Karnataka High Court
K.P. Sachidananda And Ors. vs State Of Karnataka, Revenue Department ... on 18 December, 2003
Equivalent citations: ILR2004KAR593, AIR 2004 (NOC) 238 (KAR), 2004 AIR - KANT. H. C. R. 1228
ORDER Chandrashekaraiah, J.
1. The petitioners claiming to be the owners of certain bits of lands have filed these Writ Petitions challenging the notifications issued by the State Government under Section 28(1) and (4) of the Karnataka Industrial Area Development Board Act, 1966 (hereinafter referred to as 'the Act')
2. The State Government issued several notifications proposing to acquire certain lands under Section 28(1) of the Act for the purpose of establishing industries by the Karnataka Industrial Area Development Board (hereinafter referred to as 'the Board') on different dates. These notifications were followed by final notifications issued under Section 28(4) of the Act. Before issuing the said notifications the State Government issued a notification under Section 3(1) of the Act declaring the area as an industrial area comprising of the lands notified in the said notifications. Thereafter, the State Government has also issued another notification under Section 1(3) of the Act making applicable the provisions of the Act in respect of the industrial area notified under Section 3(1) of the Act.
3. The petitioners in all these Writ Petitions have challenged the proceedings. Proposing to acquire the lands, on the ground that the said lands ought not to have been acquired as certain area has been fully utilised for the purpose of putting up residential houses and for establishing industries by investing huge sum of money. Further, on the ground the said acquisition results in displacing the residents of the locality and take away the livelihood of certain persons. It is also the submission of the advocates appearing for some of the petitioners that certain lands were permitted to be used for non agricultural purpose and in the event if the said lands were acquired for establishing an industry, the owners of the said lands would be deprived of utilising the said lands for the purpose for which the lands have been permitted to be used. In some Writ Petitions it is contended that certain lands came within the green belt area and therefore, the same shall not be declared to be an industrial area for the purpose of utilising the said land for the purpose of establishing industries. Some of the petitioners contended that the lands which are now proposed to be acquired for the purpose of establishing industries by the Board are not really required for establishing industries by the board and on the other hand, the impugned acquisition proceedings are for the benefit of one M/s. Nandi Infrastructures Corridor Enterprises Limited (hereinafter referred to as 'Nandi') and therefore, the proposed acquisition is illegal and void as it results in colourable exercise of power and also suffers from legal malafides.
4. It is further submitted by the learned Counsel appearing for the petitioners that as certain lands come within the green belt area, the same shall not be declared as an industrial area without obtaining the change of Land use from the Planning Authority. The further case of the petitioners is that any proposal for acquisition of land under the Act is to meet the objects referred to in the preamble of the Act, whereas the proposed acquisition is for the benefit of Nandi and therefore, the proceedings for acquisition are vitiated by malafides
5. It is submitted that from the statement of objections filed by the respondents it is seen that the proposed acquisition is for the Project known as Mysore-Bangalore Corridor Project (hereinafter referred to as 'project') by Nandi, in view of the commitment to Nandi as per the agreement dated 3-4-1997 entered into between the State Government and the Nandi and not for establishing any industry by the Board and therefore, the entire acquisition is vitiated. Some of the petitioners contended that the agreement dated 3-4-1997 entered into between the State and the Nandi, which is a Company registered under the companies Act, is illegal and therefore, any acquisition pursuant to the said agreement to fulfill the obligations of the State Government cannot be considered as an acquisition for public purpose and therefore, the impugned acquisition is to be declared as illegal and void. The further submission of the learned Counsel appearing for the petitioners is that formation of a road is not an industry as defined under the Act and therefore, there cannot be any acquisition under the Act for the purpose of formation of road.
6. The State Government and respondents 3 and 4 and Nandi have filed Statement of objections justifying the acquisition. From the statement of objections filed by respondents 2, 3 and 4 it is seen that the State Government entered into an agreement with the Nandi for the development, construction and maintenance of the project known as Bangalore-Mysore Infrastructure Corridor Project which has, as its components, a four lane 111 kms. Expressway between Bangalore and Mysore, 41 kms of peripheral road and 9.1 kms. of link road. The project also comprises of five town ships to be developed all along the corridor way from Bangalore to Mysore. But, the extent of land required for the above project is to be provided by the State Government out of the lands at its disposal as also by way of acquisition under the Act. The cost of the Land to be acquired is to be met by Nandi. From this it is seen that the acquisition of land is for the purpose of project. According to the respondents acquisition of land for the purpose of formation of the road comes within the definition of the word 'industrial area'; as amended by Act 11 of 1987 and it cannot be said that the State Government has no authority to acquire the lands for the purpose of formation of the road. The further submission of the respondents is that the impugned notifications proposing to acquire the lands is for the formation of the peripheral road and the link road which are part of the project proposed and accepted by the State Government. The peripheral road, link road are connected with interchanges and ramps.
