HONOURABLE SRI JUSTICE ASHUTOSH MOHUNTA WRIT PETITION Nos. 680,686,881,955, & 3122 of 2007 and 26485 of 2006 & 28837 OF 2008 . DATED—15th December, 2010 BETWEEN Pirla Chinabbai …Petitioner in WP.No. 680 of 2007 Karri Varahalamma and ors ….Petitioners in WP.No. 686 of 2007 Kambala China Yesurathnam and ors ….Petitioners in WP.No. 881 of 2007 G.Krishnamurthy and ors ….Petitioners in WP.No. 955 of 2007 N.Chakram …..Petitioner in WP.No. 3122 of 2007 Rayavarapu Venkata Subbarao and ors …….Petitioners in WP.No.26485 of 2006 Putta Veera Pratap Nath & ors ….Petitioners in WP.No. 28837 of 2008 and Government of AP, Rep. by its Secretary, Revenue (LA) Department, Secretariat, Hyderabad and ors ….Respondents in all WPs HONOURABLE SRI JUSTICE ASHUTOSH MOHUNTA WRIT PETITION Nos. 680,686,881,955, & 3122 of 2007 and 26485 of 2006 & 28837 OF 2008. *********** COMMON ORDER: 1. As the grounds urged in support of the writ petitions are similar, and, as all the writ petitions challenge the similar land acquisition notifications, all these writ petitions are being disposed of by this common order 2. All these writ petitions are filed questioning the land acquisition notifications, by which the lands of the petitioners were acquired by the State for the purpose of “constitution of a special economic zone” (for refinery and other industries and later stage for future requirement) on the ground that the land acquisition is illegal and contrary to the procedure laid down under the Land Acquisition Act, 1894, for short “the Act”. 3. It is noticed that the facts in each of the writ petitions are almost common, except the extents of land and the date of Land Acquisition Notifications. Hence it is sufficient if the facts in W.P.No.26485 of 2006 are noted. 4. It is manifest that the petitioners have filed all these writ petitions challenging the land acquisition notifications i.e. Section4 (1) notifications dated 01-01-2006, 28-10-2005, 29-12-2005 and Section 6 declarations dated 04-11-2006 and 28-10-2006. The petitioners claimed that they are owners of different extents of land in Sy.Nos.222, 223, 225 and 226 totally admeasuring about Ac.67-00 situated in Ponnada Village and that they are also owners of the lands in Sy.Nos.42/1E, 42/1J, 52/1, 50/5B, 54/2A, 54/2B and 42/1J of the same village. It is noticed that the notifications assailed in these writ petitions had covered an extent of about 4000 acres situated in Moolapeta, Ponnada, Ramanakkapeta and Sriramapuram villages. It is further seen that the petitioners had earlier filed writ petitions when the land acquisition was proceeded without conducting enquiry under Section 5-A of the Act and since the said writ petitions were allowed, they had submitted objections but they were overruled and the present writ petitions are filed against the declarations issued under Section 6 of the Act. 5. The petitioners assert that the acquisition of land is illegal and malafide. The petitioners further assert that the acquisition could not have been made under part-II of the Act since the acquisition is for a company and hence the procedure laid down in Part – VII of the Act should have been followed. It is noticed that the petitioners did not implead the so-called private limited company as party respondent in these writ petitions. 6. The factual matrix of the petitioners in the other writ petitions is more or less the same and hence the averments of the other writ petitions are not been incorporated herein. Suffice it to say that the learned Counsel appearing in all the writ petitions have categorically submitted that there is no factual variance in the pleadings contained in these writ petitions and that the contentions raised by them are common to all the writ petitions. 7. A counter affidavit has been filed by the State which was sworn in to by K. Nageswara Rao, Revenue Divisional Officer, Kakinada. It is noticed that another counter, captioned as rejoinder, is filed by the District Collector, Kakinada and this counter appears to be filed as a common counter affidavit in all the writ petitions. Therein, it is stated that the State has identified establishment of Special Economic Zones as one of major engine to trigger the growth rate of per capita income and as a part of this initiative, it has accorded approval for setting up of a port based multi product special economic zone including an export oriented oil refinery to be set up by a consortium headed by M/s. Kakinada Sea Ports Limited and the entire land for the project is to the tune of 10000 acres to be acquired under the provisions of the Land Acquisition Act to facilitate expeditious procurement of land. The developer, M/s. Kakinada Sea Port Limited has submitted proposal that there would be an estimated investment of 3600 crores for developing the Special Economic Zone, in an investment of the range of Rs.30000 to 40000 crores, expected to be made by various industries, who will be setting up their units. The project will also provide direct employment approximately to 2,40,000 persons and to about 1,00,000 persons will have indirect employment both skilled and unskilled. 