Karnataka High Court
Sri.C. Jayaram vs The State Of Karnataka on 25 February, 2022
Author: S.R.Krishna Kumar
Bench: S.R.Krishna Kumar
1
IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 25TH DAY OF FEBRUARY 2022
BEFORE
THE HON'BLE MR.JUSTICE S.R.KRISHNA KUMAR
WRIT PETITION No. 11615 OF 2020 (LA-KIADB)
BETWEEN:
1. SRI.C. JAYARAM
S/O LATE CHIKKA MUNIYAPPA
AGED ABOUT 66 YEARS
R/AT BELLANDURU VILLAGE AND POST,
VARTHUR HOBLI
BANGALORE EAST - 560 034.
2. SRI M LAKSHMAPPA
AGED ABOUT 63 YEARS,
S/O LATE CHIKKA MUNIYAPPA
R/AT NO. 133M, BELANDURU VILLAGE AND POST
VARTHUR HOBLI,
BANGALORE EAST - 560 034.
3. SRI C LAKSHMANA
S/O LATE CHIKKA MUNIYAPPA
AGED ABOUT 59 YEARS,
R/AT BELLANDURU VILLAGE AND POST
VARTHUR HOBLI,
BANGALORE EAST - 560 034.
4. SRI C MUNIRAJU
AGED ABOUT 55 YEARS,
S/O LATE CHIKKA MUNIYAPPA
R/AT BELLANDURU VILLAGE AND POST
VARTHUR HOBLI
BANGALORE EAST - 560 034
...PETITIONERS
(BY SRI. MADHUSUDAN R. NAIK, SENIOR COUNSEL FOR
SRI. SRINIVASA REDDY, R.V., ADVOCATE FOR P-1 & P-2
SRI. RAMESH BABU.R., ADVOCATE FOR P-3 & P-4)
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AND:
1. THE STATE OF KARNATAKA
BY ITS SECRETARY
DEPARTMENT OF INDUSTRY AND COMMERCE
(INDUSTRIAL DEVELOPMENT) M.S.BUILDING
BANGALORE - 560 001.
2. THE KARNATAKA INDUSTRIAL AREA
DEVELOPMENT BOARD
2ND FLOOR, RASTROTHANA PARISHAT BUILDING
NRUPATHUNGA ROAD
BANGALORE - 560 001.
BY ITS CHIEF EXECUTIVE OFFICER AND
EXECUTIVE MEMBER.
3. M/S SSSN PROJECT PVT LTD
(PREVIOUSLY NAMED M/S SRI SATHYA SAI NARAYANA
HOSPITALS PVT LTD)
NO.31, 3RD CROSS, RMV 2ND STAGE
BANGALORE - 560 094
REP BY ITS DIRECTOR
SRI SHAILESH KUMAR.
...RESPONDENTS
(BY SRI. A.C.BALARAJ, AGA FOR R-1
SRI. D.N. NANJUNDAREDDY, SENIOR COUNSEL APPEARING FOR
SRI. P.V. CHANDRASHEKAR, ADVOCATE FOR R-2
SRI. D.R. RAVISHANKAR, ADVOCATE FOR C/R-3
THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA PRAYING TO DIRECT
RESPONDENTS 1 AND 2 , TO TAKE NOTE OF THE
REPRESENTATION OF THESE PETITIONERS, (PER THEIR
COMMUNICATION DATED 18.03.2020) AS AT ANNEXURE-T AND
IN ACCORDANCE WITH THE ORDER AT PARA 27 OF THE ORDER
OF THE DIVISION BENCH DATED 22ND NOV 2012, IN W.A
NO.1735/2007, WHEREIN IT IS STATED AND ETC.
THIS W.P. IS BEING HEARD AND RESERVED ON
31.07.2021 COMING ON FOR PRONOUNCEMENT OF ORDERS
THIS DAY, THE COURT MADE THE FOLLOWING:-
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ORDER
In this petition, petitioners have sought for the following reliefs:-
" i. Issue a Writ of mandamus or such suitable writ or order Directing respondents 1 and 2, to take note of the Representation of these petitioners, (per their communication dated 18.03.2020) as at Annexure-T; and in accordance with the order at para 27 of the Order of the Division Bench dated 22nd Nov 2012, in W.A.No.1735/2007, wherein it is stated:
"If there is any violation of the terms of the lease or if his land is used for purposes other than putting up a Hospital, the KIADB shall cancel the lease, reclaim the property and, the benefit of this acquisition shall be given to the beneficiary. ...Keeping in mind 'the object' behind the acquisition, the object with which the third respondent has been formed and above all, keeping in mind the public interest, the persons who are going to be benefited by this Hospital, this acquisition is upheld. If the object is in any way diluted or not given effect to, the third respondent would not be entitled to the benefit of this acquisition".
ii. Further be pleased to direct Respondent Nos.1 and 2, to withdraw the acquisition proceedings, issued vide Notification -I, No.Va.Kai/82/SPQ/2004 dated 06.03.2004 vide Annexure-B, Notification-II No.Va.Kai/82/SPQ/2004 dated 08.03.2004 vide 4 Annexure-C, Notification No.Va.Kai/82/SPQ/2004 dated 06-03-2004 vide Annexure D and Notification No.C1/241/SPQ/2004 dated 20-05-2004 vide st Annexure-E issued by the 1 Respondent, declaring them as not for 'public purpose' and as 'impermissible in law' and iii. Consequently further be pleased to direct, to withdraw 'the leases granted' pursuant to such notification; since the 3rd Respondent is not entitled for the benefit of acquisition under the said notifications, and, iv. Issue such other appropriate writ, order of direction, as may be deemed fit in the circumstances of the case, in the interest of justice and equity".
2. The petitioners contend that the subject land were notified for acquisition by the State Government for the purpose of industrial development by issuing the notices under Sections 3(1), 1(3) and Section 28(1) of the Karnataka Industrial Areas Development Act (for short 'the KIAD Act'). The said notifications were issued on 06.03.2004 by the respondents. In pursuance of the same, the final notification under Section 28(4) of the KIAD Act was issued by the KIADB after rejecting the various 5 objections submitted by the petitioners and other land owners.
2.1 Meanwhile, the Karnataka Industries (Facilitation) Act, 2002, came into force on 17.12.2003 which provided for constituting single window clearance procedure for consideration of applications from entrepreneurs intending to establish industries in the State of Karnataka. The respondent No.3 approached the aforesaid single window agency on 17.12.2002 requesting for grant of 5 acres of land including the subject land for the purpose of establishing a Multi Specialty Hospital. In pursuance of the same, on 29.12.2003, the single window agency resolved to recommend acquisition of 5 acres of land including the subject land for the purpose of the respondent No.3 to construct a Hospital.
2.2 The petitioners filed W.P.No.21408/2004 before this Court challenging the acquisition. In the said petition, M/s.Sri.Satya Sai Narayana Hospital (P) Ltd., - respondent No.3 herein was arrayed as respondent No.3 while the KIADB was arrayed as respondent No.2; the State of Karnataka was arrayed as respondent No.1. The aforesaid 6 petition in W.P.No.21408/2004 was dismissed by the learned Single Judge of this Court vide order dated 13.08.2007, thereby upholding the acquisition of the subject land. Aggrieved by the said order, petitioners preferred writ appeal before the Hon'ble Division Bench in W.A.No.1735/2007. By final order dated 22.11.2012, the Hon'ble Division Bench dismissed the said writ appeal. It is contended by the petitioners herein that while dismissing the writ appeal, this Division Bench has issued directions and made observations in favour of the petitioners against the respondents.
2.3 Aggrieved by the aforesaid order dated 22.11.2012 passed in W.A.No.1735/2007, the petitioners herein preferred SLP No.9662/2013 which was dismissed vide final order dated 28.01.2020 by the Apex Court. It is contended that the Apex Court reserved liberty in favour of the petitioners in respect of issues other than the challenge to the order passed by this Court which attained the finality on account of the dismissal of the special leave petition. With this background and contending that the petitioners have been given the liberty to file the present petition, the 7 petitioners are before this Court by way of the present petition.
