Karnataka High Court
Smt Lakshmamma vs State Of Karnataka on 22 April, 2022
Author: P.S. Dinesh Kumar
Bench: P.S. Dinesh Kumar
W.A No.15210/2011
C/W W.A No.15417/2011
W.A No.15418/2011
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 22ND DAY OF APRIL, 2022
PRESENT
THE HON'BLE MR. JUSTICE P.S. DINESH KUMAR
AND
THE HON'BLE MRS. JUSTICE M.G. UMA
WRIT APPEAL No.15210 OF 2011
C/W
WRIT APPEAL No.15417 OF 2011
WRIT APPEAL No.15418 OF 2011 (LA-KIADB)
IN W.A. NO.15210 OF 2011
BETWEEN :
1. MS. NOORAINE FAZAL
D/O MR. HUSSAN FAZAL
AGED ABOUT 41 YEARS
RESIDENT OF S-2, 'CLARIDGE'
NO.4, LEWIS ROAD
COOKE TOWN
BANGALORE-560 005
2. MRS. NAFEESA FAZAL
D/O MR. HUSSAN FAZAL
AGED ABOUT 65 YEARS
RESIDING AT NO.31
NOW VIVANI ROAD
BANGALORE-560 005 ... APPELLANTS
(BY SHRI. S. AJESH KUMAR, ADVOCATE)
W.A No.15210/2011
C/W W.A No.15417/2011
W.A No.15418/2011
2
AND :
1. BASE CORPORATION LIMITED
(A COMPANY INCORPORATED UNDER
THE PROVISIONS OF THE
COMPANIES ACT, 1956)
AND HAVING ITS REGD. OFFICE AT
NO.848, 15TH MAIN, 3RD BLOCK
KORAMANGALA
BANGALORE-560 034
REP. BY MANAGING DIRECTOR
GIRISH ARORA
AGED ABOUT 51 YEARS
R/O BANGALORE
2. KARNATAKA INDUSTRIAL AREAS
DEVT. BOARD
NO.14/3, 2ND FLOOR
R.P.BUILDING, NRUPATHUNGA ROAD
BANGALORE-560 001
REP. BY CHIEF EXECUTIVE OFFICER
AND MANAGING DIRECTOR
3. GOVERNMENT OF KARNATAKA
REPRESENTED BY PRINCIPAL SECRETARY
COMMERCE & INDUSTRIES
DEPARTMENT, M.S.BUILDING
3RD FLOOR, BANGALORE 560 001
4. MR. L. DHANANJAYA
5. MR. L. MUNIRAJU
6. MR. L. THAGARAJ
S/O LATE A. LAKSHMAIAH
RESIDENTS OF KARIYAMMANA
AGRAHARA VILLAGE
VARTHUR HOBLI
BANGALORE SOUTH TALUK
BANGALORE
W.A No.15210/2011
C/W W.A No.15417/2011
W.A No.15418/2011
3
7. SMT. PREMAMMA
W/O A. KRISHNAPPA
MAJOR
RESIDENTS OF KARIYAMMANA
AGRAHARA VILLAGE
VARTHUR HOBLI
BANGALORE SOUTH TALUK
BANGALORE
8. SMT. MUNIYELLAMMA
MAJOR
RESIDENTS OF KARIYAMMANA
AGRAHARA VILLAGE
VARTHUR HOBLI
BANGALORE SOUTH TALUK
BANGALORE
9. THE POLLUTION CONTROL BOARD
8TH FLOOR, PUBLIC UTILITY
BUILDING, M.G.ROAD
BANGALORE-560 001
REP. BY ITS SECRETARY ... RESPONDENTS
(BY SHRI. MADHUSUDHAN R. NAIK, SENIOR ADVOCATE FOR
SHRI. M. ABHISHEK, ADVOCATE FOR R1;
SHRI. P.V. CHANDRASHEKAR, ADVOCATE FOR R2;
SHRI. T.P. SRINIVAS, GA FOR R3;
SHRI. A.G. SHIVANNA, SENIOR ADVOCATE FOR
SHRI. H.M. KISHORE KUMAR, ADVOCATE FOR R4-R7;
R8-SERVED;
SHRI. C.K. VENKATESH, ADVOCATE FOR R9)
THIS WRIT APPEAL IS FILED U/S 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE
ORDER PASSED IN THE WRIT PETITION NO.19579/2004
(LA-KIADB) DATED 9 & 10/06/2011.
