Karnataka High Court
Sapphire Infrastructure Development vs Karnataka Udyog Mitra on 15 November, 2012
Author: Ashok B.Hinchigeri
Bench: Ashok B. Hinchigeri
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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE DAY 15th DAY OF NOVEMBER 2012
BEFORE
THE HON'BLE MR. JUSTICE ASHOK B. HINCHIGERI
WRIT PETITION NO.24677 OF 2012 (LB-RES)
BETWEEN:
Sapphire Infrastructure Development
Private Limited,
A Company incorporated under the
Companies Act, Having its office
At 97/B, 1st Floor, 6th Block,
Koramangala,
Bangalore - 560 095,
Represented by its Joint
Managing Director
Shri D.Kupendra Reddy. ... Petitioner
(By Sri C.S.Prasanna Kumar, Advocate)
AND:
1. Karnataka Udyog Mitra,
(A Government of Karnataka
Organization) Office at: 3rd Floor,
Khanija Bhavan, No.49,
Race Course Road,
Bangalore - 560 001,
Represented by its
Managing Director.
2. The Metropolitan Commissioner,
Bangalore Metropolitan
Region Development Authority
Bangalore (BMRDA)
#1, Ali Askar Road,
Bangalore - 560 052.
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3. The Commissioner,
Bangalore Development Authority,
T Chowdaiah Road,
Kumara Park West,
Bangalore - 560 020.
4. The Commissioner,
Bruhath Bangalore Mahanagara
Palike, N.R.Square,
Bangalore - 560 009.
5. The Director,
Karnataka Pollution Control Board,
'Parisara Bhavan'
4th and 5th Floor,
No.49, Church Street,
Bangalore - 560 001.
6. The Commissioner,
Industrial, Developmental and
Director of Industries and Commerce,
No.49, II Floor, Khanija Bhavan,
Race Course Road,
Bangalore - 560 001.
7. The Secretary to the Government,
Department of Information Technology
And Bio Technology,
Science & Technology Department,
Karnataka Government Secretariat,
Vidhana Soudha,
Bangalore - 560 001.
8. M/s.Ferns Estate & Developers,
Represented by its Proprietor,
Mr.Errol Fernandes,
Having its office at No.95,
Amar Jyothi Layout,
Intermediate Ring Road,
Domlur, Bangalore - 560 071.
9. Urban and Rural Development
Department, Government of Karnataka,
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M.S.Building, K.R.Circle,
Bangalore - 560 001,
Represented by its Principal Secretary.
10. Anekal Planning Authority,
N.Nagara, Hosur Main Road,
Bangalore. ... Respondents
(By Sri S.G.Pandit, Advocate for R2 and R10:
Sri K.Krishna, Advocate for R3:
Sri B.V.Muralidhar, Advocate for R4:
Sri C.Panchaksharimath, Advocate for R5:
Sri Udaya Holla, Senior Counsel for
Sri Vivek Holla, Advocate for R8 and
Sri R.B.Sathyanarayana Singh, HCGP for R6, 7 and 9:
R1 served)
This writ petition is filed under Articles 226 & 227 of the
Constitution of India, praying to quash Annexures H and J
dated 11.11.2011 (sanction issued by the residential layout in
favour of R8 viz., order bearing No.LAO/20/11-12 & approved
plan) in favour of R8 has been violative of Annexure-D namely
the project of the petitioner, etc.,
This writ petition, coming on for orders, this day, the
Court made the following:
ORDER
The petitioner's infrastructure development project, namely, Sapphire City is cleared by the State High Level Clearance Committee on 17.3.2008. It has identified 1,200 acres of lands spread over the villages of Neriga, V.Kallahalli and Chambenahalli of Sarjapura Hobli, Anekal Taluk, Bangalore Urban District. The petitioner is ventilating its -4- grievance over the granting of the approval to the eighth respondent for the formation of the layout on the land measuring 10 acres 23.05 guntas. The petitioner's opposition is on the ground that the land purchased by and being developed by the eighth respondent comes within the project area of the petitioner.
2. Sri C.S.Prasanna Kumar, the learned counsel for the petitioner submits that the approval granted to the eight respondent for the formation of the layout runs contrary to Section 5 of the Karnataka Industries Facilitation Act, 2002 ('K.I.F. Act' for short). He submits that the Committee, consisting of the representatives of the different Governmental agencies and departments, has accorded approval to the petitioner's project in respect of the lands measuring 1,220 acres. The according of the approval for the formation of the layout is not in keeping with the approval accorded to the petitioner's project.
