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Land Vs Industry

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This side of delusional demagogues in dyed white dhotis, the single biggest developmental challenge facing a faltering India is undoubtedly the acquisition of land for industrial development. Repeated interventions by the Supreme Court in acquisition disputes suggest as much. Now that the Calcutta High Court has decided that the Singur Land Rehabilitation & Development Act, 2011 is unconstitutional, another round of litigation in the apex court seems inevitable. It seems that in India circa 2012, acquiring land from farmers is as hard as giving it back!

Let's not assume that everyone knows all the facts. Tata Motors needed to set up a factory for their Nano project. Tata Motors accepted West Bengal's invitation so the state government acquired land for the factory in 2006. There were protests culminating in a test before the court. The Calcutta High court said on January 18th, 2008 that the acquisition procedure was valid and legal in all respects. By that time, it didn't matter what the court said. Mamata Banerjee and the leftist state government had collided in the countryside with gangsters running amuck everywhere. By August 2008, the Tatas had had enough. They abandoned the project, moved the Nano to Gujarat and lived just a little happier ever after.

Meanwhile, Didi extracted mileage enough to ride her all the way to the Chief Minister's chair on May 20th 2011. The Singur land became a tiger by the tail: she now had to deliver on her electoral promise to give that 'prime farmland become 95 per cent factory' back to the farmers. What were her choices? She didn't have the several thousand Crores that the Tatas would doubtless ask. She had to snatch the land without paying for it so she passed this law. Since the mandatory presidential assent wasn't likely to come in the foreseeable future, she decided to dispense with it and set to implementing the law. Tata Motors went to the High Court.

The question before the High Court was one of constitutional due process, not the law on land acquisition. Since land is a concurrent subject under our constitution – meaning both parliament and state legislatures are competent to make laws on it - the potential conflict of law is handled through a presidential consent mechanism. Were the central and state laws "repugnant", the court was asked? Clearly, the purpose of both the Singur law and the general land acquisition law was to take land away for their owners, for money in one case and for free in another. The payment question was repugnancy enough and so the law was void.

Clearly, this new judgment has done much to promote justice for victimized industrialists in India but it is a justice based on constitutional principles developed to deal with our federalism. None of this has anything to do with India's struggle to acquire land from poor farmers for developmental purposes. The moral to the story is in its perfect illustration of the inextricable connection between land acquisition and power politics. Who snatches whose land at what price is ultimately a question of who has the political power to establish laws to do so, legalizing the robbery in the process. Who has the ability to resist that legal ‘due process' and be rewarded with the chief minister's chair is equally a matter of political power. Finally, who has the power to then snatch the land right back and give it to the original owner, or not, is the final test of counter veiling political power. The diabolical diatribes of Didi are ultimately about colliding politics and political class conflicts. It is in this colliding class politics that the lessons of Singur are to be learnt, not in the development of Indian jurisprudence. It is equally in understanding these conflicts that we are able to understand Didi's terrifying tantrums. Let me illustrate.

Didi is far too astute not to know that the Singur law would require presidential assent. If she did not ask for it, it is because she calculated she would not get it, certainly not in the time frame she had set herself in her electoral promises. She calculated that law's delays would give her time enough to stage her grandstand public ceremonies with jubilant farmers, leaving the Tatas to fight only for compensation. Compensation didn't bother her because a successor government would find the money to pay it, when and if and how much. The court did not oblige her with delays. So what are her choices now?

She could take this case up to the Supreme Court. It will linger on for a bit by which time her Chief Ministerial birth could possibly be gone and the appeal would have become academic. Alternatively she could pitch for presidential assent. To do that, she needed a plaint president. Accepting the Congress' candidate as her candidate was simply not on. He wasn't going to be HER candidate and besides, she perceived the putative president in waiting as a Bengali rival, not a potential ally in her war with industrial India. Once Abdul Kalam declined the role she was thrusting on him, the game was pretty much lost. No coalition compulsion can now be extracted to help the Singur law. Given the grief she has given the incoming president,he would need to be more sage than man to let her have both his consent and the credit for something that he, not she, has the power to give to the farmers. Its checkmate.

In the result, the Singur law may well be a corpse best used to promote an understanding of the politics of law making in India. The country of course is no closer to establishing a just and fair land acquisition law worthy of a mature liberal democracy and our problems with it remain the same. Net, net, colliding political power resolves itself, the developmental challenge doesn't.

(The author is managing partner of the Gurgaon-based corporate law firm N South and author of the pioneering business book Winning Legal Wars. He can be contacted at [email protected])


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