W.A No.15210/2011
C/W W.A No.15417/2011
W.A No.15418/2011
4
IN W.A. No.15417 OF 2011
BETWEEN :
PREMAMMA
W/O A. KRISHNAPPA
AGED ABOUT 63 YEARS
R/O KARIYAMMANA
AGRAHARA VILLAGE
VARTHUR HOBLI
BANGALORE SOUTH TALUK
BANGALORE-560 071 ... APPELLANT
(BY SHRI. D.R. RAVISHANKAR, SENIOR ADVOCATE FOR
SHRI. S. SARAVANA, ADVOCATE)
AND :
1. BASE CORPORATION LIMITED
(A COMPANY INCORPORATED UNDER
THE PROVISIONS OF THE
COMPANIES ACT, 1956)
AND HAVING ITS REGD. OFFICE AT
NO.848, 15TH MAIN, 3RD BLOCK
KORAMANGALA
BANGALORE-34
R/BY MANAGING DIRECTOR
MR. GIRISH ARORA
AGED ABOUT 51 YEARS
R/O BANGALORE
2. GOVERNMENT OF KARNATAKA
REP. BY THE PRINCIPAL SECRETARY
COMMERCE AND INDUSTRIES
DEPARTMENT, M.S.BUILDING
3RD FLOOR, BANGALORE 560 001
3. THE KARNATAKA INDUSTRIAL AREAS
DEVELOPMENT BOARD
NO.14/3, 2ND FLOOR
R.P.BUILDING, NRUPATHUNGA ROAD
BANGALORE-560 001
W.A No.15210/2011
C/W W.A No.15417/2011
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5
REP. BY CHIEF EXECUTIVE OFFICER
AND MANAGING DIRECTOR
4. MRS. NAFEESA FAZAL
FORMER MINISTER OF
STATE FOR SCIENCE AND
TECHNOLOGY AND INDIAN SYSTEM
OF MEDICINE AND HOMEOPATHY
VIDHANA SOUDHA
BANGALORE-560 001
5. MUNIYELLAMMA
MAJOR
R/O KARIYAMMANA
AGRAHARA VILLAGE
VARTHUR HOBLI
BANGALORE SOUTH TALUK
BANGALORE-71
6. MS. NOORAINE FAZAL
D/O MR. HUSSAN FAZAL
AGED ABOUT 41 YEARS
R/O S-2, 'CLARIDGE'
NO.4, LEWIS ROAD
COOKE TOWN
BANGALORE-560 005
7. THE POLLUTION CONTROL BOARD
8TH FLOOR, PUBLIC UTILITY
BUILDING, M.G.ROAD
BANGALORE-560 001
REP. BY ITS SECRETARY ... RESPONDENTS
(BY SHRI. MADHUSUDHAN R. NAIK, SENIOR ADVOCATE FOR
SHRI. M. ABHISHEK, ADVOCATE FOR R1;
SHRI. T.P. SRINIVAS, GA FOR R2
SHRI. P.V. CHANDRASHEKAR, ADVOCATE FOR R3;
SHRI. S. AJESH KUMAR, ADVOCATE FOR R4 & R6;
SHRI. GURURAJ JOSHI, ADVOCATE FOR R7)
W.A No.15210/2011
C/W W.A No.15417/2011
W.A No.15418/2011
6
THIS WRIT APPEAL IS FILED U/S 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE
ORDER PASSED IN THE WRIT PETITION NO.19579/2004
(LA-KIADB) DATED 9 & 10/06/2011.
IN W.A.No.15418 OF 2011
BETWEEN :
1. L. DHANANJAYA
AGED ABOUT 48 YEARS
2. L. MUNIRAJU
AGED ABOUT 42 YEARS
3. L. THAGARAJ
AGED ABOUT 42 YEARS
ALL ARE S/O LATE LAXMAIAH
R/AT KARIYAMMANA
AGRAHARA VILLAGE
VARTHUR HOBLI
BANGALORE SOUTH TALUK
BANGALORE-71 ... APPELLANTS
(BY SHRI. D.R. RAVISHANKAR, SENIOR ADVOCATE FOR
SHRI. S. SARAVANA, ADVOCATE)
AND :
1. BASE CORPORATION LIMITED
(A COMPANY INCORPORATED UNDER
THE PROVISIONS OF THE
COMPANIES ACT, 1956)
AND HAVING ITS REGD. OFFICE AT
NO.848, 15TH MAIN, 3RD BLOCK
KORAMANGALA
BANGALORE-34
R/BY MANAGING DIRECTOR
MR. GIRISH ARORA
W.A No.15210/2011
C/W W.A No.15417/2011
W.A No.15418/2011
7
AGED ABOUT 54 YEARS
R/O BANGALORE-560 034
2. GOVERNMENT OF KARNATAKA
REP. BY THE PRINCIPAL SECRETARY
COMMERCE AND INDUSTRIES
DEPARTMENT, M.S.BUILDING
3RD FLOOR, BANGALORE 560 001
3. THE KARNATAKA INDUSTRIAL AREAS
DEVELOPMENT BOARD
NO.14/3, 2ND FLOOR
R.P.BUILDING, NRUPATHUNGA ROAD
REP. BY CHIEF EXECUTIVE OFFICER
AND MANAGING DIRECTOR
BANGALORE-560 001
4. MRS. NAFEESA FAZAL
MINISTER OF STATE FOR SCIENCE AND
TECHNOLOGY AND INDIAN SYSTEM
OF MEDICINE AND HOMEOPATHY
VIDHANA SOUDHA
BANGALORE-560 001
5. MUNIYELLAMMA
W/O KRISHNAPPA
MAJOR
R/O KARIYAMMANA
AGRAHARA, VARTHUR HOBLI
BANGALORE SOUTH TALUK
BANGALORE-560 071
6. MS. NOORAINE FAZAL
D/O MR. HUSSAN FAZAL
AGED ABOUT 42 YEARS
R/O S-2, 'CLARIDGE'
NO.4, LEWIS ROAD
COOKE TOWN
BANGALORE-560 005
7. THE POLLUTION CONTROL BOARD
8TH FLOOR, PUBLIC UTILITY
BUILDING, M.G.ROAD
W.A No.15210/2011
C/W W.A No.15417/2011
W.A No.15418/2011
8
BANGALORE-560 001
REP. BY ITS SECRETARY ... RESPONDENTS
(BY SHRI. MADHUSUDHAN R. NAIK, SENIOR ADVOCATE FOR
SHRI. M. ABHISHEK, ADVOCATE FOR R1;
SHRI. T.P. SRINIVAS, GA FOR R2
SHRI. P.V. CHANDRASHEKAR, ADVOCATE FOR R3;
SHRI. S. AJESH KUMAR, ADVOCATE FOR R4 & R6;
SHRI. GURURAJ JOSHI, ADVOCATE FOR R7)
THIS WRIT APPEAL IS FILED U/S 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE
ORDER PASSED IN THE WRIT PETITION NO.19579/2004
DATED 9 & 10/06/2011.