2.4 Petitioners have contended that subsequent to the disposal of the matter by the Apex Court, they submitted a representation dated 18.03.2020 to the respondents 1 and 2 calling upon them to implement and take necessary action against respondent No.3 for alleged violation and non-compliance of the directions issued by this Court in W.A.No.1735/ 2007 referred to supra. It is the grievance of the petitioners that despite the directions issued by this Court and liberty reserved by the Apex Court in favour of the petitioners as well as the representation submitted by the petitioners, the respondents 1 and 2 are not taking any action to cancel the allotment and lease of the subject land in favour of respondent No.3, who is guilty of contravening and violating the orders passed by this Court and the Apex Court. Under these circumstances, prayer No.(a) for necessary directions have been sought for by the petitioners as against respondents 1 and 2.
2.5 Petitioners have also contended that the impugned acquisition proceedings purporting to allot and 8 convey the subject land in favour of respondent No.3, who is intending to use the subject land for real estate business under the guise of claiming to use it for the purpose of Hospital is vitiated by fraud and collusion and as such, the acquisition of the subject land pursuant to the impugned notifications are illegal, impermissible in law and the same deserve to be withdrawn by the respondents 1 and 2.
3. Respondent No.1 - State Government has not filed statement of objections.
4. Respondent No.2 - KIADB has filed statement of objections inter-alia contending that in view of the earlier round of litigation, wherein the challenge to the acquisition by the petitioners was rejected right up to the Supreme Court, the petitioners does not have locus standi to file the present petition, particularly, when the subject land had stood vested with the State Government free from all encumbrances. It is contended that the project of putting up of Hospital became unworkable and unviable on account of the ill health of Dr.A.S.Hegde, who was in- charge of constructing the Hospital. Further, the new Multi 9 Specialty Hospital with large capacity have come up in the close vicinity of subject land, thereby rendering the Hospital project of the respondent No.3 impracticable and unviable. Under these circumstances, the State Level Single Window Clearance Committee resolved in its meeting dated 15.06.2019 to permit the respondent No.3 to use / utilize the subject land to put up an IT park (Information Technology Park) which is also an industrial infrastructure facility as defined under Section 2(7-a) under the KIAD Act.
4.1 It is also contended that by virtue of Section 28(5) of the KIAD Act and dismissal of the earlier petitions filed by the petitioners, the subject land has vested in the State free from all encumbrances and the petitioners having become persona non grata, they are not entitled to put forth any contentions or challenge the change of user of the land, over which they do not have any right. The KIADB has stated that subsequent to disposal of writ appeal in W.A.No.1735/2007 several changed circumstances and subsequent events have transpired which necessitated the subject land to be used for putting up an IT park and not use the same for the purpose of Hospital. It is therefore 10 contended that there is no merit in the petition and that the same is liable to be dismissed.
5. In its statement of objections, respondent No.3 in addition to putting forth various contentions and contesting the petition contended that in view of dismissal of the earlier round of litigation commenced by the petitioners in W.P.No.21408/2004, which was confirmed by the Division Bench in W.A.No.1735/2007 and affirmed by the Apex Court, the present petition putting forth the very same contentions is not maintainable and barred by principles of res judicata and constructive res judicata. It is contended that the specific contention urged in the present petition with regard to change of land use from putting up an Hospital to doing real estate business by respondent No.3 was urged for the purpose of challenging acquisition, which was negated by the Division Bench which did not quash the acquisition nor interfere with the vesting of the land with the KIADB in terms of Sections 28(4) and 28(5) of the KIAD Act. So also, all the contentions urged by the petitioner to challenge the acquisition of the subject land were rejected 11 by the Apex Court which confirmed the order of the Division Bench. The Apex Court has clearly rejected the challenge made by the petitioner to the acquisition and vesting of land with the State and KIADB and the question of revisiting the said contentions would not arise.
5.1 Respondent No.3 contended that once the acquisition proceedings had attained finality, having been confirmed by the Apex Court and the subject land having been vested with the State Government, the petitioners become persona non grata and there cannot be divesting of the subject land under any circumstances; once the land had stood vested with the State Government free from all encumbrances, the same cannot be divested and merely because the subject land was not utilised for the purpose for what it was acquired, it cannot be said that the land which had already stood vested with the Government can be divested and returned in favour of the petitioners. It is further contended that the petitioners do not have locus standi to challenge the acquisition proceedings nor seek any direction for change of land use which is a matter inter se between the respondents.
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5.2 The respondent No.3 has further contended that a perusal of the facts and grounds urged in the memorandum of special leave petition filed by the petitioners against the order of the Division Bench in W.A.No.1735/2007 will indicate that the very same grounds urged in the present petition had already been urged and negated by the Apex Court. The order of the Apex Court will clearly reveals that the grounds urged by the petitioners before the Division Bench as well as additional grounds urged before the Apex Court have been rejected by the Apex Court which merely reserved liberty in favour of the petitioners to pursue such remedies other than the claims - contentions already put forth by the Apex Court. It is therefore contended that apart from the fact that there are no bonafides in the present petition, permitting the petitioners to re-agitate the very same grounds all over again is not permissible in law.
5.3 Respondent No.3 has also contended that so long as the Division Bench has come to the conclusion that the property can be used for industrial purpose by putting up an Hospital, the challenge to the acquisition cannot be 13 questioned by the petitioners. It is contended that change of land use for the purpose for which the subject land was acquired cannot be a ground to challenge the acquisition in the light of earlier round of litigation instituted by the petitioners themselves. Though the Hospital was a project sought to be implemented by renowned Neurologist Dr.A.S.Hegde, on account of the pendency of the earlier round of litigation as well as the advanced age and health condition of the said Doctor, the Hospital project could not be proceeded with and all the respondents have together decided to use the subject land to set up a software technology park - industry, which is permissible. It is therefore contended that apart from the fact that the petitioners do not have locus standi to either challenge the acquisition or question the change of land use from putting up of Hospital to putting up an IT park, the respondent No.3 was entitled to put up an IT park on the subject land after obtaining necessary clearances and permission from the respondents 1 and 2, which is perfectly permissible, legal and proper. Putting forth these contentions, respondent No.3 has sought for dismissal of the present petition. 14
6. The petitioners have filed rejoinder to the statement of objections filed by the respondent No.2- KIADB. In the rejoinder, in addition to denying the various contentions urged in the statement of objections and reiterating the contentions put forth in the writ petition, petitioners have contended that the respondents are guilty of fraud and that the entire acquisition is vitiated by fraud. It is contended that action of the respondent No.2 permitting change of land use from putting up of Hospital to putting up of IT park is an abuse of power as well as process of court. It is also contended that the respondent No.2 is ignoring its functions under public trust of doctrine and is seeking to confer largess on respondent No.3 as a premium for his commission of fraud of the court. It is contended that both respondent No.2 and respondent No.3 are guilty of violating the order of the Division Bench in the earlier round of litigation as well as the order of the Apex Court. The meeting of the SLSWCC was held on 15.06.2019 and the decision taken in the said meeting was at a point in time when status quo order was passed by the 15 Apex Court and consequently, the said meeting and decision are illegal, invalid and void.
6.1 The petitioners have also contended that during the pendency of the matter before the Apex Court, respondent No.3 has changed its memorandum of objects and reason which was followed by a sale agreement on 31.05.2018 in favour of M/s.Anushka Investments. It is therefore contended that the directions issued by the Division Bench, liberty granted by the Apex Court in favour of the petitioners as well as subsequent events that transpired during the pendency of the matter before the Apex Court clearly establish that the acquisition proceedings are vitiated by fraud and collusion between respondent Nos.2 and 3 and the acquisition proceedings deserve to be quashed.
7. The respondent No.2 has filed additional statement of objections inter alia contending that during the course of enquiry under Section 28(3) of the KIAD Act, while the other land owners filed their objections to the preliminary notification, the petitioners did not chose to do 16 so and consequently, petitioners are not entitled to challenge the acquisition. The contention of the petitioners that they did not have opportunity to file objections to the preliminary notification has already been considered and negatived by the Division Bench in W.A.No.1735/2007 and it is now not open for the petitioners to re-agitate the same issue all over again. It is contended that pursuant to a final notification and the notification dated 20.05.2004, the subject land stood vested with the State Government free from all encumbrances under Section 28(5) of the KIAD Act. In pursuance of the same, the SLAO took possession of the subject land on 06.07.2004 and handed over the same to the KIADB on 07.07.2004. It is therefore contended that the entire acquisition proceedings have been completed and the various contentions urged on the grounds of fraud, misrepresentation etc., cannot be re- agitated by the same and attained finality as affirmed by the Apex Court.
