Karnataka High Court
M/S Century Central vs State Of Karnataka on 11 April, 2014
Bench: Chief Justice, B.V.Nagarathna
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R
IN THE HIGH COURT OF KARNATAKA, BANGALORE
DATED THIS THE 11TH DAY OF APRIL, 2014
PRESENT
THE HON'BLE MR. D.H.WAGHELA, CHIEF JUSTICE
AND
THE HON'BLE MRS. JUSTICE B.V.NAGARATHNA
W.A.Nos.6411-12/2013 (LB-BMP).
BETWEEN:
M/S CENTURY CENTRAL,
BEING A REGD. PARTNERSHIP FIRM,
HAVING ITS OFFICE AT NO.10/1,
GROUND FLOOR,
LAKSHMINARAYANA COMPLEX,
PALACE ROAD,
BANGALORE-560 052,
REP. BY ITS PARTNER,
P.RAVINDRA PAI,
AGED ABOUT 36 YEARS,
S/O SRI.DAYANAND PAI. ... APPELLANT
(BY SRI: G.L.VISHWANATH, ADV.)
AND:
1. STATE OF KARNATAKA,
URBAN DEVELOPMENT DEPARTMENT,
VIKAS SOUDHA,
BANGALORE-560 001,
BY ITS SECRETARY.
2. KARNATAKA INDUSTRIAL
AREA DEVELOPMENT BOARD,
NO.14/3, CMC BUILDING,
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NRUPATHUNGA ROAD,
BANGALORE-560 001,
BY ITS CHIEF EXECUTIVE OFFICER.
3. STATE SINGLE WINDOW
CLEARANCE COMMITTEE,
KARNATAKA UDYOG MITRA,
1ST FLOOR, KANIJA BHAVAN,
RACE COURSE ROAD,
BANGALORE-560 009,
BY ITS MANAGING DIRECTOR &
MEMBER SECRETARY.
4. BRUHAT BANGALORE
MAHANAGARA PALIKE,
N.R.SQUARE, BANGALORE-560 002,
BY ITS JOINT DIRECTOR (SOUTH)
TOWN PLANNING.
5. RMS EDUCATIONAL TRUST,
NO.18, SRINIVAS INDUSTRIAL ESTATE,
KANAKAPURA ROAD,
BANGALORE-560 062,
BY ITS SECRETARY.
6. M.SRINIVAS,
S/O MUNISWAMAPPA,
AGED 71 YEARS,
NO.8, 4TH CROSS, 7TH BLOCK,
JAYANAGAR,
BANGALORE-560 070. ... RESPONDENTS
(BY SRI: A.S.PONNANNA, PRL.GA, FOR R.1, SRI.ASHOK
HARANAHALLI, SR. COUNSEL A/W SRI.SUBRAMANYA.R.,
ADV. FOR R.5 AND R.6, SRI.C.M.POONACHA, ADV. FOR
R.3, SRI.D.L.N.RAO, SR. COUNSEL A/W
SRI.P.V.CHANDRASHEKAR, ADV. FOR R.2, R.4 SERVED)
*****
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THESE WRIT APPEALS ARE FILED U/S 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE
THE ORDER PASSED IN THE WRIT PETITION 47552-
553/12 DATED 2/7/13.
THE JUDGMENT IN THESE APPEALS HAVING BEEN
RESERVED ON 06/02/2014 AND IT BEING LISTED FOR
PRONOUNCEMENT TODAY, NAGARATHNA J.,
PRONOUNCED THE FOLLOWING:
C.A.V. JUDGMENT
1. These writ appeals arise out of the order dated
02/07/2013 passed by the learned Single Judge in
W.P.Nos.47552-47553/2012.
Factual Back ground:
2. Appellant herein had filed two sets of writ petitions
namely, W.P.Nos.47552-47553/2012 and W.P.Nos.268-
270/2013 in respect of land bearing Sy.Nos.18 and 19
(BBMP New No.234/19/3D) Kumudanapalya, Konankunte
Village, Uttarahalli Hobli, Bangalore South Taluk,
admeasuring about 11,507sq.mtrs. (hereinafter referred to
as "scheduled land" for the sake of convenience). By a
common order, those writ petitions were disposed of.
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3. In W.P.Nos.47552-553/2012 approval granted by the
third respondent-State Level Single Window Clearance
Committee ('SLSWCC' for short) vide communication dated
12/09/2012 (Annexure "M") and consequently,
communication dated 17/09/2012 (Annexure "N") and
communication dated 08/10/2012 (Annexure "P") issued
by the fourth respondent-Bruhat Bangalore Mahanagara
Palike ('BBMP' for short) directing the appellant herein to
stop further construction were assailed. The order of
BBMP was quashed. It was observed that in case the
petitioner constructed the building in contravention of
building plan or in violation of building bye-laws or any
other law, then BBMP was at liberty to act in accordance
with law. Being aggrieved by the order passed in
W.P.Nos.47552-47553/2012, these writ appeals are filed.
4. In W.P.Nos.268-270/2013, the appellant had
assailed Notification dated 16/11/2012 issued under
Sections 3(1), 1(3) and 28(1) of Karnataka Industrial Area
Development Act, 1966 (hereinafter referred to as 'KIAD
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Act'). These writ petitions were disposed of by directing
the appellant herein to file objections within two weeks
from the date of that order before the Special Land
Acquisition Officer ('SLAO') without waiting for any notice
under sub-section (2) of Section 28 of the KIAD Act and to
appear before the SLAO on 18/07/2013 at 3.00p.m.
Pursuant to the liberty granted by the learned Single
Judge, the appellant filed its objections before the SLAO
and an order has been passed under sub-section (3) of
Section 28 of the KIAD Act. But no further steps have
been taken subsequent thereto.
5. The appellant is the original petitioner, which is a
registered partnership firm engaged in construction of both
commercial as well as residential building in Bangalore.
The scheduled land was purchased by the appellant under
registered sale deeds dated 20/07/2007 and 12/10/2007.
Both these lands got a common BBMP Khata number under
an amalgamation order dated 25/10/2010 and a New
No.234/19/3D was assigned to the scheduled land. It is
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stated that Bangalore Development Authority ('BDA') had
approved change of land use from industrial to residential
purpose by order dated 28/04/2006 by accepting
conversion charges of Rs.2,16,750/-. The appellant
intended to construct residential apartments on the
scheduled lands and therefore, obtained necessary
sanctions and permissions from various authorities
including BBMP, who sanctioned the plan on 28/08/2012 to
the appellant to construct residential Blocks-I and II
comprising basement and ground, equal to 8/9 upper
floors. Appellant thereafter commenced excavation work
and extensively advertised in respect of its project.
6. Sixth respondent who is stated to be the Member of
Legislative Assembly (MLA) representing Rajarajeshwari
Constituency is running a school called 'RMS International
School' through the fifth respondent-RMS Educational Trust
(hereinafter referred to as "Educational Trust"). His wife
Smt.Ratnamma is stated to be the Secretary of the Trust.
Sixth respondent approached second respondent to
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sanction an extent of one Acre of land out of the scheduled
land, but the request was declined by stating that they
could approach the State Government seeking permission
to purchase agricultural land under Section 109 of the
Land Reforms Act. Thereafter, sixth respondent wrote to
BBMP on 01/02/2012 not to approve any plan in favour of
the appellant, till such time, that its application for
allotment of portion of scheduled land was considered.
BBMP, however, granted sanction of the building plan to
the appellant on 28/08/2012.
7. In the meanwhile, sixth respondent made an
application on 09/08/2012 to the third respondent-
SLSWCC to approve its project and allot scheduled land for
the fifth respondent-Educational Trust. At a meeting held
on 17/08/2012, third respondent approved the proposals
submitted by the sixth respondent and a communication in
that regard was issued on 12/09/2012 stating that its
project proposal has been favourably considered.
Thereafter, the second respondent-Karnataka Industrial
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Area Development Board ('KIADB' for short) issued
directions to its Land Acquisition Officer on 17/09/2012 to
prepare draft preliminary Notification for acquisition of 01
Acre 04 Guntas of land in Sy.Nos.18/2B, 1B, 18/2, B2,
18/2C, 1 and 19/3B, which is the scheduled land at
Konankunte Village, Uttarahalli Hobli, Bangalore South
Taluk. It is averred that the sixth respondent abusing his
official position instigated fourth respondent - BBMP to
issue letter dated 08/10/2012 to the petitioner to stop
further construction on the scheduled land, on false and
flimsy grounds.
8. Appellant has produced documents with regard to
the scheduled lands, which are at Annexures "A" to "H".
Annexure "J" is the communication dated 05/11/2011
issued by the fifth respondent, stating that the land in
question cannot be acquired for a private person or a
company, in view of circular dated 14/03/2008. Annexure
"K" is a letter dated 01/02/2012, addressed by the sixth
respondent to the Commissioner, BBMP, stating that the
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scheduled land is in the process of acquisition for the
purpose of RMS International School's playground and that
an order be passed disapproving any plan for construction
of any building in the schedule plan. Acting on that letter,
the Special Commissioner (Planning), BBMP addressed a
letter to the Deputy Commissioner, Bangalore District,
Bangalore, seeking his opinion prior to sanction of the plan
to be issued on the appellant's application.
9. When the matter stood thus, by communication
dated 12/09/2012 (Annexure "M") issued by the third
respondent-SLSWCC, it was stated that at the 74th
meeting of the SLSWCC held on 17/08/2012, the project
proposal of the Educational Trust was approved and that
all necessary "escort services" for the speedy
implementation of the project would be provided. In that
communication, it was specifically stated that KIADB was
to acquire 01 Acre 04 Guntas of land as a Single Unit
Complex (SUC) at Sy.Nos.18/2B1B, 18/2B2, 18/2C1 and
19/3B of Konankunte Village i.e., the scheduled land and
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that the Educational Trust had to file an application to
KIADB with an initial deposit towards tentative cost of the
land. On 17/09/2012, Special Deputy Commissioner of
KIADB wrote to Special Land Acquisition Officer-II of
KIADB, Zonal Office stating that at the 74th meeting of
SLSWCC held on 17/08/2012, it was decided to acquire
land measuring 01 Acre 04 Guntas in the aforesaid survey
numbers in Konankunte Village for RMS Educational and
Cultural Institution. Annexures "F" and "N" were issued on
the basis of the application made by the fifth respondent-
Educational Trust to the SLSWCC on 09/08/2012. In that
application, the scheduled land was shown as industrial
land, whereas according to the appellant, it was by then
converted for residential purpose.
10. Annexure "U" is the Executive Summary of the
application made by the Educational Institution on
13/08/2012. The Managing director of Karnataka Udyog
Mitra ('KUM' for short) wrote to the Member Secretary,
Karnataka State Pollution Control Board ('Pollution Control
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Board' for short) seeking opinion as to whether the
aforesaid four survey numbers would comply with the
environmental guidelines, so that the matter could be
placed before the SLSWCC for further discussion and to
take a decision (Annexure "V"). Another communication
was issued by the Managing Director, KUM, to the Chief
Executive Officer (CEO) & Executive Member to KIADB on
16/08/2012 to provide his opinion on the acquisition of the
land in the aforesaid survey numbers to establish a project
by an educational institution. The 74th meeting of the
SLSWCC was held on 17/08/2012, on which date, the
proposed project of the respondent - Educational Trust was
approved and communication was issued to the project
proponent and to other respective departments or
organizations for further course of action. It was decided
that KIADB would acquire 1 Acre 4 Guntas of land in
respect of the aforesaid survey numbers. It is thereafter,
an endorsement dated 08/10/2012 (Annexure "P") was
issued by the BBMP to the appellant with reference to the
letter dated 03/10/2012 written by fifth respondent-
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Educational Trust, restraining the appellant from working
on the scheduled land in order to verify the documents
pertaining to the land including the change of land user,
failing which, action was to be initiated. Perturbed at
these developments, appellant-firm, on 17/10/2012, wrote
to BBMP, seeking withdrawal of their letter dated
08/10/2012, failing which legal action was to be initiated.
