September 6, 2008

SC widens scope of ‘public purpose'

NEW DELHI: This Supreme Court judgment is sure to take the wind out of political agitations — including the one by Mamata Banerjee at Singur — opposing largescale acquisition of land for setting up of projects, particularly those by private players in different states. The court ruled on Friday that any project giving largescale employment has to be treated as one serving public purpose, thus legitimising the role of state in facilitating land acquisition.
Earlier, narrow interpretation of ‘public purpose’ entitled the state to acquire large tracts of land only if every component of the project to be set up on the acquired land passed the test of public benefit. Departing from this, the apex court gave a very wide meaning to the words ‘‘public purpose’’ and said: ‘‘If the project taken as a whole is an attempt in the direction of bringing foreign exchange, generating employment opportunities and securing economic benefits to the state and the public at large, it will serve public purpose.’’ Accepting in toto arguments advanced by solicitor general G E Vahanvati, who appeared for Andhra Pradesh, a bench comprising Justices C K Thakker and D K Jain cleared the state’s acquisition of vast tracts of land to set up an integrated project, meant to make Hyderabad a major business-cum-leisure tourism centre. The bench held that the project, to be implemented by Andhra Pradesh Infrastructure Investment Corporation (APIIC), would make Hyderabad a world-class business destination.
The fallout of this judgment is significant as the court upheld ‘‘development of infrastructure’’ as legal and legitimate ‘‘public purpose’’ for exercising power of eminent domain. ‘‘Simply because a company has been chosen for fulfilment of such public purpose does not mean that the larger public interest has been sacrificed, ignored or disregarded,’’ said the bench. This is sure to come in handy for the embattled Buddhadeb Bhattacharjee government to counter the arguments of Mamata Banerjee against Tata’s Nano project at Singur. To determine ‘public purpose’, the project has to be taken as a whole and judged whether it was in the larger public interest, and then its various components also put to the same test, the bench said. The judgment is in keeping with the requirements of the time with the public sector having long ago ceased to occupy the ‘‘commanding heights’’ of economy, ceding ground to the private sector.
However, while the domination of public sector has diminished, there is resistance to state playing the enabler for the private sector. The SC on Friday applied it more to the joint venture, given the nature of the case being discussed. The joint venture mechanism for implementing the policy, executing the project and achieving lawful public purpose for realising the goal of larger public good would neither destroy the object not vitiate the exercise of power of public purpose for development of infrastructure, the bench said.

6 Sep 2008, 0120 hrs IST,
Dhananjay Mahapatra,

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