{"id":401240,"date":"2026-11-13T17:30:22","date_gmt":"2026-11-13T12:00:22","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=401240"},"modified":"2026-11-13T17:25:30","modified_gmt":"2026-11-13T11:55:30","slug":"bombay-hc-tata-power-bhivpuri-hydro-land-acquisition-mid-act","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2026\/11\/13\/bombay-hc-tata-power-bhivpuri-hydro-land-acquisition-mid-act\/","title":{"rendered":"Public purpose cannot be a pretext for private benefit: Bombay HC quashes acquisition of 84 hectares of Tata Power Bhivpuri Hydro Project Land under MID Act"},"content":{"rendered":"
\n

Bombay High Court:<\/span> In a significant ruling on land acquisition for private entities under the Maharashtra Industrial Development Act, 1961<\/a> (MID Act), the Division Bench of Manish Pitale*<\/span> and Shreeram V. Shirsat, JJ., examined the legality of the State’s decision to acquire 84 hectares of Tata Power Company Limited’s land for the benefit of a private entity. The Court held that the MID Act could not be used to bypass the procedural safeguards under the general land acquisition law to facilitate acquisition for a private company. It further emphasised that the power of eminent domain must be exercised primarily for a public purpose and not merely for private interests with incidental public benefits. The Court therefore held that the acquisition amounted to a colourable exercise of power and accordingly quashed the impugned notifications and acquisition proceedings.<\/p>\n

Also read:<\/span> Supreme Court: Appeal under Section 54, Land Acquisition Act challenging statutory benefits attracts ad valorem court fee<\/a><\/p>\n

Background<\/p>\n

The present writ petition was filed by Tata Power Company Limited (petitioner) challenging the notification issued by respondent-State under the provisions of the MID Act, declaring approximately 84 hectares of its land as an industrial area for the benefit of Respondent 6, a private company. The petitioner contended that the subject 84 hectares of land had been acquired and transferred to its predecessor decades ago, under agreements and conveyances executed between 1911 and 1940, specifically for hydro-electric projects, and continued to serve that public purpose. It argued that the proposed acquisition amounted to a colourable exercise of power, as the MID Act does not provide for acquisition of land for the benefit of a private company. It further alleged that the State had bypassed the procedural requirements of the 2013 Act by adopting the “pass-through” method, despite the land being utilised for its existing and proposed hydro-electric projects. The petitioner also questioned the necessity of the additional 84 hectares, particularly when Respondent 6 already possessed 126 hectares of adjoining land.<\/p>\n

The respondent, on the other hand, contented that the writ petition was premature as proceedings before the Sub-Divisional Officer (SDO) were pending. They argued that the proposed project of Respondent 6 was an ultra-mega industrial project serving public interest through infrastructure development and employment generation for approximately 1000 persons. They further contented that the acquisition under the MID Act was justified, relying on the State’s power of eminent domain and contended that the “pass-through” method was legally permissible under Section 39(1)(a<\/span>)<\/a>, MID Act<\/a>. They also maintained that the land was unutilised by the petitioner and that the acquisition followed the prescribed statutory procedure.<\/p>\n

Analysis<\/p>\n

The Court while addressing the issue of maintainability of the writ petition, held that the proceedings before the SDO appeared to be predetermined and the result of the said proceeding can be said to be a foregone conclusion. It further, held, that since the constitutional challenges raised by the petitioner were beyond the SDO’s jurisdiction, the writ petition was maintainable.<\/p>\n

The Court examined the nature of the rights claimed by the petitioner in the backdrop of the agreements and conveyances executed in its favour between 1911 and 1940 in respect of the subject lands. The Court noted that the lands, including the disputed 84 hectares, had originally been acquired and handed over to the petitioner’s predecessor for the specific public purpose of constructing a reservoir and dam for the collection and storage of water required for the hydro-electric power generation project. The Court further noted that Clause 5 of the relevant agreement empowered the State Government to transfer any part of the acquired land if it was not actually utilised for the hydro-electric project and the specific land was required for purposes of revenue administration, public health, safety or necessity.<\/p>\n