In the above backdrop of facts, appellant herein assailed
the approval of the fifth respondent's project by the third
respondent - SLSWCC as well as acquisition of the
scheduled lands by first and second respondents in two
separate writ petitions.
11. Statement of objections were filed on behalf of
second respondent-KIADB, contending that there was no
justification in the objection taken by the appellant with
regard to the acquisition of the scheduled land for an
Educational Institution as it was an amenity as defined
under sub-section (1) of Section 2 of the KIAD Act.
Referring to "Industrial Policy : 2001-2006" and New
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Industrial Policy of 2006-2011 and 2009-2014 published
by the State Government, it was contended that an
educational institution is a facility, which contributes to the
development of industries in the State as contemplated
under sub-section (7-a) of Section 2 of the KIAD Act.
Therefore, it was averred that acquisition Notifications
were issued under Sections 3(1), 1(3) and 28(1) of the
KIAD Act and that only the preliminary Notification could
not be assailed by the appellant in the absence of a final
Notification, which was yet to be issued.
12. Karnataka Udyog Mitra ('KUM' for short) filed its
statement of objections contending that it was appointed
as a Nodal Agency under Section 12 of the Karnataka
Industries (Facilitation) Act, 2002 (hereinafter referred to
as 'Facilitation Act, 2002') and that SLSWCC has been
constituted under that Act, to examine and consider
proposals received from the entrepreneurs relating to
industrial and other projects to be set up in the State with
an investment of more than Rs.3.00 Crore and less than
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Rs.50.00 Crore. It was admitted that the fifth respondent
filed an application for approval of the project by SLSWCC,
which was submitted to KUM and on its scrutiny, the
matter was submitted before the SLSWCC for discussion at
the 74th SLSWCC meeting held on 17/08/2012 and
approved on that date and a communication was issued on
12/09/2012 to the fifth respondent. That CEO & Executive
Member of KIADB as well as KUM received letter dated
18/10/2012 from the appellant, stating that it was putting
up a residential apartment complex on the scheduled land
and therefore, SLSWCC could not have accepted the
project proposal of the fifth respondent - Educational
Trust. Therefore, appellant sought withdrawal of approval
accorded to the said institution by the aforesaid letter
(Annexure "R-3A"). Acting on that letter, the Managing
Director of KUM wrote to the Principal Secretary,
Commerce and Industries Department on 19/11/2012
(Annexure "R-3B") bringing to the notice of the latter, the
contents of letter dated 18/10/2012.
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13. In the additional statement of objections filed by
KUM, it has been stated that 74th SLSWCC meeting was
held on 17/08/2012 and the meeting notice was sent on
08/08/2012 (Annexure "R-C"). Thereafter, on 14/08/2012,
invitation for meeting was dispatched stating that the
notice and agenda were annexed. Annexures "R3-D" and
"R3-E" are those documents. However, as far as the fifth
respondent's project proposal was concerned, it was made
part of the additional agenda, which was circulated on
17/08/2012 i.e., on the date of the meeting (Annexure "R-
3F"). KUM has stated that there was no "un-due or un-
wholly haste" (un-holy) in the matter of processing the
application of fifth respondent and that no legal mala fide
arose in the matter while approving the project of the fifth
respondent.
14. First and fourth to sixth respondents did not file any
statement of objections to the writ petition. However, an
application for vacating the stay granted by this Court was
filed by fifth respondent-Educational Trust, contending that
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the Trust was established three to four years ago and
about 1,000 to 1,200 children were studying from pre-
nursery to ninth standard. The school was established in
Konankunte Industrial Area. In order to provide additional
facility to the school, it had approached SLSWCC for
acquisition of the scheduled land adjoining the educational
institution. SLSWCC, considering all the relevant aspects
of the matter and the project proposal of the fifth
respondent - Trust, issued clearance and KIADB was
requested to take up acquisition of scheduled land by
communication dated 17/10/2012 and that fifth
respondent was directed to deposit the acquisition
expenses, in response to which it deposited a sum of
Rs.83,77,600/- by demand drafts (Annexures "R1" and
"R2"). KIADB on getting clearance from SLSWCC and in
light of the deposit made by the institution, proceeded to
notify the scheduled land as an industrial area under
Section 1(3) and 3(1) of the Act on 16/11/2012 and it was
published on 17/11/2012 (Annexure "R3"). Further
Notification under sub-section (1) of Section 28 of the
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KIAD Act was also issued on 16/11/2012 (Annexure "R4").
At that stage, the appellant had approached this Court
assailing the Notifications. Denying that sixth respondent
had misused his official position as a local MLA in seeking
to acquire the scheduled land, it was contended that
Konankunte Industrial Area, in which the scheduled land is
situated, is not within Rajarajeshwarinagar Constituency of
which sixth respondent was the representative and that
request made to the State Government for acquisition of
scheduled land by the sixth respondent was in his capacity
as a Chairman of the fifth respondent-Trust. While denying
various averments made in the writ petition, it was,
however admitted by the fifth respondent-Educational
Trust that it had approached KIADB for acquiring the land
in question as the same is abutting the existing school
building and that if the appellant was allowed to put up
construction, the same would come in the way of the fifth
respondent-institution in making use of the land in
question for the purpose for which it was notified. It was
also contended that the construction activities commenced
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by the appellant was causing nuisance to the Educational
Institution and therefore, sought vacating the interim
order granted by this Court.
15. Learned Single Judge of this Court disposed the writ
petitions by quashing the order of the BBMP (Annexure
"P"), but did not dwell on the challenge made to Annexures
"M" and "N". As stated above, with regard to the challenge
made to the acquisition Notifications, appellant was left to
object to the same under sub-section (3) of Section 28 of
the KIAD Act. Being aggrieved by the order of the learned
Single Judge in not considering the case of the petitioner
with regard to the challenge made to Annexures-M and N,
these appeals are preferred.
Contentions:
16. Sri. G.L.Vishwanath, learned counsel appearing for
the appellant, contended that approval of the project of
the fifth respondent-Educational Trust by SLSWCC was
vitiated and consequently, the acquisition of the scheduled
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land for the said purpose by the KIADB is illegal. He
contended that the exercise of power by the respondent-
authorities in the instant case is a glaring instance of
colourable exercise of power as private lands could not be
acquired by the State Government or its instrumentalities
at the instance of a private party under the provisions of
KIAD Act. Drawing our attention to the documents on
record, he submitted that application dated 09/08/2012
submitted by the respondent-Educational Institution was
incomplete as the processing fee was remitted only on
14/08/2012 and till that date, the application could not
have been considered by KUM. But even prior to that, on
13/08/2012, a letter was addressed by KUM to the
Pollution Control Board and thereafter on 16/08/2012 to
KIADB for their opinion in the matter. Even without waiting
for their opinion, on 17/08/2012, a decision was taken
approving the project of the respondent - Educational
Trust. That 15/08/2012 was a National Holiday on account
of Independence Day and the 74th meeting of SLSWCC was
held on 17/08/2012. Seven days prior notice of such a
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meeting along with agenda had to be issued under Rule
4(2) of Karnataka Industries Facilitation Rules, 2004
(hereinafter referred to as 'Facilitation Rules'). In the
instant case, fifth respondent's project proposal was not
part of the original agenda, which was dispatched on
08/08/2012 as the Educational Trust had not submitted its
application on that date and processing fee of Rs.30,000/-
was remitted only on 14/08/2012. Therefore, as on
08/08/2012 fifth respondent's project proposal could not
have been included in the original agenda. However, on
the date of 74th meeting of SLSWCC, additional agenda
was circulated in which, fifth respondent's project was at
Sl.No.2.85. Thus, the members of the SLSWCC had no
opportunity to consider the fifth respondent's project in
light of the Facilitation Act, 2002. The role of the sixth
respondent in getting approval of the fifth respondent's
project is patent and it is at his instance that the project
was illegally approved by the SLSWCC was his submission.
Thus, the proceedings of the SLSWCC vis-à-vis fifth
respondent is alleged to be ex facie illegal.
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17. Elaborating on the misuse and abuse of official
position as a MLA by sixth respondent, it was contended
that, with an oblique motive and contrary to public
interest, sixth respondent ensured that SLSWCC approved
the project of fifth respondent, even though it was not
originally a part of the agenda. Drawing our attention to
the aforesaid chronology of events that had taken place on
the application filed by the fifth respondent, learned
counsel submitted that the action of the SLSWCC on the
application of the fifth respondent suffered from legal mala
fide and it was an instance of colourable exercise of power.
The approval of the fifth respondent's project included
acquisition of land for the fifth respondent - Educational
Institution. It was, therefore, contended that the
acquisition of scheduled land based on an illegal approval
granted by SLSWCC was also vitiated.
18. On behalf of the appellant, it was also contended
that the appellant had purchased the scheduled land in the
year 2007 and after seeking all statutory approvals,
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sanctions and clearances, they had commenced
construction of a residential project and the scheduled land
belonging to a private entity could not be acquired at the
instance of another private entity through instrumentalities
of the State, such as KUM and SLSWCC under the
provisions of KIAD Act. It was also contended that the
scheduled land was earmarked for residential purpose in
the CDP, but the fifth respondent had falsely indicated the
same as 'Industrial land' in the application made to KUM.
That in total disregard of the Comprehensive Development
Plan (CDP) and the order of conversion passed in respect
of the scheduled land, the same was sought to be acquired
for an industrial purpose. It was also contended that, at
the behest of private individuals, KIADB could not acquire
lands for industrial purpose. That is not the object of KIAD
Act. Elaborating the said contention, it was submitted that
the State had misused its power of eminent domain by
invoking the KIAD Act in the instant case. Even if the
lands had to be acquired at the instance of the private
persons, it must be in public interest and that in the
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instant case, there was only private interest, which was to
be catered to be by the respondent-authorities. Sixth
respondent being a MLA and his wife being the Secretary
of the fifth respondent-Educational Trust, they wielded
their power and influence in the State Government to bring
about acquisition of the scheduled land for a project
proposal by fifth respondent, which was not in consonance
with the scope of the Facilitation Act, 2002. The same
could not have been approved by SLSWCC. Consequently,
acquisition of the land initiated solely based on the
approval given by the SLSWCC was also vitiated, was the
submission.
19. Relying on certain decisions of the Hon'ble Supreme
Court as well as this Court, learned counsel contended that
the learned Single Judge has not considered these aspects
of the matter and had not granted any relief to the
appellant. It was, therefore, submitted that Annexures-M
and N ought to be quashed and consequently, the
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acquisition of land would also be without any authority of
law.
20. Drawing our attention to the object and scope of
Facilitation Act, 2002 as well as the KIAD Act, it was
contended that the Facilitation Act, 2002 could not have
been invoked by the fifth respondent to acquire the
scheduled land through the KIADB. That third respondent-
authority had no jurisdiction to consider the project
proposal of fifth respondent as an infrastructure facility to
be added to the fifth respondent - school and it could not
be considered to be an 'industrial project' or an 'industrial
undertaking'. That a piece of residential land belonging to
the appellant could not have been legally acquired for an
industrial purpose under the provisions of the KIAD Act for
the benefit of fifth respondent-Trust. Also the institution
was not an 'amenity' or an 'industrial infrastructural
facility' within the scope of their definitions under KIAD
Act. Thus, the actions of the respondent-authorities under
the two Acts vis-à-vis fifth respondent's project were
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vitiated, was the submission. It was urged that the
impugned orders be set aside and relief be granted to the
appellant.
