1984 Act holds SEZs hostage

1984 Act holds SEZs hostage

DR DEWAN C VOHRA
Posted online: Saturday, January 13, 2007 at 0136 hours IST

The month-old controversy over the proposed Special Economic Zones
(SEZs) in Singur, and Nandigram in West Bengal turned into armed
violence resulting in the death of a number of farmers and the simmer-
ing discontent in various other parts of the India, such as Kashipur in
Orissa & Mundhra in Gujarat. These events do not bode well for the
proposed 60 Special Economic Zones (SEZs) in the National Capital Region
(NCR) and suggest major challenges to the implementation of the SEZ Act
2005.
The matter has already been challenged in the Supreme Court through a
Public Interest Litigation (PIL) and their Lordships have issued notices
to the Centre and the States of Haryana, Uttar Pradesh and Rajasthan for
their affidavits-in-opposition. The issue before the Apex Court is a
ruling in the case of Basavya case of 1979 wherein it was held that
“once the states have surrendered their right to legislate on a subject
to the Centre, they cannot enact any law on the subject so transferred.”
Hence the SEZ Acts passed by state legislatures are illegal.

Be that as it may, the root of the continuing row over the entire scheme
of SEZs involves as it does the use of agricultural land/farmland for
the benefit of private interest. Opinions at the Union level have come
thick and fast that what was intended was the making available of barren
land for the purpose of SEZs and the development of infrastructure is
the responsibility of the industrial, commercial or technological units
which would be controlled by corporate houses. These houses are
obviously interested in the benefits which accrue to them
notwithstanding the provisions of Land Acquisition Act 1894.

What is crucial in the matter of the expanding list of proposals for the
establishment of SEZs across the length and breadth of the country is
that these developments have brought into focus the legal deficit in the
policy of land acquisition for the purpose of setting SEZs. The states
are vying with each other for establishment of more such zones by the
big business houses for promotion of further industrialization. This is
is outside the parameters of the policy of land acquisition by states
for private economic benefit.

It needs to be specifically mentioned that “land” is a state subject
vide entry No 18 in the List II of the Seventh Schedule of the
Constitution under the Article 246(3) which states that “the legislature
of any state has exclusive power to make laws for such state or any part
thereof with respect to any of the matters enumerated in List II in the
Seventh Schedule, referred to as State List in the Constitution.” The
entry 18 of the State List says: “land, that is to say, rights in or
over land, land tenures including the relations of landlord and tenant,
and the collection of rents, transfer and alienation of agricultural
land, land improvement, agricultural loans and colonization”, which
involves acquisition of land by a state from its owners for the pursuit
of policies for the welfare of the people and those uprooted in this
exercise are suitably compensated and rehabilitated. Since independence,
apart from grievances of the owners about insufficient compensation,
there has been no major controversy regarding which type of land —
farmland or barren/waste land can be acquired.

Seen in the larger perspective of the economic policy in the country,
the underlying purpose of the Central legislation is to develop about 68
million hectares or one-fifth of the total wasteland which is available
for industrialization and economic development in general. The SEZs are
thus a gigantic programme envisaged in the Special Economic Zone Act
2005 (28 of 2005) enacted by the Central Legislature.

In terms of sub-section (1) of Section 53 of the Act, “A Special
Economic Zone shall, on or from the appointed day, be deemed to be a
territory outside the customs territory of India for the purpose of
undertaking the authorized operation.” And under subsection (2) of the
said Section “A Special Economic Zone shall, with effect from such as
the Central Government may notify, be deemed to be a port, airport,
inland containe depot, land station and land customs station, as the
case may be under Section of the Customs Act 1962 .” Howsoever laudable
the objective of the SEZ Act may be, it cannot pass the conditionalities
of a 112-year old Land Acquisition Act amended in 1984. The Preamble to
the amending act said: “It is expedient to amend the law for the
acquisition of land needed for public purposes and for companies and for
determining the amount of compensation to be made on account of such
acquisition.”

The implementation of the SEZ Act 2005 remains hostage to the phrase
"public purpose". Unless land acquisitions by any State meets the
criteria of public purpose as set out by parliament, the SEZ Act 2005
would continue to remain controversial. The uncertainty over the
subsidization of acquisitions of corporate entities and the acquisition
of farmland instead of wasteland would then warrant a re-thinking by the
executive.

—The author is a Supreme Court advocate dr_dcvohra@hotmail.com

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