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Legally Explained: Why the SC struck down the Singur land acquisition (and what it means) [via Mint]

Land acquisition: More than just a Nano problem
Land acquisition: More than just a Nano problem

On 31 August, a two-judge Supreme Court bench comprising justices Gopal Gowda and Arun Mishra delivered two separate judgments on the Singur land dispute, with split reasoning, but reached similar results.

We unravel this judgment, simplifying the complex reasoning and the case laws cited by both judges.

So, is the decade-old Singur land dispute now finally over?

Not really. There are two major disputes here.

One is the acquisition of land in Singur by the erstwhile Left Front government in West Bengal for Tata Motors Ltd’s Nano car project.

The second is about the validity of the Singur Act, passed by the Mamata Banerjee government in 2011, with the aim of returning the land to owners.

The second case, which was separated from the first by the Supreme Court, is still pending.

Okay. So, how did the first dispute begin?

In May 2006, the then West Bengal chief minister, Buddhadeb Bhattacharya, and the then Tata group chief, Ratan Tata, announced that the Nano project would come up in the state.

Massive demonstrations were held against the forcible land acquisition proposed for the project.

In June 2006, unmindful of the protests, the state government forged ahead anyway with the land acquisition.

In 2008, the Left Front government acquired 997 acres of land in Singur, 40km from Kolkata, under the Land Acquisition Act (LAA), 1894, for Tata Motors to build the Nano factory.

It became controversial because it was prime arable land that was forcibly acquired by the West Bengal government.

On 18 January 2008, a division bench of the Calcutta high court upheld the acquisition of the land, holding it to be in the interest of the public and for public purpose.

This was quickly challenged in the Supreme Court, which agreed to hear the appeal on 31 August 2008.

Did you say 1894 Land Acquisition Act?

Yes, it’s pretty ancient.

The British enacted the LAA in 1894 for introducing the railway system in India. After independence, the new rulers retained the Act to acquire any privately held land.

Many were critical of the Act, as it granted unfettered powers to the government under a so-called “eminent domain principle”, to take possession of land based on the premise that all land ultimately vests in the state.

And via an urgency clause, any land could be acquired under the Act without even hearing objections to the planned acquisition.

Only recently have the courts begun to question the urgency ground on the basis of the facts of the case.

There were also other issues such as a lack of adequate compensation for the loss of livelihood, besides land.

Considering the many societal changes since the enactment of the 1894 Act, the previous United Progressive Alliance (UPA) government enacted the Right to Fair Compensation and Transparency in Land Acquisition and Resettlement Act, 2013, to provide better compensation to those deprived of land and livelihood, and to limit arbitrariness in acquisition.

But the 2013 Act has been the cause of some controversy. The Narendra Modi government has proposed to dilute the rights of farmers and landowners in the Act by amending it, but it has not been able to overcome resistance to the move.

The Communist Party of India (Marxist), or CPM, which led the West Bengal government when the Singur dispute flared, now says that the 1894 Act was the reason why the Singur controversy took place; had it been replaced by the new Act before 2008, the dispute would not have flared, it now says.

As a great votary of the 2013 Act as it now stands, the CPM has resolved to oppose the amendments to it proposed by the Modi government.

That is an interesting counterfactual. But what actually happened in Singur in eight years of litigation?

The land was legally acquired by the West Bengal Industrial Development Corporation (WBIDC). The WBIDC then granted a lease to Tata Motors, and handed over possession. The state government has retaken possession of the land from Tata Motors because the auto maker moved the Nano project to Gujarat in 2008.

Tata Motors first challenged the constitutional validity of the Singur Act before a single-judge bench of the Calcutta high court. On 28 September 2011, the judge upheld the validity of the Act.

On 22 June 2012, a larger division bench of the high court struck down Sections 2, 4(3), 5 and 6 of the Singur Act as unconstitutional. It also held that the entire Act was void and unconstitutional as it had not received assent from the President. This was appealed in the Supreme Court.

This appeal is pending.

A Left Front government being accused of forcible acquisition of land sounds a bit paradoxical; how did this happen?

Well, the then chief minister, Bhattacharya, who succeeded Jyoti Basu, pursued an aggressive industrialization agenda from the outset. The party’s electoral victory in 2006 was credited to his push for large-scale industrialization.

Everything went fine until the decision to acquire 997 acres of fertile land for the Nano factory in the agriculturally prosperous town of Singur.

The initial compensation offered was between Rs.8.7 lakh and Rs.12.8 lakh per acre for landowners; registered sharecroppers were to receive 25% of this value.

About 400 acres belonged to farmers who were unwilling to sell their land.

Construction continued throughout 2007 and the first half of 2008 amid regular protests. Continuing violence forced Tata Motors to announce a formal withdrawal of the project in October 2008.

Who is Kedar Nath Yadav, the lead appellant?

He is one of the cultivators who lost his land because of forcible acquisition by the state.

What were his and his co-appellants’ contentions?

They alleged that the acquisition of land in the case was not for a public purpose, but for a company, Tata Motors, under the guise of a public purpose.

Acquisition for a public purpose is made under Part II of the LAA, whereas the acquisition for a company is made under Part VII of the LAA.

