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Should land acquired for Public Purpose be used for Private Benefit? by Shuchi Pandey

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Should land acquired for Public Purpose be used for Private Benefit? by
Article Posted: 06/13/2013
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Should land acquired for Public Purpose be used for Private Benefit?

Law,Real Estate
Should land acquired for Public Purpose be used for Private Benefit ?

“Public purpose must be viewed through the Prism of constitutional values, "

Land acquisition has been always the most ignored legislation in India. In the first quarter of the year 2011 3 cases of Illegal Acquisition of land have already taken place. In Tamil Nadu a stretch of land reserved for Slum Redevelopment has been passed on to private investors by the Government, followed by Maharastra where the state's housing Area Development Authority sold a 3-acre plot worth Rs 300 crore to a Builder and finally Haryana Urban Development Authority (HUDA) an HSIIDC acquired almost 350 acres of Panchayat land before selling it to a private individual. The law regulating such acquisitions formulated during the British Raj does not help in curbing such a menace. Even after being amended several times it resulted only in strengthening the acquiring power of the Government. ‘Public Purpose’ is the alibi used by the Government to avail ‘Private Benefits’ from the land acquired.

Right to Property

The Indian Constitution does not recognize property right as a fundamental right. In the year 1977, the 44th amendment eliminated the right to acquire, hold and dispose of property as a fundamental right. However, in another part of the Constitution, Article 300 (A) was inserted to affirm that no person shall be deprived of his property save by authority of law. The result is that the right to property as a fundamental right is now substituted as a statutory right.

The amendment expanded the power of the state to appropriate property for social welfare purposes. However, the alibi called ‘Public Purpose’ only enhanced the powers of the state to snatch away properties, rendering the owners landless and helpless.

Public Purpose

“It is impossible to precisely define the expression ‘Public Purpose ’.”

The Land Acquisition Act defines ‘Public Purpose’ in Section 3(l), including eight points. Among these points are: improvement of village sites; planned development of town and rural areas; provision of land for the landless or people staying in natural calamity affected areas and for persons affected by development projects.

The proposed Land Acquisition Amendment Bill 2007, attempts to redefine “public purpose” classifying it into three categories: • Strategic purposes, relating to the defense forces or work “vital to the state” • Public infrastructure: Electricity, communication, water supply, mining, public facilities. • Projects “useful for the general public”.

The Apex Court of India has also attempted to construe the concept of ‘Public Purpose’ in the following cases:

The earliest decisions of the Supreme Court addressing the issue State of Bihar vs Maharajadhiraja Sir Kameshwar Singh of Darbhanga and Ors , held that the expression public purpose was not capable of a precise definition and has no rigid meaning. The point to be determined in each case is whether the acquisition is in the general interest of the community as distinguished from the private interest of an individual.

In Somawanti v. State of Punjab , the Court observed that public purpose must include an object in which the general interest of the community, as opposed to the particular interest of individuals, is directly and vitally concerned.

In Babu Barkya Thakur vs. the State of Bombay & Others , the Court observed as under: “It will thus be noticed that the expression ‘public purpose’ used in its generic sense includes any purpose in which even a fraction of the community may be interested or by which it may be benefited.”

The Constitution Bench in Satya Narain Singh v. District Engineer, P.W.D., Ballia and Anr while describing public service observed:- “It is undoubtedly not easy to define what is “public service” and each activity has to be considered by itself for deciding whether it is carried on as a public service or not.

In Arnold Rodricks v. State of Maharashtra , while Justice Wanchoo and Justice Shah dissenting from judgment observed that there can be no doubt that the phrase ‘public purpose’ has not a static connotation, which is fixed for all times. There can also be no doubt that it is not possible to lay down a definition of what public purpose is, particularly as the concept of public purpose may change from time to time.

In Maharao Sahib Shri Bhim Singhji v. Union of India , as per Sen, J., the concept of public purpose necessarily implies that it should be a law for the acquisition or requisition of property in the interest of the general public, and the purpose of such a law directly and vitally sub serve public interest.

Dev Sharan and others; Babu Ram Dixit vs State of Uttar Pradesh and others

The apex Court in the said case accepted Land Acquisition Act to be “a pre-Constitutional legislation of colonial vintage, a drastic law, being expropriatory in nature as it confers on the State a power which affects a person's property right.”

The bench also considered that, “even though right to property is no longer a fundamental right, and was never a natural right, and is acquired on a concession by the State, it has to be accepted that without right to some property, other rights would become illusory.”

Further the Bench clarified that, “any attempt by the State to acquire land by promoting a public purpose to benefit a particular group of people or to serve any particular interest at the cost of the interest of a large section of people especially of the common people defeats the very concept of public purpose.”