THESE WRIT APPEALS, HAVING BEEN HEARD AND
RESERVED FOR JUDGMENT ON 30.03.2022 COMING ON FOR
PRONOUNCEMENT OF JUDGMENT, THIS DAY, P.S.DINESH
KUMAR J, PRONOUNCED THE FOLLOWING:-
JUDGMENT
These three writ appeals are filed assailing the order dated June 9th & 10th, 2011 in W.P.No.19579/2004.
2. W.A.No.15210/2011 is by the third and sixth respondents in the writ petition, W.A.No.15417/2011 is by respondent No.4(b)and W.A.No.15418-15420/2011 is by respondents No.4(a) (1 to 3).
W.A No.15210/2011C/W W.A No.15417/2011 W.A No.15418/2011 9
3. We have heard Shri Ravi Shankar, learned Senior Advocate and Shri Ajesh Kumar, learned advocate for the appellants, Shri Madhusudhan Naik and learned Senior Advocate for the first respondent.
4. BASE Corporation Limited1 filed the instant writ petition with following prayers:
"a) Issue a writ of certiorari, or any other appropriate writ, order or direction, quashing the Gazette Notification CPMG/KA/BG-GOP/13/2003-05 dated 05.05.2004 issued by the 2nd respondent vide Annexure N to the present writ petition;
b) Issue a writ of mandamus, or any other writ or direction directing the 1st respondent to continue and complete the acquisition proceedings in respect of the land covered; under Survey Numbers 28/1, 28/2 and 29/2 at Kariyammana Agrahara, Varthur hobli, Bangalore South Taluk pursuant to the extraordinary Gazette Notification dated 05.05.2004 bearing No. issued by the 1st respondent vide Annexure N."
1
Writ Petitioner - BASE Corporation for short W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 10
5. Petitioner's case is, BASE Corporation is a public limited company in the business of manufacturing batteries. It had entered into a joint venture agreement with Matsushita Panasonic, Japan, to set up an industry in Bengaluru to manufacture power back up banks.
6. BASE Corporation had entered into agreements with the owners of land bearing Survey No.29/2, measuring 1 acre 17 guntas, in Kariyammana Agraghara, Bengaluru South Taluk. Land owners did not perform their part of the obligation. BASE Corporation filed a suit2 for specific performance. It had also entered into an 'oral agreement' to purchase 4 acres in Survey Nos.28/1 and 28/2. A Preliminary Notification under Section 28(3) of the KIADB Act was issued on 2 O.s. No.15022/2011 in the City Civil Court, Bengaluru W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 11 December 1, 2001 to acquire several lands including the aforementioned lands.
7. BASE Corporation submitted a representation dated July 8, 2002 to the Chief Minister, Government of Karnataka, requesting him to direct KIADB to complete the acquisition formalities with regard to lands bearing Survey No.29/1 and 28/2, together measuring 5 acres.
8. On August, 19, 2002, KIADB wrote to BASE Corporation that an area of 5 acres would be acquired in survey No.28 and 29/2 subject to BASE Corporation obtaining 'no objection' from M/s Royal Fragrances Pvt. Ltd. and making an application in the format prescribed by the KIADB for acquisition and allotment. Subsequently, KIADB also called upon the BASE Corporation to deposit Rs.22,50,000/- and the said payment was made. W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 12
9. On August 22, 2003, third respondent in the writ petition, who was a Minister of State for Science and Technology, wrote to the Chief Minister stating that her daughter(sixth respondent) had paid advance sale consideration to purchase lands in Survey No.27, 28/1, 28/2 & 29/2 to start a business school and requested for dropping the said lands from acquisition proceedings. On November 29, 2003, the Pollution Control Board wrote a letter to the Special Deputy Commissioner, KIADB, stating that lands proposed for establishment of power back up system was not ideal as the process involved use of lead. On December 01, 2003, BASE Corporation wrote a letter to the KIADB, stating that the allotment of land should not be delayed as it was causing huge revenue loss. The KIADB offered to allot equivalent area of land W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 13 elsewhere, but the BASE Corporation did not agree to shift the project site.
10. On February 21, 2004, the Principal Secretary to the Government, C & I Department3, wrote to the KIADB that the land was not suitable for the project and acquisition may not be completed; and the amount in deposit be refunded to BASE Corporation. Thereafter, the impugned notification dated May 5, 2004 was issued by the Government withdrawing the proposed acquisition. Feeling aggrieved, BASE Corporation has filed the instant writ petition and the same has been allowed by the Hon'ble Single Judge. Hence, these writ appeals.