21. Learned Senior Counsel, Sri.Ashok Haranahalli,
appearing for fifth and sixth respondents, countered the
arguments of the appellant's counsel with reference to his
written submission and contended that Section 2 of KIAD
Act defines 'amenity' and that, by a Notification, the State
Government is empowered to add any other facility as an
amenity. By Notification dated 13/03/1991, gazetted on
09/05/1991, the State Government added "Educational
Institution" as an amenity. Therefore, acquisition of lands
for an "educational institution" is permissible under the
provisions of the KIAD Act. That initially, fifth respondent-
Educational Trust approached KIADB for acquisition of
lands for providing additional facilities such as playground
etc. On 15/06/2012, the CEO of KIADB has advised the
Secretary of the fifth respondent-Educational Trust to
make an application to SLSWCC and in case its project was
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approved, steps could be initiated for acquisition of land
under KIAD Act. Accordingly, the project proposal was
submitted to KUM and was approved by SLSWCC, which
has been constituted under the provisions of the
Facilitation Act, 2002 to assist entrepreneurs to set up
industries in the State. That the proposal of the fifth
respondent-Educational Trust comes within the expression
"other projects" under sub-section (2) of Section 6 of
Facilitation Act, 2002. The said expression has to be
interpreted in a broad manner and not in a narrow and
pedantic way. The expression "other projects" must be
given a plain and popular meaning to include infrastructure
development project notified under the Notification issued
under Section 2(vii) of Facilitation Act, 2002. It was also
contended that at the behest of the KIADB, scheduled land
was sought to be acquired for the purpose of fifth
respondent-Educational Trust for providing additional
facility to its school such as playground and therefore, the
issue relating to acquisition of the land cannot be the
subject matter of these appeals. SLSWCC approved the
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project after considering all aspects of the matter and no
legal mala fides could be attributed to the grant of
approval of the project by the SLSWCC. Neither was there
any colourable exercise of power, was the submission.
Placing reliance on certain decisions of both the Hon'ble
Supreme Court and this Court on the object of KIAD Act, it
was contended that there is no merit in these appeals.
22. Sri.M.Poonacha, learned counsel appearing for the
third respondent-SLSWCC gave a chronology of dates in
the matter, right from 09/08/2012 when the fifth
respondent-Educational Trust made its application to KUM
and fairly stated that its project was not part of the
original agenda of the 74th meeting of SLSWCC, but on the
date of the meeting i.e., on 17/08/2012 an additional
agenda was circulated to the members of the Committee in
respect of fifteen projects, one of which was the fifth
respondent's project. Supporting the action of SLSWCC
under the provisions of the Act, he contended that there
was no colourable exercise of power in the instant case
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and nor was any undue favour shown to fifth or sixth
respondent.
23. Learned Senior Counsel, Sri.D.L.N.Rao, appearing for
KIADB, at the outset contended that there has been no
appeal against the order passed in W.P.Nos.268-270/2013.
In these writ appeals, there cannot be any challenge to the
acquisition Notifications issued under the provisions of the
KIAD Act. With a view to assist the Court, learned Senior
Counsel also proffered submissions on the provisions of
the Facilitation Act, 2002 and contended that the
expression "other projects" in the definition of industrial
undertaking, must receive a broad interpretation by
placing reliance on certain decisions of the Hon'ble
Supreme Court. He also contended that in the guise of
attempting to challenge the approval granted to the 5th
respondent - Educational Trust under the provisions of the
Facilitation Act, 2002, the acquisition of the scheduled land
could not be challenged. He further contended that the
challenge to acquisition of land was premature as only a
-: 29 :-
preliminary Notification had been issued under sub-section
(1) of Section 28 of the KIAD Act and that no final
Notification or declaration had been yet issued.
24. Learned Government Advocate appearing on behalf
of the State fairly contended that the basis for issuance of
acquisition Notifications for acquiring scheduled land was
the decision taken at the 74th meeting of SLSWCC and that
the acquisition in the instant case was not preceded by any
independent exercise of power by the State.
25. Learned counsel for respondent-authorities have
produced for our perusal the original records as well as
copies of the relevant documents along with translation of
the documents, which are in Kannada.
26. Learned counsel for the appellant, in his reply,
contended that the acquisition of scheduled land had its
genesis in the act of granting approval by SLSWCC under
the provisions of the Facilitation Act, 2002. That SLSWCC
had no jurisdiction to grant any such approval to the
-: 30 :-
project proposal of fifth respondent-Educational Trust as
the application was not made by an "entrepreneur" and
that the facilities to be added to an Educational Institution
could not be considered to be an "industrial undertaking or
other project". Drawing our attention to the preamble and
scheme of the Facilitation Act, 2002, it was contended that
only certain specified industries or services could seek
approval under the provisions of the Act, through
entrepreneurs. That in the instant case, the Facilitation
Act, 2002 has been abused by the fifth and sixth
respondents with the active co-operation of the
respondent-authorities. The undue haste with which the
project was approved manifests a patently orchestrated
effort. Drawing our attention to the manner in which the
objections of the appellant, filed pursuant to the directions
of this Court, were considered under Section 28 of the
KIAD Act, it was contended that the State Government had
decided to acquire the scheduled land pursuant to the
approval of the project in the 74th meeting of the SLSWCC
and therefore, now the issuance of a declaration under
-: 31 :-
sub-section (4) of Section 28 of KIAD Act is a mere
formality. He, therefore, contended that, having regard to
the factual background of the issues which arise in these
appeals, it is a fit case calling for intervention by this
Court.
Point for consideration:
27. Having heard learned Senior Counsel as well as
learned counsel for the respective parties and on perusal
of the material on record as well as relevant records, the
point that arises for our consideration is, whether the
approval accorded by the third respondent-SLSWCC to the
project proposed by fifth respondent-Educational Trust is
legal or vitiated. Answering the aforesaid point calls for an
interpretation of the relevant provisions of the Facilitation
Act, 2002 and the KIAD Act. The acquisition of the
scheduled lands, though not a subject matter of these
appeals, would nevertheless have to be considered in light
of our findings on the point for consideration.
-: 32 :-
28. The facts are not in dispute in these appeals. A
detailed factual background given in the initial part of this
judgment obviates reiteration of the facts at this stage.
Re: Approval granted under the Facilitation Act, 2002.
Since approval of the project submitted by the fifth
respondent in the 74th meeting of SLSWCC is called in
question in these matters, at the outset, it would be useful
to refer to the preamble and relevant provisions of the
Facilitation Act, 2002, which are extracted as under:
"Preamble of the Act:
An Act to provide for the promotion of
industrial development and facilitation of new
investments to simplify the regulatory frame
work by reducing procedural requirements and
rationalizing documents and to provide for an
investor friendly environment in the State of
Karnataka.
Whereas, it is expedient to provide for
speedy implementation of industrial and other
projects in the State by providing single point
guidance and assistance to promoters,
-: 33 :-
reducing the procedural requirements
rationalizing documents and to ensure smooth
operation;
x x x
2. Definitions:- In this Act unless the context
otherwise requires,-
(ia) "Applicable Acts" means the
Factories Act, 1948, the Boilers Act, 1923, the
Contract Labour (Regulation and Abolition) Act,
1970, the Employees State Insurance Act,
1948, the Minimum Wages Act, 1948, the
Payment of Bonus Act, 1965, the Payment of
Wages Act, 1936, the Maternity Benefit Act,
1961, Gratuity Act, 1972, the Equal
Remuneration Act, 1976 and the Karnataka
Shops and Commercial Establishments Act,
1961;
(ii) "Authority" includes a local authority
or any statutory Board, Corporation or other
authority established by the State Government
and which are entrusted with the powers or
responsibility to grant or issue clearances;
(iii) "Clearances" means grant or issue of
no-objection certificate, allotments consents,
approvals, permissions, registration,
enrolments, licences and the like, by any
-: 34 :-
Authority or authorities in connection with
setting up an industrial undertaking in the
State.
x x x
(vi) 'Entrepreneur' means a person or
body of persons or a company, having majority
investment or controlling interest in an
industrial or undertaking.
(emphasis supplied)
(vii) 'Industrial undertaking' means an
undertaking engaged in manufacturing or
processing or both or providing service or
doing any other business or commercial
activity as may be specified by the State
Government ;
6. State Level Single Window Clearance
Committee:-
(1) The State Government may by
Notification constitute a single window
clearance committee for the State called as the
'State Level Single Window Clearance
Committee' consisting of such members as
may be specified therein.
-: 35 :-
(2) The State Level Single Window
Clearance Committee shall examine and
consider proposal received from the
entrepreneurs relating to industrial and other
projects to be set up in the State with an
investment of more than three crores rupees
and less than rupees fifty crores each.
(3) A member of the Committee shall
personally attend the meeting and in case he is
unable to attend the meeting he may depute a
senior level officer with a written authorization
to take appropriate decision in the meeting.
x x x
(emphasis supplied)
29. The object of the Act is to promote industrial
development and facilitation of new investments and to
simplify the regulatory frame work by reducing procedural
requirements and rationalising documents so as to provide
an investor friendly environment in the State. In order to
have a speedy implementation of industrial and other
projects, the Act seeks to provide a single point guidance
and assistance to promoters, reducing the procedural
-: 36 :-
requirements, rationalizing documents and to ensure
smoother operation of the process. The Act envisages
three Committees viz., (1) State High Level Clearance
Committee (Section 3); (2) State Level Single Window
Clearance Committee (Section 6) and (3) District Level
Single Window Clearance Committee (Section 9). Their
constitution and functions are provided in Chapter II of the
Act.
30. For a project having an investment of more than
Rs.3.00 Crore and less than Rs.50.00 Crore, sub-section
(2) of Section 6 of the Act enables the State Government
to constitute SLSWCC to consider proposals received from
entrepreneurs relating to industrial and other projects to
be set up in the State. The functions of that Committee
are stated in Section 7 and its powers are stated in Section
8 of the Act. The SLSWCC would meet at such times and
adopt such procedures as are required to transact its
business. It would examine proposals for setting up
industrial undertakings referred to in sub-section (2) of
-: 37 :-
Section 6 and communicate its decision to the
entrepreneur and the departments or authorities
concerned within one week of the meeting. The decision
of the Committee granting approval for the projects placed
before it is final and binding on the departments or
authorities concerned, who are mandated to issue the
requisite clearances within the stipulated time, subject to
compliance by the entrepreneurs with regard to the
applicable Acts or Rules made thereunder. KUM is the
Nodal Agency at the State Level to undertake investment
promotional activities and to render necessary guidance
and assistance to entrepreneurs to set up industrial
undertakings in the State. The functions of the Nodal
Agency are stated in Section 13 of the Act. If a person is
aggrieved by the decision of SLSWCC disapproving the
project, he may within thirty days from the date of
issuance of communication, appeal to the Appellate
Authority.
-: 38 :-
(30a). The Facilitation Act is a piece of legislation
intended to assist entrepreneurs to get their proposals
approved and cleared in a prompt and timely manner, so
as to cut down red tapism and obviate procedural delays
in getting statutory clearances. The SLSWCC is a high
powered committee, which has to apply its mind at the
time of considering the proposals of an entrepreneur for
approval, where a proposal requires acquisition of land,
there has to be a greater application of mind. The object
of the Act in constituting KUM and its various committees
is to ensure that all statutory requirements are adhered to
at the time of granting approvals or clearances for
industrial projects. Where the approval of a project is
questioned before Court, there has to be a strict and
comprehensive scrutiny of the decision of KUM as its
decision would be binding on various statutory authorities,
which have to adhere to the recommendations and
decisions of KUM. Thus, there has to be an independent
application of mind by the members of the SLSWCC and
not an abdication of its duties and responsibilities.
-: 39 :-
31. Sub-section (2) of Section 6 uses the expression
"entrepreneurs" relating to industrial and other projects.
