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Madras HC Slams BSNL For Unjust Enrichment As They Fail to Utilize Land For 20 Years 

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Madras High Court criticized BSNL on Wednesday for essentially taking individual A. S. Marimuthu’s property by paying a meagre sum of Rupees 1.

Facts of the case

Here, the petitioner was the owner of 59 cents land that was purchased by him in the year 1999 by paying a sale consideration. The petitioner acquired this land with the noble intention of building a memorial for his father, who is said to be a philanthropist and a well-known figure in the community. 

However, in 2001, a divisional engineer of BSNL (one of the respondents) visited the petitioner and asked him to sell his land since it was in an ideal location for the respondent to build a telephone exchange for BSNL. 

The petitioner agreed to give his land to BSNL free of charge, if the structure in which the telephone exchange will function is named after the petitioner’s father. 

The respondents then took the stance that they cannot receive the land as a donation or settlement and thus asserted on a sales contract being issued in exchange for a nominal payment. Even to this request of BSNL, the petitioner consented.

To the petitioner’s surprise, no structure has been erected in more than 13 years, and the petitioner discovered that the objective of selling the land for practically free has been defeated, leaving the petitioner with no other alternative than to submit the current writ petition before this Court.

Arguments before the Court 

Based on the facts of the case, the petitioner simply argued that because there had been no construction or any development for over 13 years on the land, the petitioner seeks the dismissal/ cancellation of the property in favour of the petitioner.

Whereas, on behalf of the respondents, a counter-affidavit has been submitted. In the counter-affidavit, it is stated unequivocally that the building of the telephone exchange was halted owing to procedural rules and administrative problems. It is also specified that if a structure is constructed, it will not be named after the petitioner’s father. 

Thus, the property is owned by BSNL, and the petitioner has no authority to seek reconveyance.

Observation made by the Court 

The Court stated at the beginning that if the circumstances of the current case were presented to any such sensible person, he would be surprised and bewildered, and he would never regard this transaction to be reasonable and fair.

The court also said that – “The writ petition is a textbook as to how the instrumentality of a state has attempted to unjustly enrich itself and had thereby virtually grabbed the property belonging to the petitioner measuring an extent of 59 cents by paying a paltry sum of just Rupee one”. 

The court further added that when the State or its agents enter into a contractual agreement, it is required that they should maintain a higher amount of discipline, fairness and rationality, and it should not be judged from the perspective of a private individual who may be motivated solely by the desire to make a monetary benefit from the transaction. Therefore, BSNL, as a state-owned enterprise, was obligated to act reasonably and fairly in its interactions with citizens. 

The Court lastly stated that every person of this nation has a fundamental right to property under Article 300A of the Indian Constitution and that the State or its functionaries cannot expropriate a citizen’s property.

Court’s Decision

The court said that the sale in issue violates principles of equality, good conscience and so plainly violates public policy as well.

Furthermore, the Court directed BSNL to pay the petitioner the actual price of the property as it stood on the date of implementation of the sale deed, which was on September 6, 2001, plus interest at the rate of 9 percent per annum from September 6, 2001, until the payment date of the market value of the property to the petitioner.

In the alternatives, the Court gave BSNL the right to reconvey the land to the petitioner if no request to build a telephone exchange is made in the property.

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