3. Sri Prasanna Kumar submits that the petitioner has already acquired 600 acres of lands privately. In respect of -5- the 150 acres, the petitioner has already entered into an agreement of sale with the owners of the lands.
4. He submits that the Government and Governmental instrumentalities are estopped from doing anything that would change the nature or ownership of the lands. In support of his submissions, he read out para 25 of the Apex Court's judgment in the case of M/S.MOTILAL PADAMPAT SUGAR MILLS CO. LTD., vs. THE STATE OF UTTAR PRADESH AND OTHERS reported in AIR 1979 SC 621. The said paragraph is extracted hereinbelow:
"25. The doctrine of promissory estoppel was also held applicable against public authority like a municipal Council in Century Spg. And Mfg. Co. Lt. vs. Ulhasanagar Municipal Council (1971 3 SCR 854: (AIR 1971 SC 1021). The question which arose in this case was whether the Ulhas Nagar Municipal Council could be compelled to carry out a promise made by its predecessor Municipality that the factories in the industrial area within its jurisdiction would be exempt from payment of octroi for seven years from the date of the levy. The appellant company, in the belief induced by the assurance and undertaking given by the predecessor Municipality that its factory would be exempt from octroi for a period of seven year, expanded -6- its activities, but when the Municipal Council came into being and took over the administration of the former Municipality, it would to levy octroi duty on the appellant- company. The appellant company thereupon filed a writ petition under Art.226 of the Constitution in the High Court of Bombay to restrain the Municipal Council from enforcing the levy of octroi duty in breach of the promise made by the predecessor Municipality. The High Court dismissed the petition in limine but, on appeal, this Court took the view that this was a case which required consideration and should have been admitted by the High Court. Shah J., speaking on behalf of the Court, pointed out: (at p.1024 of AIR):
"Public bodies are as much bound as private individuals to carry out representations of facts and promises made by them, relying on which other persons have altered their position to their prejudice. The obligation arising against an individual out of his representation amounting to a person who acts upon the promise: when the law against a public body shall be in certain form or be executed in the manner prescribed by statute, the obligation may be if the contract be not in that form be enforced against it in appropriate cases in equity."
The learned Judge then referred to the decision in the Indo-Afghan Agencies case (AIR 1968 SC 718) and observed that in that case it was laid down by this -7- Court that "the Government is not exempt from the equity arising out of the acts done by citizens to their prejudice relying upon the representations as to its future conduct made by the Government." It was also pointed by the learned Judge that in the Indo Afgan Agencies case this Court approved of the observations made by the Denning J. in Robertson v. Minister of Pensions (1949) 1 KB 227 (supra) rejecting the doctrine of executive necessity and held them to be applicable in India. The learned Judge concluded by saying in words pregnant in the hope and meaning for democracy:
"If our nascent democracy is to thrive different standard of conduct for the people and the public bodies cannot ordinarily be permitted. A public body is, in our judgment, not exempt from liability to carry out its obligation arising out of representations made by it relying upon which a citizen has altered his position to his prejudice."
This Court refused to make a distinction between a private individual and a public body so far as the doctrine of promissory estoppel is concerned."
5. He also sought to draw support from the Apex Court's judgment in the case of STATE OF PUNJAB vs. M/S.NESTLE INDIA LTD., AND ANOTHER reported in AIR 2004 SC 4559. Paragraph 29 of the said decision read out by him is extracted hereinbelow:
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"29. As for its strengths it was said that the doctrine was not limited only to cases where there was some contractual relationship or other pre-existing legal relationship between the parties. The principle would be applied even when the promise is intended to create legal relations or affect a legal relationship which would arise in future. The Government has held to be equally susceptible to the operation of the doctrine in whatever area or field the promise is made, contractual, administrative or statutory. To put it in the words of the Court:
The law may, therefore, now be taken to be settled as a result of this decision, that where the Government makes a promise knowing or intending that it would be acted on by the promise and, in fact, the promise, acting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable agaisnt the Government at the instance of the promise, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Art.299 of the Constitution. (Para 442). .............. Equity will, in a given case where justice and fairness, demand, prevent a person from insisting on strict legal rights, even where they arise, not under any contract, but on his own title deeds or under statute (p.424) ............. Whatever be the nature of the function which the Government is discharging, the Government is -9- subject to the rule of promissory estoppel and if the essential ingredients of this rule are satisfied, the Government can be compelled to carry out the promise made by it."(p.453)"
6. He submits that the granting of approval to the petitioner's project is in keeping with the new industrial policy of 2006-2011. He read out clauses 3.23, 3.27, 3.28 and 4.15, 4.16 of the said policy document, which are extracted hereinbelow:
"3.23. The BMRDA has taken up 5 New Townships around Bangalore. As per BMRDA Master Plan economic activities would be encouraged within these townships by creating industrial infrastructure.