8. The petitioners have filed the rejoinder to the additional statement of objections filed by respondent No.2 17 disputing that possession of the subject land has been taken by the respondents 2 and 3. It is contended that possession of the subject land have not been taken by the respondents 2 and 3 and the same continuous to remain in possession and enjoyment of the petitioners. The documents produced by the respondents 2 and 3 are neither legal nor valid and no reliance can be placed upon the same in support of their contentions of respondent No.2. The petitioners have disputed and denied the various contentions urged in the additional statement of objections filed by respondent No.2 and have contended that the additional statement of objections be rejected and the petition be allowed.
9. I have heard Sri.Madhusudhan R.Naik, learned Senior counsel for the petitioners. I have also heard Sri.D.N.Nanjunda reddy, learned Senior counsel for KIADB and Sri.D.R.Ravishankar, learned counsel for respondent No.3 as well as the learned AGA for respondent No.1 - State and perused the material on record.
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10. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned Senior counsel for the petitioners has made the following submissions:-
(i) In the earlier round of litigation, the Division Bench upheld the acquisition despite the specific contention of the petitioners that the subject land for not being utilised for the purpose of Hospital, since the public interest was involved and large number of people would be benefited if a Hospital is constructed on the subject land. It is submitted that the upholding of the acquisition was a conditional one and only on the ground that the purpose of acquisition for a Hospital project was in a public interest and consequently, interference with the acquisition proceedings was not warranted in the facts of the instant case. However, as specifically contended by the petitioners, subsequent to disposal of W.A.No.1735/2007 on 22.11.2012, the respondent No.3 has not only changed its Memorandum of Articles of Association but has also diverted the subject land by changing the land use from constructing a Hospital to putting up an IT park. It is therefore contended that the 19 respondents are guilty of misleading the Division Bench by portraying as if the subject land be used/utilised to put up a Hospital with the ulterior motive/purpose of defending the acquisition; however, the events that have occurred / transpired subsequent to the said order passed by the Division Bench, are sufficient to show that respondent No.3 never intended to put up a Hospital and consequently, the entire acquisition for the alleged purpose of Hospital and rejection of the challenge to the acquisition by portraying as if it was intended to construct a Hospital is clearly fraudulent and consequently, the order of the Division Bench would not come in the way of the petitioners putting forth the contentions in the present petition.
(ii) It is contended that the entire acquisition proceedings and the findings recorded by the Division Bench upholding the acquisition and confirmation of the same by the Apex Court proceeded on the basis that putting up of a Hospital was a noble cause and in larger public interest. However, it has now transpired that the petitioners were fully justified in their contention that respondent No.3 had never intended to use the subject 20 land to put up a Hospital and that all along they only intended to do real estate business which stands established by their subsequent conduct and the subsequent events that have transpired after the order of the Division Bench. It is therefore contended that the entire acquisition proceedings are vitiated by fraud and the order of the Division Bench has been obtained by misleading and playing fraud upon the Court which is sufficient to vitiate the acquisition proceedings.
(iii) It is contended that after the Division Bench upheld the acquisition after coming to the conclusion that the acquisition was for a noble cause of constructing of Hospital, the petitioners approached the Apex Court and an order of status quo was passed on 18.03.2013 by the Apex Court. The said SLP was disposed of by the Apex Court on 28.01.2020; however, in the interregnum period, on 03.03.2016, Dr.A.S.Hegde and his wife resigned from the respondent No.3-company and one Sri.Shylesh Kumar became the Director; the said Shylesh Kumar also a Director of a real estate company and the respondent No.3
- company has been renamed during the pendency of the 21 matter before the Apex Court. It is therefore submitted that the subsequent events that have transpired during the pendency of the matter before the Apex Court, in which there was an order of status quo in all respects in relation to the subject land not only establishes fraud being played and practiced by respondent No.3 but also vitiates the acquisition.
(iv) Learned Senior counsel further submits that while disposing of the petition on 28.01.2020, the Apex Court reserved liberty in favour of the petitioners to urge other issues which were not the subject matter of the proceedings before the Division Bench and the Apex Court. The various contentions urged by the petitioners in the present petition with regard to fraud being played by respondents 2 and 3 at the time of passing of the order by the Division Bench and the subsequent events which transpired during the pendency of the matter before the Apex Court had neither been considered by the Division Bench nor by the Apex Court which had instead reserved liberty in favour of the petitioners to urge the said contention. It is therefore submitted that in view of the 22 express / specific liberty reserved in favour of the petitioners by the Apex Court, the present petition is maintainable and can be entertained by this Court in the present petition.
(v) Learned Senior counsel also submitted that when the matter was seized by the Apex Court which had passed an order of status quo in all respects, the SLSWCC, a committee comprising of the KIADB, State Government and representative of the respondent No.3 did not inform the committee about either pendency of the matter before the Apex Court or the order of status quo passed by the Apex Court. It is submitted that the resolution dated 15.06.2019 passed by the SLSWCC permitting change of land use from putting up of Hospital to an IT park is clearly in the teeth of the order of status quo passed by the Apex Court and in violation of the same and consequently, the said decision taken in the SLSWCC meeting dated 15.06.2019 is non-est and a nullity.
(vi) Learned Senior counsel further submits that since the aforesaid decision of the SLSWCC is invalid and a nullity coupled with the fact that the direction issued by 23 the Division Bench to the effect that if the subject land is used for the purpose of other than putting up of a Hospital, the KIADB shall cancel the lease and reclaim the property and that the benefit of the acquisition shall not be given to the respondent No.3 - beneficiary, the KIADB has no option but to resume and reclaim the subject land from respondent No.3, particularly when the SLP filed by the petitioners had been dismissed, thereby confirming the order of the Division Bench. It is therefore contended that necessary directions are to be issued to respondent No.2 - KIADB to comply with, implement and give effect to the order passed by the Division Bench and accordingly, reclaim/resume the subject land from respondent No.3 by canceling and revoking all leases, licences, clearances etc., given to respondent No.3.
In support of his contentions, learned Senior counsel has placed reliance upon the following decisions:-
(i) Union of India and others vs. Ramesh Gandhi
- (2012) 1 SCC 476;
(ii) Bhaurao Dagdu Paralkar vs. State of Maharashtra - 2005 AIR SCW 4094;24
(iii) State of Andhra Pradesh and another vs. T.Suryachandra Rao - 2005 AIR SCW 3603;
(iv) Haribhau Siddappa Patil and others vs. The State of Karnataka, Rep., by its Secretary, Department of Industries and Commerce and others - ILR 2012 KAR 4691;
(v) Kishore Samrite vs. State of Uttar Pradesh and others - (2013) 2 SCC 398;
(vi) Uddar Gagan Properties Limited vs. Sant Singh and others - (2016) 11 SCC 378;
(vii) Greater Noida Industrial Development Authority vs. Devendra Kumar and others - (2011) 12 SCC 375;
(viii) Vyalikaval House Building Coop. Society vs. V.Chandrappa and others - (2007) 9 SCC 304;
(ix) Comptroller and Auditor-General of India, Gian Prakash, New Delhi and another vs. K.S.Jagannathan and another - (1986) 2 SCC 679;
(x) Badrinath vs. Government of Tamil Nadu and others - AIR 2000 SC 3243;25
(xi) RBF RIG Corporation, Mumbai vs. Commissioner of Customs (Imports), Mumbai - (2011) 3 SCC 573;
(xii) Harigovind Yadav vs. Rewa Sidhi Gramin Bank & others - (2006) 6 SCC 145;
(xiii) Thomas Patrao since deceased by his LR and another vs. The State of Karnataka, Rep. by its Secretary and others - ILR 2005 KAR 4199;
(xiv) Patasi Devi vs. State of Haryana and others
- 2012 AIR SCW 5294;
(xv) Raghbir Singh Sehrawat vs. State of Haryana
-(2012) 1 SCC 792;
(xvi) Sri.H.V.Nandakumar vs. The State of Karnataka and others - W.P.No.13374/2013 dated 02.02.2016; and (xvii) Sri. S.Srikanta and another vs. The State of Karnataka and others - W.P.No.46004/2013 dated 10.04.2014.