7. It is further contended that since the agreement entered into between the State and the Nandi is held to be valid by the Division Bench or this Court in W.P-29211/1997 disposed of on 21-9-1998, it is not open for the petitioners to contend that the said transaction is illegal. Further, the acquisition of land is to meet the obligation of the State Government under the above said agreement as it is for the benefit of the general public and therefore, it cannot be said that the acquisition is bad in law.
8. The statement of objections filed by Nandi is also to the effect that the acquisition of land is for implementation of the project by Nandi as per the agreement dated 3-4-1997. The said agreement has been upheld by the Division Bench of this Court and therefore, there is no reason for the petitioners to contend that the proposed acquisition is not for the public purpose. As per the statement of objections filed by Nandi, the area required for peripheral road is only 1,600 acres which includes link roads, service roads, service changes and interchanges. The remaining extent of lands which are the subject matter of the notifications is to provide alternative sites to the land owners, who lost their lands consequent upon the acquisition and give some portion to the Indian Machine Tool Manufacturers Association (IMTMA) for the purpose of establishing a convention centre. It is further stated that from the total extent of land acquired, 60% of the land will be utilised for the purpose of road and 40% of the land will be utilised for the purpose of township and for other purposes.
9. Some of the petitioners have challenged the impugned notifications on the ground that they have not been served with any notice as required under Section 28(2) of the Act and therefore, the final notification issued under Section 28(4) of the Act is invalid. In some Writ Petitions they have challenged the final notification on the ground that the land acquisition officer, to whom the power of the State Government has been delegated, has passed an order dropping the proceedings in the first instance and later on recalled the said order and ordered to issue the notification under Section 28(4) of the Act. According to the petitioners the land acquisition officer has no jurisdiction whatsoever to recall the earlier order of dropping the proceedings. In respect of this type of cases, this Court has already quashed the final notifications in some matters reserving liberty to the respondents to proceed with the acquisition from the stage of the preliminary notifications. In cases where no notices have been served on the land owners the Board filed a memo stating that the order passed under Section 28(3) of the Act be quashed with a direction to the Special Land Acquisition Officer to hear the petitioners on the date that may be fixed by this Hon'ble Court and pass suitable orders under Section 28(3) of the Act in the interest of justice and equity. Those cases are W.P.Nos. 29694-95 of 2003; 31574/2003: 31570-72/ 2003: 37571/2003; 43193/2003; 44890/2003, 43723/2003. In W.P.28953-55/2003 a memo has been filed by the respondent Board to dismiss the said Writ Petitions stating that the petitioners in the said cases have filed W.P. Nos. 29694-95/2003.
10. Most of the petitioners submitted that they have no objection for acquisition of the Land in so far as the lands required for the purpose of formation of the peripheral road is concerned. Their grievance is against the acquisition of the lands situated outside the peripheral road on the ground that the said lands are not required for the public purpose. From the objections filed by some of the petitioners pursuant to the notice issued to them under Section 28(2) of the Act, I find that they have no objection in so far as the acquisition of land required for the acquisition of the peripheral road is concerned.
11. The object of the Act is for establishment of industrial area in the State to promote the establishment and orderly development of industries in such industial area and for other connected purposes. Sections 2(6) of the Act defines 'Industrial Area' 2(7) defines 'Industrial Estate and 2(7)(a) defines Industrial Infrastructural Facilities' as follows:
2(6). "Industrial Area" means any area declared to be an industrial area by the State Government by notification which is to be developed and where industries are to be accommodated, and industrial infrastructural facilities and amenities are to be provided, and includes an Industrial estate;
2(7) "Industrial Estate" means any site selected by the State Government where factories and other buildings are built for use by any industries or class of industries;
2(7)(a) "Industrial Infrastructual Facilities" means facilities which contribute to the development of industries established in Industrial Area such as research and development., communication, transport, Banking, Marketing, Technology parks and Townships for the purpose of establishing Trade and Tourism Centres and any other facility as the State Government may be notification specify to be an industrial infrastructural facility for the purpose of this act;
From the reading of the above said definitions it is clear that industrial area includes facilities which contribute to the development of industries established in industrial area such as research and development, communication, transport, Banking, Marketing, Technology Parks and Townships for the purpose of establishing trade and tourism centres and any other facilities as the State Government may by notification specify to be an industrial infrastructual facility for the purposes of this Act, and amenities are to be provided and includes an industrial estate. If that is so, acquisition of land for development of the industries and providing communication, transport and for establishment of township cannot be said to be not for industrial purpose.
