Govt SEZ no, but can they?

Govt SEZ no, but can they?
Legal fraternity foresees obstacles for Digambar ‘sarkar’

By Preetu Nair

Panjim: The state Government may have announced the scrapping of the Special Economic Zones (SEZs) in its “existing form” with immediate effect, but the going for the state may not be smooth before it hits a legal hurdle in a bid to conform to its New Year resolution.

Legal experts opine that the state government cannot decide to scrap especially the ones which have obtained permission and have already started work on developing the infrastructure. But yes, if the infrastructure is not set up or no third party rights granted, the Central government may honour the states views and recommendations.

In other words, the state government may request not to process the applications of the SEZs which have so far not obtained permissions. Meanwhile with regards to the 3 SEZs that have already been granted permissions, the state government can only request the Central government to denotify it.

According to Advocate General Subodh Kantak, “ The state government’s role is only to make recommendation to the Central governement’s Board of Approval to denotify the SEZs . It is not possible for state government to denotify it but it for the Central government to decide”. Experts agree that the government has a right to change it policies but then they cannot leave investors in the lurch and investors would have to be adequately compensated.

Another interesting argument that the lawyers put forth is that if the state government decides to scrap SEZs due to popular public opinion , then they will have to give convincing reasons to the Central government for the same.

Scrapping of SEZs , which have got permission and already started work relying on people’s apprehension may just not be easy, they add.

Nitin Sardessai, who is the counsel for Meditab , which is developing SEZ in Keri , reacting to the media reports that the state government has decided to scrap SEZs in the state said , “The government at its highest can give its recommendations to the Central government that it does not need SEZ in Goa .But this recommendation governs the future of the projects which have not got permissions and the not the ones, which have all permissions like Meditab. In the present SEZ policy , there is no clause to denotify the SEZ which have been granted permission”.

Interestingly, former Chief Minister Pratapsingh Rane in his letter to Union Minister of Commerce Kamal Nath has said, “The setting up of SEZ is going to benefit the State of Goa economically as well as help in creating huge employment opportunities.” This letter was sent on December 21,2006. Now a year later , the state government would have to definitely give a strong reason to the Central Government explaining why they are baking out.

“Whether to have SEZs or not is a policy decision, in which courts, have no role to play . But if the question of promissory estopel arises, then the court may look into it. Promissory estopel (equitable estopel) applies when any state government or any agency of the state government comes out with a representation /promise and an individual sets up an industry , then they cannot go back on it.


(Article published in Gomantak Times, Panaji edition dated January 2, 2008 )