SC verdict on SEZs may be turning point

SC verdict on SEZs may be turning point
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First Published: Sat, Jun 27 2009. 12 34 AM IST

SC has not yet announced a date for the commencement of the hearing. Sandeep Bhatnagar / Mint
SC has not yet announced a date for the commencement of the hearing. Sandeep Bhatnagar / Mint
Updated: Sat, Jun 27 2009. 12 34 AM IST
Mumbai: The Supreme Court, or SC, will hear together at least half a dozen cases in July that could change the contours of India’s policy on SEZs, or special economic zones, and even require a change to the SEZ Act of 2005.
Leading the clutch of petitions is one against Mumbai Special Economic Zone Ltd, or MSEZ, promoted by billionaire industrialist Mukesh Ambani and his business associate Anand Jain. Experts say the outcome of the hearing could set a precedent for SEZ projects, irrespective of which way the court’s decision goes.
SC has not yet announced a date for the commencement of the hearing. Sandeep Bhatnagar / Mint
There are also petitions, such as Kuldeep Bishnoi and Others versus The Union of India, that raise questions about the acquisition of farmland for SEZs in Haryana. Mint could not obtain specifics of other petitions that have been tagged together by SC.
SC has not yet announced a date for the commencement of the hearing. Some of the cases challenge specific SEZ projects while others, such as the public interest litigation against MSEZ by half a dozen farmers from Raigad district and led by the Maha Mumbai Shetkari Sangharsh Samiti (MMSSS), a regional farmers’ activist group, question the constitutional validity of the SEZ Act itself. Last year, the apex court had transferred these cases to itself from across various state high courts to be able to hear the issue in its entirety.
Lawyers and experts agree that the cases will test the SEZ Act as well as the government’s will to stick to its legislation.
“This is a test case. There are other petitions, too, but nothing like this that puts the law to test,” said Sunil D. Dighe, a lawyer for MMSSS, who represented the group in the Bombay high court.
Mumbai-based independent SEZ consultant C.S. Sanghavi said the legal process will tread new ground as nothing like it has come up before the Indian courts yet. “It will be a trial by fire (for the act) since you are questioning the basic law itself,” he said.
MSEZ counsel Shanti Bhushan admitted the lawsuit is crucial but said he didn’t think the arguments of the SEZ Act violating Constitutional provisions would stick. He added that this argument seemed to be targetted at delaying the development of a “very important SEZ”.
Nationally, 568 formal approvals have been granted for SEZs; of this, 315 have been notified, meaning the projects have been able to acquire land needed, according to data from the “SEZ(s) in India” website. The site is maintained by the department of commerce. Maharashtra and Andhra Pradesh have the most formal approvals, at 109 and 101 SEZs, respectively.
Ambitious appeal
The MMSSS petition is ambitious, going beyond opposing the 10,000 hectare project and questioning the very rationale behind SEZs.
The group has alleged that the SEZ Act is “discriminatory, arbitrary”, and wants the court to declare it as “illegal, unconstitutional and null and void as being (in) violation of Articles 14, 19 and 21 of the Constitution”.
Article 14 of the Constitution guarantees every person “equality before the law or the equal protection of the laws within the territory of India”, while Article 19 provides citizens freedom “to move freely throughout the territory of India...(and) to reside and settle in any part of the territory of India”. Article 21 provides “protection of life and personal liberty” to all Indians.
The petition claims that the area approved for MSEZ will be a “sovereign island” under the Act, “having special economic laws, civil and criminal laws empowering them with special powers...in respect of running and managing such SEZ, which is unconstitutional”, and adds that such enclosed zones have restricted entry, violating the spirit of Article 19.
The petition also alleges that special provisions under the SEZ Act effectively deprive workers in SEZs of the protection and equality in wages and service conditions available to workers outside SEZs.
An emailed questionnaire to an MSEZ spokesperson about the status of the project and the allegations against it remained unanswered.
Earlier this month, SC set aside a special leave petition from MSEZ asking for a stay on the land acquisition deadline that was set to expire 8 June. The project, envisaged with an initial investment of Rs40,000 crore to create at least 2 million jobs over the next decade, was approved in June 2005 and has had its land acquisition deadline extended twice.
An industry official familiar with developments at MSEZ, who declined to be named because the matter is before the court, said that since notifications on land acquisition for different villages had been issued at different dates going as far back as August 2007, the two-year deadline varied for each location.
bhuma.s@livemint.com
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First Published: Sat, Jun 27 2009. 12 34 AM IST