The legislation, which resumed violations of citizens' property rights by rulers after a long absence, also came under fire for being ad hominem or specially targeting pre-identified firms and arrogating the powers of the executive.
The law applied to once-state owned land sold or leased to citizens or non citizens within the last 20 years.
Distilleries Company said in interim accounts filed with the Colombo Stock Exchange that after the expropriation law was passed in parliament in November 09," state officials are occupying the land leased to PSI Plc."
"As the leasing of the land to PSI PLC was done in 1985, and the abovementioned Act empowers the vesting of land leased during a period of 20 years before the enactment of the Act, the Company believes that the land that was used by PSI PLC have not been vested in the state," the firm told shareholders in interim accounts.
"At this moment we are unable to comment further on the implications on the ruling as we await instructions by the Secretary to the Treasury."
The ad hominem law also gave no judicial redress to affected citizens, which legislators said was an arrogation of judicial powers as well.
During feudal times, all land belonged to the king and citizens had no property rights. During the industrial revolution in Europe, property rights of citizens began to be established.
Economic analysts point out that private property rights was a key reason that allowed Europe to pull ahead of the Asia - which has always led the world - as liberalism swept Western Europe in particular during the last millennium.
As property rights went to citizens, the king or, the nation-state, which had then started to become established, began to tax citizens instead.
In the late 19th century Japan, during the so-called Meiji restoration ended a feudal system and established private property and taxation, setting the stage for industrialization.
In Eastern Europe however, Marxian ideology gave rise to expropriation, and collectivization leading to widespread violation of property rights, resulting property going back to the state, which had by then replaced the sovereign.
Fascist-nationalist states in Europe also violated citizen's property rights with expropriation but there was no collectivization.Citizens then had to pay taxes, but did not have property rights either, leading to economic stagnation and lagging behind other nations. In recent years socialist states in Asia have reversed collectivization and started to re-establish citizens' property rights.
Vietnam for example has established a system of land use certificates, which helped not only set the stage for industrialization with investment by foreign citizens, but which has also created an agricultural and inland fisheries productivity boom in rural areas.
Economic analysts say what Sri Lanka's rulers now call 'state land' is mostly 'Crown land' of the British colonial period.
Sri Lanka started violating property rights of citizens and non-citizens after independence from British rule. The 2011 expropriation law was passed in parliament despite the existence of a constitutional guarantee against violation of property rights.