Industrial projects in West Bengal are unlikely to be affected by the Allahabad High Court judgment that questioned the legitimacy of invoking the Land Acquisition Act for private companies’ projects by the ‘public purpose’ tag.
Land and land reforms minister Abdur Rezzak Mollah said, “Our department is acquiring the land and handing it over to the West Bengal Industrial Development Corporation (WBIDC), a state agency. The ownership remains with WBIDC and the land is given on lease to private companies.”
Moreover, the state government highlights that the projects will create employment. “If the economic development and job creation clause is added, then it can be considered for public purpose,” said Mollah.
In January 2008, the Calcutta HC had ruled that the land acquisition in Singur for Tata Motors’ Nano project was for “public purpose”, as the compensation was paid from the state exchequer. WBIDC had paid the compensation.
Debanjan Mandal, partner, Fox & Mandal, said: “The land acquisition format in West Bengal could be challenged on the basis of this judgment if it indeed lays down new criteria defining public purpose. But, in doing so, one must also take into account a large number of judgments that have considered projects undertaken by private companies at the instance of the state to be for (a) public purpose.”
The West Bengal government, which has been facing serious problems with land acquisition, has a number of projects in the pipeline. There are at lease 10 proposed steel plants in the private sector involving an investment of Rs 1,09,550 crore for a capacity creation of 28.1 million tonnes.
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Of the 10 projects, JSW Steel opted for direct purchase of land and has completed it, while Videocon, too, has decided it will go for the direct purchase route.
Bhushan Steel, which has lined up a six million-tonne unit in the state, is among the eight companies that would be taking the acquisition route with the state’s help.
Neeraj Singal, managing director, Bhushan Steel, said: “The project in West Bengal has been declared as an industrial project. Moreover, the land will be given on a 99-year lease. Our land in Orissa was also leased to us. We don’t see a problem with this judgment.”