The Court, while examining the case on merits, observed that the land admeasuring about 84 hectares continued to be utilised for the Hydro Electric Project, namely the Thokarwadi Dam and the Bhivpuri Hydro Project, particularly the proposed 1000 MW Bhivpuri Pumped Storage Project being established pursuant to the MoU which was executed between the petitioner and the respondent-State. The Court further observed that since such non-conventional sources of energy are the need of the present times, any step for transfer of the land by the State either to itself or to Respondent 6 could have been undertaken only if the said 84 hectares of land was unutilised for the hydro-electric projects of the petitioner. The Court also noticed that Respondent 6 had failed to explain why the additional 84 hectares of land was necessary when it already possessed 126 hectares. It further noted that the land was sought mainly for aesthetic purposes and Vedic chanting, without showing how the project would be affected if the additional land was not acquired.<\/p>\n

The Court observed that Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013<\/a> permits land acquisition for private companies for “public purpose” under Section 2(1), subject to prescribed conditions, but none of the projects specified under Section 10-A of the Act of 2013 contemplated acquisition for the benefit of a private company. The Court further relied upon Shri Ramtanu Coop. Housing Society Ltd.<\/span> v. State of Maharashtra<\/span>, (1970) 3 SCC 323<\/a>, to reiterate that the MID Act, aims to develop industrial areas and estates and promote industrial growth in Maharashtra, and does not contemplate acquisition of land for the benefit of a private company.<\/p>\n

The Court, while examining the judgments relied upon by the respondents, observed that they pertained to acquisitions under the general law of land acquisition, whereas the present acquisition was sought to be undertaken under the MID Act. The Court held that the State had resorted to the provisions of the MID Act to bypass the procedural requirements and rigours of general law of acquisition in order to benefit Respondent 6. The Court also held that Respondent 5 could not rely upon Section 39(1)(a<\/span>)<\/a>, MID Act<\/a> to justify the “pass through” method of acquisition while ignoring the requirement under Section 39(2)(a<\/span>) to first offer the land to original owners. It therefore concluded that the acquisition amounted to a colourable exercise of power and was actuated by mala fides, as the requirements of law were sought to be circumvented solely for the benefit of a private entity.<\/p>\n

The Court, also rejected the respondent’s contention that the project would generate employment for over 1000 persons, and held that any activity undertaken by a private company is likely to generate employment, but employment generation alone cannot establish public purpose, the primary objective of the project must be examined. The Court also examined the chronology of events, including the earlier rejection of the proposal by the High-Power Committee and the subsequent steps taken by the State authorities and MIDC to acquire the subject land through the “pass-through” method. It concluded that the manner in which the acquisition proceedings were undertaken indicated a predetermined attempt to benefit Respondent 6.<\/p>\n

The Court while dealing with the issue of eminent domain<\/span> observed that it is an inherent sovereign power of the State, however such power is subject to the requirement that the acquired property must be put to public use. It cannot be exercised arbitrarily or whimsically, particularly when the subject land was already being utilised by the petitioner for the public purpose of Hydro Electric Projects. The Court, while relying on Kolkata Municipal Corpn.<\/span> v. Bimal Kumar Shah<\/span>, (2024) 10 SCC 533<\/a>, emphasised that the State must establish a public purpose for the acquisition and exercise its power in accordance with law. It further relied upon K.T. Plantation (P) Ltd.<\/span> v. State of Karnataka<\/span>, (2011) 9 SCC 1<\/a>, to reiterate that the primary purpose of acquisition must be public and not primarily private, with only incidental public benefits, as it was in the present case.<\/p>\n

