Land Acquisition For Industrial Park Is 'Public Purpose', Not For Private Company; Subsequent Lease To Industry Valid: Calcutta High Court

Emphasising that land acquired for “employment generation and socio-economic development” cannot be invalidated merely because the implementing agency changes, the Calcutta High Court has held that acquisition for setting up an industrial park constitutes a clear “public purpose” under the Land Acquisition Act, 1894, and cannot be attacked as acquisition for a private company simply because the land is later leased to an industrial unit.A Division Bench of Justice Sabyasachi Bhattacharyya and Justice Supratim Bhattacharya dismissed an intra-court appeal filed by Shree Garden Resort Pvt. Ltd. challenging the State's acquisition of its land and the subsequent lease executed by the West Bengal Industrial Development Corporation Ltd. (WBIDCL) in favour of Ganapati Flour & Foods Pvt. Ltd. for establishing a manufacturing unit at the Vidyasagar Industrial Park.The Court rejected the landowners' principal contention that the acquisition was originally meant for “Telcon & Allied Industrial Units” and that handing over the land to a flour mill company amounted to deviation from the declared purpose. It held that the notification under Section 4 expressly stated that the acquisition was at public expense “for a public purpose viz., employment generation and socio-economic development of the area,” and that Telcon was only the then contemplated vehicle for achieving that objective.“The acquisition was not for Telcon… but it was the mere agency through which the public purpose… was sought to be achieved,” the Bench observed, adding that leasing the land to another industry through WBIDCL was only “a means to the end of setting up an industrial park.”The judges made it clear that the nomenclature of the project or the identity of the industrial unit is immaterial so long as the overarching public purpose remains intact. “The purpose has remained the same throughout… employment generation and socio-economic development,” the Court said.On maintainability, the Bench disagreed with the Single Judge's view that the writ petition was barred because a civil suit concerning the lease was pending. It held that the writ petition in fact challenged the acquisition process itself and not merely the lease deed, and therefore was maintainable under Article 226. However, after examining the merits, the Court found no illegality in the acquisition.The appellants' argument that the acquisition was effectively “for a company” and hence compensation should not have been borne by public funds was also rejected. The Court distinguished acquisitions for a specific private company from those for broader public purposes, holding that the present case clearly fell in the latter category.Dealing with the contention that permission from the Midnapore-Kharagpur Development Authority (MKDA) was necessary before development, the Court held that the Land Acquisition Act, being a special Central statute, would prevail over any inconsistent State planning laws. It further noted that the development authority itself had not raised any objection and that third parties lacked locus to question it.Significantly, the Bench also weighed equitable considerations. It recorded that nearly 400 out of 405 land losers had accepted compensation, awards had attained finality, possession had been taken, and construction had already commenced. Interfering at such a belated stage would “stall a public project” and defeat the very purpose of acquisition, the Court said.The Court also noted that earlier challenges to the same acquisition had failed up to the Supreme Court, observing that judicial propriety and finality of litigation required restraint. Entertaining repetitive challenges would lead to “no end to litigation” and hamper public projects.On the objection that the award was passed in the name of Vivek Bajoria, a former director, instead of the company, the Bench held that the title deed itself reflected his name as signatory on behalf of the company and that, in any case, defects in the award could not vitiate the entire acquisition. The appropriate remedy would have been a reference under Section 18 of the Act.Concluding that the acquisition was lawful, for a genuine public purpose, and already substantially implemented, the Court refused to interfere within the limited scope of an intra-court appeal and dismissed the matter.Case Title: Shree Garden Resort Pvt. Ltd. & Anr. v. State of West Bengal & Ors.Case No.: F.M.A. 621 of 2025Click here to read order

Land Acquisition For Industrial Park Is 'Public Purpose', Not For Private Company; Subsequent Lease To Industry Valid: Calcutta High Court

Srinjoy Das

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