3.27. The Government shall encourage setting up of various institutions and centres of excellence in the field of automobile/machine tools/food processing/ building materials and other fields and also encourage setting up of Technology Business Incubators in these areas. The Government assistance will be in the form of providing financial assistance for creation of basic infrastructure facilities, subject to a ceiling of Rs.50.00 lakhs per incubator/centre.
3.28. Existing areas of concentration of industries would be converted into "Industrial Township" for efficient maintenance of civic amenities and services etc. -10- 4.15. Besides physical infrastructure, fiscal/ financial incentives, the key aspect enabling timely implementation and commissioning of projects is "de- regulation and ease of doing business". The Karnataka Industries (Facilitation) Act, 2002 and Karnataka Industries (Facilitation) Rules, 2003 would be implemented more effectively for efficient delivery of services to the entrepreneurs.
4.16. Karnataka Udyog Mitra would be strengthened and assigned a dominant role in the task of Investment Promotion and Investors support to facilitate implementation of projects. The Single Window Mechanism would further be rationalised and strengthened to this effect."
7. He submits that the respondent No.8 cannot be permitted to have his residential zone in the middle of the petitioner's project area.
8. He submits that in the approval granted to the petitioner's project on the land in question is shown as institutional area which cannot be diverted for the residential purpose.
9. Sri R.B.Sathyanarayana Singh, the learned Government Pleader appearing for the respondent Nos.6, 7 -11- and 9 submits that the Government has not made any promise to the petitioners that the lands would be compulsorily acquired for the petitioner's project. If the lands are required for the petitioner's project, the petitioner has to purchase them privately by holding negotiations with the owners. He submits that what the Government has done is only to permit the petitioner to establish the industry.
10. Sri S.G.Pandit, the learned counsel appearing for the respondent Nos. 2 and 10 submits that the petitioner is not exempted from obtaining the clearances under different statues. The term 'Applicable (Central or State) Acts' used in Section 5 of the K.I.F. Act is defined in Section 2(ia) of the said Act. It reads as follows:
"2. Definitions: In this Act unless the context otherwise requires, - (ia) "Applicable Acts" means the Factories Act, 1948, the Boilers Act, 1923, the Contract Labour (Regulation and Abolition) Act, 1970, the Employees State Insurance Act, 1948, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965, the Payment of Wages Act, 1936, the Maternity Benefit Act, 1961, Gratuity Act, 1972, the Equal Remuneration Act, -12- 1976 and Karnataka Shops and Commercial Establishments Act, 1961."
11. Sri Pandit submits that the petitioner has not come out with any progress report on what has been accomplished after obtaining the approval in May 2008. He submits that the petitioner has no locus- standi to challenge the approval granted to the eighth respondent for the formation of the layout, as the petitioner has not purchased the said lands and as the Government has not issued any notification for acquiring the said lands. He submits that the tenth respondent has already released 60% of the sites in the layout developed by the eighth respondent.
12. Sri Udaya Holla, the learned Senior Counsel appearing for Sri M.S.Rajendra for the eighth respondent submits that the petitioner's attempt to stall the development work being done by the owner of the property is nothing short of colossal fraud. He brings to my notice the approval order for the petitioner's infrastructure project which reads as follows:
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"The company is permitted to establish the project in 1220 acres of land at different Sy.Nos. (as per the Annexure) of the Neriga, V.Kallahalli & Chambenahalli Villages of Sarjapura Hobli, Anekal Taluk, Bangalore Urban District."
13. The above extracted portion of the approval order clearly reveals that there is no obligation on the part of the Government to acquire the land for the petitioner. The petitioner has to make his own arrangement for purchasing the lands.
14. The learned Senior Counsel submits that the memorandum of the writ petition does not disclose as to how many acres of lands are purchased by the petitioners.
15. The learned Senior Counsel submits that the change in the land from commercial or industrial to residential use is by the very operation of the law as per Section 14A(3) of the Karnataka Town and Country Planning Act, 1961. The applicant desirous of seeking the change in the land use is only required to give the information and pay the stipulated -14- fee. The provisions contained in Section 14-A(3) of the said Act reads as follows:
"14-A. Change of land use from the Master Plan .-
(1) .............................
