New Delhi, Nov 10 (UNI) In an important ruling having wide ramifications for the Special Economic Zone (SEZ) policy of the government, the Supreme Court ruled that good agricultural land should not be acquired by the state for setting up of a company.
A bench comprising Justices SP Sinha and Harjeet Singh Bedi allowed the appeals of some land owners of district Hosiarpur, Punjab including Devinder Singh and others, challenging the acquisition of land under the Land Acquisition (Companies) Rules 1963 and also imposed a cost of Rs 25,000 on the state government.
The apex court in its judgement said ''the state is also enjoined with a duty to make an enquiry wherefor an opportunity of hearing the company is required to be given. When the state intends to proceed with the acquisition of land it must form an opinion that the land which are going to be acquired are not good agricultural land. The rules by and large lay down a statutory policy in that behalf and question of ignoring the same by the state does not arise.'' According to Rule 4 the state had also to ensure that no other suitable land was available for acquisition and should try to acquire barren or waste land, if available.
Commenting on the judgement of the Punjab and Haryana High Courts upholding the acquisition of farmers land, the apex court said ''the approach of the High Court in this behalf, in our opinion, is totally erroneous. A provision of a statute is either mandatory or directory.'' Even if a provision is directory, the same should be substantially complied with. It cannot be ignored in its entirety only because the provision is held to be directory and not an imperative one.
In this case admittedly there has been no compliance of Rule 4.
If Rule 4 has not been complied with, the exercise of jurisdiction under part VII must be held to have been erroneous. For the reasons afore mentioned the impuned judgement cannot be sustained, which is set aside accordingly. The appeals are allowed with costs. Counsel's fee assessed at Rs 25,000.'' The state government had proceeded to acquire the land of the appellate located in village Chak Gujran for M/S International Tractors Limited which wanted to setup a tractor manufacturing project named Ganesha Project. The state government acquired the land on the grounds that it was required for public purpose and the company was to deposit the entire amount of compensation payable to the land owner before getting possession. Later the State government paid a nominal amount of Rs 100 as compensation to comply with the provisions of the Act, which made it mandatory for the state to make a contribution towards the acquisition of land for public purpose.
The apex court, however, held that the state government made the contribution only after the agreement had been signed with the company and hence it was only an afterthought.