8. It is stated that the purpose of setting up of Special Economic Zone is well within the sovereign power of the State and is not actuated by any malice. The role of the developer (Kakinada Sea Ports) is limited and controlled by the statutory authorities under Central Act No.28 of 2005. It is also their contention that the special economic zone would prosper under strict control and guidance of the development commissioner. Therefore, the land acquisition for the purpose of SEZ is not a new one and the impugned notifications are legally valid. In the circumstances, the challenge to the acquisition is unwarranted and untenable. 9. M/s. Kakinada Special Economic Zone Private Limited has filed a petition to implead it as one of the respondents and thus it was impleaded as the 5th respondent and the SEZ company has averred that the Central Government, with a view to achieve its objectives for promoting the foreign trade policy in a more effective manner and to create enough confidence for industries to commit substantial funds for development of the infrastructure and for setting up of the units in the Special Economic Zone for export of goods and services and in order to give a long term stable policy frame work, had enacted the Special Economic Zones Act, 2005 and that the Central Government exercised powers under Section 55 of the Act and the Rules made thereunder, namely, the Special Economic Zone Rules 2006. It is stated that the total extent proposed for acquisition was 7956.10 cents and an extent of 4695.12 was secured by the 5th respondent (which is a sister company to M/s. Kakinada Sea Ports Limited) at the rate of Rs.3 lakhs per acre as against the basic value register price of Rs.1,20,000/-. 10. It is further stated that the concerned land acquisition officers had passed awards in respect of an extent of 1550.36 and possession of the said lands was delivered to the 5th respondent. It is stated that the Central Government had granted its “in principle” approval in the year 2002 and final notification dated 18-05-2007 laying down the terms and conditions to be complied with by the 5th respondent, who is the developer of the Special Economic Zone. It is stated that the total extent of land involved in the present batch of writ petitions and certain other writ petitions is only 480 acres and hence the continuance of the interim stay would cause serious hardship to the developer. It is further stated that enquiry under Section 5-A of the Act was already held pursuant to the orders passed by this Court in the first round of litigation and that the objections and contentions of the petitioners against the acquisition of their lands were untenable. It is further stated that no private interest is involved in establishing the Kakinada Special Economic Zone and that no private individual is a shareholder in the said company. 11. It is stated that as early as in the year 2002, the Union of India accorded “In principle” approval vide letter dated 27-11-2002 for setting up a port based Special Economic Zone at Kakinada and it had issued a notification dated 27-06-2006 according approval for setting up a port based multi product special economic zone at Kakinada. The Union of India vide letter dated 18-05-2007 has also communicated its approval for authorized operations to be carried out in the port based multi product special economic zone at Kakinda. It is stated that the acquisition is for public purpose, which is validly taken under part-II of the Act. It is stated that as against the total notified extent of 7956 acres, the 5th respondent is in possession of about 6250 acres of land and the extent involved in the present writ petition is only 92 acres and 16 cents and the acquisition proceedings could not be proceeded in view of the interim order that were passed by this Court. Hence the said company had sought for impleadment and vacating of the interim orders. 12. It is noticed that a rejoinder was filed by the writ petitioners to the implead party petition affidavit of M/s. Kakinada Special Economic Zone Private Limited and it is not necessary to extract the contents of the same. 13. From the above respective pleadings, it is obvious that the petitioners are challenging different land acquisition notifications that were issued under Section 4(1) of the Act and the declarations that were issued under Section 6 of the Act on various grounds. On the other hand the State and M/s. Kakinada Special Economic Zone Private Limited (Developer) are sustaining the impugned land acquisition notifications. 