(2) ...........................
(3) Notwithstanding anything contrary contained in the Act, if the change in land use or development is from commercial or industrial to residential or from industrial to commercial and the stipulated fee is paid and the Local Planning Authority is informed prior to effecting the change, the permission for such change of land use or development shall be deemed to have been given."
16. He submits that the commencement certificate, dated 25.11.2010 (Annexure-R1) and the conversion orders, dated 28.12.2010 (Annexure-R2) and dated 05.03.2011 (Annexure-R3) are not challenged by the petitioners.
17. The respondent No.8 is a bonafide purchaser of the lands. It has made due enquiry with the Karnataka Industrial Areas Development Board and has satisfied itself that it has not been the subject matter of any acquisition proceedings. In this regard, he brings to my notice the endorsements, dated 22.09.2010 (Annexure-R4) and dated -15- 30.06.2011 (Annexure-R5). On making the enquiries and satisfying themselves that the lands are not the subject matter of any acquisition proceedings, the parties have purchased the lands by registered sale deeds in 2011.
18. The petitioner is also guilty of delay and laches, as the order, dated 11.11.2011 is challenged on 19.07.2012. The respondent No.8 has invested over Rs.32.00 crores for purchasing and developing the lands. The respondent No.8 has already sold as many as 39 sites. The persons, who have purchased sites from the respondent No.8 have availed of the financial assistance from the banks, etc. as is evident from the documents in Annexure-R18 series. The third party interests have come in.
19. He brings to my notice the Apex Court's judgment in the case of RAMANA DAYARAM SHETTY vs. INTERNATIONAL AIRPORT AUTHORITY OF INDIA AND OTHERS reported in (1979) 3 SCC 489, wherein it is held that the Court may refuse relief to the petitioner if the equities are in favour of the respondent who has meanwhile -16- changed his position. The delay of five months in filing the writ petition was held to be fatal to the petitioner in the said reported case. While submitting that these petitions are liable to be rejected on the ground of delay and laches, he also relied on the decisions in the cases of CHAIRMAN AND M.D. BPL LTD. v. S.P.GURURAJA AND OTHERS reported in (2003) 8 SCC 567 and of YUNUS (BABOOBHAI) A. HAMID PADVEKAR v. STATE OF MAHARASHTRA reported in (2009) 3 SCC 281. In the instant case, on purchasing the property in 2010, the eighth respondent has invested enormous sums of money into developing the land.
20. He also relies on the Apex Court's judgment in the case of CHAIRMAN & MD., BPL LTD., vs. SCHEDULE PROPERTY.GURURAJA AND OTHERS reported in 2003 (8) SCC 567, wherein the delay of one year was held to be fatal to the writ petitioner.
21. The learned Senior Counsel relying on the Apex Court's judgment in the case of STATE OF HARYANA vs. MUKESH KUMAR AND OTHERS reported in (2011) 10 SCC -17- 404 submits that the right to property may have ceased to be a fundamental right, but it is a legal and constitutional right. It is now recognised as a human right too.
22. For contending that the expropriatory legislation must be strictly construed, he sought to draw support from the Apex Court's judgment in the of BHARAT PETROLEUM CORPORATION LTD. vs. MADDULA RATNAVALLI AND OTHERS reported in 2007 (6) SCC 81.
23. In the course of rejoinder, Sri Prasanna Kumar submits that the petitioner has the financial capability to implement the industrial project in question. He submits that the promoters' equity contribution itself is 8000 million rupees. It proposes to raise the term loans in the region of 15000 million rupees. It proposes to generate 5675 million rupees from the prospective shareholders. He submits that the State Government has taken four long years to process and examine the petitioner's project before giving the approval.
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24. The learned counsel submits that under Section 17 of the K.I.F. Act, the petitioner is entitled to the deemed approval from every department of the Government and from every statutory authority. He submits that the petitioner has already secured 623 acres. He submits that the remaining portions are being acquired by the petitioner privately. The petitioner has already entered into agreements of sale with many parties in this regard. He submits that the order approving the petitioner's project is very clear regarding the earmarking of the lands for specific purposes. If the eighth respondent's project is permitted to come in the middle of the petitioner's proposed project, it affects the contiguity. The learned counsel submits that the petitioner's project is going to generate the employment for 1,90,000 people. He submits that the eighth respondent's conduct also disentitles it to get the approval for its layout and for its building plans. When the eighth respondent issued a public notice in the newspaper proposing to buy the property in question and calling for the objections, the response was sent on behalf of the petitioner asking the respondent No.8 not to purchase the -19- lands in question. Despite the service of legal notice/objections, the respondent No.8 has chosen to go ahead with buying the properties at its own peril.
