Facts of the Case
- The Government of Andhra Pradesh acquired private land from individuals.
- The stated purpose of acquisition was to establish a Special Economic Zone (SEZ).
- The SEZ is to be developed and operated by a well-known private business group.
- The landowners are challenging the acquisition on the ground that the purpose is not genuinely public in nature.
Issues in the Case
- Whether the acquisition of private land for an SEZ operated by a private business group qualifies as a “public purpose” under the Act.
- Whether the State can acquire land and transfer it to a corporate entity for commercial operations.
- Whether such acquisition is constitutionally valid and complies with Article 300A (Right to Property).
- Whether the acquisition is bonafide or serves private commercial interests under the guise of public purpose.
Principles Associated with It
- Under Section 3(f) of the Land Acquisition Act, 1894, “public purpose” includes land acquisition for planned development, industrial projects, and employment generation, but the term is not strictly defined, leaving it open to interpretation.
- The Supreme Court in Sooraram Pratap Reddy v. District Collector, Ranga Reddy (2008) held that land acquisition for SEZs can be a public purpose if it benefits the public at large (e.g., economic growth, employment).
- However, courts have also cautioned that “public purpose” should not be misused for indirectly promoting private profit at the cost of dispossession.
- In Dev Sharan v. State of UP (2011) and Bangalore Development Authority v. R. Hanumaiah (2005), the courts held that misuse of the term “public purpose” to favor private parties is unconstitutional.
- Under Article 300A, property cannot be acquired arbitrarily without fair compensation and genuine public interest.
Judgment
- Acquisition of land for an SEZ can be considered a public purpose, provided it satisfies public benefit criteria like:
- Boosting industrial development.
- Generating employment.
- Improving infrastructure.
- If the acquisition is only to favor a specific business group without clear public benefit, courts may deem it invalid or mala fide.
- Therefore, the validity depends on:
- Transparency of process.
- Proper notification and consent (especially in Scheduled Areas or under the 2013 Act).
- Proof that the SEZ serves the larger community and not just private interests.
- Courts will examine the intention and execution, and if the acquisition substantially serves the public, it will be upheld.
- Hence, in principle, land acquisition for SEZ can qualify as a public purpose, but subject to judicial scrutiny.