11. Per contra, learned Senior counsel for the KIADB as well as the learned counsel for respondent No.3, in 26 addition to reiterating the various contentions urged in the statement of objections submit that there is no merit in the petition and that the same is liable to be dismissed for the following reasons:-
(i) The subject land having vested with the State Government under Section 28(5) of KIAD Act, upon issuance of the final notification dated 20.05.2004 under Section 28(4) of the KIAD Act, the petitioners have become persona non grata and have no locus standi to challenge the acquisition of the subject land;
(ii) In view of the earlier round of litigation initiated by the petitioners which was dismissed by this Court and confirmed by the Apex Court, the claim of the petitioners is barred by principles of res judicata and constructive res judicata;
(iii) The liberty reserved by the Apex Court in favour of the petitioners in the earlier round of litigation is restricted and limited to the claim for compensation only and nothing more; the said liberty has to be read and understood in the context of the Apex Court rejecting the claim of the petitioners not only on all the grounds urged 27 before this Court but also the grounds urged for the first time before the Apex Court and consequently, the petitioners are not entitled to the reliefs sought for in the present petition.
(iv) Since the petitioners do not have any manner of right, title, interest or possession over the subject land, they do not have any locus standi to seek any directions to the KIADB to take action against the respondent No.3;
accordingly, apart from the fact that the prayer for quashing the acquisition proceedings is liable to be rejected, the prayer for a direction to the KIADB to take necessary steps against respondent No.3 also cannot be granted in favour of the petitioners, who do not have locus standi to seek the said relief.
(v) There is no merit in the claim made by the petitioners with regard to fraud and misrepresentation and in the absence of pleading and proof in this regard, even this claim of the petitioners is liable to be rejected.
(vi) The claim of the petitioners is also barred by Explanation-(v) to Section 11 CPC which envisages that any relief claimed by the petitioners which was not 28 expressly granted by this Court or the Apex Court was deemed to have been refused; in this context, it is contended that since all the claims put forth by the petitioners before this Court as well as for the first time before the Apex Court were rejected in the earlier round of litigation, the present petition seeking to re-agitate the very same claims / contentions is not maintainable and is liable to be rejected.
In support of their contentions, learned Senior counsel for KIADB and learned counsel for respondent No.3 have placed reliance upon the following decisions:-
(i) C.Padma and others vs. Deputy Secretary to the Govt. of T.N. and others - (1997) 2 SCC 627;
(ii) Northern Indian Glass Industries vs. Jaswant Singh and others - (2003) 1 SCC 335;
(iii) Sulochana Chandrakant Galande vs. Pune Municipal Transport and others - (2010) 8 SCC 467;
(iv) Smt.Ranee Govindram Hassanand vs. The Chief Secretary of Karnataka, Bangalore and others -
(2011) 6 KLJ 591.29
(v) The State of Tamil Nadu vs. Vasanthi Veerasekaran - (2019) 7 SCC 342;
(vi) V.Chandrasekaran and another vs. The Administrative Officer and others - (2012) 12 SCC 133;
(vii) State of Kerala and others vs. M.Bhaskaran Pillai and another - (1997) 5 SCC 432;
(viii) Smt. Sulochana Chandrakant Galande vs. Pune Municipal Transport and others - (2010) 8 SCC 467;
(ix) Khoday Distilleries Limited and others vs. Sri.Mahadeshwara Sahakara Sakkare Kharkane Limited, Kollegal - (2019) 4 SCC 376;
(x) Devilal Modi vs. Sales Tax Officer, Ratlam and others - AIR 1965 SC 1150;
12. Before adverting to the rival contentions, it is relevant to extract the decision of the Division Bench in W.A.No.1735/2007, wherein it is held as under:-
"JUDGMENT This appeal is preferred against the order of the learned single Judge dismissing the Writ Petition where acquisition of their land by the Government was upheld.30
2. The subject matter of this appeal is land bearing Sy. No. 38/8P measuring an extent of 1 acre 2 guntas situated at Bellandur Village, Varthur Hobli, Bangalore East Taluk. The said land belonged to late Chikkamuniyappa who died on 5.2.1983. After his death, the petitioners who are his sons have inherited the property. Katha has been made out in their names. RTC stands in their name. It is their joint Hindu Family property. The said land is situated within half kilometer of the gramathana. They have constructed residential premises and they are residing there. The Government of Karnataka issued a notification under Section 3(1), 1(3) and 28(1) of the Karnataka Industrial Areas Development Act, 1966 (for short hereinafter referred to as 'the Act') notifying several survey numbers, in all a total extent of 5 acres 5 guntas for industrial purposes. The grievance of the petitioners is, without giving an opportunity to them to file objections, the said lands are acquired by issuing a final notification under Section 28 (4) of the Act. In fact, the President of the Gram Panchayath on their behalf and others had filed objections. Without considering their objections, 28(4) notification came to be issued. The land owners filed 7 Writ Petitions which covered an extent of 4 acres 9 guntas challenging the said notification on various grounds. The learned single Judge on consideration of all the grounds raised by all the landlords clubbed all the Writ Petitions together and by a common order dismissed the same upholding the acquisition. This appeal is preferred in W.P. No. 21408/2004 challenging 31 the order of the learned single Judge. At the time of arguments it is submitted 4 appeals had been preferred against the impugned order. Except this appeal all other appeals are settled. Out of 5 acres 5 guntas of land, now the acquisition in so far as 4 acres 3 guntas is concerned, has been upheld, possession of the land is taken by the Government and handed over to the beneficiary of the acquisition. Therefore, the subject matter of this appeal is only acquisition of land in Sy.
No. 38/P measuring 1 acre 2 guntas.
3. Sri Anant Mandagi, the learned Senior counsel appearing for the appellants assailed the impugned order on several grounds. Firstly he contended the petitioners were not served with the notice of the acquisition. They have not been given a personal hearing and therefore the acquisition is vitiated for violation of principles of natural justice. Secondly, he contended the land which is sought to be acquired is an agricultural land. It is acquired for an industrial use. This Court has held that, unless an order for change of land use is obtained, acquisition proceedings cannot be initiated for industrial purpose in respect of an agricultural land. Therefore, on that ground also the acquisition is bad. He further contended this notification is issued to acquire land for the benefit of the third respondent - M/s Sri Sathya Sai Narayana Hospitals Private Limited. Acquisition of land for the purpose of one individual or company is not permissible under the Act. Therefore, the acquisition is liable to be set aside. The Single Window Agency constituted under the 32 Karnataka Industries (Facilitation) Act, 2002 has no power to recommend the land for acquisition. As the entire acquisition in the case is initiated on the basis of such recommendation, the acquisition is bad. The proposed acquisition is for the establishment of a Hospital. Hospital is neither an industry nor an infrastructure and therefore acquisition for a Hospital under the Act is bad. Lastly he contended petitioners are all poor agriculturists. They are eking out their livelihood from agriculture. This is only the piece of land owned by them. If the said land is acquired for the benefit of the third respondent, virtually the Board is acting as an estate agent which is not permissible under law. Therefore, seen from any angle, the acquisition is liable to be set aside. He also contended that, during the pendency of this appeal, an application is filed bringing to the notice of the Court that the respondents have now handed over the land so far acquired for a real estate agent. The said application and affidavit is not controverted to by the third respondent by filing any objection.
4. Sri Ashok Haranahalli, the learned Senior counsel appearing for the Board contended that, all the contentions which are raised in this appeal are considered by the learned single Judge and by a common order all of them have been negatived as almost all the issues are covered either by the judgment of the High Court or the Apex Court. In the Writ Petition the petitioners have not pleaded that they have not been served. The contention taken is that, they have 33 not been heard. When the petitioners have not filed any objections to the acquisition, question of hearing the objector would not arise. It is settled law that, only after the acquisition is complete, before the land could be put for industrial use, the requisite permission by way of change of land use is to be taken and an order of change of land use is not a condition precedent for initiation of acquisition proceedings. It is settled law that acquisition could be for an individual or a company, provided the said beneficiary uses the land for an industrial purpose. The Single Window Agency is constituted under the Karnataka Industries (Facilitation) Act, 2002 to enable the entrepreneur to obtain all sanctions at one counter so that there could be expeditious development of industries in Karnataka. The acquisition proceedings are initiated by the State Government on being satisfied that the lands are required for establishment of an industry by the third respondent. Incidentally, the third respondent has approached the Single Window Agency who have examined their project and they have made their recommendation. Therefore, there is no illegality in the acquisition proceedings on that ground. It is too late in the day for the petitioners to contend that the acquisition for a Hospital is not for industrial purpose, as requisite notification under Section 2(1) is issued by the Government as far back as in the year 1991 itself. Therefore, he submits there is no merit in any of these contentions.
