In a setback to the Narendra Modi government, the Supreme Court on Thursday held its decision to sell 36 acre of land to a private refinery in Gujarat “bad in law and arbitrary”. Setting aside the Gujarat government's decision to allow sale of land in Bhuj to Alumina Refinery, the court said the company should pay R3.15 crore to the government if it wants to proceed with the project. Anandi Ben Patel, who is the state revenue minister, had cleared the sale of this 36 acre-land. A bench comprising Justices HL Gokhale and J Chelameswar set aside the Gujarat HC judgment that upheld the permission granted by the collector, Bhuj, to sell certain parcels of agricultural land situated in Kutch, which were bought by Mumbai-based Indigold Refinery for industrial purpose, to Alumina Refinery. Holding the Gujarat government’s order of December 18, 2009, as arbitrary and bad in law, the apex court said the land involved is held to have vested in Gujarat free from all encumbrances, and the amount of R1.20 crore paid by Alumina to Indigold is treated as full payment towards the compensation payable by the state to Indigold. It further said the sale of the concerned land by Indigold to Alumina is held to be bad in law. “If Alumina is interested in their proposed project, it shall pay an amount of R3.15 crore to the government of Gujarat within three months. On such a payment being made, an order of allotment of the land to Alumina will be issued by the government. The further activities of Alumina on the concerned parcel of land will start only after this payment is made, and in the event the amount is not so paid within three months hereafter, the government will proceed to take further steps to dispose of the land,” the apex court said. The order came on a petition filed by Congress leader Dipak Babaria which alleged that the government was facilitating sale of about 39.25 acre of land at a throwaway price to Alumina Refinery. He said the government should have taken the land back and auctioned it, instead of allowing sale from company to company. According to the petition, eight parcels of land in Kukma and Moti Reldi villages of Kutch were initially sold to Indigold Refinery in 2003 for setting up of an industry. The company, however, never set up any industry there. In 2009, Alumina Refinery expressed its willingness to the state government, through a proposal to the deputy collector of Bhuj, to directly purchase the land from Indigold and set up an industry there, the petition states. It says Alumina wrote to the CM for permission to buy the land from Indigold besides signing an MoU with the state during the Vibrant Gujarat Global Investors Summit-2009. Alumina Refinery had argued it had spent huge money in setting up the plant.