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SC order on Noida land acquisition rekindles hope for Singur, may harm Tata Motor’s plans

Posted by on July 9, 2011 0 Comment

A verdict for farmers in Sahberi village in Noida has become a reason to celebrate for peasants a thousand miles away in West Bengal’s Singur. The Supreme Court order on Wednesday will help Sahberi’s Sarafat Ali to get back his land, which the Uttar Pradesh government had taken away for private builders. It has also made Singur’s Bhuban Bagui hopeful that his piece of land, which was acquired by Tata Motors for a factory to produce small cars, will be his again.

But amid the celebrations at the two tiny villages tied by a similar cause, the Supreme Court’s verdict has brought a sense of despair among industrialists and builders who need land in proximity to existing cities to build factories and homes, and many middle-class home buyers who were investing in the suburbs as real estate in the cities is becoming unaffordable. “But in the backdrop of such verdicts, acquisition of land by the government or government agencies will become next to impossible,” says Sunil Mantri, chairman of Sunil Mantri Realty, which had entered into a public-private partnership project with the government of Uttar Pradesh to develop a 1,000-acre satellite township near Noida.

Even though the company was prepared to pay Rs 20 lakh an acre as compensation to the farmers, it withdrew its proposal two months ago following the court verdict on land acquisition in the area. Supreme Court, on Wednesday, upheld the Allahabad High Court order asking the government to return land to farmers in Noida Extension. KK Venugopal, senior advocate of the Supreme Court, says that Wednesday’s verdict will become a precedent for High Courts in the country. He says one should expect fairly drastic changes in the land acquisition laws soon. The government is trying to push the new Bill in the current Monsoon Session of the Parliament.

Land acquisition has become a bone of contention in other parts of the country as well, including West Bengal and Andhra Pradesh. The Tatas have dragged the West Bengal government to court after the latter passed the Singur Bill, which allows the land taken for the Nano factory to be returned to the farmers who sold them in the first place. Siddhartha Mitra, counsel for Tatas, disagrees.

“The two cases are absolutely different and a comparison cannot be drawn between the two. The Supreme Court ruling refers to use of land for the rich and not for the benefit of the poor and needy. Land was acquired in Noida Extension by the state government for industrial purposes and subsequently, the same was handed over to the builders who were building homes for the affluent and rich. That was objectionable .” Developers say many farmers do not protest when the land is being acquired but protests and agitations start once prices move up as they think they have been cheated.

“The fight is usually regarding the price and compensation, usage is not the issue,” Niranjan Hiranandani, managing director of Hiranandani Group. One of the options then is to allow private negotiations like some of the states already do. States like Maharashtra and Karnataka define development zones around cities, which are earmarked for certain use, like residential or commercial. “So developers only buy land in these zones at market rates from farmers and villagers,” says Lalit Kumar Jain, president of the Confederation of Real Estate Developers’ Associations of India. All land that is bought outside of these zones will require to be converted for suitable land use, which is a difficult process in these states.

Farmers want to sell their land directly to builders at market rates. DLF’s group executive director Rajeev Talwar says that the government should not be involved in acquisition. “The seller (farmer) thinks he is being shortchanged by government which acts like a middleman,” he adds. Developers, on the other hand, like to buy land from the government because it offers them clarity of land title and they get it cheaper. When they buy directly , they are uncertain about the title, possession even after payment and most importantly, conversion of land use.

“For any developer or industry to succeed , it is important that the laws of the country and the state and also the municipal corporations are clear and consistent ,” says Pranay Vakil, chairman, Knight Frank India. States like Gujarat have a consistent policy on land acquisition . They facilitate land acquisition by private developers by fixing a rate and also helping people relocate. He suggests that developers and governments either pay the farmers or make them partners, like in the Magarpatta City model. Here farmers, who earlier earned Rs 5,000 a month per acre were made shareholders in the project, and now earn about Rs 50,000 a month per acre. Economic Times

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