14. Sri VVLN Sarma, Sri CH. Dhanamjaya and Sri P. Bhaskar, the learned Counsel who appeared for the petitioners in the all the Writ Petitions, have vehemently contended that the establishment of Special Economic Zone is not a public purpose since the State Legislature having introduced a legislative bill for bringing out an amendment to Section 3 (f) of the Act has abandoned the process and hence it is to be inferred that the acquisition for the purpose of Special Economic Zone is not a public purpose under Section 3 (f) of the Act. It is their contention that as per the contents of the declaration under Section 6 of the Act, it is clear that the land acquisition is for the 5th respondent company and that the entire compensation amount to be paid for acquisition of land is flowing from the 5th respondent and hence there is a flagrant violation of the second proviso to Section 6 of the Act. It is also contended that the acquisition of land for companies is regulated by part–VII of the Act i.e. Sections 39, 40 and 41 of the Act and since there is no compliance of the procedure laid down by the Part – VII of the Act and the Land Acquisition Rules, the entire acquisition proceedings are illegal being contrary to the procedure laid down by law. 15. In support of their contentions, the learned counsel for the petitioners have laid great emphasis and placed reliance on the cases of SOMAWANTHI Vs. STATE OF PUNJAB (AIR 1963 SC 151) and DEVINDER SINGH Vs. STATE OF PUNJAB {2008 (1) SCC 728} and submitted that when the land acquisition is for a private limited company, non compliance of the procedure laid down by part–VII of the Act is illegal and hence the entire acquisition proceedings are liable to be declared as ultra virus of the provisions of the Act. It is further contended by them that the other Central Act i.e. Special Economic Zones Act, 2005 contemplates that the developer should first acquire the land and then only seek notification that the Central Government should recognize it as Special Economic Zone. Since no authority under Section 31 of the Special Economic Zones Act, 2005 is constituted, the acquisition is just for the benefit of the 5th respondent company and therefore it is not a public purpose. As the company is bearing the cost of the land acquisition, it is a clear case where the resort to Section 6 of the Act is illegal and unsustainable. 16. Per contra, Sri S. Sriram, learned Special Government Pleader representing the State and Sri Vedula Venkataraman, learned Senior Counsel appearing for the 5th respondent company would submit that Section 3 (f) of the Act has defined the expression “public purpose” in a inclusive manner and that the acquisition for SEZ would fall under 3 (f) (vii) of the Act. They further contended that Section 3-A of the Act has defined the term ‘local authority’ and hence a SEZ authority under Section 31 would be a local authority under the Act and hence the payment of compensation by the developer, which finally culminates into constitution of a SEZ authority would qualify the definition of local authority as per Section 3 (aa) of the Act and hence the requirement of payment of compensation from the fund of a local authority in terms of second proviso to Section 6 of the Act is fully complied with. 17. The learned counsel therefore would submit that the present acquisition is perfectly in terms of Part – II of the Act and on a reading of the provisions contained in Sections 39, 40 and 41 of the Act, the present acquisition does not fit into the frame work of part – VII of the Act and since formation of a Special Economic Zone has been recognized as a public purpose by the Supreme Court in a recent judgment in the case of BONDU RAMASWAMY Vs. BANGALORE DEVELOPMENT JAUTHORITY reported in 2010 (7) SCC 129, it is no longer open to the petitioners to contend that the acquisition is not for a public purpose. In the said judgment, the Apex Court while observing that acquisitions for economic development and industrial growth include acquisitions for industrial layouts/zones/Corporations owned or controlled by the State, expansion of existing industries and setting up Special Economic Zones, held, that in such category of acquisitions the beneficiaries are industrial or business houses, though ultimately there will be indirect benefit to the public by way of generation of employment and overall economic development. 