The Court also noted that the compensation for the proposed acquisition was to be funded by Respondent 6, undermining the respondents’ claim that the acquisition served a public purpose. Applying these principles, the Court observed that Respondent 6’s project primarily served private interests, whereas the subject 84 hectares continued to form part of the petitioner’s existing hydro-electric projects.<\/p>\n

Decision<\/p>\n

The Court allowed the writ petition and quashed the impugned notifications dated 3 March 2025 and 4 March 2025, along with the show-cause notices dated 7 March 2025. The Court further quashed the proposed acquisition proceedings concerning the subject 84 hectares of land and directed that the proceedings pending before the SDO stand disposed of.<\/p>\n

[Tata Power Co. Ltd.<\/span> v. State of Maharashtra<\/span>, Writ Petition No. 6215 of 2025, decided on 5-11-2026<\/span>]<\/p>\n

*Judgment Authored by: Justice Manish Pitale<\/span><\/strong><\/p>\n\n

Advocates who appeared in this case:<\/p>\n

For the Petitioners:<\/span> Mr. D. J. Khambata and Mr. Prateek Seksaria, Senior Advocate. Mr. Bhushan Deshmukh; Mr. Venkatesh, Mr. Karan Rukhana; Mr. Rohit Agarwal; Mr. H. N. Vakil; Mr. Samkit Shah; Mr. Farad Vakil; Mr. Ashutosh Srivastava; Mr. Syresth Sharma; Mr. Siddharth Nigotia; Mr. Ashirwad Sapre and Ms. Megha Chandu.<\/p>\n

For Respondent Nos. 1—4:<\/span> Mr. Shrihari G. Aney, Special Counsel; Smt. Shruti D. Vyas, Additional Government Pleader and Smt. G. R. Raghuwanshi, Assistant Government Pleader.<\/p>\n

For Respondent-5:<\/span> Mr. Chetan Kapadia, Senior Advocate; Mr. Yuvraj Singh and Ms. Shraddha Dube Patil. <\/p>\n

For Respondent-6:<\/span> Mr. Anil Anturkar, Senior Advocate; Mr. Abhishek Salian; Ms. Srushti Thorat; Mr. Mayuresh Ingale; Ms. Kinnari Raut and Ms. Ayesha Dhorajiwala.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Bombay High Court held that the State cannot misuse the Maharashtra Industrial Development Act, 1961, to acquire land for the benefit of a private entity under the guise of public purpose. The Court while emphasising that the power of eminent domain must primarily serve public interest, quashed the acquisition of 84 hectares of Tata Power’s land as a colourable exercise of power.<\/p>\n","protected":false},"author":67011,"featured_media":401243,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,10],"tags":[119637,119631,2518,33095,119640,119638,67752,100460,2723,119628,119633,119629,119635,119632,119634,11531,119641,36059,36058,45115,70818,119630,119636,119626,119639,119627],"class_list":["post-401240","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-highcourts","tag-acquisition-for-private-entities","tag-acquisition-of-land-for-private-company","tag-Bombay_High_Court","tag-colourable-exercise-of-power","tag-employment-generation-as-public-purpose","tag-hydro-electric-projects","tag-justice-manish-pitale","tag-justice-shreeram-v-shirsat","tag-Land_Acquisition","tag-maharashtra-industrial-development-act-1961","tag-mala-fide-land-acquisition","tag-mid-act","tag-pass-through-method-of-acquisition","tag-power-of-eminent-domain","tag-private-interest-versus-public-purpose","tag-public-purpose","tag-quashing-of-land-acquisition-proceedings","tag-rehabilitation-and-resettlement-act-2013","tag-right-to-fair-compensation-and-transparency-in-land-acquisition","tag-section-10a","tag-section-21","tag-section-39-of-mid-act","tag-statutory-safeguards-in-land-acquisition","tag-tata-power-company-limited-v-state-of-maharashtra-and-others","tag-tata-power-land-acquisition","tag-writ-petition-no-6215-of-2025"],"yoast_head":"\nBombay 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