SC revokes TN order, lets GAIL lay Kochi-Bangalore pipeline

GAIL (India) Ltd's Kochi-Bangalore gas pipeline project crossed the final hurdle with the Supreme Court on Tuesday revoking the Tamil Nadu government's three-year-old ban on laying gas pipelines along agricultural lands.

GAIL's Rs3,400-crore natural gas pipeline project had caused consternation among farmers in seven districts of the state, who raised objections to the project that did not benefit them, although it was a  project of national importance.

The Supreme Court on Tuesday stuck to the stand of the Madras High Court, which overturned the state order, and permitted the scheme. The SC also pulled up the state government for following a "vote bank-minded" policy response to projects of public interest.

A bench of Chief Justice T S Thakur, Justice A K Sikri and Justice R Banumathi, confirming an order of the Madras high court, said though the Tamil Nadu government was supportive of the scheme in the beginning, it passed orders against it after people of seven districts raised objections. The state did this with an eye on votes, the judges said.

GAIL's pipeline from its Kochi terminals to consumers in Bengaluru in Karnataka, was to pass through farmland in Coimbatore, Tirupur, Erode, Namakkal, Salem, Dharmapuri and Krishnagiri. The state had earlier supported the project, but later, following protests by local farmers, argued that a pipeline across farmland would devalue property and adversely affect farming.

Besides, the state government argued that Gail was offering only 10 per cent of the market value as right of passage fee in compensation. Due to pressure and public sentiment, the Tamil Nadu industries department issued an order on 2 April 2013 directing GAIL to take steps to lay the Kochi-Kuttanad-Bengaluru pipeline along national highways, without affecting agricultural land.

Gail them moved the madras High court against the order and the HC had, on 25 November 2013, quashed the order, observing that "there is overwhelming public interest" in favour of the gas pipeline project.

Adopting a similar stand on Tuesday, the Supreme Court helped GAIL cross the final hurdle, stating that it is a central government and public sector entity under the Union power ministry.

No state government can stop a scheme by a Union ministry , the judges said, adding that the Tamil Nadu government had no jurisdiction to pass orders that GAIL lay the pipeline along national highways instead of through agricultural land.

The judges said they quashed the Tamil Nadu government order as being without jurisdiction.

GAIL had now offered to award 3 per cent additionally as compensation. For the purpose of compensation GAIL will have to take into account the market value of the land on January 2016, the judges said.

They also said the Tamil Nadu government should pass appropriate orders to ensure that the compensation is distributed evenly to all farmers the project affects.

The GAIL pipeline project will be of benefit to Tamil Nadu, just as it is to Kerala and Karnataka, the judges said, adding that the project also did not have any adverse impact on the ecology.