Facts of the Case
- The government acquired private land under the Land Acquisition Act, 1894.
- The stated purpose of acquisition was to establish a factory.
- The factory is to be set up by a multinational corporation (MNC)—a private, profit-making entity.
- The acquisition is challenged by landowners, questioning the validity of acquisition for a private party’s benefit.
Issues in the Case
- Whether the acquisition of private land for a multinational corporation’s factory can be classified as serving a public purpose.
- Whether the transfer of acquired land to a private commercial entity satisfies the constitutional safeguards under Article 300A.
- Whether the acquisition is a case of state power being misused to promote private interests.
- Whether landowners can challenge such acquisition for lack of genuine public interest.
Principles Associated with It
- Section 3(f) of the Land Acquisition Act, 1894 defines public purpose broadly, including industrial development, employment, and infrastructure.
- However, the purpose must benefit the public, not just serve private commercial gain.
- In Dev Sharan v. State of UP (2011), the Supreme Court held that acquisition for private companies lacking public purpose is unconstitutional.
- In Sooraram Pratap Reddy v. District Collector, Ranga Reddy (2008), the Court held that acquisition for industrial development is valid if it serves larger public interest.
- Under Article 300A, no person can be deprived of property except by authority of law and for a legitimate public purpose, with fair compensation.
Judgment
- Acquisition of private land for a factory by a multinational corporation may be valid only if:
- The factory is part of an approved industrial development project.
- The project brings employment, infrastructure, and economic benefit to the local community.
- The acquisition process follows due process, with fair compensation and transparency.
- If the acquisition is clearly aimed at private profit, lacks public consultation, or is not backed by policy justification, courts may declare it invalid.
- Hence, the validity depends on the intent, benefit to public, and compliance with legal safeguards.
- If these conditions are not met, the landowners can challenge the acquisition and courts may order its quashing.
