In Metro vs Traders: legal test coming up, we explained how land acquisitions are being carried out under Bangalore’s Namma Metro project. The acquisitions are premised on the notion of eminent domain and public purpose. The experiences of eminent domain cases in other cities across the world help us understand the nuances involved when the state decides to take away private properties in the name of public purpose.

The Dutch jurist Hugo Grotius first explained the term eminent domain. According to him, the state has the right to take away private property for implementing projects that will serve public purposes, but only when it is clear that private properties are necessary for proceeding with the public utility works. Grotius also qualified that when the state decides to take away individuals’ properties, it must adequately compensate them (Source: http://en.wikipedia.org/wiki/Eminent_domain).

Public purpose and eminent domain

However, across the world, there is no standard definition of "public purpose". In fact, it has been suggested that the definition of public purpose is elastic and its concept varies with time and according to the needs of the society. Thus, at one time, the Indian state acquired land under eminent domain for building dams, land is now being acquired for constructing mass rapid transport systems, for mining, and for constructing information technology parks and international airports.

Legal texts also mention that the government is the final authority that declares whether the land is being acquired for a public purpose or not; the court has no jurisdiction to impose any restriction on the government’s discretion.

Compensation for acquired properties

Laws usually do not mention the amount of money that has to be compensated to individuals in lieu of their properties. This is determined mostly on a case-by-case basis. In Singapore, in the 1960’s, the national government acquired land under eminent domain through the Land Acquisition Act (LAA). This land was obtained to develop public housing. The compensation was determined in the legal statutes, which enabled the government to acquire large parcels of land at a very low cost. Chua Beng Huat, professor at the National University of Singapore, notes that after 1985, when the government had acquired sufficient lands, it began to pay market rates to individuals whose properties were subsequently acquired for developing more public housing.

In the 1990s, acquisition of land under eminent domain has substantially reduced and the Singapore government has now permitted private developers to negotiate with individuals who want to upgrade their properties. In this case, if more than 50 per cent of the individuals owning property in a building/locality agree to give them up to private developers for developing luxury condominiums, then the other 50 per cent have to automatically agree to surrender their properties.

This system is similar to that prevailing in Mumbai in the case of dilapidated and cess properties. The state and its housing development board (MHADA) have now allowed private developers to develop dilapidated buildings in premium areas in the city. The developers privately negotiate with the residents and according to the rules, if 70 per cent of the residents agree to give up their properties, the rest have to fall in line with the majority decision.

In Japan, individuals giving up private property have usually been compensated with apartments in the same place. However, when Japan built the Narita Airport in the 1970s, individuals were not given housing around the airport. The Narita Airport is one of the few cases in world history which provoked violent riots between the Japanese government and individuals, the government bent on acquiring the property for building the airport, and individuals and groups adamant that they will not leave their place. The airport was eventually constructed but its initial operations were hindered by bombing and other violent activities.

Use of Eminent Domain for Economic Growth?

The US-based Institute of Justice has recorded over 10,000 cases between 1998-2002 where eminent domain was used for private gains (See: www.castlecoalition.org/report). The institute argues that it is a myth that economic development requires eminent domain. In fact, the institute points out that use of eminent for private development often thwarts rather than helps economic growth.

Challenging Eminent Domain

Eminent Domain can be challenged by questioning the notion of public purpose. According to legal texts, the grounds for questioning public purpose are;

1. The acquisition made is not for public purpose;
2. Acquisition is intended to benefit a particular individual, firm or company as was raised in the recent case of Kelo Vs. the City of London in the United States;
3. The notification for acquiring the land is vague and does not clearly indicate the purpose of acquisition;
4. The cost of acquisition is not coming out the government revenue or public fund;
5. The activities of the agency on whose behalf the acquisition was made is not related to public purpose;
6. The acquisition leads to the individual’s loss of means of livelihood.

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