11A. The acquisition of land for the purpose of formation of road is no doubt a public purpose. This fact has been accepted by all the land owners at the time of argument. In view of the fact that Bangalore the State Capital and Mysore, which is an important tourist centre, are fast developing cities both in commerce and industries, the Government has taken a policy decision for the purpose of formation of an Expressway between Bangalore and Mysore. Further, it has also taken a decision to provide easy and fast access to the centre of the city by forming peripheral road, link road and elevated road. The formation of the Expressway, peripheral road, link road and elevated road are the need of the day. Therefore, keeping this fact in mind the petitioners have rightly submitted that they have no objection in so far as acquisition of land for formation of road is concerned.
12. Keeping these definitions in mind and also in view of the fact that the petitioners have no objection for acquisition of land for the purpose of formation of road, I do not propose to disturb the proposed acquisition for the purpose of formation of peripheral road, link road, service road, interchanges and ramps is concerned.
13. In most of these petitions it is contended that the lands are situated beyond the peripheral road and the said lands are not required for the purpose of formation of the road as the proposed acquisition is for the benefit of Nandi and therefore, it is not for a public purpose. From the project report and the map produced at the time of the argument, it is seen that several lands, which are situated outside the pheripheral road, link road and service road, are also proposed for acquisition. Whether the said lands are really required for public purpose or not is to be examined with reference to the provisions of the Act.
Under Section 28(1) of the Act if in the opinion of the State Government any land is required for the purpose of development of the Board in furtherance of the object of the Act, the State Government may issue a notification proposing to acquire the said land. Under Section 28(2) of the Act, the State Government shall serve notice upon the owner or if the owner is not the occupier, on the occupier of the land to showcause why the said land shall not be acquired within 30 days from the date of the service of the notice. If any objections are filed objecting the proposed acquisition, the State Government may pass such orders as it deems fit after affording an opportunity of hearing to the owner of the land. After passing of the order as required under Section 28(3) of the Act, if the Government is satisfied that the land proposed for acquisition under Section 28(1) of the Act is required for the purpose notified in the notification issued under Section 28(1) of the Act, may issue declaration to that effect. Under Section 28(5) of the Act consequent upon the publication of the notification under Section 28(4) of the Act, the land shall vest with the State Government.
14. Under Rule 14 of the Rules framed under the Act, the power of the State Government under Sub Sections 2, 3, 6 7 and 8 of Section 28 and Sub Sections 1, 2 and 3 of Section 29 is delegated to the Asst. Commissioner in charge of the concerned sub division or to the Special Land Acquisition officer working in the Board. The State Government in exercise of the power under Section 28(1) of the Act issued several notifications stating that the lands shown in the notification are required for the Board for the purpose of establishing Industries by the Board. It would have been proper for the State Government to issue one notification under Section 28(1) of the Act as the purpose of acquisition is only one. In this notification the purpose notified is establishing of industries by the Board, whereas from the statement of objections it is seen that the acquisition of land is for the purpose of formation of road by Nandi, pursuant to the agreement entered into between the State Government and Nandi. At the time of arguments the learned Counsel for the petitioners submitted that the very purpose for which the lands are required is not notified in the notification issued under Section 28(1) of the Act and they came to know the purpose for acquisition only after the respondents have filed the statement of objections and therefore, they are deprived of making representation objecting the acquisition of land for the purpose for which it is now proposed to be used by the State Government.
15. In reply to this submission the learned Counsel appearing for the respondents submitted that some of the land owners , in their objections before the Special Land Acquisition officer, specifically objected the acquisition of lands for the formation of road and therefore, they cannot now say that they are not aware of the purpose of acquisition.
16. The acquisition of land under the Act is against the will of the land owner. No doubt, under the Land Acquisition Act the land owner, who is deprived of the land, is paid 30% solatium because of this compulsory acquisition. But acquisition of land by the State Government against the will of the land owner, in exercise of its power of eminent domain, is always for a public purpose. If that is so, every land owner is entitled to show whether the said acquisition is for a public purpose or not. Under the Scheme of the Act referred to above, the land owner is to be served with notice and is to be heard before passing the order declaring the land as required for the purpose for which it is notified. Therefore, any compulsory acquisition against the will of the land owner shall be relatable for a public purpose. If it is not, then the said acquisition is on account of colourable exercise of power and also to be characterised as fraud on power.
