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LATEST NEWS UPDATES | Govt guilty of fraud if land acquired for public purpose is given to pvt firms: SC

Govt guilty of fraud if land acquired for public purpose is given to pvt firms: SC

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published Published on Oct 7, 2011   modified Modified on Oct 7, 2011
-The Indian Express
 
The Supreme Court has said that it amounts to “fraud” on the part of the government to forcibly acquire land under the guise of a public purpose, only to have the property transferred to real estate developers or companies for their use.
 
A Bench of Justices G S Singhvi and S J Mukhopadhyaya held that the State cannot use its power to compulsorily purchase or acquire land of a private citizen, telling him it is for a public purpose, and then, for whatever reason, decide to hand it over to individuals or corporate houses for a private purpose.

“If landowners are deprived of their land under the cover of public purpose and there is diversification of land for a private purpose, it amounts to fraudulent exercise of the power of eminent domain (compulsory acquisition),” the judgment said.

The court held that such acquisition will be held invalid in toto, and it cannot be made valid in part and invalid in other parts.

“The courts have repeatedly held that in exercise of its power of eminent domain, the State can compulsorily acquire land of the private persons, but this proposition cannot be over-stretched to legitimise a patently illegal and fraudulent exercise undertaken for depriving the landowners of their constitutional right to property with a view to favour private persons,” Justice Singhvi, who authored the judgement, said.

The judgement dismissed the appeal of certain corporate houses challenging the Karnataka High Court's decision to quash the acquisition proceedings of over 37 acres of prime land located near the Bangalore airport.

The Karnataka State Tourism Development Corporation, which acquired the land through the state government, had proposed a golf-cum-hotel resort.

But the corporation later backed out after the acquisition and possession of the land was complete, citing “poor financial health” to complete the project. Instead, it transferred big chunks of the property to a real estate developer who wanted a group housing scheme on the land.

A division bench of the state High Court had quashed the acquisition, saying the corporation played fraud.

A committee of the Karnataka Legislature on Public Undertakings had slammed the acquisition in its report as “far-fetched and grandiose” and “lacking in the basic sense of realism as regards details and specifies assured modes of financing, benefits and income to be derived and viability”.

The SC found that the corporation had made a "false projection" to the state government that land was needed for execution of tourism related projects and the “true design” of the directors of the corporation was to ultimately transfer the property to the developer.

The Indian Express, 6 October, 2011, http://www.indianexpress.com/news/govt-guilty-of-fraud-if-land-acquired-for-public-purpose-is-given-to-pvt-firms-sc/856244/


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