States free to acquire land:Supreme Court

This Supreme Court judgment is sure to take the wind out of political leaders, including Mamata Banerjee, opposing largescale acquisition of land to set up projects, particularly those in the private sector, in different states.The apex court ruled on Friday that any project giving largescale employment has to be treated as one serving public purpose, thus legitimising the role of the state in facilitating land acquisition.Earlier, the narrow interpretation of ‘public purpose’ entitled the state to acquire large tracts of land only if every component of the project to be set up on the land passed the test of public benefit.Departing from this, the SC gave a wide meaning to the words “public purpose” and said, “If the project taken as a whole is an attempt in the direction of bringing foreign exchange, generating employment opportunities and securing economic benefits to the state and the public at large, it will serve public purpose.” Accepting in toto the arguments advanced by solicitor general G E Vahanvati, who appeared for Andhra Pradesh, a bench of Justices C K Thakker and D K Jain cleared the large tracts of land acquired to set up an integrated project, to be implemented through Andhra Pradesh Infrastructure Investment Corporation (APIIC), which would make Hyderabad a world-class business-cum-leisure tourism destination.The fallout of this judgment is significant, as the SC held that “development of infrastructure” is legal and legitimate “public purpose” for exercising power of eminent domain.“Simply because a company has been chosen for fulfilment of such public purpose does not mean that the larger public interest has been sacrificed, ignored or disregarded,” said the SC, providing the embattled Buddhadeb Bhattacharjee government a sound reasoning to meet arguments from Mamata Banerjee against Tata’s Nano project at Singur.To judge ‘public purpose’, the project has to be taken as a whole and must be judged on whether it is in larger public interest by splitting it into different components and considering if each served public good, the SC said.The judgment is in keeping with the requirements of the time when the public sector has ceased to occupy the “commanding heights” of economy, ceding ground to the private sector. But while the domination of the public sector has diminished, there is resistance to the state playing the enabler for the private sector.The SC applied it more to the joint venture, given the nature of the case being discussed. The joint venture mechanism to implement the policy, execute the project and achieve lawful public purpose to realize the goal of larger public good would neither destroy the object not vitiate the exercise of power of public purpose for development of infrastructure, the bench said.“The concept of joint venture to tap resources of private sector for infrastructural development for fulfilment of public purpose has been recognised in foreign countries as also in India in several decisions of this court,” it said. Except in cases where malafide was writ large in the land acquisition, the state was the final decision maker on what constituted ‘public purpose’ and courts could not substitute their opinion with that of the state’s, the bench said.