Legislation affecting an individual is constitutional if justified by public interest and adequate grounds, confirming state legislative authority over property transactions.

ORDER :

(i) FACTS :

The petitioner, a private limited company, in this writ petition has assailed the constitutional validity of the Telangana Government Property (Preservation, Protection and Resumption) Act, 2007. In order to appreciate the petitioner’s grievance, the relevant facts need mention which are stated infra.

2. The petitioner is a company incorporated on 05.08.2003 under the provisions of the Companies Act, 1956. The composite State of Andhra Pradesh on 09.08.2003 had entered into a Memorandum of Understanding (MoU) with the petitioner. Under the aforesaid MoU, the State of Andhra Pradesh identified the petitioner as an expert organisation which can produce and train champions in various sports. The MoU acknowledges the fact that the petitioner is renowned in the field of events, entertainment and marketing. The erstwhile Government of Andhra Pradesh (hereinafter referred to as, “the State”) under the MoU agreed that it shall sell Acs.400.00 of land in Survey No.25 of Gachibowli, Serlingampalli Mandal, Ranga Reddy District, to the petitioner to build, develop, own and operate sports academies.

3. The State further agreed to sell another extent of land measuring Acs.450.00 in Survey No.99/1 of Mamidipalli Village, Saroornagar Mandal, Ranga Reddy District to enable the petitioner to build, operate and for extension of facilities and activities relating to sports academies and also agreed to sell land measuring Ac.1.00 to Acs.5.00 in the area on main road from Banjara Hills, Hyderabad to Shilparamam, Madhapur, Ranga Reddy District to build an international class office headquarters with a condition that the petitioner shall not alienate such lands. Acting in furtherance of MoU dated 09.08.2003, the State executed a registered sale deed in favour of the petitioner on 10.02.2004 in respect of land measuring Acs.400.00 at the rate of Rs.50,000/- per acre, for a consideration of Rs.2.00 crores. Thereafter, the State Legislature initially issued an Ordinance, namely Ordinance No.12 of 2006, which was subsequently enacted as Act No.11 of 2007, namely the Andhra Pradesh Government Property (Preservation, Protection and Resumption) Act, 2007 (hereinafter referred to as “the 2007 Act”). Under the 2007 Act, the MoU dated 09.08.2003 and sale deed dated 10.02.2004 and other benefits available to the petitioner under the MoU were annulled. Consequent on annulment of transactions and instruments under Section 2 of the 2007 Act, the transferee i.e., the petitioner was held entitled to reasonable compensation along with interest @ 12% per annum. In the aforesaid factual background, the petitioner has assailed the constitutional validity of the 2007 Act.

(ii) SUBMISSIONS ON BEHALF OF PETITIONER:

4. Learned Senior Counsel for the petitioner, at the outset, submitted that the issue of validity of the 2007 Act be examined in the context of the provisions of the 2007 Act and cannot be examined on the basis of plea taken in the counter affidavit or subsequent pleading. It is urged that Section 2 of the 2007 Act does not lay down any legislative policy as to why only the two transactions to which petitioner was a party alone have been brought within the purview of the 2007 Act. It is contended that Article 298 of the Constitution of India expressly confers the executive power on the State to enter into an agreement in respect of its property and to dispose of the same. It is further contended that the MoU