25. The preliminary question that falls for my consideration is whether the petition is liable to be rejected on the short ground of delay and laches? What weighs with the Court in condoning the delay or taking a lenient view of the delay is not the length or duration or period of the delay but whether the sufficiency of the cause exists or not.
26. It is not in dispute that the petitioner has indeed objected to the eighth respondent's proposed purchase of the properties in question. The order, dated 11.11.2011 is challenged after about eight months. The facts and circumstances of the case are such that this petition cannot be rejected on the ground of delay and laches.
27. The first question that falls for my consideration is whether the relief can be granted based on the policy documents. The policy documents could be of immense guidance for the legislature in making the law. If there is no -20- law, then also the policy document may be of assistance in seeking the relief. No relief can be given to a party contrary to the statutory provisions.
28. It is trite position in law that if the preliminary notification under the Land acquisition Act, 1894 or under any other applicable expropriatory Act is issued, then changing the nature of the land becomes impermissible. In the instant case, no preliminary notification is issued. No right accrues to a party only because he proposes to buy the land privately or that the State Government is going to acquire it for him.
29. The doctrine of promissory estoppel pressed into service by the petitioner's learned advocate does not come to the rescue of the petitioner in any way, as admittedly no promise was made to acquire the lands for the petitioner. The approval order granted by the State Government places no obligation whatsoever on the Government to acquire the lands.
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30. The obtaining of the approval under the K.I.F. Act may enable the project proponent to get the clearances speedily. But under no circumstance, a party becomes the owner of the property by virtue of obtaining such approvals and clearances. The transfer of ownership can take place only in accordance with the provisions of the Transfer of Property Act, 1882 and/or Land Acquisition Act, 1984 or any other such law.
31. The facts of the case of MOTILAL PADAMPAT SUGAR MILLS CO. LTD. (supra) and of the instant case are entirely different, as in the said reported case what fell for consideration was the payment of sales tax. In the case of STATE OF PUNJAB (supra), the imposition of the purchase tax was the issue. The issues pertained only to the project proponent and the Government. In the instant case, the respondent No.8 has nothing to do with the petitioner obtaining the approvals and clearances. As the owner of the property, it is open to the respondent No.8 to develop, enjoy and alienate the property as it likes.
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32. Even when the petitioner has, rightly or wrongly, objected to the purchase of the property in question by the respondent No.8, he has not raised the challenge to the validity of the sale deeds as such. The petitioner cannot be content by raising the challenge to the change in the use of the land.
33. The right to property may have ceased to be a fundamental right; but an express provision is made recognizing it as a legal right. Nobody can be deprived of his property without following the due process of law.
34. In the case of STATE OF HARYANA (supra) the Apex Court has held that the right to property is not only a constitutional and statutory right but also a human right. In the case of BHARAT PETROLEUM CORPORATION LTD. (supra), the Apex Court has observed that reasonableness and non-arbitrariness are the hall-marks of the action of the State in acquiring the private property.
35. Thus, as there are no legal impediments for the respondent No.10 in granting the approval for the formation -23- of the layout by the eighth respondent or in sanctioning the building plan, I dismiss this petition.
36. However, it is made clear that the dismissal of this petition shall not come in the way of the petitioner purchasing the lands in question by holding negotiations with the eighth respondent and the persons who have purchased the sites from the eighth respondent.
37. I do not propose to express any opinion on the capability or profile of the petitioner or its employment- generating potentiality. Nor this Court would give a direction, in exercise of the powers conferred by Article 226 of the Constitution of India, to the State Government to resort to the compulsory acquisition of lands. For the compulsory acquisition of lands falls within the eminent domain of the State.
38. Now that the main matter itself is disposed of, nothing survives for any consideration of I.A.Nos.1 and 3/2012 for vacating interim order and IA No.4/2012 for impleading. They are dismissed as having become -24- unnecessary. In view of the order, dated 24.09.2012 and the petitioner's compliance therewith, I.A.No.2/2012 for impleadment is dismissed as having become unnecessary.
39. No order as to costs.
Sd/-
JUDGE Cm/-