34
5. Sri P.S. Dinesh Kumar, the learned counsel for the beneficiary contended that, they have filed objections in Court without serving a copy on the appellants. Therefore, office has returned their objections for compliance of the office objections. Hence, it is not correct to say that they have not filed the objections. They had entered into an agreement with M/s SJR Developers for the purpose of putting up a construction to build the Hospital as all the promoters of the Company are Surgeons and Doctors who have no expertise in building construction. In fact, though they have entered into an agreement, because of the delay in completion of the acquisition proceedings, the contractor has gone back and the contract is rescinded and now they have to look out for another contractor. Therefore, he submits there is no merit in the said submission. He reiterates all the contentions urged by the counsel for the Board.
6. In the light of the aforesaid material on record and the rival contentions, the question that arise for our consideration in this appeal is :-
Whether the acquisition of land by the Government for the benefit of the third respondent is vitiated and liable to be quashed?
7. In the Writ Petition, the petitioners have nowhere stated that they have not been served with the notice of the acquisition proceedings. On the contrary, what is 35 asserted is, after publication of the said notification, the respondents without giving an opportunity to the aggrieved persons including the petitioners to file objections to the same have issued notification under Section 28(1) of the Act for acquisition of the lands in question. It is further stated that, without considering the detailed objections filed by the President of the Gram Panchayath on behalf of the petitioners and others have issued notification under Section 28(4) of the Act without showing the purpose of acquisition for which it is made. From the aforesaid averment it is clear the petitioners have no grievance of non-service of notice. Their grievance is non-consideration of the objections filed by the Gram Panchayath on their behalf.
8. The order passed by the Land Acquisition Officer under Section 28(3) is before the Court. It discloses that the Land Acquisition Officer has set out in the said order the particulars of the land which are notified for acquisition, the names of the owners, person in whose name the katha stands, person who is enjoying the property, survey number, extent. Thereafter, he has set out the objections filed by each one of the land owners and consideration by him. Thereafter, he has stated in so far as Sy.No.38/8P measuring 1 acre 2 guntas which is the subject matter of this proceedings is concerned, he has not received any objections from any one. Therefore, this order clearly shows that not only notices were served on all 36 the land owners, but also, all the land owners except the petitioners filed the objections. The Gram Panchayath of the village who had no right to file objections also filed objections on behalf of the petitioners, which were considered and over- ruled. In so far as the petitioners are concerned, as they had not filed objection, question of issue of notice of enquiry, permitting them to participate in the enquiry, hearing did not arise and therefore they proceeded to pass an order holding that the land is required for industrial purposes and consequently 28 (4) notification was issued. Therefore, the contention that the acquisition proceedings violates the principles of natural justice is contrary to the material on record and without any substance.
9. The learned counsel for appellant relying on the judgment of a Division Bench of this Court in the case of SPECIAL LAND ACQUISITION OFFICER, KIADB, BANGALORE AND ANOTHER vs STATE OF KARNATAKA [ILR 2007 KAR 4891] contended that, a land in a residential zone cannot be notified for industrial purpose. It only shows lack of application of mind. It was contended that unless the change of land use is obtained, such a notification could not have been issued. In fact, the said judgment is the subject matter of appeal before the Apex Court.
10. The Apex Court in the case of S.S.DARSHAN vs STATE OF KARNATAKA AND OTHERS [AIR 1996 SC 671] repelling the contention that the user of the 37 acquired land shown in the master plan being different, there cannot be a conversion of the user except in accordance with the provisions for making the change in the land use, held that, it is not a case of change of user by the owner of the land but one of acquisition by the State under the provisions of the Land Acquisition Act, 1894.
11. In fact, the Apex Court in the case of BHAGAT SINGH vs STATE OF U.P. AND OTHERS [AIR 1999 SC 436] has held as under: -
"22. .... there is no need that the land proposed to be acquired by the Government for a particular public purpose should be for the same purpose or use mentioned in the Master Plan or Zonal Plan for the said area. Nor will the acquisition be invalid merely because the land proposed to be acquired is for a purpose other than the one permitted by the Master Plan or Zonal Plan applicable to that locality. Acquisition will be valid if it is for a public purpose even if it is not for the type of user permitted by the Master plan or Zonal plan in force at the time the acquisition is made. It will be for the beneficiary of the acquisition to move the competent authority under the Development Act and obtain the sanction of the said authority for suitable 38 modification of the Master Plan so as to permit the use of the land for the public purpose which the land is acquired. In fact, it may be difficult for the beneficiary of the acquisition to move the competent authority under the Development Act seeking permission to change of land use even before the land is acquired or before possession is given to the beneficiary. On the principle stated in Aflatoon's case, it is clear that acquisition for a public purpose and obtaining permission from competent authority under the concerned Development Act for change of land use are different from one another and the former is not dependent upon the latter."
12. Therefore, the change of land use is required before the said land is put to use for a purpose other than that mentioned in the master plan. Change of land user is not a condition precedent for initiation of acquisition proceedings. It is only after acquiring a land, vested with the Government, transferred to the beneficiary, if the beneficiary wants to put the land to the use which is other than specified in the master plan, then without the permission he cannot use the land for industrial purposes. Therefore, we do not find any substance in the said contention.
39
13. Next, it was contended by the learned Senior Counsel for appellant that, the entire land measuring 5 acres 5 guntas is meant for third respondent-a private limited company. Under the scheme of the Act there cannot be an acquisition for an individual or a company. He further submitted a Division Bench of this Court over-ruling two earlier judgments of the learned single Judges has held that such an acquisition is not permissible. In support of this contention reliance is placed on a judgment of the Division Bench of this Court in the case of Kakaral Ravikumar and others V/s. State of Karnataka and others decided on 22nd March 2012 in W.A. Nos. 6193- 6195/2009 and other connected matters.
14. In the aforesaid judgment, the notification issued under the Act, specifically mentions the names of two private companies for setting up their Steel Plant. It is in that context, the Division Bench held the land is acquired only for the purpose of the Board as the Board is not developing the acquired land and allotting to the aspiring industrialists. If the industries proposed to be set up in the area is either not feasible or does not get environmental clearance, the very purpose of acquisition fails. Having regard to the nature of the industry proposed to be set up, prior environmental clearance as per the Environment Protection Act, 1986 and the Environment Protection Rules, 1986 is a must. The State was embarking on acquisition of private land by exercise of statutory power of the State to acquire 40 private lands which is equivalent to exercise of power of eminent domain of the State, even in a situation where there is no real public purpose and even without applying its mind to the relevant aspects. It is a clear instance of not only a colourable exercise of power but also arbitrary exercise of power violative of Article 14 of the Constitution of India. Therefore, it was held on a overall examination of the acquisition proceedings and in the background of the operation of the provision of the Karnataka Industries (Facilitation) Act, 2002, the acquisition proceedings cannot be sustained as it is neither law conformant nor procedural conformant and not for a genuine public purpose.
15. The judgment of the Hon'ble Supreme Court in the case of Ramtanu Co-operative Housing Society Limited, was referred to, and the law laid down by the two Single Bench decisions in HEGGAPPANAVAR MARKHANDAPPA AND OTHERS vs. STATE OF MYSORE AND OTHERS, reported in 1974 (1) KAR LJ 71 and N. SOMESHAKAR AND OTHERS vs. STATE OF KARNATAKA, reported in 1997 (7) KAR LJ 410, were over-ruled. From the reading of the aforesaid judgment, it cannot be inferred that under the Act, the land cannot be acquired by the Board for the purpose of developing industrial area by an individual entrepreneur. What is laid down in the aforesaid judgment is that under the Act, land cannot be acquired for an industrial entrepreneur mentioning that purpose for which the land is sought to be acquired. Therefore, 41 after acquiring that land for industrial purpose, such acquired land cannot be given for setting up of one industry or by one individual or a company.