18. He further contended that all the issues sought to be raised in the present Writ Petitions have already been decided by a learned single Judge of this Court in a decision in K.SOMARAJU & OTHERS Vs. STATE OF AP reported in 2010 (6) ALT 545 and no issues which are urged in the present batch of Writ Petitions point out any legal basis for distinguishing the said judgment and that the writ petitioners cannot be permitted to reopen the issues which have already been adjudicated by the learned Judge in the decsion stated supra. 19. Sri Vedula Venkataramana, the learned senior counsel appearing for the 5th respondent has submitted that as per the ratio laid down by the Apex Court in a recent judgment in the case of NANDAKISHORE GUPTA AND OTHERS Vs. STATE of U.P. AND OTHERS, reported in 2010 (9) SCALE 175, there is no difference of opinion in the case reported in PRATHIBA NEMA AND OTHERS Vs. STATE OF MP reported in (2003 (10) SCC 626) and DEVENDER SINGH AND OTHERS Vs. STATE OF PUNJAB (supra). He would submit that since no proprietary interest is getting vested in the 5th respondent company and that the 5th respondent company is bound by the conditional approval granted by Union of India and in conjunction with the Rule 51 of the Rules made under the SEZ Act, the 5th respondent has no authority of law to indulge in re-sale of the acquired land, the requirement of ad hearing to the compliance of the provisions contained in Part –VII of the Act, does not arise. The learned senior counsel has made elaborate submissions on the distinction between acquisition under part–II and acquisition under part-- VII of the Act. 20. It is agreed to by all the learned counsel that some of the writ petitions wherein similar challenge was made to the land acquisition notifications, was considered by a learned single judge of this Court in the judgment in the case of K.SOMARAJU & OTHERS Vs. STATE OF AP reported in 2010 (6) ALT 545. While the learned counsel for the petitioners contend that there was no exhaustive consideration of the contentions in the said judgment, the learned counsel for the respondents would contend that the said judgment, being of a coordinate bench of the Court, would bind in appreciating the contentions that were raised in the present writ petitions. 21. I have heard the learned Counsel appearing for the petitioners in great detail. I have also heard the learned counsel who appeared for the respondents in the present writ petitions. Perused the case laws cited by both the parties and also critically went through the judgment of my learned Sister Judge, Justice Ms. G. Rohini in the case of K.SOMARAJU & OTHERS Vs. STATE OF AP (supra). I had also gone through the provisions of the land Acquisition Act, 1894 and the Special Economic Zones Act, 2005. I have carefully examined the approvals that were granted by the Government of India, which laid down the terms and conditions subject to which the 5th respondent/developer would deal with the land after acquisition. I have no hesitation to hold that the purpose of acquisition i.e. “formation of a Special Economic Zone” is a public purpose under Section 3(f) (vii) of the Act. I also hold that the SEZ authority under Section 31 would amply satisfies the test of “local authority” under Section 3 (aa) of the Land Acquisition Act, 1894. I am convinced that the 5th respondent is not obtaining a proprietary right on the acquired land and as per the rules under the SEZ Act, there is a prohibition on the developer from alienating the land. Thus the requirement contained under the Second proviso to Section 6 of the Act is fully satisfied. Hence I hold that there is no illegality in the compensation amount borne out by the 5th respondent/developer. On the ratio laid down by the Apex Court in the case of NANDAKISHORE GUPTA AND OTHERS Vs. STATE of U.P. AND OTHERS (supra), I hold that the present acquisition would fall under part –II only and it does not fit into the ambit of part–VII of the Land Acquisition Act. Hence I reject the contention of the learned counsel for the petitioners that the ratio laid down in DEVENDER SINGH Vs. STATE OF PUNJAB (supra) shall be applied to the present case. 22. Similar such contentions raised by the petitioners herein were infact considered by the Apex Court in the case of NAND KISHORE GUPTA & OTHERS Vs. STATE OF UP & ORS (supra). In the context of the present batch of Writ Petitions, the observations made by the Apex Court in the said judgment are apposite: “ 23. We have now to see as to whether the challenge posed by the appellants herein about this acquisition not being for public purpose is justified or not. Sri Ranjit Kumar, Shri Debo Banerjee, learned Senior Counsel appearing