'Entrepreneur' is defined in Clause (vi) of Section 2 to
mean a person or body of persons or a company, having
majority investment or controlling interest in an "industrial
or undertaking". At this stage, it would be necessary to
state that the word "or" between the words industrial
undertaking in this clause is an instance of printer's devil
and the correct expression is "industrial undertaking" and
not "industrial or undertaking". We say so after comparing
the English version of the text of Clause (vi) of Section 2 of
the Act with the original Kannada version. Clause (vii) of
Section 2 defines "Industrial Undertaking" to mean an
undertaking engaged in manufacturing or processing or
both or providing service or doing any other business or
commercial activity as may be specified by the State
Government. Both these definitions are exhaustive and not
inclusive. Therefore, an application to SLSWCC can be
made only by an entrepreneur who has a majority
investment or a controlling interest in an industrial
-: 40 :-
undertaking as defined in Clause (vii) of Section 2 of the
Act and not by anybody else. The expression "industrial
undertaking" also does not have an expansive meaning
though the words manufacturing, processing, providing
service, doing business or commercial activity are included
within that expression. In fact, those words are limited by
the expression "as may be specified by the State
Government". Therefore, the intention of the Act is not to
extend the provisions of the Act to all and sundry industrial
undertakings. Thus, an industrial undertaking must comply
with all the requisites under the definition before an
entrepreneur makes an application to SLSWCC. Firstly,
the undertaking must be engaged in manufacturing or
processing or both or providing service or doing any other
business or commercial activity and secondly, such
manufacturing, processing, service, business or
commercial activity must be specified by the State
Government. The Notification dated 20/07/2006, issued in
exercise of powers conferred by clause (vii) of Section 2 of
the Act specify the undertakings as "Industrial
-: 41 :-
Undertaking" for the purposes of the Act. The Notification
has essentially two categories of industrial undertakings
and they are as follows:
(1) All types of manufacturing Industries; and
(2) The following undertakings providing services:
(a) Information Technology, IT Enabled
Services, Business Process Outsourcing;
(b) Bio-Technology Industries;
(c) Tourism Projects;
(d) Infrastructure Development Projects;
(e) Energy Generation and Distribution
Projects.
The project of the fifth respondent definitely would
not come within the expression "manufacturing industry".
As far as "services" are concerned, there are five
categories, which have been mentioned above. Education
as a service does not find a place therein. Learned Senior
Counsel appearing for fifth and sixth respondents
contended that education as a service could be read into
the expression "Infrastructural Development Projects" and
therefore, the use of that expression in the Notification
-: 42 :-
issued by the State Government is on account of the
expression "other projects" finding place in sub-section (2)
of Section 6 of the Act and therefore, the said expressions
must be given an expansive interpretation by placing
reliance on certain decisions.
32. Educational projects cannot be brought within the
scope of the expression "other projects", and that
expression does not find a place in the definition of
industrial undertaking in clause (vii) of Section 2 of the Act
but finds a place in sub-section (2) of Section 6 of the Act.
Thus, "educational services or projects" cannot be read
into the expression "Infrastructural Development Projects"
under Notification dated 20/07/2006. The reason is not far
to see. Infrastructural Development Projects aid industrial
undertakings by providing transport, communication,
technology parks or township or those facilities, which aid
business and commercial activity or manufacturing or
processing activities, and such other service come within
the scope of that expression. Therefore, unless both the
-: 43 :-
aforesaid requisites are complied with, it cannot be read
within the scope of the expression industrial undertaking.
Thus, the definition of industrial undertaking under the Act
cannot have an expansive meaning, as contended by the
learned counsel for the respondents. The legislative
intention is to extend the benefit of the Act only to certain
kinds of industrial undertakings, which are specified by the
State Government. However, learned counsel for the
respondents in unison contended that sub-section (2) of
Section 6 uses the expression "relating to industrial and
other projects". Therefore, "other projects" would require
a wide interpretation. Such an interpretation cannot be
given to the expression "other projects" as the definition
clause itself is restrictive in nature and not an inclusive
one. If the interpretation as sought by the respondents
was intended by the legislature, then the expression
"projects" would have found a place in the definition of
industrial undertaking. In that event, a project which is not
industrial in nature, i.e., even if it is unrelated to
manufacturing or processing or providing service or doing
-: 44 :-
any business or commercial activity would have come
within the scope of the definition of industrial undertaking
under the Act. Secondly, it would then not have been
necessary to specify such projects by the State
Government. That however, is not the intention of the
legislation. It becomes clearer on consideration of
definition of "Applicable Acts" in clause (ia) of Section 2 of
the Act. "Applicable Acts" means Factories Act, 1948,
Boilers Act, 1923, Contract Labour (Regulation and
Abolition) Act, 1970, Employees State Insurance Act,
1948, Minimum Wages Act, 1948, Payment of Bonus Act,
1965, Payment of Wages Act, 1936, Maternity Benefit Act,
1961, Gratuity Act, 1972, Equal Remuneration Act, 1976
and Karnataka Shops and Commercial Establishments Act,
1961. A reading of the names of the aforesaid Acts makes
it clear that it relates to only manufacturing or processing
or a business or a commercial activity or where there is a
service activity, which is relatable to an industrial activity.
-: 45 :-
33. Thus, on a conjoint reading of the aforesaid
provisions along with the Notification dated 20/07/2006
issued by the State Government would make it apparent
that only certain types of industries specified under the
aforesaid Notification would come within the scope of
definition of industrial undertaking and it is only the
"entrepreneurs" as defined under the Act, who intend to
commence such an industrial undertaking who can make
an application to SLSWCC under Section 6 of the Act.
Therefore, the fifth respondent, which is an Educational
Trust running a School can by no stretch of imagination
come within the scope of definition of "industrial
undertaking" or "other projects" as mentioned in sub-
section (2) of Section 6 of the Act. In fact, a perusal of the
Notification dated 26.07.2004 issued under sub-section (1)
of Section 6 of the Act constituting the SLSWCC also
indicates that it does not make a provision for a member
of the Department of Education to be on the said
Committee. The committee consists of following persons:
-: 46 :-
"1. The Principal Secretary to Govt.,
Commerce & Industries Dept.
Chairman
2. The Principal Secretary to Govt.,
Kannada & Culture Dept.
Member
3. The Secretary, Food Processing &
Post Harvest Technology Dept.
Member
4. The Secretary to Govt.,
IT & BT Dept.
Member
5. The Secretary to Govt.,
Dept. of Ecology & Environment
Member
6. The Joint Secretary/Dy. Secretary,
Urban Development Dept.
Member
7. The Principal Secretary to Govt.,
Revenue Dept.
Member
8. The Joint Secretary/Dy. Secretary,
PWD
Member
9. The Addl. Secretary to Govt.,
Infrastructure Development Dept.
Member
10. The MD,
KSIIDC,
Member
11. The Managing Director,
KSFC
Member
-: 47 :-
12. The MD,
KPTCL,
Member
13. The Member Secretary,
Karnataka State Pollution Control Board
Member
14. The Commissioner for Industrial Development and
Director of Industries & Commerce
Member
15. The Commissioner for Tourism
Member
16. The CEO & EM, KIADB
Member
17. The Commissioner for Commercial Taxes
Member
18. The Director of Factories & Boilers
Member
19. The Director Technical Cell,
Commerce & Industries Dept.
20. The Deputy Secretary to Govt.,
Irrigation Dept.
Member
21. The Managing Director,
Karnataka Udyog Mitra
Member"
Therefore, third respondent-SLSWCC had no
jurisdiction to consider the project submitted by fifth
respondent - Educational Trust. That project is neither a
project specified by the State Government by its
-: 48 :-
Notification dated 20/07/2006 much less an infrastructural
development project nor is it a manufacturing, processing
business or commercial activity. Neither is fifth respondent
an entrepreneur having a majority investment or
controlling interest in an industrial undertaking. In that
view of the matter, the SLSWCC had no jurisdiction to
consider the proposal submitted by the fifth respondent,
much less approve the same.
34. In the matter of interpretation of statutes, reliance
was placed on State of Tamil Nadu v. Kodaikanal
Motor Union (P) Ltd., [AIR 1986 SC 1973], with
regard to the approach of the Court. In that decision, it
has been stated that Courts must always seek to find out
the intention of the legislature from the language used, but
language more often than not is an imperfect instrument
of expression of human thought. In that decision,
reference was made to Court Estates v. Asher [(1949)
2 All-ER 155], wherein, Lord Denning stated that when a
defect appears, a Judge cannot simply fold his hands and
-: 49 :-
blame the draftsman. But he must set to work on the
constructive task on finding the intention of Parliament and
then, he must supplement the written word so as to give
'force and life', to the intention of the legislature. This
passage has also been quoted in Ahmedabad Municipal
Corporation v. Nilaybhai R.Thakore and another [AIR
2000 SC 114]. This approach of the Court would be
necessary only when the Court finds that the statute is not
happily worded or that there is no clarity in the words of
the statute, which is not so in the provisions under
consideration.
35. In the same vein, in Reserve Bank of India v.
Peerless General Finance And Investment Co. Ltd.
and Others [(1987) 1 SCC 424], the object of having an
inclusive definition in a statute has been stated. Also,
observations have been made with regard to interpretation
of statute both textually as well as contextually. We
respectfully agree with those observations but on applying
the same to the present case, we have arrived at the
-: 50 :-
aforesaid interpretation, having regard to the scope and
object of the Facilitation Act, 2002.
36. It also needs to be noted that the matter is also in
the realm of public law in as much as public authority has
to act in public interest. In this context, elaborate
submissions have been made on both sides with regard to
the way in which fifth respondent's proposal was approved
and sanctioned by the SLSWCC.
37. Under Facilitation Rules, 2003, the procedure for
holding meeting of the SLSWCC is envisaged. Rule 4 reads
as follows:
"4. Meeting of the State Level Single
Window Clearance Committee (SLSWCC)
etc:-
(1) The State Level Single Window Clearance
Committee (SLSWCC) shall meet ordinarily on
3rd Monday of every month at Bangalore or
such other place as the Chairman may specify
to transact business of the Committee.
(2) The Member-Secretary shall issue a
meeting notice convening a meeting of the
-: 51 :-
State Level Single Window Clearance
Committee indicating the date, time and place
of meeting. He shall enclose agenda to the
meeting notice for transaction of business in
the said meeting. He shall send notice of
meeting atleast seven days in advance of the
meeting. Member Secretary shall also send
notice intimating the date, time and place of
the SLSCC meeting to the entrepreneurs,
whose proposals are included in the Agenda.
(3) He shall place all the proposals received
before the committee for its consideration.
(4) The State Level Single Window Clearance
Committee shall examine all the proposals
placed before it and take appropriate decisions.
(5) The Member-Secretary shall prepare
proceedings and obtain the approval of the
Chairman of State Level Single Window
Clearance Committee within seven days of the
meeting.
(6) After the proceedings are approved, the
Member Secretary shall communicate the
decision of the committee within a period of
-: 52 :-
seven days from the date of such approval, to
the authorities or departments concerned and
to the entrepreneurs concerned."
The object of Rule 4 is to give a clear intimation to
the members of the SLSWCC as well as to the
entrepreneurs about the date time and place of the
meeting. They should also know about the proposals or
projects to be considered at least seven days in advance.
This is to enable the members of the SLSWCC to study the
proposals and apply their mind independently. The
SLSWCC has to collectively examine the proposals and
take appropriate decisions and within seven days after the
approval is granted to the projects, the entrepreneurs
must be intimated of the same. The concerned authorities
or departments must also be informed about the decision
taken by the SLSWCC.
38. Assuming that SLSWCC had the jurisdiction to grant
approval to the fifth respondent's project, we would have
to examine as to whether the requisite procedure has been
-: 53 :-
followed in the instant case. We have set out the
chronology of events leading upto the approval given by
the SLSWCC vis-à-vis fifth respondent's proposal. The
same was submitted on 09/08/2002 to KUM. The said
application stated that fifth respondent-Trust is engaged in
providing education to children and that it needed one Acre
of industrial land for its project (School Building). The
details of the promoters or directors of the project are
stated in the application as follows: Smt.Rathnamma M.,
who is wife of sixth respondent, is the Secretary of the fifth
respondent-Educational Trust; S.Venkatesh Babu is a
BBMP Corporator, having fifteen years experience in
manufacturing industry; M.Srinivas - sixth respondent is
an MLA, Ex-Member of Parliament and Chairman of the
Institution; Smt.Chandrika is a trustee; Smt.Sandhya is
the Treasurer of the RMS International School; and
B.R.Venkata Narayana Dixit is a Trustee. The nature of
activity is shown as Educational Institution and the project
proposal was for expansion of the existing institution with
-: 54 :-
an investment of Rs.16.00 Crore on the aforesaid survey
numbers measuring 1 Acre 4 Guntas.
