INDIA BUSINESS WORLD OCTOBER (1^st - 20^th) 2007
The Month that was ...

SUPREME COURT SETS RIDER FOR LAND PURCHASE BY GOVT

In a landmark judgment that's bound to impact governments' land acquisition for SEZs, the Supreme Court has ruled that agricultural land should not be acquired for "setting up a factory or for any other corporate purpose".

The bench also made it mandatory for governments to make it clear whether the land being acquired by the state is meant for public purpose or for private enterprise. "The government's land acquisition notifications can't claim both purposes simultaneously," the SC said while clarifying its order further.

The SC order came in response to a land dispute involving Punjab government and an automobile company. The state government in this case had invoked Section 4 of the Land Acquisition Act 1894 that allows the government to acquire any land for whatever cause it deems fit.

In the order, the court made it abundantly clear that the governments will have to exercise discretion while buying land.