on behalf of the appellants vehemently urged that this acquisition, in the first place, is colourable exercise of power. All the learned Counsel urged that the very nature the whole transaction showed was that the whole acquisition was tailor made for the respondent company. The learned Counsel further urged that it was meant only for the benefit of the Company, inasmuch as, though the acquisition should have been made under the provisions of Part VII of the Act, it was carried out in terms of the provisions of the Part II of the Act, citing this to be an acquisition for public purpose. According to the learned Counsel, there already existed a road which was a functional road ……………………………………………… …………………………………………………………………..It was also pointed out that the present purpose was not a public purpose as envisaged in Section 3(f) of the Act. The learned Counsel pointed out that from the agreement itself, it is clear that the entire cost of the acquisition is going to be borne by the Company and therefore, there can be no doubt that the acquisition is for the company and not for the public purpose. The learned Counsel argued that merely because the Company has paid the entire cost of acquisition along with Rs.100/- per hectare per year by way of premium, it cannot be denied that it is only the private respondent who is bearing the entire cost of the acquisitionand the State Government/YEIDA has not contributed anything. Heavily relyong on the decision in Pratibha Nema & Ors . Vr. State of M.P. (2003 (10) SCC 626), the learned Counsel argued that this issue needs to be addressed by this Court on the backdrop of this case. 24. As against this, the learned Counsel appearing on behalf of the State as also for the Company and YEIDA, pointed out that this cannot be said to be a colourable exercise of power. They also pointed out that there cannot be any dispute about the utility of this Project and its benefits to the public. They further pointed out that the whole process has been extremely transparent. They also pointed out that this acquisition cannot, under any circumstances, come within Part VII of the Act. …………………………………………………………………………………………………………………… According to the learned Counsel, all that the Government was doing was merely choosing a third party agency to implement the work of building, designing financing or running the Project and tht the Government was utilizing the expertise and enterprise of a third party. 26. Our attension was also invited to two decisions of this Court concerning the BOT contracts and the allegations made relating to them. The decisions were State of Karnataka & Anr. Vs.All India Manufacturers Organization & Ors ( 2006 (4) SCC 683), and, Sooraram pratap Reddy & Ors Vs. District Collector, Ranga Reddy District & Ors etc (2008(9) SCC 552). 27. xxxxx xxxx xxxxxx Xxxxx xxxx xxxxxx 30. During the debate, our attention was invited to Section 3(f) of the Act, which contains a definition for ‘public purpose’. It was pointed out that where the acquisition is for the Company, it cannot amount to a public purpose. There can be no dispute about this proposition that where the acquisition of land is for the companies, it cannot amount to public purpose. It was therefore our endeavor to find out whether this land was for the company and we are quite satisfied with a finding recorded by the High Court that this acquisition was not for the Company but was for the public purpose. The State gains of immense public importance. The State gains advantages from the construction of an Expressway and so does the general public. Creation of a corridor for fast moving traffic resulting into curtailing the traveling time as also the transport of the goods would be some factors which speak in favour of the project being for the public purpose. Much was stated about the 25 million square meters of land being acquired for the five parcels of land. In fact, in our opinion, as has rightly been commented upon by the High Court, the creation of the five zones for industry residence, amusement etc., would be complimentary to the creation of the Expressway. It cannot be forgotten that the creation of land parcels would give impetus to the industrial development of the State creating more jobs and helping the economy and thereby helping the general public. There can be no doubt that the implementation of the Project would result in coming into existence of five developed parcels/centers in the State for the use of the citizens. There shall, thus, be the planned development of this otherwise industrially backward area. The creation of these five parcels will certainly help the maximum utilization of the expressway and the existence of an express