11. Shri.Ajesh Kumar for the appellants (respondents No.3 and 6 in the Writ Petition), 3 Commerce and Industries W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 14 assailing the impugned order mainly contended that:
• BASE Corporation is no more in existence. In M/s Phoenix ARC Private Limited Vs. BASE Corporation Limited, vide order dated August 2, 2019, the NCLT4, Bengaluru Bench, has admitted CP(IB) No.220/BB/2018 and one Shri Aashish Gupta has been appointed as the Resolution Professional; and moratorium has been declared. Therefore, in view of the subsequent developments, the cause of action with regard to the allotment of land in favor of BASE Corporation does not exist any more; • there exists a detailed procedure for allotment of land under the KIADB Act. A person desirous of acquiring land, is required to make an application to the KIADB. The Board shall 4 National Company Law Tribunal W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 15 register the application and make allotment as per Regulations 5 to 10 of the KIADB Regulations, 19695. The BASE Corporation, bypassing the Regulations has directly submitted a representation to the Chief Minister to complete the acquisition of the lands contending inter alia that it had entered into a sale agreement to purchase the lands and it was in peaceful possession and enjoyment of the lands. The said assertion is contrary to the pleadings contained in paragraph Nos.22 and 23 of the writ petition; • the BASE Corporation has suppressed filing O.S.No.15022/2001 seeking a decree of specific performance and possession of the lands;
5 Karnataka Industrial Areas Development Board Regulations W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 16 • BASE Corporation has suppressed filing PCR No.9/2001 against the land owners alleging commission of offences punishable under Sections 420 and 406 of IPC;
• the Hon'ble Single Judge has allowed the writ petition holding that the exercise of discretion leading to issuance of the impugned notification is illegal, arbitrary and colourable exercise of power for improper purpose and therefore fraudulent. It is further held that the Chief Minister had yielded to the influence of his cabinet colleague. The writ petition has been allowed mainly on the ground of malafide exercise of power, without issuing notice to the then Chief Minister and the same is contrary to the law laid down by the Apex Court.W.A No.15210/2011
C/W W.A No.15417/2011 W.A No.15418/2011 17
12. Shri Ravishankar, learned Senior Advocate on behalf of the appellant (land owner in Writ Appeal No.15417/2011) contended that :
• properties in question were subject matter of notifications dated December 10, 2001 issued under Section 1(3), 3(1) and Section 28(1) of the KIADB Act;
• in view of the subsequent event, namely admission of petition by the NCLT6 and denotification of surrounding lands, isolated development cannot be undertaken in a small area of land and therefore no purpose would be served in directing completion of acquisition proceedings;
• the writ appeal is continuation of the writ petition and affects the final outcome in the 6 National Company Law Tribunal, Bengaluru Bench in C.P. (IB) No. 220/BB/2018 W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 18 proceedings. Therefore, as held in Laxmi & Co. v. Anant R. Deshpande7 and Beg Raj Singh v. State of U.P.8, Court is required to take note of subsequent events into account; • BASE Corporation has to be non-suited for suppression of material facts such as institution of civil suit, criminal proceedings as held in K. Jayaram and Others vs. Bangalore Development Authority and Others9 • BASE Corporation is a defaulter to the tune of Rs.1,500 Crores to various banks and financial institutions. It has suppressed this material fact. Hence, no relief can be granted to a person who suppresses material facts by exercising discretionary jurisdiction under Article 226 of the Constitution of India; 7 (1973) 1 SCC 37 (para 27) 8 (2003) 1 SCC 726 (para 7) 9 2021 SCC OnLine SC 1194 (para 17) W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 19 • BASE Corporation having not made any application to the KIADB, has attempted to get the very same land, which it has failed to obtain through specific performance in an indirect method by approaching the Chief Minister;
• Once the petition has been admitted by the NCLT, BASE Corporation's cause of action stands abated. Hence, nothing more requires to be done except holding that the cause of action has abated and the writ petitioner cannot pursue the relief sought;
• The properties in question are yet to be acquired and therefore, they are excluded from the meaning of 'property' of a corporate debtor in Section 18(1)(f) and Section 25(2)(a) of the IBC Code;
W.A No.15210/2011C/W W.A No.15417/2011 W.A No.15418/2011 20 • Explanation to Section 18(1)(g) provides that assets owned by the third party, even if in possession of the corporate debtor under trust or contractual agreement shall not be an asset of a corporate debtor, as held in Embassy Property Developments (P) Ltd. v. State of Karnataka10 • Writ petitioner is not an aggrieved party as held in Ayaaubkhan Noorkhan Pathan v. State of Maharashtra11, because declaration of an industrial area under Section 1(3) and 3(1) of the KIADB Act only enables the Government to acquire any property which it intends for development of industrial layout in terms of Section 27 of the KIADB Act;
• A notification under Section 28(1) of the KAIADB Act is only a proposal to acquire and 10 (2020) 13 SCC 308 (para 40) 11 (2013) 4 SCC 465 (para 9) W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 21 unless Notification under Section 28(4) is issued, the acquisition is not complete; • As held in Special Land Acquisition Officer v. Godrej and Boyce12, only after publication of notification under Sub Sections (4) and (5) of Section 28, the property shall vest in the Government;
• Regulation 7 provides for allotment of lands available with the Board;
• It is held in Jayamma v. Commr.13, it is not within the jurisdiction of the Court to compel the Government to acquire any property; • BASE Corporation has no legal right in the property. Therefore, as held in Maharshi Dayanand University v. Surjeet Kaur14, 12 (1988) 1 SCC 50 (para 5) 13 (2013) 7 SCC 554 (para 10) 14 (2010) 11 SCC 159 (para 18) W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 22 promissory estoppel is based on promise capable of enforcement under law; • The Preliminary Notification dated 10.12.2001 does not indicate that the land was required for the benefit of the writ petitioner; • As held in Ajit Kumar Nag v. Indian Oil Corpn. Ltd.,15 And E.P. Royappa v. State of T.N.,16, Court should be slow in drawing dubious inferences from the facts placed by the parties when imputations are grave and made against the holder of office which has high responsibility in administration; • As held in ITI Employees Housing Co- operative Society Limited v. State of Karnataka17, the satisfaction by the Chief Minister to exclude land from acquisition when 15 (2005) 7 SCC 764 (para 56) 16 (1974) 4 SCC 3 (para 92) 17 2008 SCC OnLine Kar 412 (para 26) W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 23 possession was not taken and no award was passed, cannot be faulted under Article 226 of the Constitution of India.
