New Delhi: Relief for disadvantaged communities cannot be extended to benefit commercial entities, the Supreme Court has said.
With this, it has upheld the West Bengal government’s acquisition of land belonging to a ceramic company in Hooghly’s Singur at the site of Tata Motors’ now-discontinued Nano manufacturing plant, overturning a Calcutta High Court order.
In a 13 October ruling, the Supreme Court clarified that one of its 2016 judgments quashing land acquisition in Singur was intended for disadvantaged cultivators only. It was not intended for industrial entities that accepted compensation to then go silent for years, the court stated.
“Relief conceived to prevent impoverishment among the disadvantaged cannot extend to commercial enterprises with financial capacity and institutional sophistication,” the Supreme Court observed Monday.
A division bench of Justice Surya Kant and Justice Joymalya Bagchi was hearing an appeal by the state government against the Calcutta High Court decision to restore acquired land to Santi Ceramics.
Santi Ceramics had been operating a manufacturing facility in Singur before the acquisition of its land for the Tata Motors’ Nano manufacturing plant, a project the automobile major abandoned in 2010.
In 2016, the Supreme Court, in the Kedar Nath Yadav case, quashed the state’s acquisition of land belonging to vulnerable communities, directing the state government to restore the land to farmers and landowners.
However, the Supreme Court has now rejected the restoration of the land that Santi Ceramics had handed over for the now-discontinued project. It directed the company to remove all structures from the land or auction them and keep the proceeds. The entire process should be completed within four months.
In this report, ThePrint explains the dispute, the 2016 Kedar Nath Yadav case, and the current SC judgment.
Singur land acquisition & case at hand
The controversy dates back to 2006, when the West Bengal government acquired land of 1,000 acres or more for the Tata Motors’ Nano manufacturing facility in Singur, Hooghly district.
The acquired land had a 28-bigha plot owned by Santi Ceramics. The company purchased the agricultural land in 2001–02, converted it for industrial use, and built a ceramics manufacturing unit.
When the West Bengal government initiated land acquisition, the company filed objections under Section 5-A of the Land Acquisition Act, 1894. It requested the government to exclude the land on which its factory was operational. However, rejecting its objections, the government acquired the land.
Section 5-A of the 1894 Act provides landowners a right to object to property acquisition for a public purpose, mandating a fair hearing before the state can take possession. “Any person interested in any land, which has been notified…as being needed or likely to be needed for a public purpose or for a company, may within thirty days from the date of the publication of the notification, [voice their] objection to the acquisition of the land or of any land in the locality, as the case may be,” Section 5-A (1) reads.
The 1894 law has since been repealed and replaced by the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act, 2013.
For the handover of its land and factory, the ceramic company, at the time, received Rs 14.54 crore, which it accepted without protest. The state then took possession of the land and handed it to Tata Motors.
A few years later, as protests against the land acquisition and opposition to the Tata project spread far and wide, with Mamata Banerjee leading a political agitation against the then-Left Front government, the project fell apart. Tata Motors eventually withdrew from Singur in 2010. All acquired land was thereafter vested with the West Bengal government.
In the 2016 Kedar Nath Yadav case, the Supreme Court, at the time, struck down the state-led land acquisition. It held that the Singur land acquisition violated procedural safeguards and disproportionately impacted poor agricultural workers, who had no means to challenge the state’s action.
“This action is grossly perverse and illegal and void ab initio and cannot be allowed under any circumstance,” the Supreme Court said, observing that the West Bengal government had given mandatory procedures a go-by.
“Such an acquisition, if allowed to sustain, would lead to the attempt to justify any and every acquisition of land of the most vulnerable sections of society in the name of ‘public purpose’ to promote socio-economic development,” the Supreme Court added.
After the 2016 judgment, Santi Ceramics sought relief in the Calcutta High Court, arguing that the company, the landowner, was entitled to the land it sold. The high court agreed, ordering the West Bengal government to return the 28 bighas based on the 2016 SC ruling, which had not distinguished between cultivators and corporate owners.
Later, the West Bengal government challenged the HC ruling in the Supreme Court.
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Why SC rejected claims of Santi Ceramics
Hearing the state government’s petition Monday, the Supreme Court said its Kedar Nath Yadav ruling was based on the peculiar circumstances of the case in which poor farmers had lost their livelihoods and lacked the means to litigate. It was not meant for industrial enterprises with financial capacity and institutional resources, the court added.
“The express objective of PIL was to safeguard cultivators whose livelihoods faced extinction through large-scale acquisition. Extending such relief to industrial entities like Respondent No.1 would thus defeat the remedy’s foundational intent,” the court said.
The Supreme Court further noted that Santi Ceramics voluntarily accepted Rs 14.54 crore in compensation without protest and did not pursue its objections after a 2006 rejection.
“Unlike marginal farmers, facing potential destitution from loss of their sole livelihood, Respondent No. 1 operated a 60,000 square feet manufacturing facility, employing over 100 workers since 2003, having purchased and converted agricultural land for commercial purposes,” the Supreme Court observed.
The top court added that the company had the financial capacity and institutional access but chose not to exercise its rights when the land acquisition happened. It warned that allowing such claims would “incentivise strategic inaction”, encouraging parties to stay silent during litigation and later claim the benefits of others’ efforts.
“Having chosen not to contest the acquisition through available statutory mechanisms, Respondent No.1 now seeks the same relief that was granted to disadvantaged communities through PIL—a classic free-rider problem that judicial remedies cannot encourage,” the top court observed.
It also said that decisions in land acquisition processes apply “in personam (against the respective person)”, not “in rem (against the world at large)”. This means that remedies in such cases are available only to those personally challenging the acquisition. Those who do not object or pursue litigation cannot later claim that the process was flawed.
“It is thus clear that the benefits of quashing do not accrue to persons who were not parties unless the court has struck down the entire acquisition on fundamental grounds applicable to all,” the SC concluded.
(Edited by Madhurita Goswami)
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