Gender Justice: A Pathway to Human Rights” was published as a Chapter in book Advancement of Human Rights in India: Contemporary and emerging challenges (Sage Publications), which is also co - authored and edited by Dr. Shrut Brahmbhatt.
Her Case Comment on “Jagjeet Singh vs Ashish Mishra” (Voices Unheard: Empowering Victims at every stage of Justice) was published in the Legal Specs Journal. She has also theoretically and practically worked on the same via workshop.
Her works are published in National and International Journals.
Her works are cited by the authors in Journals, including Legal Service India.
Her forthcoming paper will be on the Permanent Crisis of Water in India, including different Concepts, Laws and Pollution.
She is available at different social media websites: Linkedin, Academia, Scribd, ResearchGate, SSRN, etc. Her hobbies are poetry, singing, etc.