16. The Constitutional Bench of the Supreme Court in the aforesaid case of Ramtanu Co-operative Housing Society Limited has laid down the law as under:-
"21. Counsel on behalf of the petitioners contended that there was procedural discrimination between the Land Acquisition Act and the Act in the present case. It was said that there was a special procedure designed by the Land Acquisition Act for acquisition of land for the companies whereas in the present case the State was acquiring land for companies without adopting the procedure of the Land Acquisition Act. It is to be remembered that the Act in the present case is a special one having the specific and special purpose of growth, development and organisation of industries in the State of Maharashtra. The Act has its own procedure and there it no provision in the Act for acquisition of land for a company as in the case of Land Acquisition Act. In the present case, acquisition under the Act is for 19 the purpose of development of industrial estates or industrial areas by the 42 Corporation or any other purpose in furtherance of the objects of the Act. The policy underlying the Act is not acquisition of land for any company but for the one and only purpose of development, organisation and growth of industrial estates and industrial areas. The Act is designed to have a planned industrial city as opposed to haphazard growth of industrial areas in all parts of the State. The Act is intended to prevent growth of industries in the developed parts of the State. Industries are therefore to be set up in the developing or new parts of the State where new industrial towns will be brought into existence. The object of the Act is to carve our planned areas for industries. On one side there will be engineering industries and on the other there will be chemical industries. There will be localisation of industries with the result that the residents and dwellers of towns and cities will not suffer either from the polluted air or obnoxious chemicals of industries or the dense growth of industries and industrial population, within and near about the residential areas. The Land Acquisition Act is a general Act and that is why there is specific provision for acquisition of land by the State for public 43 purpose and acquisition of land by the State for companies. The present Act on the other hand is designed for the sole purpose of development of industrial areas and industrial estates and growth and development of industries within the State. Industrial undertakings or persons who are engaged in industries all become entitled to the facilities on such industrial growth. Under the Land Acquisition Act acquisition is at the instance of and for the benefit of a company whereas under the present Act acquisition is solely by the State for public purposes. The two Acts are dissimilar in situations and circumstances."
17. Following above judgment, the learned Single Judge of this Court in the case of Heggappanavara Markhandappa & others vs. State of Mysore & others reported in 1974(1) Kar.L.J. 71, held as under:-
"As long as the acquisition of the land is for the purpose of the Act, that negotiations were made with individuals concerned before taking steps for acquisition under the Act cannot, by itself, be regarded as a circumstances justifying an inference that there has been a fraud on power. The essential question to be determined is, as to whether the acquisition is really for the purpose of 44 the Act or it is only a camouflage for achieving some other object. As already mentioned, a notification was issued by the State Government declaring the area in question as an industrial area. The lands were acquired for the purpose of establishing an industry. The expression '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. Even if in a particular place, a single industry is established, the same would answer the definition of the expression 'industrial estate', as defined in S.2(7) of the Act. The preamble itself clearly states that one of the objects of the Act is to promote the establishment and orderly development of industries in industrial areas. If, therefore, the lands in question were acquired for the purpose of establishing an industry by M/s. Harihar Polyfibres with a view to secure a planned and orderly development of industries in that particular area, it cannot be said that the action taken for acquisition of the lands amounts to fraud on power".
18. It is to be noted that in the aforesaid judgment, the lands were acquired for the benefit of M/s. Harihar Polyfibres. The challenge was on the ground that the real object of acquisition of land is not a development of industrial area, but for the benefit of a particular 45 company which is not the object of the Act repealing the said contention.
19. Then, after referring to the judgment of the Constitutional Bench, in Ramtanu (supra) this Court held as under:-
"The Supreme Court upheld the validity of the Maharashtra Industrial Development Act, 1961, which, in many respects, is similar to the Act with which we are concerned. Their Lordships of the Supreme Court have emphasized that under the Industrial Development Act, the policy underlying is not acquisition of land for any company, but for the one and only purpose of development, organization and growth of industrial estates and industrial areas. If acquisition of land is made under the Act for the purpose of development, organization and growth of industrial estates and industrial areas, the fact that a single industry belonging to a single company or institution was established in a particular area does not mean that the acquisition of the land was for the particular individual or institution and not for the purpose of development, organization and growth of industrial estates and industrial areas. On the facts, I have no hesitation in coming to the 46 conclusion that the lands in question were acquired for the purpose of development, organization and growth of industrial estates and industrial areas in the area in question and not for a particular company. As the acquisition of the lands is for the purpose of the Act, I do not find it possible to accede to the contention of Shri. Venkataranga Iyengar that there has been fraud on power".
20. The Apex Court in the case of P. Narayanappa and another Vs. State of Karnataka and others [(2006) 7 SCC 578] was considering the acquisition where a land can be acquired under the Act in order to benefit the Company. without mentioning the particulars of the said company and its 24 need in the notification. After referring to the definition clause and Sections 3, 5, 14, 28 and 29 of the Act as well as the preamble, it was held as under:-
"An entrepreneur or a company may give proposal to the State Government for setting up an industry or infrastructural facility and the Government may thereafter acquire the land and give it to the Board. It is also possible that after the land has already been acquired and developed by the Board, it may be allotted to an entrepreneur or a company for setting up an 47 industry or infrastructural facility. Therefore, the scheme of the Act does not show that at the time of acquisition of the land and issuing a preliminary notification under Section 28(1) of the Act, the complete details of the nature of the industry or infrastructural facility proposed to be set up should also be mentioned. At this stage what is to be seen is whether the land is acquired for development by the Board or for any other purpose in furtherance of the objects of the Act, as mentioned in Sub- Section (1) of Section 28 of the Act. In fact, if the contention raised by the learned Senior Counsel for the appellants is accepted, it would mean that even at the stage of preliminary notification under Section 28(1) of the Act, nature of the activity which may be done by some entrepreneur or a company which may give a proposal for setting up an industry or infrastructural facility much after land has been acquired should also be taken note of and specifically mentioned in the notification, which is well-nigh impossible. While interpreting the provisions of the Act, the Court should not only take into consideration the facts of the present case but should also have in mind all possible contingencies. Therefore, on a plain reading 48 of the language used in the Act, it is not possible to accept the contention of the learned Senior Counsel for the appellants that the impugned notification is vague and cryptic as the complete details of the project which was proposed to be established by Vikas Telecom Limited (P) Ltd., (Respondent No.9) were not mentioned and on account of the aforesaid lacuna, the land owners deprived of their right to make a proper representation or to show-cause against the proposed acquisition".
21. Therefore, from the aforesaid judgment, it is clear that the Board can acquire land for the benefit of a single entrepreneur. The only condition to be fulfilled is it should be for the development of an industry. In the light of the aforesaid law, we do not find any merit in the contention of the appellants that the acquisition for the benefit of third respondent is not permissible.
22. In the instant case, merely because the Single Window Agency has made a recommendation for acquisition of land by the Government, the acquisition would not get vitiated. The Karnataka Legislature has passed the Karnataka Industries (Facilitation) Act, 2002 to provide for the promotion of industrial development and facilitation of new investments, to simplify the regulatory frame work, by reducing the procedural requirements and rationalizing documents and to 49 provide for an investor friendly environment in the State of Karnataka. Accordingly, under the Act a Single Window Clearance Committee is constituted at the State Level as well as at the District Level. These State Level and District Level Committees shall meet at such times and such places and shall examine the proposals for setting up industrial undertakings and shall take a decision and communicate its decision to the entrepreneur and the concerned departments or authorities within such time as may be prescribed. The Committee shall be the final authority in granting approvals for the projects placed before it. The approvals given by the Committee shall be binding on the departments or authorities concerned and such departments or authorities shall issue the required clearance within the stipulated time subject to compliances by the entrepreneurs with the provisions of the applicable Central or State Acts or rules made there under.