39. On 13/08/2012, the Managing Director of the KUM
wrote to the Member Secretary, State Pollution Control
Board, seeking his opinion on the proposed project.
According to learned counsel for the appellant, that letter
was dispatched only on 28/08/2013. It was stated that it
was only on 13/08/2012 that the requisite fee was
deposited by the respondent - Educational Trust. That
15/08/2012 was a Public Holiday; on 16/08/2012, the
Managing Director of KUM wrote to the CEO and Executive
Member of KIADB to give his opinion to acquire and allot
the land in the aforesaid survey numbers to establish an
"Educational Institution" project. That letter was also
dispatched only on 28/08/2012. Prior to that, the
proceedings of the 74th SLSWCC was held on 17/08/2012.
According to learned counsel for the third respondent,
invitation for that meeting was sent on 08/08/2012,
stating that the notes and agenda would be sent shortly.
-: 55 :-
On 14/08/2012, invitation for the meeting was sent along
with the notes and agenda. That agenda did not include
fifth respondent's project. On 17/08/2012, during the
course of 74th SLSWCC meeting, additional agenda was
circulated and Sl.No.8.25 of the agenda pertained to the
fifth respondent - Educational Trust. Thus, without there
being any prior consideration of that proposal as required
under Rule 4 of the Facilitation Rules, 2004, the approval
of the project has been given. There was no seven days
prior notice about the fifth respondent's proposed project
to the members of the SLSWCC. There was also no
examination of the proposal by the members
independently and despite such lapses, the proposal of the
fifth respondent - Trust was sanctioned at the 74th meeting
of the SLSWCC on the same day after the additional
agenda was circulated. Therefore, the approval of the fifth
respondent's project in the instant case is in clear violation
of the procedure contemplated under Rule 4 of the Rules.
-: 56 :-
40. On 17/09/2012, the Managing Director, KUM
intimated the fifth respondent-Educational Institution
about the approval of the project and also about providing
of "necessary escort service for the speedy
implementation" of the project (Annexure-M). On the
same day, Special Deputy Commissioner of KIADB wrote
to Special Land Acquisition Officer-II, KIADB, Zonal Office
about the decision taken to acquire land in the aforesaid
survey numbers in the scheduled land and to submit
supporting documents and to draft the Notifications under
Sections 3(1), 1(3) and 28(1) of the KIAD Act (Annexure
"N"). These Notifications were assailed in Writ Petition
Nos.268-270/2013 filed by the appellant.
41. In order to consider the argument of the appellant's
counsel with regard to legal malafides and colourable
exercise of power, we would have to consider the aforesaid
aspects in light of the relevant records made available to
us.
-: 57 :-
42. Karnataka Udyog Mitra, representing respondent
No.3 has made available photocopies of Notes and Orders
with regard to the fifth respondent's project proposal. On
12/09/2012, it is noted that the 74th SLSWCC meeting
proceedings were placed for perusal and approval of
intimation letter was sought. On 06/11/2012, the Noting
at Sl.No.11 is as follows:-
"11. M/s. Century Metal No.10/1,
Lakshminarayana Complex, Palace Road,
Bangalore-52, has informed vide its letter
dated 18/10/2012 that Sy.No.18/2/316,
18/2C1, 18/2B2 and 19/3B of Konanakunte
Village, Uttarahalli Hobli, Bangalore South Tq.,
Bangalore Urban District which was approved
in favour of M/s. RMS Educational & Cultural
Trust in 74th SLSWCC meeting held on
17/8/2012 was purchased by them vide their
Absolute Sale Deed vide
No.BNG(U)JPN/3547/29 dated 12/10/2007 and
submitted sale deed copy, BBMP khatha, they
also informed that they have taken building
plan approval from BBMP to construct
residential layout. As such we may inform
KIADB to insist consent from land owners for
-: 58 :-
acquisition, the Co also requested to withdraw
the approval given to RMS Educational Trust.
As such file is put up for perusal and approval."
43. Second respondent-KIADB, has also made available
the file notes as well as translated version. The translated
Notes at Sl.Nos.1, 6, 44, 45, 46, 47, 60, 63 are relevant
and are extracted as under:-
1) Received E-mail message dated 15/06/2012 from the
Principal Secretary, attaching the request letter of
MLA of Rajarajeshwarinagar constituency requesting
to acquire an extent of lands measuring 0-29 guntas
in Sy.No.18/2B2; 0-10 guntas in Sy.No.18/2B1b and
0-09 guntas in Sy.No.18/2C1, in all 1 Acre of
Konanakunte village for the purpose of school ground
of RMS International school and to submit a report in
this regard.
Perused the same, we may inform the project
proponent to obtain project clearance from
SHLCC/SLSWCC. Draft letter prepared in this regard
is placed for perusal and approval.
Sd/- 15/06/2012
X X X
6) Placed letter dated 21/07/2012 of RMS International
school addressed to the Hon'ble Minister of Large and
Medium Scale Industries, G of K., requesting for
acquisition of Lands measuring 0-29 guntas in
Sy.No.18/2B2; 0-10 guntas in Sy.No.18/2B1b and
0-09 guntas in Sy.No.18/2C1, in all 1 Acre of
Konanakunte village towards the southern side of this
lands RMS School is situated. The Hon'ble Minister
has forwarded the same with a note to consider the
acquisition request of 1 Acre of land for the school.
-: 59 :-
In pursuance of the E-mail message dated
15/06/2012 of the Prl. Secretary, on 16-06/2012, a
letter has been addressed. The same may be
perused at Pages 8 & 9.
If approved the matter can be placed before
the Board, For perusal & Orders
Sd/- 30/07/2012
X X X
44) As per the proceedings SLSWCC in its 74th
proceedings held on 17/08/2012, as approved the
project of M/s RMS International & Cultural Institute
for acquisition and allotment of lands in Sy.18/2B1b;
18/2B2; 18/2C1 and 19/3B for an extent of 1 Acre 04
guntas for the purpose of educational institution as a
single unit complex (SUC)
45) As per SLSWCC proceedings, the Spl.LAO has
submitted proposal on 12/10/2012 and 16/10/2012.
It is reported that, the subject lands having been duly
converted and registered as BBMP katha Nos.197/375
for an extent of 47916 Sq.ft. and submitted
Notifications U/Sec: 3(1), 1(3) and 28(1) of the KIAD
Act. The company has deposited 40% of the
tentative cost of Rs.83,77,600=00 vide receipt
No.31998 dated 19/10/2012, and entered into an
agreement on 20/10/2012.
46) M/s.Century Central has written a letter on
18/10/2012, with documents to the KIADB and
Karnataka Udyoga Mitra communicating that the
BBMP has sanctioned plan for residential complex in
respect of the subject property on 28/08/2012.
47) In view of the above, and as per the report submitted
by the Spl.LAO, we may submit draft Notification to
acquire an extent of land measuring 47916 Sq.ft.,
U/Sec 3(1), 1(3) and 28(1) along with the contents of
the representation given by M/s century central to
the Govt. For perusal and order. Sd/- 20/10/2012
X X X
-: 60 :-
60) Placed the Govt. letter dated 03/12/2012 for perusal
M/s.Century central have raised objection
stating that, the property proposed for acquisition is
in residential zone as such without obtaining change
of land use starting of a education institution cannot
be taken up. The same may be considered at the
time of enquiry under Section 28(3) of the Act.
Therefore, letter prepared addressed to Spl.LAO-
2, to proceed as per the directions of the government
is placed for perusal and approval.
Sd/-13/12/2012
X X X
63) Govt. Letter dated 28/01/2013 is placed for perusal.
Along with a letter the request of the M/s Century
Central is enclosed requesting to drop the acquisition
proceedings relating to property bearing BBMP Khata
No.197/375, 19, 382, Sy.No.18/2B, 1B, 18/2B2,
18/2C1 and 19/3B of Konanakunte Village measuring
01 Acres 04 Guntas. The Government has also
sought the copy of the writ petition Nos.47552-
553/2012. The Copy of the said letter has been
given to LCO. With regard to request of the
Company for deletion of the land is forwarded to
SPL.LAO-2 for perusal and approval.
Sd/- 08/02/2013
The relevant notings made by the State Government
in the matter on 02/11/2012 on other dates are extracted
as under:-
"Subject: Issue of Preliminary Notification for
1-04 Acres of land in Konanakunte Village, Bangalore
South Taluk, Bangalore Urban District in favour of
M/s. RMS International School for Educational
purpose.
-: 61 :-
2) In the 74th SLSWCC meeting held on
17/08/2012 it has been decided to allot 1-04 Acres
of land in Sy.No: 18/2B1B, 18/2B2, 18/2C1, 19/3B
of Konanakunte village, Bangalore South Taluk of
Bangalore Urban District to M/s. RMS International
School for their educational purpose (Page:85).
3) As per the decision of SLSWCC the Special
Land Acquisition Officer has conducted spot
inspection of the area in the above mentioned
Sy.Nos. and has reported that these lands have been
converted and Khatas have been registered in Bruhat
Bengaluru Mahanagara Palike vide property No:
197/375 and also has submitted a proposal to issue
preliminary Notification under Section 3(1), 1(3) &
28(1) for this area totaling 47916 Sq. Ft.
4) The company has entered in to an agreement
in the prescribed format with the Board for the
proposed acquisition process of the land and also has
deposited 40% of tentative land acquisition cost
including the service charges of the Board on
19/10/2012.
5) In the meanwhile M/s. Century Central in
their representation dated 19/10/2012 duly
enclosing a few documents has addressed to the
KIADB and Karnataka Udyog Mitra duly requesting
not to acquire the said property since approval for
the sketch for construction of Residential Complex in
-: 62 :-
the property of the said Sy.Nos has been obtained on
28/08/2012 (Page: 81 to 83). But the Special Land
Acquisition Officer while submitting the proposal to
Government for issue of Preliminary Notification
under Section 3(1), 1(3) & 28(1) of KIAD Act for
acquisition of a total of 47916 Sq. Ft. of property
bearing No: 197/375 of Konanakunte Village duly
stating that suitable action as per rules on the said
representation will be taken while issuing order
under Section 28(3) after issue of notice under
Section 28(2).
6) On scrutiny of the proposal of the KIADB, M/s.
Century Central have submitted representation duly
expressing their objections for the proposed land
acquisition as per the decision of SLSWCC. They
(M/s. Century Central) have stated that they have
Sale deed and Bruhat Bengaluru Mahanagara Palike
Khata in their name and have also obtained sanction
for construction of Residential Complex in the said
land from Bruhat Bengaluru Mahanagara Palike on
28/08/2012. At present this land is a private land it
has not been mentioned in the proposal whether any
consent of the land owners of the said lands has
been obtained. This area has been earmarked as
Residential Area. In view this change of land use
must be obtained.
-: 63 :-
7) In view of the above points, CEO & EM, KIADB
may be requested to re-examine again and submit a
detailed proposal to the Government.
Senior Assistant
(ID Section)
2/11/2012
8) Additional Secretary}
At page 86, the Land Acquisition Officer has
noted that the acquired land falls in the Residential
Zone. Hence, it is appropriate to inform, to obtain
change of land use from the Competent Authority.
9) And also M/s. Century Central who have
expressed their objections for the scheme in this
land has stated that this land is in their name
through sale and BBMP has sanctioned approval on
28/08/2012 for construction of Residential Complex.
In view of these points, it is felt appropriate to
re-examine the present land acquisition process. For
orders.
Sd/-
Additional Secretary
02/11/2012
10) Principal Secretary}
Pl. discuss
Sd/-
Principal Secretary
03/11/2012
11) Additional Secretary}
Discussed.
