Changes in policies can be made in the public interest: SC

Changes in policies can be made in the public interest: SC
Posted on 07-06-2022

Changes in policies can be made in the public interest: SC

In News:

  • Recently, the Supreme Court reiterated that any change in policy made by the Government when determined by reason and carried out in the public interest, will be superior to private agreements signed between private and public entities.

Today's news article:

  • Historical Background (Origin of case arguments made by both parties, HC's decision)
  • Supreme Court's Judgement


  • The case involved the recuperation in addition 64.7 percent in compensation from those who were allocated lots by Yamuna Expressway Industrial Development Authority (YEIDA).
  • This extra money was intended to compensate farmers whose land were bought in the development project. It was thought of as an "no-litigation incentive" for the farmers.
  • The farmers whose lands were bought by the YEIDA began to experience tension when they realized that the farmers whose land were purchased through the New Okhla Industrial Development Authority (NOIDA) for similar projects were also paid 64.7 percent additional compensation.
  • The farmers' discontent eventually caused the delay of YEIDA project due to the fact that vast tracts of land were not developed.

High-level Committee by U.P. Government:

  • The land allottees approached YEIDA seeking a solution to the issue.
  • In the following days it was decided that The Uttar Pradesh Government formed an high-level committee to come up with the solution.
  • The committee recommended the collection of an additional sum of 64.7 percent from the plot allotted to the farmers.
  • At this point, the allottees who claimed that they already had purchased the plots came to their Allahabad High Court saying that the recommendations of the high-level committee was arbitrarily formulated.
  • The High Court held that the policy change that was made to make the extra amount had been "arbitrary".
  • In the following days, YEIDA challenged the High Court's ruling through appeal in the Supreme Court.

Supreme Court's Judgement:

  • In reversing ruling in the High Court decision, the Supreme Court said that the government has the power to change its policies and revoke prior agreements with private parties as long as the modification is in the public's interest and guided by rationality.
  • The Court declared that in situation of conflict between private interest and public interests, the public interest must be the winner.
  • The Court reaffirmed the principle that changes in Government policy can have an impact on impact on the private contracts between Government and private parties in the event that the policy is reasonable and serves the purpose of the public interests.
  • In the case at hand the Court concluded that the choice from the Govt. was not just in the public interest but also in the best interest of allottees.
Thank You