However, the Singur acquisition took place under Part II of LAA, rather than under Part VII.

Didn’t the West Bengal government change in those eight years of the case? Did that change anything?

When the Left Front government was in power, it took the stand in an affidavit before the Supreme Court that establishing a new industry was the public purpose envisaged under Section 3(f) of the LAA.

As it was the state government that had acquired the land in favour of the WBIDC for the purposes of fulfilling its industrialization policy, Part VII of the LAA had no application in the case, and the acquisition of land was done in the public interest, it contended.

After the change of government in 2011, the Mamata Banerjee government changed its stand, but without filing an affidavit. This was opposed by Tata Motors.

However, the Banerjee government argued that the state could change its stand if it found that the previous government had acted contrary to the provisions of law or was against public policy.

The Supreme Court too held that a stand taken by a state government could be changed subsequently if there was material on record to show that the earlier action in acquiring the land was illegal or suffered from legal bad faith.

So, what exactly was the argument of the Banerjee government against land acquisition?

It argued that the previous government had acquired land without following the statutory provisions contained in Sections 3(f), 4 and 6 of the LAA as well as Part VII of the LAA.

So, what the Left Front government did was to acquire land for Tata Motors, and then claim that it was for public purpose, although the LAA had different provisions to cover acquisition for companies, and for public purpose?


The previous government, in the notification issued under Section 6 of the LAA, provided that the land was needed for the setting up of the Tata small car project, which is a public purpose under the LAA.

This seems like a bit of a procedural wrangle. What difference does it make if the acquisition took place for Tata Motors under Part II of LAA?

That was exactly the point of disagreement between justices Gowda and Mishra.

Mishra held that when a government wants to attract investment, create job opportunities, and aims at the development of the state, such an acquisition is permissible for public purpose.

Mishra found nothing wrong in the non-application of Part VII in the acquisition, relying on the “eminent domain principle” in the LAA.

What is the ‘eminent domain principle’?

Eminent domain is the right or power of a sovereign state to take private property for public use without the owner’s consent, after payment of just compensation.

Mishra devotes several paragraphs to discuss this doctrine in his judgment, but avers that it should be interpreted liberally, and not whittled down by logomachy.


Logomachy is a meaningless battle of words, according to the dictionary.



In any case, we guess Gowda disagreed with Mishra that it was mere logomachy.

Why did Gowda disagree?

The LAA was amended in 1984 to lay down different requirements for acquisition for public purpose and acquisition for companies. Therefore, both could not be fused, found Gowda.

He, therefore, held that the mandatory procedure laid down in Part VII of the LAA must have been followed by the state government, as the acquisition was in favour of Tata Motors.

His reasons: First, there was no scheme of development by the government; and second, funds for the project were not derived from public revenue.

Gowda has a point. If acquisition for a company could also qualify as a public purpose, then what was the point of the 1984 amendment of the LAA that carved out a separate regime for public companies?

It is a good question. Mishra skips this issue.

So, how was it that the two judges still reached the same conclusion?

Mishra agreed with Gowda that the entire acquisition was ineffective under the law, in the facts and circumstances of the case.

For instance, Mishra held that the inquiry under Section 5A—which deals with hearing of objections against the acquisition—was a farce and an eyewash, as neither the district collector nor the state government considered the matter with objectivity as mandated. The inquiry has not been done with an open mind and with requisite fairness, as they were clearly influenced by the decision of the cabinet, he held.

Interestingly, Gowda did not deal with Section 5A at length.

Mishra also held that the service of personal notice to people was mandatory under Section 9(3) of the Act. Non-compliance with the provision would render the compensation award invalid, he said.

However, as the project was abandoned, Mishra saw no point in directing the authorities to comply with Sections 5A and 9(3) afresh.

So, what relief did the judges provide?

Both directed that the land be given back to the landowners, and compensation, if any, paid to them should not be recovered from them.

They also held that those who had not collected the compensation would be free to collect it instead of damages for having been deprived of the land for 10 years.

Both judges agreed in quashing the acquisition and setting aside the high court judgment dated 18 January 2008.

Both directed a fresh survey of the lands acquired, and to be returned to the landowners/cultivators within 10 weeks of the order, and restoration of the lands to them within 12 weeks of the judgment.

That’s quite a victory for the farmers. Surely Prime Minister Modi and Indian companies can’t be happy, though?

Probably not. More liberal land acquisition regulation is one of the main planks of industrial reform and growth proposed by the Modi-led National Democratic Alliance government.

With the Supreme Court now having come down on the side of protecting individuals’ rights, potential reform of land laws to make it easier for the government and companies to acquire land could meet even greater resistance now.

On the other hand, the court only decided that land acquisition was conducted badly in the specific case of Singur (though it gives an indication that judges may not stand for much dilution of land-holders’ and workers’ rights).

And, on the bright side for Modi, although the Tatas won’t be happy with the Supreme Court judgment, it is said that they are quite happy in his home state of Gujarat.

This article was first published in Mint today. Mint’s association with LegallyIndia.com will bring you regular insight and analysis of major developments in law and the legal world.

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