Expanding the scope of fundamental rights, the Bench said, “even though the concept of public purpose was introduced by pre-Constitutional legislation, its application must be consistent with the Constitutional ethos and especially the Chapter under Fundamental Rights and also the Directive Principles.”

The Bench made it clear that “in construing the concept of public purpose, the mandate of Article 13 of the Constitution could not in any way take away or abridge the rights conferred under the Chapter on Fundamental Rights.”

The Learned Judges were of the view that the meaning of public purpose in acquisition of land must be judged on the touchstone of this expanded view of fundamental rights. “The open-ended nature of our Constitution needs a harmonious reconciliation between various competing principles and the overhanging shadows of socio-economic reality in this country.”

They also accepted that: “If public purpose can be satisfied by not rendering common homeless and by exploring other avenues of acquisition, the courts, before sanctioning an acquisition, must in exercise of its power of judicial review, focus its attention on the concept of social and economic justice. While examining these questions of public importance, the courts, especially the higher courts, cannot afford to act as mere umpires.”

Defending one’s land from being unlawfully acquired

When the Land Acquisition Act was drafted, Section 5A was not there, however, the need for the said provision was felt during the drafting of Land Acquisition (Amendment) Act, 1923 and the same was inserted vide Section 3 of the Amendment Act of 1923. The section provides that if a person is interested in a land being needed or likely to be needed for a public purpose or for a Company may object to the same in writing before a Collector. The said objection must be within 30 days of the notification of the acquisition to avail the opportunity to be heard before the said acquisition takes place.

The history behind insertion of Section 5A, in the Act of 1894 can be traced to the decision of the Division Bench of Calcutta High Court in J.E.D. Ezra vs. The Secretary of State for India and ors , where, the properties of Ezra were sought to be acquired under the pre amended provision of the Act for expansion of the offices of the Bank of Bengal. In challenging the said acquisition, it was argued that the person whose property is going to be taken away should be allowed a hearing on the principles of natural justice. However the judges found that there was no such provision in the Act.

The importance and scheme of Section 5A was construed by this Court in several cases. In 1964, the Apex Court in the judgment of Nandeshwar Prasad and Ors. vs. U.P. Government and Ors. , held "...The right to file objections under Section 5A is a substantial right when a person's property is being threatened with acquisition and we cannot accept that that right can be taken away as if by a side-wind....." In that case the Court was considering the importance of rights under Section 5A vis-`-vis Section 17(1) and Section 17(1)(A) of the Act.

The same view has been reiterated in Munshi Singh and Ors. vs. Union of India . The Court held that Section 5A embodies a very just and wholesome principle of giving proper and reasonable opportunity to a land loser of persuading the authorities that his property should not be acquired.

In Hindustan Petroleum Corporation Limited vs. Darius Shahpur Chennai and ors , the Supreme Court held that the right which is conferred under Section 5A has to be read considering the provisions of Article 300-A of the Constitution and, so construed, the right under Section 5A should be interpreted as being akin to a Fundamental Right. This Court held that the same being the legal position, the procedures which have been laid down for depriving a person of the said right must be strictly complied with.

Compensation to the people for being rendered landless for serving the ‘Public Purpose’

Section 11 of the Land Acquisition Act provides that: the collector shall make an award under his hand of:- • The true area of the land • The compensation, which in his opinion should be allowed for the land, and • The apportionment of the said compensation among the persons interested.

Consequent upon framing of awards U/S 11 of the Act, the Collector disburses the compensation to the awardees. If the awardees receive the compensation under protest, he is entitled to file reference petition U/s 18 requiring the Collector to refer the matter to the court for determination of the compensation.

Any person who is not satisfied by the Award and has not accepted the award under Sub-Section (1) of Section 28-A may, by written application to the Collector, require that the matter, be referred by the Collector for the determination of the Court and the provisions of Section 18 to 28 shall, so far as may be, apply to such reference as they apply to a reference under Section 18.


India has the highest number of SEZs in the world despite widespread protests against the land-grabbing exercise for public purpose by the government as authorized by the law. When the land is acquired the rehabilitation of land owners does not take place properly. Ultimately, it is the poor who pay the price for development.

The following measures might prove helpful to the victims of land acquisition, namely,

• Firstly, wherever possible, the affected people should be made stakeholders in the project, rather than being offered enhanced compensation.

• Secondly, when the land acquired for the use of a Company the same should always be treated as ‘acquisition for company’, regardless of whether ownership of the land is to be transferred to the company or not; whether the cost of acquisition is to be paid partly or fully using public funds or not.

• Thirdly, the government should be required to publish project details before acquiring land for a company, and.

• Finally, an independent and representative Land Acquisition Regulatory Authority may be set up, providing approvals for the acquisitions by the Companies and redressing the grievances in case of dispute.

Related Articles - Land Acquisition (Amendment) Act, 1923, defination of public purpose,

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