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The Centre and states like Maharashtra and West Bengal are grappling with a Supreme Court ruling that has banned the acquisition of good farm land by the government for private industries.

In a landmark judgment, the apex court has set to rest all issues pertaining to land acquisition. Given that acquisition of farm land could only be made for public purposes, the SC has told states to make a distinction between private and public cause before taking over land. The verdict may unsettle Maharashtra and some of the other state governments' plans to acquire land for SEZs and big power projects.

The ruling, was given in October by a Bench comprising Justice SP Sinha and Justice Harjeet Singh Bedi.

The order was in response to a petition by the villagers of Chak Gujran in Punjab against the state government's role to acquire land for International Tractors. Like Maharashtra and West Bengal, the Punjab government had also invoked the Land Acquisition Act 1894 claiming that the proposed factory will contribute to the general welfare and prosperity of the whole community and as such it's in the public interest. This forced the villagers to challenge the government's move. The matter landed in Supreme Court after the Punjab and Haryana High Court upheld the state government's land acquisition drive. But, the apex court was categorical in setting aside the HC order. Noting that the approach of the high court "is totally erroneous", the SC interpreted the Land Acquisition Act to deliver its ruling. ''The state is obligated to issue a notification clearly stating whether the acquisition is for a public purpose or for a company. A declaration is to be made either for a public purpose or for a company. It cannot be both,'' the SC categorically notes. It also clarified that ''when properties of citizens are being compulsorily acquired by a state in exercise of its power, the existence of public purpose and payment of compensation are principal requisites.''

In a stricter interpretation of the Land Acquisition Act, 1894, the SC stipulated that "good agricultural land" should not be acquired for setting up a factory or for any other corporate purpose. Good agricultural land would mean "any land with average productivity, including gardens and groves," said the court.

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