-: 64 :-
The Principal Secretary has informed that in view of
the discussion held with an Officer of the Planning
Department, educational institution can be started
without obtaining change of land use though the land
acquired has been declared as Residential Zone.
Even then, the CEO, KIADB may be instructed to
ensure this point once again before submitting
proposal for issue of Final Notification.
12) The point in Para: 9 may be considered while
Land Acquisition Officer conducts enquiry under
Section 28(3).
13) Hence, may be submitted to the Hon'ble
Minister for Large & Medium Industries for approval
of the Preliminary Notification at Pages: 97-98 as
proposed by the CEO, KIADB subject to the condition
of ensuring after enquiry the points at Para: 11, 12
before Final Notification. And also, sanction may be
given for publishing the Notification in the Special
State Gazette.
Sd/-
Additional Secretary
03/11/2012
14) Principal Secretary }
Paras: 11 to 13 may be perused. File
submitted for approval of Para: 13.
Sd/-
M.N.Vidyashankar, IAS,
Principal Secretary to Government,
Commerce & Industries Department
Bangalore
03/11/2012
-: 65 :-
15) Hon'ble Minister for Large & Medium
Industries }
Para: 13 is approved
Sd/-
(Murugesh.R.Nirani),
Minister for Large & Medium Industries,
04/11/2012"
44. Before pronouncing on the validity of the approval of
the project proposal submitted by the fifth respondent -
Trust, it would be relevant to dilate on the argument made
on behalf of the appellant relating to colourable exercise of
power, mala fides and abuse of discretion.
45. It is trite that when discretionary power is conferred
on an administrative Authority, it must be exercised in
accordance with law. There are several forms of abuse of
discretion, e.g., exercise of power for a purpose different
from the one for which the power was conferred or for an
improper purpose or in bad faith or on irrelevant
considerations. Sometimes, these various forms of abuse
of discretion may overlap. If an act complained of is
without jurisdiction or is in excess of authority conferred
by the statute or there is an abuse or misuse of power, the
Court would interfere. In such circumstances, the Court
-: 66 :-
can interfere by enquiring into the truth of allegations
leveled against the authority and grant appropriate relief
to the aggrieved party. While exercising the power of
judicial review, Courts have a duty to ensure that the acts
of an authority are within the four corners of law, having
regard to the object of the statute.
46. In Shri Sitaram Sugar Co. Ltd. v. Union of India
(AIR 1990 SC 1277), Hon'ble Supreme Court has stated
that a repository of power acts ultra vires either when he
acts in excess of his power in the narrow sense or he
abuses his power by acting in bad faith or for an
inadmissible purpose or with gross unreasonableness. An
instance of abuse of discretion is when an authority
exercises power where such power does not exist in it.
Similarly, an administrative authority, which exercises
power beyond the limits of the statute would be acting in
ultra vires the statute and the action is vitiated. This
question would depend upon the facts and circumstances
-: 67 :-
in each case and can be decided having regard to the facts
of the case.
47. It is difficult to precisely articulate the concept of
mala fide. It may mean want of good faith, improper or
oblique motive or dishonest intention [de Smith, Judicial
Review of Administrative Action (1995) 553-556]. In other
words, no administrative authority can be allowed to act in
bad faith or contrary to the requirements of a statute or to
exercise discretion to achieve an ulterior object, which is
foreign to the statute. As held in Jaichand Lal Sethia v.
State of West Bengal [AIR 1967 SC 483],by the
Hon'ble Supreme Court, if the power conferred by the
statute has been utilized for some indirect purpose not
connected with the object of the statute or the mischief it
seeks to remedy, it is an instance of mala fide exercise of
power.
48. According to "Administrative Law", by Justice
C.K.Thakkar and Mrs.M.C.Thakker - Second Edition,
"Malice" or "mala fides" is of two types (1) express malice
-: 68 :-
or "malice in fact" and (2) implied or legal malice or
"malice in law". Mala fides violating the proceedings may
be factual or legal. The former is actuated by extraneous
considerations, whereas the latter arises where a public
authority acts deliberately in defiance of law, may be
without malicious intention or improper motive. Thus,
while dealing with the plea of mala fide, two questions
would arise: (1) whether there is a personal bias or oblique
motive; and (2) whether the administrative action is
contrary to the objects, requirements and conditions of a
valid exercise of power [State of Bihar v. P.P.Sharma
(AIR 1991 SC 1260)].
49. The Hon'ble Supreme Court has, in Jaichand Lal
(supra), stated that mala fide exercise of power does not
necessarily imply any moral turpitude as a matter of law.
It only means that the statutory power is exercised for
purposes foreign to those for which it is in law intended.
50. In this sense, the Hon'ble Supreme Court has
equated mala fide exercise of power with ultra vires
-: 69 :-
exercise of administrative power. However, malafides can
be a distinct ground for quashing administrative action
apart from ultra vires. Two decisions of the Hon'ble Court,
where mala fide exercise of power have been quashed, can
be cited in the context of the present case. One is
C.S.Rowjee v. State of Andhra Prasad [AIR 1964 SC
962] and the other is State of Punjab v. Gurdial Singh
[AIR 1980 SC 319]. The latter case is one arising from
land acquisition proceedings where acquisition of land was
struck down on account of mala fides.
51. Also, there is a distinction between mala fide, malice
or exercise of power by an authority by taking into account
irrelevant or extraneous consideration. Whether an action
is mala fide or not, would depend upon the facts and
circumstances of each case but the factors would be
pertinent in determining whether decision is mala fide or
motivated on improper considerations and the
circumstances in which the decision is taken and
considerations which have entered into in taking the
-: 70 :-
decision [State of M.P. v. Nandalal Jaiswal (AIR 1987
SC 251) ].
52. On the other hand, if a statutory power conferred on
an authority is exercised for a purpose which is contrary to
the statute, then it is an exercise of power outside the law
for an extraneous or collateral purpose and the decision is
liable to be set aside. When exercise of power is for a
collateral purpose, there may be no malice or oblique
motive involved but the action of the authority would not
be bona fide, where statutory power is exercised for a
collateral purpose which is sometimes termed as
colourable exercise of power, where there is extraneous
consideration. Sometimes, colourable exercise of power is
expressed as fraud on power. This revolves on the
competency of a particular authority to act under a
particular statute. When an authority exercises statutory
power ostensibly for the purpose for which it is conferred
but in reality for some other purpose or an alien purpose,
then it is a case of colourable exercise of power. Some
-: 71 :-
times, it would be difficult to draw a line between mala fide
exercise of power and colourable exercise of power.
Similarly, it is difficult to distinguish between improper or
collateral exercise of power on the one hand and
colourable exercise of power on the other hand. There are
instances where these expressions are used
interchangeably.
53. In the facts of the present case, it is noted that the
sixth respondent had requested KIADB for acquisition of
the scheduled land for the purpose of play-ground of the
School of the fifth respondent - Trust, by email dated
15/06/2012. The latter had in fact advised the sixth
respondent to obtain project clearance from the third
respondent. On 21/07/2012, the school had addressed
the letter to the then Minister of Large and Medium Scale
Industries, Government of Karnataka, requesting for
acquisition of the scheduled land. That letter was also
forwarded to KIADB. It is pursuant to the advice of KIADB
-: 72 :-
that the fifth respondent approached KUM and the project
proposal was forwarded to KUM.
54. Although, application of the fifth respondent made to
KUM was dated 09/08/2012, processing fee of Rs.30,000/-
was remitted on 14/08/2012. In the Executive Summary
of the project proposal prepared by KUM submitted by fifth
respondent, the lands are shown to be in an industrial
zone, whereas, the lands are actually converted for
residential purpose. 15/08/2012 being Independence Day,
was a public holiday. Even without the fifth respondent's
project proposal being part of the agenda, circulated to the
members of SLSWCC prior to the date of the 74th meeting,
it was made part of additional agenda circulated on the
date of the meeting and the project was approved. Thus,
project proposal submitted on 14/08/2012 by fifth
respondent was approved by KUM on 17/08/2012, with an
intervening National Holiday. The file notes of KUM, KIADB
as well as the State Government, squarely indicate that
the approval of the project of fifth respondent in the 74th
-: 73 :-
meeting was the basis for initiating acquisition of the
scheduled lands. The manner in which the project proposal
of fifth respondent was approved by SLSWCC makes
apparent the abusive role played by sixth respondent. In
fact, right from June 2012, sixth respondent had been in
communication with various authorities, including KIADB,
for the purpose of acquisition of the schedule lands. It is
in fact, KIADB which advised sixth respondent to approach
KUM to get fifth respondent's proposal approved and then
to seek acquisition of the schedule lands. Therefore, the
very genesis of the acquisition of the schedule lands is in
the approval of fifth respondent's project on 17/08/2012.
55. The notings in the Government records clearly lead
to an unambiguous inference that the concerned
authorities abused the jurisdiction and discretion vested in
them in approving the fifth respondent's project and their
action was illegal. The exercise of power by KUM was not
only ultra vires the Facilitation Act, 2002 but also, a clear
case of mala fide exercise of power and also colourable
-: 74 :-
exercise of power. In fact, the expression fraud on power
which is used when power is exercised by an authority in
the absence of any power being conferred on it also
squarely applies to the present case.
56. In the instant case, the object of acquisition was to
provide a play ground and possibly, other facilities for a
private school run by the fifth respondent - Educational
Trust. The acquisition is pursuant to the approval of the
project granted by SLSWCC on 17/08/2012. It is already
discussed how that approval granted by third respondent -
SLSWCC, is illegal and is an instance of colourable exercise
of power and therefore vitiated. Having regard to the
spectrum of facts in this case and the exercise of power by
various authorities, it is necessary to consider the legality
of the very initiation of acquisition of the scheduled land
under the provisions of the KIAD Act. A perusal of the
Notifications issued by the first respondent clearly indicate
that the approval of the fifth respondent's project at the
74th meeting of SLSWCC is the basis for initiating
-: 75 :-
acquisition of the scheduled lands which is found to be
illegal.
57. Apart from the fact that KUM and SLSWCC had no
jurisdiction to grant approval to fifth respondent's project,
the validity of the initiation of acquisition of the scheduled
land could also be examined from another angle i.e., under
the provisions of the KIAD Act.
Re: Initiation of acquisition under KIAD Act:
58. The KIAD Act is a special enactment made for
securing the establishment of industrial areas in the State
and to promote orderly development of industries therein,
through the KIADB. The objects and relevant provisions
read as under:
"An Act to make special provisions for
securing the establishment of industrial areas
in the State of Karnataka and generally to
promote the establishment and orderly
development of industries therein, and for that
purpose to establish an Industrial Areas
-: 76 :-
Development Board and for purposes
connected with the matters aforesaid.
Whereas it is expedient to make special
provisions for securing the establishment of
industrial areas in the State of Karnataka and
generally to promote the establishment and
the orderly development of industries in such
industrial areas, and for that purpose to
establish an Industrial Areas Development
Board and for purposes connected with the
matters aforesaid;
CHAPTER I
Preliminary
1. Short title, extent and commencement:
(1) This Act may be called the Karnataka
Industrial Areas Development Act, 1966.
(2) X X X
(3) This Act except Chapter VII shall come into
force at once; Chapter VII shall come into
force in such area and from such date as the
State Government may, from time to time, by
Notification, specify in this behalf.
2. Definitions: In this Act, unless the context
otherwise requires,-
-: 77 :-
(1) "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;
(2) "Board" means the Industrial Areas
Development Board established under this Act;
(3) "Building" means any structure or
erection or part of a structure or erection,
which is intended to be used for residential,
industrial, commercial or other purposes,
whether in actual use or not;
(4) "Deputy Commissioner" means the
Deputy Commissioner of the district concerned,
and includes any Officer specially appointed by
the State Government to perform the functions
of a Deputy Commissioner under this Act;
(5) "Development" with its grammatical
variations means the carrying out of levelling,
digging, building, engineering, quarrying or
other operations in, on, over or under land, or
the making of any material change in any
building or land, and includes re-development;
-: 78 :-
and "to develop" shall be construed
accordingly;
(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;
(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;
(7a) "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.