• As held in Shri Ramtanu Coop. Housing Society Ltd. v. State of Maharashtra18, it is not permissible under the scheme of Industrial Development Act to acquire the land for the benefit of a company unlike under the Land Acquisition Act, 1894;
• The surrounding lands having been denotified, no power could be exercised under Section 27 of the KIADB Act, as held in Bondu Ramaswamy v. Bangalore Development Authority19 18 (1970) 3 SCC 323 at page 329 (para 21) 19 (2010) 7 SCC 129 (para 137) W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 24
13. In reply, Shri Madhusudhan R Naik, learned Senior Advocate for BASE Corporation mainly contended that:
• petitioner's collaborator is based in Japan. It manufactures sealed batteries which are imported and used as consumables by the petitioner in the manufacture of power back-up banks. The area was identified as IT corridor. Petitioner had initially attempted to purchase the land privately by entering into an agreement of sale. In the meanwhile, the land was notified by KIADB;
• The third respondent was a Minister of State. She had represented to the Chief Minister to withdraw the acquisition proceedings on the ground that her daughter was interested in the land and that she had paid advance sale consideration. Based on her request, the W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 25 impugned notification has been issued. It amounts to a colourable exercise and fraud on power;
• KIADB had rejected the objections of other members of the family who are owners of adjacent lands and the same was challenged in W.P.No.25206/2002 and 28808-10/2002. The writ petitions were rejected and the same has been confirmed by the Apex Court in P. Rajappa vs. The State of Karnataka and Others20;
• On the representation of the third respondent, the Chief Minister had sought a report from KIADB. Subsequently, the Chief Minister had ordered to drop the acquisition. Thereafter, KIADB has addressed a letter to the Pollution Control Board to submit a report based on the 20 ILR 2004 KAR 2969 W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 26 representation made by the land owner. It is alleged in the letter that manufacturing of batteries would pollute the Bellandur Lake; • The denotification is ordered apparently on the basis of a report by the Pollution Control Board. The report does not suggest that the land is unsuited for manufacture of batteries. Pollution Control Board has now admitted that there was no clear report on the issue. Yet, in the absence of any material, the impugned order has been passed with malafifde intention to favour third respondent. • The scope of writ petition cannot be expanded in an intra-court appeal. The Division Bench is required to decide the case based on the facts which existed as on the date of filing of the writ petition.W.A No.15210/2011
C/W W.A No.15417/2011 W.A No.15418/2011 27 • the consequential direction issued in the impugned order is just and appropriate in the facts and circumstances of the case. With above submissions, he prayed for dismissing the appeals.
14. Shri P.V.Chandrashekar, learned advocate for the KIADB submitted that the State Government have the power to withdraw the acquisition proceedings. BASE Corporation had no right of allotment of a particular land because pursuant to acquisition, KIADB is the beneficiary and not the writ petitioner.
15. Shri Venkatesh for the Pollution Control Board submitted that it had informed the KIADB that if further details were provided, it would re- examine the matter, but the Pollution Control Board did not receive any further details from KIADB. W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 28
16. We have carefully considered rival submissions and perused the records.
17. In substance, writ petitioners' case is, acquisition proceedings have been dropped at the instance of third respondent who was a Minister by malafide exercise of power.
18. Case of the appellants and the land owners in nutshell is, BASE Corporation's cause of action has abated. It has not submitted any application to the KAIDB. Unless the acquisition proceedings are complete, KIADB cannot allot any land. The large chunk of surrounding lands have been denotified. The reasons recorded by the Hon'ble Single Judge with regard to malafide exercise of power is unsustainable because the Chief Minister is not a party in the writ proceedings. The Hon'ble Single Judge ought not have issued W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 29 consequential direction to complete the acquisition and to allot the land to BASE Corporation.
19. In the light of rival submissions, the following points arise for consideration of this Court.
a) Whether findings with regard to malafides and colourable exercise of power are sustainable?
b) Whether subsequent events can be considered in an intra-court appeal?
c) Whether writ petitioner's cause of action has been rendered redundant?
d) Whether BASE Corporation is entitled for allotment in pursuance of doctrine of Promissory Estoppel?