17. Whenever the land is required for a public purpose, the specific public purpose is to be stated in the notification under Section 28(1) of the Act. The Supreme Court in the case of MUNSHI SINGH AND ORS. v. UNION OF INDIA, states as follows :-
"But the mere words, as are to be found in the notifications here "planned development of the area" were wholly insufficient and conveyed no idea as to the specific purpose for which the lands were to be utilised".
18. The purpose notified in the notification issued under Section 28(1) of the Act should be the same as declared in the notification issued under Section 28(4) of the Act. In the instant case, the purpose notified under Section 28(1) of the Act is to the effect that the land is required by the State Government for the purpose of establishing industries by the Board. The final notification issued under Section 28(4) of the Act is also to the effect that the Government is satisfied with the purpose for which it has been notified in the preliminary notification issued under Section 28(1) of the Act, whereas in the instant case the acquisition of land admittedly, as seen from the statement of objections filed by the respondents, is for the purpose of implementation of the project by the Nandi and not for establishing an industry by the Board. From this it is seen that the land owners were not made known of the purpose for which the lands have been notified so as to make their effective representation objecting the proposed acquisition. The very object of affording an opportunity of being heard to the land owners under the scheme of the Act is for the purpose of objecting the acquisition if they are of the view that the lands notified are not required for the purpose for which they have been notified. In the cases on hand, the land owners were not aware of the purpose, by looking at the contents of the notification issued under Section 28(1) of the Act, that the said lands are required for the purpose of implementation of the project. If that is so, in so far as the lands which fall outside the peripheral road, link road, service roads are concerned, the land owners are deprived of an opportunity of objecting the acquisition.
19. Some of the petitioners contended that no opportunity has been afforded to them and others before declaring the said area as industrial area. In reply to the said submission the learned Counsel appearing for the Board submitted that no opportunity is required to be afforded since Section 3 of the Act is in the nature of conditional legislation. In support of this submission he relied upon the decision of the Supreme Court in the case of TULSIPUR SUGAR CO. LTD v. THE NOTIFIED AREA COMMITTEE, TULSIPUR., The Supreme Court in the said decision has held that the power of the State Government to make a declaration under Section 3 is legislative in character because the application of the rest of the provisions of the Act to the geographical area, which is declared as a town area, is dependent upon such declaration. The maxim of audi alteram partem does not become applicable to the case by necessary implication. Section 3 does not require the State Government to make declaration after giving notice of its intention so to do to the members of the public and inviting their representations regarding such action.
In the instant case also the notification issued under Section 1(3) and 3(1) of the Act by the State Government is legislative in character and therefore, in view of the above said decision of the Supreme Court the maxim "audi alteram partem' has no application. Hence, I hold that the notifications issued under Section 1(3) and 3(1) are valid in law.
20. Some of the petitioners have taken the ground that the Special Land Acquisition Officer has not issued any notice to them as required under Section 28(2) of the Act. In those Writ Petitions the Board has filed a memo stating that those Writ Petitions may be allowed with a direction to the Land Acquisition officer to hear the petitioners and pass appropriate orders under Section 28(3) of the Act.
21. In some petitions the Land Acquisition Officer has passed orders to drop the proceedings in respect of certain lands on the ground that the said lands are not required for the purpose of the project. The said orders were subsequently recalled by the Special Land Acquisition Officer and again orders were passed overruling the objections of the land owners. On the basis of the said orders, final notifications under Section 28(4) of the Act were issued. In the Writ Petitions challenging the said procedure adopted by the Special Land Acquisition Officer, this Court quashed the final notifications reserving liberty to proceed from the stage of the preliminary notification.
22. The petitioners in all these cases have filed objections on several grounds. The Government has appointed more than one person as Special Acquisition Officers by delegating its power. All the orders passed on the objections are stereotyped stating that the objections are general in nature. There is no proper consideration of the objections in the orders passed under Section 28(3) of the Act.