23. Therefore, any entrepreneur who intends to set up an industry has to approach this Single Window Agency. After examining the proposals, not only they will communicate to the entrepreneur their approval, they will also call upon all the agencies to assist the entrepreneur in establishing the undertaking. It is in this background, the third respondent approached the Single Window Agency with a request to grant about 5 acres of land to establish a Multi Specialty Hospital. Along with the said application, the third respondent 50 also enclosed a copy of the Memorandum of Association of their company as well as Articles of Association. The said documents disclose that the third respondent wanted to establish and maintain one or more Hospitals for the treatment of persons suffering from illness, mental or other diseases or for the reception and treatment of persons during convalescence or Hospitalization. They also wanted to engage in medical research by engaging in research and development of all fields of Medical Sciences. The first directors of the Company are Dr. Hegde A.S., Neuro Surgeon, presently visiting Sri Sathya Sai Institute of Higher Medical Sciences, Whitefield, Bangalore and Manipal Hospital, Bangalore. He has earlier worked in NIMHANS, Bangalore. He is a consultant in many Hospitals in Bangalore and runs his own clinic. He has about two decades of experience in the Neuro Surgery Specialty. He has been conferred 'Rajyotsava Award' by the Government of Karnataka for his meritorious services in the field of medicine. He has published several research papers on Neurology and Surgery in association with other colleagues, delivered a number of guest lectures in various prestigious institutions, both in India and abroad. His medical skills, experience in establishing Hospitals and sound financial background is adequate in establishing the proposed Hospital successfully. His wife - Dr. Sridevi Hegde is also a doctor presently working in Manipal Hospital as the Head and Senior Consultant of Genetics Department. She has earlier worked with St. 51 Martha's Hospital. She has 25 years of experience in the medical field. The other doctor is Dr. Shailesh Kumar who is also a Neuro Surgeon with vast experience and is associated with Dr. A.S. Hegde for the last 7 - 8 years. He is actively involved in establishment of the proposed Hospital project. Then they have given the particulars regarding where they intend to locate the Hospital, extent of land required, extent of building to be constructed, power requirement, water requirement, effluents, man power, equipments and Hospital furniture. They have also enclosed letters received by Vijaya Bank - the financial institution who have given permission to give a loan of Rs.25 crores. They have also produced documents showing the cost of construction of 200 bedded Hospital. They have also produced invoice of LG Health Air Shoppee showing the equipment which they intend installing in the said Hospital. It is on consideration of all these material, the Single Window Agency by their letter dated 29.12.2003 informed the third respondent that their project has been approved. They also informed that they have resolved to recommend to KIADB to acquire 5 acres of land as a single unit complex in IT corridor along the Outer Ring Road, Bangalore, for the project. KIADB was requested to help the promoters in identifying suitable land with survey numbers for the project. It is thereafter, after identification of the land, proceedings were initiated for acquisition of 5 acres 5 guntas of land. Therefore, the contention that the Single Window Agency has no power and that the procedure adopted 52 is all illegal, which vitiates the acquisition, is without any basis.
24. Next, it was contended that Hospital is not an industry. The said contention also has no substance. In this context, it is necessary to look at the object of the Act and the definition of an industrial area, industrial estate and industrial infrastructural facilities as defined under the Act. Section 2(6) defines '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. It is by Act No.11 of 1997, Industrial infrastructural facilities and amenities are included in the definition of industrial area, infrastructural facilities is also defined in Section 2(7a) as under :-
"industrial infrastructural 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 by notification specify to be an industrial infrastructural facility for the purposes of this Act".53
25. Therefore, it is clear, the State Government is vested with the power to specify what are the amenities which are to be provided in an industrial area. In fact, Section 2(1) defines 'Amenity'. The amenity includes road, supply of water or electricity, street lighting, drainage, sewerage, conservancy and such other convenience, as the State Government may by notification specify to be an amenity for the purposes of this Act. By virtue of the said Sub-Section (1) of Section 2, Government of Karnataka has issued a notification on 13th March 1991 specifying what are the amenities for the purpose of the Act. The said notification includes R & D Centres, Technical Institutes, Training Institutes, Educational Institutions, Power Sub-Stations and Diesel Power generating stations and water supply works, Hospitals, dispensaries, Hotels, Motels and Holiday Resorts and cinema theatres. Therefore, a Hospital would fall within the definition of amenity and the land in question is acquired for the purpose of setting up the said amenity which is an industrial purpose under the Act.
26. Lastly, it was contended that the third respondent has entered into an agreement with a builder and it is a real estate venture and not establishment of a Hospital. A counter has been filed by the third respondent pointing out that they do not have requisite expertise to put up construction of a Hospital as all of them are doctors. Therefore, they had to enter into an agreement with the contractor for putting up the construction. The construction to be put is exclusively 54 for a Super Specialty Hospital. In fact, it was contended at the time of argument that, because of the delay in execution of the terms of the contract, with steep increase in the cost of construction, the contractor has backed out. It is only after getting possession of the entire land, they would be in a position to put up a Hospital. In fact they have kept the plans ready. Once the plan is sanctioned, they will have to construct within 2 years, therefore they have with-held the submission of the plan to the competent authority. Out of 5 acres 5 guntas, excluding an extent of 1 acre 2 guntas, now they are put in possession, they have leveled the ground, enclosed the entire land and awaiting the judgment in this case so that once they get possession of the land which is the subject matter of these proceedings they could submit the sanctioned plan, enter into an agreement with the contractor to put up construction and proceed expeditiously in establishing the Hospital. Therefore, they submit there is no substance in the said contention.
27. The acquisition of land is for setting up a Multi Speciality Neuro Hospital. We quite understand when the total extent of land is 5 acres 5 guntas, 7 Writ Petitions were filed challenging acquisition, now 6 Writ Petitions are disposed of, it has attained finality. The possession of 4 acres 3 guntas of land is delivered to the third respondent. 1 acre 2 gunta which is the subject matter of this appeal, once it is handed over to 55 the third respondent they should be in a position to implement the project. Unless the entire extent of land is handed over to the third respondent they cannot think of putting up the construction. The pendency of this litigation before the Court is the cause for a delay in obtaining sanction of the plan and putting up construction. As all the persons who are involved in the Company are doctors of high repute and the financial institutions have come forward to extend the financial benefit, once the land is made available to them by the Board, we do not see any impediment for establishment of the said Hospital. But, nonetheless once the land is acquired and possession is delivered to the third respondent, the third respondent shall use the entire extent of land only for the purpose of setting up a Hospital. In fact, the said land is to be given to them on lease-cum-sale agreement. If there is any violation of the terms of the lease or if this land is used for purposes other than putting up a Hospital, the KIADB shall cancel the lease, reclaim the property and the benefit of this acquisition shall not be given to the beneficiary. Keeping in mind the object behind the acquisition, the object with which the third respondent has been formed and above all keeping in mind the public interest, the persons who are going to be benefited by this Hospital, this acquisition is upheld. If the object is in any way diluted or not given effect to, the third respondent would not be entitled to the benefit of this acquisition.
Hence, we pass the following order:-
56
Writ Appeal is dismissed.
Sri K. Krishna, the learned AGA, is permitted to file memo of appearance for respondent No.1 within four weeks.
Parties to bear their own costs".
13. Aggrieved by the same, petitioners preferred SLP No.9662/2013 before the Apex Court. By interim order dated 18.03.2013, the Apex Court passed an order of status-quo, which reads as under:-
"Issue notice.
Mr.Kiran Suri, advocate-on-record, and Mr.T.V.Ratnam, advocate-on-record, waive service for respondent Nos.2 and 3 respectively.
Learned Senior counsel and learned counsel for the parties are ad idem that an opportunity may be given to the parties to have their disputes resolved through the process of mediation.
As prayed by them, the matter is referred to the Bangalore Mediation Centre.
The parties are directed to appear before the coordinator, Bangalore Mediation Centre on April 2, 2013.
The coordinator, Bangalore Mediation Centre shall submit the report within two months of the appearance of the parties.
List the matter thereafter.57
In the meanwhile, the parties, including the petitioners, are directed to maintain status quo with regard to the subject land in all respects".
14. Subsequently, on 28.01.2020, the Apex Court dismissed the petition filed by the petitioners by holding as under:-
"Only two points are urged before us by the learned counsel for the petitioners. The first point is that simultaneous notification cannot be issued under the Karnataka Industrial Area Development Act, 1966, namely, under Sections 1(3), 3(1) and 28(1). This point is already answered against the petitioner in HMT Ltd. represented by its Dy. General Manager (HRM) & Anr. Vs. Mudappa & Ors.-2007 (9) SCC 768 (paragraph 30).
The second point is that no acquisition for individual entity can be countenanced as per the Scheme of the subject Act. We are not impressed by this submission. Concededly, the notifications impugned in the writ petition do not reflect that the acquisition was for an individual entity but to notify the area as industrial area.
We do not find any merit in this petition.
Learned counsel for the petitioners was at pains to urge other points which were neither pleaded nor argued before the High Court.
58
We decline to entertain those grounds, for the first time, in this court.
The Special Leave Petition is dismissed accordingly.
The petitioners are free to pursue such other remedies as may be permissible in law in respect of issues other than the challenge, which has attained finality on account of dismissal of the special leave petition.
Pending applications, if any, stand disposed of".