Re: point (a):
20. Undisputed facts of the case are, on July 8, 2002, BASE Corporation Ltd., submitted a representation to the Chief Minister of Karnataka with a request to direct the KIADB to complete the acquisition formalities and give the land under W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 30 'Single Unit Complex Scheme'. According to the writ petitioner, the third respondent, who was a Minister, had written a letter to the Chief Minister to drop the said lands from acquisition, on the ground that her daughter had paid advance sale consideration to the land owners and had desired to start a business school; and based on that letter, the acquisition proceedings have been dropped.
21. The Hon'ble Single Judge has held in para 68 of the impugned order that the exercise of discretion by the Chief Minister is colourable exercise of power. In para 77 it is held that the Government cannot claim to be exempt from the liability to carry out the promise on some indefinite and undisclosed ground of necessary expediency. It is also recorded that the then Chief Minister, though an experienced politician and administrator had yielded to the influence of his Cabinet colleague and her daughter.
W.A No.15210/2011C/W W.A No.15417/2011 W.A No.15418/2011 31
22. Finally, the Hon'ble Single Judge has directed the Government to conclude the acquisition and to allot the land in question to BASE Corporation.
23. Shri. Girish Arora, Managing Director of BASE Corporation has filed O.S.No.15022/2001 on January 3, 2001 in City Civil Court, Bengaluru, seeking specific performance of the 'Agreement to sell' the suit schedule properties in respect of two items of lands.
"SCHEDULE-I - Item No.1 All that piece and parcel of the portion of the land in Sy. No.29/2, measuring 1 acres, 17 guntas, situated at Kariyammana Agrahara, Varthur Hobli, Bangalore South Taluk, Bangalore District and bounded on the:
EAST BY : Ring Road:
WEST BY : Land Sy no.29/1:
NORTH BY : Portion of land in Sy No.29/2
belonging to Sri. Lakshmaiah:
SOUTH BY :Boundary of Devarabisinahalli
Village:
"SCHEDULE-II - Item No.2
All that piece and parcel of the portion of the land in Sy. No.29/2, measuring 25 guntas, situated at Kariyammana Agrahara, Varthur Hobli, Bangalore South Taluk, Bangalore District and bounded on the: W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 32
EAST BY :Village boundary of Kadubisinahaali;
WEST BY : Ring road;
NORTH BY : Government Road
belonging to Sri. Lakshmaiah
SOUTH BY :Boundary of Devarabisinahalli
Village:
24. The prayer in the suit reads as follows:
"PRAYER Plaintiff prays that this Hon'ble Court may be pleased to pass judgment and decree directing the defendants
a) to get registered the sale deed in favour of the plaintiff and handover peaceful and vacant possession of the suit schedule properties within the time to be fixed by the Court and on their failure to do so, permit the plaintiff to get the same registered through the process of Court,
b) to award cost of the suit and
c) to order for such other reliefs which this Hon'ble Court deems fit in the interest of justice and equity."
(Emphasis Supplied)
25. On January 27, 2001, Girish Arora has filed PCR No.9/2001 in the Court of 10th Additional Chief Metropolitan Magistrate against A Lakshmaiah and others stating that by suppressing the 'Agreement to sell', the accused were making W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 33 attempts to sell the lands to the third parties. The prayer in the complaint reads as follows:
"PRAYER:
That, this Hon'ble Court may be pleased to
a) take the cognizance of the offences committed by the Accused.
b) try the Accused under Sections 420 and 506 of Indian Penal Code, further R/W Sns.24, 25 and 34 of Indian Penal Code.
c) to arrest and punish the Accused in accordance with law.
d) pass any other orders as it may deem fit in the interest of justice and equity."
26. It was submitted that Lakshmaiah is the predecessor of respondents No.4(a) and (b) in the writ petition.
27. The original suit and the criminal complaint have been filed in the year 2001. The representation has been submitted to the Chief Minister in July 2002. The third respondent has written her letter as per Annexure-G stating that W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 34 her daughter had paid advance sale consideration to purchase the subject lands to start a Business School. Thus, both BASE Corporation and third respondent's daughter claim to have paid advance sale consideration to land owners to purchase the lands.
28. It was argued on behalf of the appellants and the land owner that the finding with regard to malafide and colourable exercise of power is unsustainable because, Chief Minister is not a party to the proceedings. It was further argued that direction to allot the land in question in favour of BASE Corporation is unsustainable in law
29. Shri. Ravishankar, learned Senior Advocate, placing reliance on para 92 of E.P. Royappa v. State of T.N.,21 and para 56 of Ajit 21 (1974) 4 SCC 3 (para 92) W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 35 Kumar Nag v. Indian Oil Corpn. Ltd.,22 has argued that strong opinion rendered against the Chief Minister is unsustainable in law. In E.P. Royappa, it is held as follows:
"92. Secondly, we must not also overlook that the burden of establishing mala fides is very heavy on the person who alleges it. The allegations of mala fides are often more easily made than proved, and the very seriousness of such allegations demands proof of a high order of credibility. Here the petitioner, who was himself once the Chief Secretary, has flung a series of charges of oblique conduct against the Chief Minister. That is in itself a rather extraordinary and unusual occurrence and if these charges are true, they are bound to shake the confidence of the people in the political custodians of power in the State, and therefore, the anxiety of the Court should be all the greater to insist on a high degree of proof. In this context it may be noted that top administrators are often required to do acts which affect others adversely but which are necessary in the execution of their duties. These acts may lend themselves to misconstruction and suspicion as to the bona fides of their author when the full facts and surrounding circumstances are not known. The Court 22 (2005) 7 SCC 764 (para 56) W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 36 would, therefore, be slow to draw dubious inferences from incomplete facts placed before it by a party, particularly when the imputations are grave and they are made against the holder of an office which has a high responsibility in the administration. Such is the judicial perspective in evaluating charge of unworthy conduct against ministers and other high authorities, not because of any special status which they are supposed to enjoy, nor because they are highly placed in social life or administrative set up--these considerations are wholly irrelevant in judicial approach--but because otherwise, functioning effectively would become difficult in a democracy. It is from this standpoint that we must assess the merits of the allegations of mala fides made by the petitioner against the second respondent."
