The more the Supreme Court writes, the more the land owners seem to lose.
Every political or economic question leaves an impression on the courts. The present concern is land acquisition for private companies. So the number and size of judgments on this problem seem to be getting bigger. In last week’s judgment of 130 pages, Sooraram vs Dist Collector, the Supreme Court dealt elaborately with ticklish subjects like the meaning of ‘public purpose’, the extent of sovereign power to take over private property and the validity of the procedure for acquisition when the land is meant to be given to a private corporation.
Land owners seem to have lost all possible legal arguments for the future after this well-considered judgment. This is what the judges say: “Prima facie the government is the best judge as to whether public purpose is served by the acquisition; the courts are not entitled to go behind the declaration of the government regarding public purpose; if the acquisition is through a statutory authority, the court would presume that it is for public purpose; even if the authority makes losses in the process, this presumption would not be rebutted; if the government makes even a ‘trifling’ sum for the acquisition on behalf of an industry, the private purpose could be turned into public purpose; the special procedure for acquisition for a company would come into play only if it bears the entire cost; the take-over proceedings could be initiated even before the planning project.”
The court deals with three main sore points of land acquisition law. The first, ‘public purpose’, has been unsatisfactorily defined in Section 3(f) of the Land Acquisition Act. It has also been exhaustively dealt with in a number of judgments. The court has admitted that “the expression is incapable of precise definition”. The tenth Law Commission report stated that if an exact definition is enacted, it would become rigid and leave no room for alteration “in the light of changed circumstances”.
Though the section specifically says that public purpose “does not include acquisition of land for companies”, that is exactly what the state governments are indirectly doing now, “in the light of changed circumstances”. The Supreme Court also says that “public purpose should be liberally interpreted, not whittled down by logomachy[sic]”. It emphasised that the mere fact that the immediate use is to benefit a particular individual would not prevent the purpose being a public one, if in the result it is conducive to the welfare of the community.
Secondly, the court also swore by the theory of eminent domain, which in essence is the state’s power to acquire private property for public use, without the owner’s consent, upon payment of a reasonable sum. Here again, the boundary between public and private purposes is blurred. Economic and political necessity justifies the take-over. The modern and more liberal view, according to the court, is that the acquired property need not be transferred to public ownership or for public use; “it is sufficient that the public derives advantage from the scheme”. Thus, even indirect benefits like roads, employment and markets would justify the compulsory takeover of land.
The third decisive declaration is that “if the intended project, taken as whole, is an attempt in the direction of bringing foreign exchange, generating employment and securing economic benefits to the state and the public at large, it will serve public purpose”. The consequence is that private land can be compulsorily acquired and given to an industry if it benefits the people at large.
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According to the court, Section 6(3) of the Act makes it clear that once the government declares that the takeover is for public purpose, it shall be conclusive. The acquisition could be either for public purpose or for a company. In the latter case, there is a special procedure. But the border between these two objects has become hazy as every industry is bound to confer benefits on the local community and the nation at large. Therefore, the special procedure laid down in Part VII of the Act for acquisition for companies could be bypassed. This is so despite the fact that the definition of public purpose has categorically excluded acquisition of land for companies.
A bill to make changes in the 19th century Act is still on the anvil and may not materialise till a new government settles down after next the general election. One reported change is to make the benefiting industry pay 70 per cent of costs. Some other improvements are necessary. The computation of compensation should be more liberal. The definition of public purpose should be more specific. The area of public notice, public hearing and land owner negotiations should be fortified and local government should be actively involved.