23. From the records produced by the Government it is seen that the total cost that may be required for acquisition would come to rupees 150 to 200 crores. The said amount shall be deposited by Nandi before issuing the notification under Section 28(4) of the Act. But, the Nandi has not deposited the proposed cost of acquisition before issuing the notification under Section 28(4) of the Act. The notes found on the Government file reads as follows:-
(1) As per the current policy of the Board, the Company is required to deposit the entire amount with the Board before issuing of final notification under Section 28(4) of the Act. However, depositing of the amount in tranches of Rs. 10 crores each, as proposed in the agreement, exposes the Board to a potential liability of Rs. 150 to 200 crores as in the event of the Company abandoning the project, the Board would be forced to pay compensation and take over the acquired land for which it may not have any immediate use.
(2) In the event of NICE abandoning the project subsequent to the issuance of the final notification the land for which the compensation is already paid should be transferred to NICE and such extent of land will not be available either to the Government or, to the Board if the project is decided to be implemented by any other Government agency consequent to the abandoning the project by NICE.
From these notes it is seen that the Nandi has not deposited the amount as per the agreement. If that is so, I do not know how the State Government has issued the final notification under Section 28(4) of the Act.
24. The note of the Government file discloses as follows:
"The officers have submitted the incomplete report thinking that whatever they send the Government at its level approve the proposal sent for acquisition. In this regard the State Government is directed to take action against the officers who submit incomplete report. It appears they got the report with signatures of the officers before issuing notifications under Section 28(4)."
From this it is seen that the officers who have passed orders under Section 28(4) at the Act have not applied their mind to the objections of the land owners and proceeded to pass orders without application of mind. Therefore, I am of the view that in so far as the lands, which fall outside the area required for the formation of the road is concerned, the matter requires reconsideration as observed above.
25. Learned Counsel for the petitioners submitted that since some portion of the land is earmarked for residential purpose and some area is declared as green belt area, the same cannot be acquired for industrial purpose by declaring the area in question as an industrial area. The respondents in the statement of objections have stated that in so far as this area is concerned, new planning authority called the Bangalore Mysore Infrastructure Corridor Area Planning Authority has been constituted. Even assuming that the said area is earmarked for a particular purpose, that will not come in the way of acquiring the land since it is open for the Government to obtain change of Land use before using the same for industrial purpose. Further, in view of the constitution of the Planning Authority, there is also no impediment for the State Government for acquiring the land for the industrial purpose, if it is of the opinion that the said land is required for industrial purpose.
26. It was argued that Nandi has already allotted certain extent of land to the Association of India Machine Tools Manufacturers to put up a big conventional centre. Whether in fact such a conventional centre is also a part of the project or not is a matter to be considered by the Government after affording opportunity to the land owners to file objections.
As per the statement of objections filed by Nandi, only 60% of the land acquired will be utilised for laying road and remaining 40% will be utilised for town ships. In so far as this 60% of the land which is required for the purpose of laying road is concerned as stated earlier, the final notification is to be confirmed. But, so far as 40% of the land is concerned i.e. the acquisition for township, construction of conventional centre and to allot alternative sites to the land owners, the matter requires reconsideration after affording opportunity to the land owners to file objections as the land owners were not aware of the requirement of the lands for implementation of the project.
27. In view of the apprehension expressed by the Board, as seen from the records, that in the event if Nandi abandons the work there would be a burden on the Board and as the lands are not required for immediate use by the Board, I feel Nandi should be put on certain terms.
28. Hence, the following order:-
Writ Petitions are disposed of in the following terms:-
The acquisition of land by the State Government in so far as it relates to the formation of the peripheral road, link road, service road, inter change and ramps are concerned (60% of the land are acquired), Writ Petitions are dismissed.
ii) In so far as the lands other than the lands referred to in para (i) above (40% of the land i.e. the acquisition of the land for township, construction of conventional centre and to allot alternative sites to the land owners) are concerned, the notifications issued under Section 28(4) of the Act are quashed in so far as they relate to the lands of the petitioners are concerned;
iii) The respondents are at liberty to proceed with the acquisition pursuant to the notifications issued under Section 28(1) of the Act.
iv) The petitioners are permitted to file objections, if any, treating the notifications issued under Section 28(1) of the Act is for purpose of execution of the project, within four weeks from today.
v) If the objections are filed, the respondents are directed to afford an opportunity of hearing to the persons who have filed objections and thereafter, to proceed with the acquisition in accordance with law.
vi) Further, in the event if Nandi fails to execute the project in so far as it relates to the formation of peripheral road, link road, service road, interchanges and ramps are concerned, the State Government is directed to resume the land without paying any compensation to Nandi and restore the same to the Land owners.