30. In Ajit Kumar, it is held that the burden of proving malafides is on the person making the allegations and the burden is very heavy. There is every presumption in favour of the administration that the power has been exercised bonafide and in good faith. The allegations of malafide are more easily made and such allegations demand proof of high degree of credibility. The words of Krishna W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 37 Iyer J., that it is the last refuge of a loosing litigant, has also been quoted by the Apex Court.
31. We may also gainfully record that in Ratnagiri Gas and Power Pvt. Ltd., Vs. RDS Projects Ltd23, Apex Court has held that the law casts a heavy burden on the person alleging malafides to prove the same on the basis of facts that are either admitted or satisfactorily established and/or logical inferences deducible from the same. With regard to issuing notice and hearing the person against whom allegation of malafide exercise of power is made, the Apex Court has held as follows:
"There is yet another aspect which cannot be ignored. As and when allegations of mala fides are made, the persons against whom the same are levelled need to be impleaded as parties to the proceedings to enable them to answer the charge. In the absence of the person concerned as a party in his/her individual capacity it will neither be fair nor proper to record a finding that malice in fact had 23 (2013) 1 SCC 524 (para 27) W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 38 vitiated the action taken by the authority concerned.
It is important to remember that a judicial pronouncement declaring an action to be mala fide is a serious indictment of the person concerned that can lead to adverse civil consequences against him. Courts have, therefore, to be slow in drawing conclusions when it comes to holding allegations of mala fides to be proved and only in cases where based on the material placed before the Court or facts that are admitted leading to inevitable inferences supporting the charge of mala fides that the Court should record a finding in the process ensuring that while it does so, it also hears the person who was likely to be affected by such a finding."
(emphasis supplied)
32. Levelling allegations of malafides against persons holding high offices is a serious matter. A person making allegation is required to aver and prove the allegation. Therefore, as a corollary, the person against whom allegations are levelled, is required to be given reasonable opportunity and heard. Admittedly, no notice has been issued to the Chief Minister and he has not been heard. W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 39
33. Viewed from other angle, the facts of this case disclose that one thing is common. Both BASE Corporation and the third respondent's daughter claim to have entered into Agreements with the land owners to purchase the property in question. Both of them have submitted their representations to the Chief Minister at different points of time. BASE Corporation is a Corporate entity. It was desirous of getting the Industrial site allotted by the KIADB. Under Regulations 5 to 10, a person desirous of acquiring Industrial site from KIADB is required to make an application to the KIADB. It is relevant to note that in its letter to the Chief Minister, BASE Corporation has stated that Sy. No.28 & 29/2 had been earmarked for some other Company by name M/s Royal Fragrance and a portion of the land was also earmarked for Global Tech Park Pvt. Ltd. It has also stated that it was willing to surrender 25 guntas of land in Sy. No. W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 40 29/2 and sought for allotment of the lands proposed for acquisition.
34. Thus, BASE Corporation, initially attempted to get the land by filing a suit for specific performance. It also attempted to arm twist the land owners by filing a criminal complaint. Having failed, it directly approached the Chief Minister circumventing the procedure laid down in Regulations 5 to 10.
35. The third respondent's daughter also approached the Chief Minister through her mother. One approached the Chief Minister to complete the acquisition and the other to drop the acquisition proceeding.
36. But there is a classic difference in the approach by both. BASE Corporation, having failed in attempt to get the land from the land owners W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 41 approached the Chief Minister in violation of Regulations. Third respondent approached with a request to drop the acquisition and there is no violation of statutory procedure except allegation of malafide exercise of power.
37. Hence this is a case in which, BASE Corporation, having approached the Chief Minister circumventing the Regulations is making allegation of malafide exercise of power. It is settled that a person who does not approach with clean hands, is not entitled for any relief under the extra ordinary and discretionary jurisdiction under Article 226 of the Constitution of India.
38. Accordingly point (a) is answered in the 'negative'.
W.A No.15210/2011C/W W.A No.15417/2011 W.A No.15418/2011 42 Re: point (b):
39. It was argued on behalf of the appellants and the land owners that proceedings have been initiated under The Insolvency and Bankruptcy Code, 2016 against BASE Corporation and Resolution Professional has been appointed. It was urged by Shri. Ravishankar that BASE Corporation owes about Rs. 1,500 crores to its creditors. A copy of the order dated August 2, 2019 passed by the NCLT has also been placed on record. It was urged that in view of the subsequent events, BASE Corporation is not entitled for any relief.