(8) X X X
-: 79 :-
(9) X X X
(10) X X X
3. Declaration of industrial areas: The
State Government may, by Notification,
declare any area in the State to be an
industrial area for the purposes of this Act.
(2) Every such Notification shall define the
limits of the area to which it relates.
4. Alteration of industrial area: The
State Government may at any time, by
Notification, exclude from any industrial area,
any area, or include therein any additional
area, as may be specified in such Notification.
x x x
CHAPTER IV
Functions and Powers of the Board
13. Functions: The functions of the Board
shall be,-
(i) generally to promote and assist in the rapid
and orderly establishment, growth and
development of industries and to provide
industrial infrastructural facilities and amenity
in industrial areas, and
-: 80 :-
(ii) in particular, and without prejudice to the
generality of clause (i), to,-
(a) develop industrial areas declared by the
State Government and make them available
for undertakings to establish themselves;
(b) establish, maintain, develop, and manage
industrial estates within industrial areas;
(c) undertake such schemes or programmes of
works, either jointly with other corporate
bodies or institutions, or with the Government
or local or statutory authorities, or on an
agency basis, as it considers necessary or
desirable, for the furtherance of the purposes
for which the Board is established and for all
purposes connected therewith.
14. General powers of the Board: Subject
to the provisions of the Act, the Board shall
have power,-
(a) to acquire and hold such property, both
movable and immovable as the Board may
deem necessary for the performance of any of
its activities and to lease, sell, exchange or
otherwise transfer any property held by it on
such conditions as may be deemed proper by
the Board;
-: 81 :-
(b) to purchase by agreement or take on lease
or under any form of tenancy any land, to
erect such buildings and to execute such other
works as may be necessary for the purpose of
carrying out its duties and functions;
(c) to provide or cause to be provided
amenities, industrial infrastructural facilities
and amenity and common facilities in industrial
areas and construct and maintain or cause to
be maintained works and buildings therefor;
(d) to make available buildings on lease or sale
or lease-cum-sale to industrialists or persons
intending to start industrial undertakings;
(e) to construct buildings for the housing of the
employees of industries;
(f) (i) to allot to suitable persons premises or
parts thereof including residential tenements in
the industrial areas established or developed
by the Board;
(ii) to modify or rescind such allotments,
including the right and power to evict the
allottees concerned on breach of any of the
terms or conditions of their allotment;
-: 82 :-
(iii) to resume possession of premises or part
thereof including residential tenements in the
industrial area, or industrial estate in the
manner provided in section 34B.
(g) to delegate any of its powers generally or
specially to the Executive Member;
(h) to enter into and perform all such contracts
as it may consider necessary or expedient for
carrying out any of its functions; and
(i) to do such other things and perform such
acts as it may think necessary or expedient for
the proper conduct of its functions, and the
carrying into effect the purposes of this Act.
x x x
Chapter VII
Acquisition and Disposal of Land
27. Application: The provisions of this
Chapter shall apply to such areas from such
dates as have been notified by the State
Government under sub-section (3) of
section 1.
28. Acquisition of land: (1) If at any time, in
the opinion of the State Government, any land
is required for the purpose of development by
the Board, or for any other purpose in
-: 83 :-
furtherance of the objects of this Act, the State
Government may by Notification, give notice of
its intention to acquire such land.
(2) On publication of a Notification under sub-
section (1), the State Government shall serve
notice upon the owner or where the owner is
not the occupier, on the occupier of the land
and on all such persons known or believed to
be interested therein to show cause, within
thirty days from the date of service of the
notice, why the land should not be acquired.
(3) After considering the cause, if any, shown
by the owner of the land and by any other
person interested therein, and after giving
such owner and person an opportunity of being
heard, the State Government may pass such
orders as it deems fit.
(4) After orders are passed under sub-section
(3), where the State Government is satisfied
that any land should be acquired for the
purpose specified in the Notification issued
under sub-section (1), a declaration shall, by
Notification in the official Gazette, be made to
that effect.
-: 84 :-
(5) On the publication in the official Gazette of
the declaration under sub-section (4), the land
shall vest absolutely in the State Government
free from all encumbrances.
(6) Where any land is vested in the State
Government under sub-section (5), the State
Government may, by notice in writing, order
any person who may be in possession of the
land to surrender or deliver possession thereof
to the State Government or any person duly
authorised by it in this behalf within thirty days
of the service of the notice.
(7) If any person refuses or fails to comply
with an order made under sub-section (5), the
State Government or any officer authorised by
the State Government in this behalf may take
possession of the land and may for that
purpose use such force as may be necessary.
(8) Where the land has been acquired for the
Board, the State Government, after it has
taken possession of the land, may transfer the
land to the Board for the purpose for which the
land has been acquired.
-: 85 :-
59. The preamble and objects of the KIAD Act clearly
pronounce that it is enacted for the specific purpose and
object of (1) establishment of industrial areas, (2)
promotion, establishment and orderly development of
industries in such industrial areas and (3) for that purpose,
establishment of a Board, and make special provisions for
purposes connected with these matters. The central
purpose and object of the Act is establishment and
development of industries in industrial areas.
60. The scheme of the statutory provisions of KIAD Act,
particularly relevant for the present purpose, indicates that
the State Government is empowered to declare and
delineate any area in the State to be an industrial area.
For the purpose of securing establishment of industrial
areas, promoting rapid and orderly establishment and
development of industries and for providing industrial
infrastructural facilities and amenities in industrial areas, a
Board is established and incorporated under Section 5 of
KIAD Act. The functions of that Board include promotion
-: 86 :-
and assistance in orderly establishment, growth and
development of industries and providing industrial
infrastructural facilities and amenities in the industrial
areas. The terms "industrial area", "industrial
infrastructural facilities" and "amenity" are defined for the
purpose of KIAD Act. Where, for the purposes of carrying
out its functions under the Act, land is required, the Board
is empowered under Section 14 to purchase it by
agreement or take it on lease. However, if any land is
required by the Board or otherwise to be acquired, the
State Government is first required to specify by notification
the area in which the provisions of Chapter VII of the KIAD
Act could be availed for acquisition of land.
61. Section 3 states that by a Notification, the State
Government may declare any area in the State to be an
industrial area for the purposes of the Act defining the
limitations of the area to which it relates. Section 4
enables the State Government to exclude from any
industrial area, any area or include therein any additional
-: 87 :-
area as may be specified in the Notification. In all cases
where an area is to be declared as an industrial area,
acquisition of land may not be necessary. But on declaring
an area to be an industrial area, where acquisition of land
therein becomes a necessity in that case, under sub-
section (3) of Section 1 r/w Section 27 of the Act, a
Notification would have to be issued making applicable
Chapter VII which deals with acquisition of land to an area
which is declared to be an industrial area. The issuance of
a Notification under Section 3(1) r/w Section 1(3) need not
be simultaneous as acquisition of land is not a necessary
corollary to declaration of an industrial area under Section
3 of the Act.
62. It has to be noted that the notification of an area
under Sections 1(3) and 3(1) of the KIAD Act is different
and meant for different purposes. Unless and until an area
is not specified by notification under Section 1(3) by the
State Government, acquisition of land in that area cannot
be undertaken, although the same area may have been
-: 88 :-
declared by another notification under Section 3(1) to be
an industrial area. "Industrial Area", by its definition is an
area declared to be so, which is to be developed and
where industries are to be set up and industrial
infrastructural facilities and amenities are to be provided.
For such industrial area, it is within the functions and
powers of the Board to promote and assist in the rapid and
orderly establishment, growth and development of
industries and to provide industrial infrastructural facilities
and amenities.
63. Acquisition of land under Section 28 of the KIAD Act
is restricted to serve two specific purposes viz, (1) if, in
the opinion of the State Government any land is required
for the purpose of development by the Board or (2) if, in
the opinion of the State Government any land is required
for any other purpose in furtherance of the objects of the
Act. Even as the objects of the Act are not defined in the
Act itself, they have to be traced to the preamble and the
statement of object. Therefore, acquisition of land for
-: 89 :-
purposes other than its development by the Board can only
be in furtherance of any of the aforesaid objects of the Act.
64. Acquisition of land for the purpose only of providing
amenity or infrastructural facility without establishment
and development of any industry and declaration of an
area to be an industrial area only for that purpose, without
reference to any industry or for any other industrial area
even in the vicinity would amount to serving a collateral
purpose rather than in furtherance of the objects of the
KIAD Act. Therefore, where acquisition of land in exercise
of the powers conferred by Section 28 of the KIAD Act is
called into question, proximate relation between
acquisition of land and furtherance of the objects of the Act
has to be demonstrated and established. Mere declaration
of an area to be an industrial area cannot be the basis for
concluding that the acquisition of land in that area is for
the purpose of in furtherance of the objects of the KIAD
Act. An "industrial area" by definition has to be not only
notified, but must have been notified with an intention of
-: 90 :-
being developed and where industries are to be
accommodated and industrial infrastructural facilities and
amenities are to be provided. The term "development" is
also defined in Section 2(5) of the KIAD Act to mean
carrying out of leveling, digging, building, engineering,
quarrying or other operations in, on, over or under land, or
the making of any material change in any building or land,
and includes re-development; and " to develop" has to be
construed accordingly. Therefore, in an area where
industries are not to be established or developed, there
cannot be provided any infrastructural facilities and
amenities. In other words, an area does not become an
"industrial area", merely by a notification declaring it to be
an industrial area under Section 3(1) of the KIAD Act. In
order to be an "industrial area" proper for the purpose of
the Act, besides the notification by the State Government,
the intention and prospect of the area being developed
where industries are to be accommodated and industrial
infrastructural facilities and amenities are to be provided
are essential ingredients. In absence of such requisite
-: 91 :-
ingredients, in spite of a notification under Section 3(1),
land comprised in the area will not require the status and
attributes of "industrial area". In that view of the matter,
acquisition of land under Section 28 of the Act could legally
be initiated only if, in the opinion of the State Government
(1) the land is required either for the purpose of
development by the Board or (2) for any other purpose in
furtherance of the objects of the Act. Where the intended
acquisition of land falls in the second category, it has to be
directly attributable to the objects of the Act, as
enumerated hereinabove. Apparently, the objects of the
Act do not include establishment of any stand-alone or
isolated amenity or industrial infrastructural facility. And
therefore, notification of any area under Section 1(3) does
not by itself authorize the State Government to initiate
acquisition thereof.
65. In exercise of powers conferred under sub-section
(1) of Section (2) of KIAD Act, the State Government has
-: 92 :-
specified certain amenities for the purpose of the Act, by
Notification dated 13/03/1991. They are as follows:-
"Banks, Post Offices, Telephone and
Telex Exchanges, Canteens, Fire Brigade and
other service facilities including Xerox
Facilities.
Disposal of solid wastes and setting up
effluent treatment plants.
Tempo/Taxi Terminals, bus depot and
automobile service centres.
R and 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 Health and Holiday Resorts, Cinema
Theatres.
Inland container depot, Air Cargo
Complex, Weigh Bridges, godowns and
warehouses.
Storage and outlets of LPG Cylinders,
Chemicals, solvents, Petrol, Diesel, Kerosene
and other oils.
-: 93 :-
Shops for vending of spare parts,
Engineering goods, paints and other materials
required by the industrial undertakings food
and bakery products, etc.
Offices of the Organisations such as
Karnataka Industrial Areas Development
Board, Karnataka State Financial Corporation,
Karnataka State Pollution Control Board,
Karnataka Electricity Board etc., which monitor
and contribute to industrial development and
such other organizations for the benefit of the
industrial units.
Housing tenements including housing
sites for the employees of industries."