15. A perusal of the aforesaid orders passed by the Division Bench will indicate that challenge to the acquisition by the petitioners was rejected by this Court. In addition to rejecting the challenge, this Court while dealing with the contention of the petitioners that respondent No.3 was proposing to use the land for the purpose of real estate business and not to put up a Hospital has categorically held that in the event the respondent No.3 were to use the land for the purpose of other than putting up a Hospital, the KIADB would be at liberty to resume and reclaim the land. Even before the Apex Court, the petitioners filed an Affidavit on 09.11.2017 putting forth additional grounds. 59
16. At the time of hearing, the Apex Court not only considered the contentions urged by the petitioners in the first instance but also the grounds and contentions urged by them for the first time before the Apex Court. A perusal of the order of the Division Bench in W.A.No.1735/2007, which was confirmed by the Apex Court as stated supra, will indicate that in unmistakable terms, both this Court as well as the Apex Court have come to the categorical conclusion that the challenge made by the petitioners to the acquisition proceedings on all grounds urged before this Court, the grounds urged before the Apex Court as well as the grounds urged for the first time before the Apex Court were clearly rejected by the Apex Court. Under these circumstances, the acquisition having been upheld by the learned Single Judge of this Court and confirmed by the Division Bench and further affirmed by the Apex Court, the petitioners do not have locus standi to challenge, assail or call in question the acquisition proceedings in relation to the subject land by re-agitating the said issues under the guise of the present petition. It is therefore clear that challenge to 60 the acquisition by the petitioners in the present petition is barred by the principles of res judicata and constructive res judicata.
17. The contention of the petitioners that the entire acquisition proceedings in relation to the subject land for the benefit of respondent No.3 as well as the orders passed by the Division Bench is essentially a disputed question of fact; the question, whether the respondent No.3 was doing real estate business and did not intend to use the subject land for a Hospital has also been dealt with by the Division Bench in paragraph-26 of its order referred to supra.
18. Except for the fact that change of land use would attract disobedience of the directions issued by the Division Bench, subsequent change of land use by the respondent No.3, changed in the name of respondent No.3 and its aims and objectives cannot be made the basis to come to the conclusion that the acquisition proceedings are vitiated by fraud and collusion between respondents 2 and 3. 61
19. The material on record and the rival contentions between the parties are sufficient to show that the issues regarding fraud, collusion etc., give rise to complicated and disputed questions of law and fact and also various contentious issues which are incapable of being determined and adjudicated upon by this Court in the exercise of its power under Article 226 of the Constitution of India. Under these circumstances, this contention of the petitioners cannot be accepted.
20. Insofar as the contention of the petitioners that the Apex Court reserved liberty in favour of the petitioners to pursue such other remedies is concerned, the order of the Apex Court clearly indicates that the said liberty was restricted and limited to only such remedies which are permissible in law and only in respect of issues other than the contentions / issues which had been answered against the petitioners and attained finality on account of dismissal of the SLP confirming the order of the Division Bench.
21. The challenge to the acquisition on all possible grounds having been rejected by this Court as well as the 62 Apex Court, which dismissed the SLP, the liberty granted by the Apex Court in favour of the petitioners to pursue such other remedy, clearly is limited and restricted to claims other than challenging the acquisition of the subject land and the said liberty cannot be construed or treated as permitting the petitioners to re-agitate the challenge to the acquisition all over again. Under these circumstances, the liberty granted by the Apex Court cannot be made the basis or relied upon by the petitioners to challenge the acquisition of land by way of the present petition.
22. It is also relevant to state that it is a well settled principle of law that once the acquired land stands vested in the State Government free from all encumbrances, land losers (petitioners herein) become persona non grata and divesting of land is impermissible in law. Viewed from this angle also, the petitioners do not have locus standi to seek a direction to the respondent Nos.1 and 2 to withdraw the acquisition proceedings and consequently, even this contention urged by the petitioners cannot be accepted. 63
23. Insofar as the contention of the petitioners that the impugned acquisition of the subject land by fraud and collusion would vitiate the acquisition itself, as stated supra, the said contention in addition to giving rise to complicated and disputed questions of fact and several contentious issues, in the absence of sufficient pleading and proof with regard to the acquisition being vitiated on account of the fraud and collusion practiced by the petitioners, even this contention urged by the petitioners cannot be accepted.
24. The next question that arises for consideration is, whether the directions issued by the Division Bench in W.A.No.1735/2007 to the respondent No.2 - KIADB have to be complied with and given effect to the KIADB in terms of the said order which directs the KIADB to take necessary steps against respondent No.3 to reclaim / resume the subject land from respondent No.3. In this context, it is relevant to state that the said direction issued by the Division Bench in paragraph-25 of its order which have neither been reversed, set aside or diluted by the Apex 64 Court which has in fact confirmed the order of the Division Bench.
25. Though reliance is placed by the respondents 2 and 3 on the events that have transpired subsequent to disposal of W.A.No.1735/2007 on 22.11.2012 in order to contend that the change of land use is permissible and that the same will not be in violation or disobedience of the direction issued by the Division Bench referred to supra, in my considered view, none of the events subsequent to 22.11.2012 can be relied upon by the respondents 2 and 3 for the following reasons:-
(i) Both respondent Nos. 1 to 3 were parties to the interim order of status quo dated 18.03.2013 passed by the Apex Court in SLP No.9662/2013 and the said order which remained in force till 28.01.2020 when the Apex Court disposed of the matter is binding upon all the respondents.
(ii) The meeting of the SLSWCC held on 15.06.2019 permitting change of land use from a Hospital to an IT park was not only during the pendency of the matter before the Apex Court but the same was in the teeth of the interim 65 order of status-quo. Consequently, respondents are not entitled to contend that change of land use was permissible by virtue of the decision taken by the SLSWCC on 15.06.2019.
(iii) Similarly, in addition to changing its name from Sri.Satya Sai Narayana Hospital Pvt. Ltd., to M/s.SSSN Project Pvt. Ltd., the respondent No.3 also changes its object by incorporating the business of real estate on 11.01.2018 when the matter was pending before the Apex Court which had passed an order of status quo as stated supra. Consequently, even these documents cannot be relied upon by the respondents to contend that change of land use was permissible and the direction issued by the Division Bench need not be complied with / implemented / given effect to by the KIADB resuming / reclaiming the land from respondent No.3, if the subject land were to be used for any purpose other than constructing a Hospital.
(iv) The final order passed in W.A.No.1735/2007, interim order of status quo passed by the Apex Court on 18.03.2013 as well as the final order passed by the Apex Court on 28.01.2020, dismissing the petition filed by the 66 petitioners lead to the inescapable conclusion that all deeds and things done by respondents 1 to 3 and any document, deed, transactions entered into by them subsequent to the final order passed in W.A.No.1735/2007 will not obviate or dispense with the specific direction to respondent No.2 - KIADB to give effect to and implement the order of the Division Bench.
26. Under these circumstances, I am of the considered opinion that the directions issued by the Division Bench at paragraph-25 in W.A.No.1735/2007 have attained finality and are conclusive and binding upon the petitioners as well as the respondents who have no option but to comply with, implement and give effect to the directions issued by this Court in the said order. To reiterate, the respondents are not entitled to take shelter or rely upon any document, event, act, deed or thing that have occurred / transpired after disposal of W.A.No.1735/2007 on 22.11.2012, in order to contend that respondent No.2 - KIADB is absolved of its responsibility or duty to comply with and implement and give effect to the directions issued 67 by the Division Bench referred to supra, particularly, when all the respondents were parties to the earlier proceedings and the representation in this regard was submitted by the petitioners dated 18.03.2020 to the respondents.
27. Though several decisions have been relied upon by both sides in support of their respective contentions, in the light of the fact that the present petition arises in the backdrop of the earlier round of litigation and the peculiar / special facts and circumstances obtaining in the instant case, the said decisions cannot be made applicable to the present case and accordingly, a detailed reference to the same may not be required for the purpose of disposal of this petition.
28. In the result, I pass the following:-
ORDER
(i) Petition is partly allowed.
(ii) Respondents 1 and 2 are hereby directed to comply with, obey, implement and give effect to the directions issued by this Court in W.A.No.1735/2007 dated 22.11.2012 against the respondent No.3 in relation to the 68 subject land by taking necessary steps in this regard by taking into consideration the representation at Annexure-T dated 18.03.2020 submitted by the petitioners and in accordance with law, within a period of three months from the date of receipt of a copy of this order;.
SD/-
JUDGE Srl.