40. In Laxmi & Co. v. Anant R. Deshpande24, it is held that where the Court finds that because of the altered circumstances, the original relief has become inappropriate by subsequent events, the Court can take notice of such changes. 24
(1973) 1 SCC 37 (para 27) W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 43
41. In Beg Raj Singh v. State of U.P.25, it is held as follows:
"....A petitioner, though entitled to relief in law, may yet be denied relief in equity because of subsequent or intervening events i.e. the events between the commencement of litigation and the date of decision. The relief to which the petitioner is held entitled may have been rendered redundant by lapse of time or may have been rendered incapable of being granted by change in law. There may be other circumstances which render it inequitable to grant the petitioner any relief over the respondents because of the balance tilting against the petitioner on weighing inequities pitted against equities on the date of judgment"
(Emphasis Supplied)
42. In view of the above authorities, this Court can take cognizance of the subsequent events and accordingly point (b) is answered in the affirmative.
25
(2003) 1 SCC 726 (para 7) W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 44 Re: point (c):
43. The impugned notification has been issued on May 5, 2004. Nearly 18 years have elapsed from the date of the notification. The KIADB who is the beneficiary, is not aggrieved by the denotification.
44. Liquidation proceedings have been initiated against BASE Corporation. It is alleged that it owes about Rs.1,500 Crores to its creditors. KIADB had offered an alternative land and the same was refused by the BASE Corporation on the ground that its Japanese Collaborator would not agree for change in the location. Therefore, BASE Corporation's cause of action has been rendered redundant and accordingly, Point (c) is answered in the affirmative.
W.A No.15210/2011C/W W.A No.15417/2011 W.A No.15418/2011 45 Re: point (d):
45. It was argued by Shri. Ravishankar that BASE Corporation has no vested right in the land. Therefore, the Doctrine of Promissory Estoppel could not have been invoked and the KIADB could not have been directed to allot land to the appellant.
46. In Peerappa Hanmantha Harijan Vs. State of Karnataka26, it is held as follows:
"54. A careful reading of the aforesaid provisions of the LA Act, the KIAD Act and the KIADB Regulations would clearly go to show that the Company is neither a beneficiary, nor an interested person in the land as on the date of acquisition of the land, as the land was acquired by the State Government in favour of KIADB who is the beneficiary and it has allotted in favour of the Company after the acquired land was transferred in its favour by the State Government and executed the lease agreement referred to supra.
57. For the acquisition of land under the provisions of the LA Act in favour of a company the mandatory procedure as provided under Part VII of the LA Act and 26 (2015)10 SCC 469 (paras 54 and 57) W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 46 Rules must be adhered to, that is not the case in the acquisition of land involved in these proceedings as the acquisition of land is under the provisions of the KIAD Act and therefore the reliance placed upon the provision of Section 3(f)(viii) of Karnataka LA Amended Act 17 of 1961 is not applicable to the facts of the case on hand and therefore, the said provision cannot be made applicable to the case on hand."
47. In view of the above legal position, BASE Corporation has no vested right in the land in question and therefore, the Doctrine of Promissory Estoppel could not have been invoked. Accordingly, point (d) is answered in the negative.
48. Further, it is settled that Court cannot compel the Government to acquire a particular property as held in Jayamma v. Commr.27
49. It was also argued by the appellants and the land owners that large parcels of lands, at and around the land in question have been dropped 27 (2013) 7 SCC 554 (para 10) W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 47 from acquisition or de-notified. Placing reliance on Bondu Ramaswamy v. Bangalore Development Authority28, it was rightly argued by Shri. Ravishankar that acquisition proceedings cannot be initiated in respect of the lands in question as they would be surrounded by large chunks of land which have been omitted from acquisition.
50. It is held in Special Land Acquisition Officer Vs. Godrej and Boyce29, that State can be permitted to exercise its power of withdrawal unilaterally.
51. Placing reliance on Shri Ramtanu Coop. Housing Society Ltd. Vs. State of Maharashtra30 ,it was also argued that special procedure has been designed under the Land Acquisition Act for acquisition of land for the Companies and there is 28 (2010) 7 SCC 129 (para 137 & 138) 29 (1988) 1 SCC 50 (para 5) 30 (1970) 3 SCC 323 (para 21) W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 48 no such provision in the KIADB Act. KIADB Act has its own procedure and there is no provision in the Act for acquisition of land for a Company.
52. In view of the above discussion, we are of the considered opinion that the finding recorded by the Hon'ble Single Judge (that the exercise of discretion is an instance of colourable exercise of power and fraudulent), is not sustainable because, no notice was issued to the Chief Minister and he has not been heard.
53. In view of the subsequent events, particularly, appointment of resolution professional by the NCLT in the liquidation proceedings of BASE Corporation, and the passage of more than 18 years from the date of denotification, we are of the view that the relief sought for by BASE Corporation in the writ petition has become redundant. W.A No.15210/2011 C/W W.A No.15417/2011 W.A No.15418/2011 49
54. In the light of above discussion, this appeal merits consideration. Hence, the following:
ORDER
(a) Writ appeals No.15210/2011, 15417/2011 and 15418/2011 are allowed;
(b) Order dated June 9/10, 2011 in W.P. No.19579/2004 is set-aside and the said writ petition is dismissed.
No costs.
Sd/-
JUDGE Sd/-
JUDGE SPS