This judgment decides only the validity of the March 2025 notification, Government Resolution and show-cause notices under the MID Act. It does not decide the validity of the 126 hectares already allotted to the Foundation, the merits of the Foundation's project on that land, or whether the State may pursue any other lawful course; the State remains free to appeal.
- Case
- The Tata Power Company Ltd. v. State of Maharashtra
- Court
- High Court of Bombay
- Decision
- Citation
- 2026:BHC-AS:45243-DB
- Bench
- Manish Pitale; Shreeram V. Shirsat
- Judgment by
- Manish Pitale
- Case numbers
- WP 6215/2025
- Outcome
- Writ petition allowed: the Division Bench quashes the notification of 3 March 2025, the Government Resolution of 4 March 2025, and the show-cause notices of 7 March 2025, and disposes of the proceedings before the Sub-Divisional Officer.
The decision
The Bombay High Court has quashed the Maharashtra Government's attempt to acquire about 84 hectares of Tata Power land at the Thokarwadi Dam in Pune district for a private Ayurvedic wellness project. A Division Bench of Justices Manish Pitale and Shreeram V. Shirsat held that the acquisition, carried out by declaring the land an industrial area under the Maharashtra Industrial Development Act, 1961, was a colourable exercise of power, because the Act contains no provision for acquiring land for a company.
The Court allowed the writ petition and quashed the notification of 3 March 2025 declaring the land an industrial area, the Government Resolution of 4 March 2025 authorising acquisition proceedings, and the show-cause notices of 7 March 2025 under section 32(2) of the MID Act. The acquisition proceedings for the 84 hectares were quashed and the proceedings before the Sub-Divisional Officer stood disposed of.
Background: a century-old hydro project and a wellness centre
Between 1911 and 1930, five principal agreements and nine deeds of conveyance were executed by the Secretary of State for India in Council in favour of Tata Power's predecessor, transferring land in Pune district for reservoirs and dams to generate hydroelectric power, after an enquiry under section 40 of the Land Acquisition Act, 1894. The Bhivpuri Hydro Station of 75 MW has operated there for more than a century, and on 8 August 2023 the State signed a memorandum of understanding with Tata Power for a 1,000 MW Bhivpuri Pumped Storage Project.
The disputed land, about 84 hectares (208 acres) in the villages of Kiwale, Inglun and Vahangaon, including two islands in the Thokarwadi reservoir, was sought for the Maharishi Vedoddharak Foundation, a private company. The Foundation wrote to the Chief Minister in July 2017 seeking benefits for a proposed "Centre for Perfect Health" — Ayurveda manufacturing, a wellness centre, an Ayurvedic college and hospital, and research facilities — and the project received Ultra Mega Project status in March 2018. The Foundation had already been allotted about 126 hectares beside the reservoir and pressed for the extra 84 hectares, including the islands.
The issue: a "pass through" acquisition for a private company
Tata Power's case was that the land was acquired more than a century ago for the specific public purpose of hydroelectric generation, that it remains in use for that purpose, and that acquiring part of it solely for a private company was a colourable exercise of power. It alleged that the State had deliberately bypassed the 2013 Act and used a "pass through" method under the MID Act, under which land declared an industrial area is acquired by the State, transferred to the MIDC, and handed to a single industrial unit.
The State, the MIDC and the Foundation answered that the unutilised portions were being acquired for an Ultra Mega Project said to serve the public good and generate employment for at least 1,000 people. They also argued that the petition was premature, because only show-cause notices under section 32(2) had been issued and the matter was closed for orders.
The rule: the MID Act acquires for industrial areas, not for companies
The Court examined the scheme of the MID Act. Under section 1(3), the State may apply Chapter VI, which deals with acquisition and disposal of land, to declare land an industrial area, but only to establish an industrial area or estate. The Constitution Bench in Shri Ramtanu Co-operative Housing Society v. State of Maharashtra had upheld the Act as a special law for the orderly establishment of industrial areas, holding that the Act has no provision for acquisition of land for a company as the Land Acquisition Act does, and that under the MID Act acquisition is solely by the State for public purposes. The Court called this "a clinching observation" in Tata Power's favour.
The Court also set out the constitutional limits on eminent domain. In Kolkata Municipal Corporation v. Bimal Kumar Shah, the Supreme Court identified seven sub-rights in the right to property under Article 300A, including the State's duty to demonstrate that the acquisition is for a public purpose. In K. T. Plantation v. State of Karnataka, a Constitution Bench held that eminent domain requires a purpose primarily public, not primarily private.
The reasoning: the chronology betrays the purpose
The Court found that the chronology strengthened Tata Power's case. When the Foundation's proposal came before the High Power Committee on 1 November 2023, it was rejected on the ground that the Government had no policy to purchase land from a private company and make it available for other projects. Yet the Cabinet Sub-Committee decided on 14 February 2024 that acquisition by the "pass through" method under the MID Act should be undertaken. The Land Selection Committee reported on 24 July 2024 that a no-objection certificate from Tata Power was necessary, but within five months the MIDC recommended that none was required. The impugned instruments followed in March 2025. The Court held that the State had acted in a pre-determined manner and hurriedly issued the impugned instruments — conduct that "smacked of mala fide".
On public purpose, the Court held that the Foundation's project, though it would generate employment, was primarily a private enterprise and only incidentally beneficial to the public. No material showed why the 84 hectares were crucial, or why the 126 hectares already allotted were insufficient; the Foundation insisted on the land, including the two islands, for aesthetic purposes and vedic chanting. Meanwhile the 84 hectares continue to serve the hydroelectric purpose for which the land was handed over a century ago. It relied on Mukesh Kumar v. State of Karnataka (2026 SCC OnLine Kar 4019), where an acquisition for a company was held mala fide and a colourable exercise of power.
Outcome and what happens next
The Court rejected the objection that the petition was premature. Ordinarily a writ court does not entertain a challenge to a show-cause notice, but relying on Siemens v. State of Maharashtra and Techno Prints v. Chhattisgarh Textbook Corporation, it held that where a notice is issued with a pre-determined mind, a hearing before the authority would be an empty formality. Here the higher authorities had overruled the High Power Committee and the Land Selection Committee and directed recourse to Chapter VI of the MID Act, so a Sub-Divisional Officer was in no position to consider Tata Power's objections.
With the notifications, the Government Resolution and the show-cause notices quashed, the proposed acquisition of the 84 hectares ends and the proceedings before the Sub-Divisional Officer stand disposed of. The Foundation retains the 126 hectares already allotted to it. The judgment decides only the validity of the March 2025 instruments; and the State remains free to appeal.
BANTHRY ANALYSISFor law students
Three doctrines do the work in this judgment. First, colourable exercise of power: the Court does not strike down the MID Act, but holds that a power conferred for one purpose — developing industrial areas — cannot be used as a device to achieve a different object, acquiring land for a single private company while bypassing the safeguards of the 2013 Act. Second, the public-purpose test from K. T. Plantation: ask what the primary object is, not whether the public gains something incidentally — employment alone does not convert a private wellness venture into a public purpose. Third, prematurity: a show-cause notice can be challenged at once when the authority has made up its mind, because the hearing would be an empty formality.
READING PROMPTSQuestions for a closer reading
- Why did the Court hold that the MID Act could not be used to acquire the 84 hectares for the Maharishi Vedoddharak Foundation?
- How did the chronology — the High Power Committee rejection, the Cabinet Sub-Committee decision and the reversal on the no-objection certificate — support the finding of colourable exercise of power?
- Why did the Court reject the argument that the writ petition was premature because only a show-cause notice had been issued?
