Bombay High Court sets aside GIDC land allotment to SEZ promoters

In a development that could come as a major blow to special economic zone (SEZ) developers, the Bombay High Court at Goa yesterday  quashed the Goa Industrial Development Corporation's (GIDC) allotment of over 30 lakh sq m of land illegally to promoters.

Upholding the state government's decision to withdraw the SEZ policy in public interest, a division bench comprising justices A S Oka and F M Reis said, "The allotment of lands to the companies has been made in undue haste without proper scrutiny of their applications. The allotment has been made arbitrarily. Procedure adopted in the allotment is not fair and transparent. The allotments made by GIDC do not stand the test of reasonableness."

In its 195-page judgment, the court observed that the allotment of the public properties vested in GIDC need to be made in a fair and transparent manner keeping in view the larger public interest. The bench further observed that the land which is public property was allotted to companies in an arbitrary and unreasonable manner. The bench ruled that the allotment illegal.

On 15 June, 2009, the state government withdrew the SEZ policy following a cabinet decision. The GIDC subsequently issued notices to SEZ promoters seeking reclamation of the allotted land, following which promoters moved the high court. Meanwhile villagers, of Keri, Sanocale and Verna filed PILs against the GIDC decision to allot land in their respective villages on lease agreements to the SEZ promoters on the plea that the allotment had been done fraudulently.

In a further clarification the court held that as far as the three notified SEZs were concerned the centre's stand was that the Goa government negotiate with the developers. It added that the notifications had been issued on the basis of allotment of lands by GIDC and as the allotments had been held to be illegal and notifications could not be acted upon. 

Though the court granted some relief, it dismissed petitions filed by the three notified SEZs-Meditab Specialities Pvt Ltd, Peninsula Pharma Research Centre Pvt Ltd and K Raheja Corporation Pvt Ltd and four other SEZ promoters - Paradigm Logistic and Distribution Private Ltd, Planetview Mercantile Company Pvt Ltd, Inox Mercantile Company Pvt Ltd and Maxgrow Finlease Pvt Ltd.