66. On a conjoint reading of the definition of "amenity",
"Industrial Infrastructural facilities and industrial area",
what emerges is that in an area declared as an industrial
area by the State Government, on which industrial sites
are located, factories and other buildings are built for use
by any industry, they form an industrial estate. In an
industrial area, industrial infrastructural facilities as well as
amenities may be provided. Infrastructural facilities are
-: 94 :-
those facilities which contribute to the development of
industries, such facilities may be provided within an area
declared to be an industrial area where industries are set
up or they may be provided outside the area earmarked
for establishment of industries and land could be acquired
for establishment of industrial infrastructural facilities for
the benefit of the industrial area. Amenities can be
provided in an industrial area, which are conveniences in
an industrial area. Notification dated 13/03/1991 specifies
certain amenities such as, Banks, Post Offices, Tempo/Taxi
Terminals, Technical Institutes, Training Institutes,
Educational Institutions, Hospitals, Dispensaries, godowns
and warehouses; certain organizations such as, KIADB,
Karnataka State Financial Corporation, Karnataka State
Pollution Control Board, Karnataka Electricity Board etc.,
which monitor and contribute to industrial development;
Housing facilities for the employees of industries etc,.
67. The dominant activity in an industrial area is
industry. In the industrial area, industrial infrastructural
-: 95 :-
facilities which contribute to the development of industries
as well as amenities could be provided. When there is a
declaration of an area to be an industrial area, the
intention of the State Government is to develop industries
in that area. Thus, industrial infrastructural facilities and
amenities are incidental to the development of industries
in an industrial area. In certain industrial areas, there may
be need for several types of industrial infrastructural
facilities and amenities, whereas, in certain other industrial
areas, such a need may not arise at all. It would depend
upon the nature or class of industries which are allotted in
an industrial area. If acquisition of land becomes a
necessity upon a declaration of an industrial area, then the
acquisition must be in the opinion of the State Government
for the purpose of development by the Board or for any
other purpose in furtherance of the object of the Act. As
noted earlier, the object of the Act is to secure the
establishment of industrial areas and orderly development
of industries therein. Therefore, when an area is declared
to be industrial area, there must be orderly development
-: 96 :-
of that area for which acquisition of land may be a
necessity. Thus, the object of acquisition of land under
Chapter VII of KIAD Act is for the purpose of establishing
an industrial area and orderly development of industries in
that area. The State Government must form an opinion
that the acquisition of land is to fulfill any of the aforesaid
purposes. The dominant purpose of acquisition of land
must be to establish orderly development of industries or
infrastructural facilities and/or amenities in an industrial
area. Thus, establishing industry in an industrial area in
an orderly manner, is the main intention of the Act and
wherever necessary, acquisition can also be resorted to
under Chapter VII of the Act. For the purpose of having an
orderly development of industries in an industrial area,
industrial infrastructural facilities and amenities could be
required. Having regard to the need for having such
facilities and amenities in an industrial area, acquisition of
land may be resorted to. Thus, facilities and amenities in
an industrial area are ancillary to the establishment of
industries in an industrial area. Only those facilities and
-: 97 :-
amenities which are specified under the Act, are ancillary
and subservient to the industries that are established in an
industrial area. Thus, acquisition of land must be for the
purpose of establishing an industrial area within which,
facilities and amenities may be provided for the efficient
working of an industry or class of industries in an industrial
area. Therefore, provision of facilities and amenities in an
industrial area would have to be considered at the time of
declaration of an area to be industrial area, as may be
necessary and concomitant to an industrial area. Also, if
an industrial area is already established, additional land
may be acquired for providing industrial infrastructural
facilities or amenities for the purpose of the industries in
the industrial area. In such a case acquisition of land for
the aforesaid purpose is to subserve the industries in the
industrial area and is therefore incidental thereto.
68. But there cannot be acquisition of land per se for the
purpose of establishing Educational Institutions, Banks or
other amenities notified by the State Government in its
-: 98 :-
Notification dated 13/03/1991, gazetted on 09/05/1991
under the KIAD Act. In other words, KIAD Act cannot be
invoked to acquire land for the purpose of establishment or
expansion of educational institutions or any other
amenities notified in the Gazette per se and for that
purpose, an area cannot be notified to be an industrial
area. We are of the view that if only an educational
institution is to be established, which calls for acquisition
of land, KIAD Act cannot be invoked for that purpose. On
the other hand, if in an industrial area, an educational
institution is to be established as an amenity, such a
mandate is permitted under the provisions of the Act.
Thus, the dominant object of acquisition under KIAD Act,
must be for establishing industrial areas and industrial
infrastructural facilities in which provision of amenities
would be incidental.
69. Thus, on a conjoint reading of the various provisions
of the Act and the Notifications, what emerges is that
acquisition of land for establishment of an educational
-: 99 :-
institution per se is not permissible under KIAD Act. In the
absence of any industry to be established in an area
acquired under the KIDA Act, only an amenity as notified
under that Act cannot be provided. Educational
Institutions, Hospitals, Banks and other amenities specified
in the Notification per se do not come within the object of
the KIAD Act. They can be established in an industrial area
where industries are set up or infrastructural facilities are
developed for which land may be acquired under the
provisions of KIAD Act. In the instant case, KUM as well as
the third respondent could not have decided to invoke the
provisions of the KIAD Act and particularly, Chapter VII to
acquire the scheduled land for the purpose of expansion of
fifth respondent's Educational Institution. We have already
held that fifth respondent - Educational Trust or its project
do not come within the scope of the expression "Industrial
undertaking" or "other projects" respectively, under the
provisions of the Facilitation Act, 2002. We also hold that
KIAD Act, could not have been invoked to acquire the
scheduled land for the purpose of expansion of educational
-: 100 :-
activities of the fifth respondent - Educational Trust. The
project of fifth respondent also does not come within the
purview of definition of "Industrial infrastructural facility",
nor an amenity, in the absence of there being development
of industries in an industrial area.
70. We clarify that the aforesaid conclusion is not based
on the manner of exercise of power under the provisions of
the KIAD Act. But the very formation of opinion by the
State Government for acquisition of the scheduled land
under that Act being wholly and solely relatable to the
recommendation of the third respondent - SLSWCC, which
has been quashed for the reasons mentioned supra.
71. In P.Narayanappa & Anr. v. State of Karnataka
& Ors. [AIR 2006 SCW 4132], the Hon'ble Supreme
Court, on noting the preamble of the Act, statement of
objects as well as the reasons of the Amending Act,
observed that the object of the Act is to secure
establishment of industrial areas and orderly development
of industries therein and to create facilities which
-: 101 :-
contribute to the development of industries, which may
include Technology Parks, Townships etc. Therefore, the
infrastructural facilities must contribute to the
development of industries in an industrial area. In the
same way, an amenity would be of convenience for the
efficient functioning of an industry in an industrial area.
The corollary is that, an area cannot be declared to be an
industrial area only for the purpose of expansion of an
educational institution, although it is declared to be an
amenity under the KIAD Act, in the absence of
development of industries in an industrial area within
which, the amenity is to be located. Thus, acquisition of
land to establish or expand an educational institution as an
amenity in the absence of there being any industries in the
land sought to be acquired is not envisaged under the Act.
72. The Hon'ble Supreme Court has further observed in
the aforesaid case that an entrepreneur or a company may
give a proposal to the State Government for setting up an
industry or infrastructural facility and the Government may
-: 102 :-
thereafter, acquire the land and give it to the Board. It is
also possible that after the land already acquired and
developed by the Board, may be allotted to an
entrepreneur or a company for setting up an industry or
infrastructural facility. Therefore, setting up of an industry
or an infrastructural facility must be the purpose and
object of acquisition of land, in case land has to be
necessarily acquired from private persons. Such acquisition
can be at the instance of an entrepreneur or a company
who proposes to set up an industry or an infrastructural
facility in an area declared to be an industrial area by the
State Government. Therefore, acquisition of land for an
educational Trust for the expansion of its activities cannot
come within the scope of the expression "setting up an
industry or infrastructural facility".
73. We have perused the Notifications issued under the
provisions of the KIAD Act, in the instant case. Notification
issued under sub-section (1) of Section 28 of the Act dated
16/11/2012 states that "the Properties shown in the
-: 103 :-
Schedule is required by the Government of Karnataka for
M/s.RMS Educational and Cultural Trust, to establish an
"Educational Institution". On the same day, Notification
under sub-section (1) of Section 3 and sub-section (3) of
Section (1) of the KIAD Act, are issued declaring the
scheduled land as 'industrial area' and making applicable
Chapter VII of the Act. The very declaration of the
schedule land as an industrial area is vitiated as there can
be no orderly establishment of any industry in 11,507 sq.
mtrs. of land converted for residential purposes and
surrounded by other residential and industrial plots and
also fifth respondent's Educational Institution. Further, we
have also held that acquisition of the scheduled land for
the purpose of the expansion of the activities of the fifth
respondent - Institution, is also vitiated as the fifth
respondent - Institution is not an entrepreneur or an
industrial unit or undertaking in terms of Facilitation Act,
2002.
-: 104 :-
74. Thus, what emerges is that, after identification of the
scheduled land by the fifth respondent, the Governmental
machinery has been abused and the KIAD Act has been
invoked for an improper purpose for acquiring the
scheduled land by declaring it to be an industrial area, in
the absence of there being any industrial activity therein.
Thus, the acquisition of the scheduled land under Section
28 of the KIAD Act, is not for the purpose of furtherance of
the object of the Act namely for the orderly establishment
of industries. In fact, the scheduled land has been
declared to be an industrial area under Section 3(1) of
KIAD Act, only to enable the invocation of Chapter VII of
the KIAD Act, at the instance of the fifth respondent.
Otherwise, the State Government suo moto, may not have
thought of declaring the scheduled land to be an industrial
area for the purpose of establishing industries in an orderly
manner. When the scheduled land has been converted for
a residential purpose and is surrounded by residential as
well as industrial lay outs and plots, which have been
developed by the petitioner as well as the sixth
-: 105 :-
respondent's family respectively, as per the sketch, the
invocation of the provisions of the KIAD Act by the State
Government is without application of mind to the aforesaid
aspects of the matter and a gross abuse of the KIAD Act.
This illegality is compounded by the fact that third
respondent had no jurisdiction under the provisions of the
Facilitation Act, 2002, to consider the application to
approve the project of the fifth respondent under that Act
on the basis of which the present acquisition has been
initiated. Therefore, the action of the State Government in
issuing Notifications under sub-section (1) of Section (3),
sub-section (3) of Section (1) and sub-section (1) of
Section 28 of the Act, are also vitiated as they are ultra
vires KIAD Act.
75. It is on the basis of the recommendation made by
SLSWCC that KIADB prepared draft Notifications under
Section 3(1), 1(3) and 28(1) of KIAD Act and requested
the fifth respondent to deposit 40% of the tentative cost
and entered into an agreement with it on 20/10/2012. In
-: 106 :-
the meanwhile, the appellant had written to KIADB and
KUM bringing to their notice that BBMP had sanctioned a
residential complex in respect of the scheduled land.
KIADB placed the letter of the appellant along with the
draft Notifications for perusal of the State Government.
The relevant notings made in the file of the State
Government reveal that it was aware of the representation
dated 19/10/2012 made by the appellant to KIADB as well
as KUM but nevertheless, decided to go ahead with the
acquisition on the premise that objections of the appellant
could be considered prior to issuing orders under sub-
section (3) of Section 28 of KIAD Act and thus, sanction for
publication of the Notifications was granted.
76. In this context, order passed by the SLAO-II of
KIADB passed under sub-section (3) of Section 28 of KIAD
Act, pursuant to the direction issued by the learned Single
Judge to the appellant to state its objections to the
proposed acquisition of the schedule land, makes
interesting reading.
-: 107 :-
77. In Annexure-I, to the order dated 30/09/2013, the
following points are noted:-
"At the time of enquiry under Section 28(3) the
objections filed by the land owners have been examined as
under the ordered as in Annexure 2
x x x x x
8 To the north of this land RMS
Institution has been running
International School and this
Institution has been set up by
Sri.M.Srinivas, Ex MLA.
Presently his wife Smt.
Ratnamma is managing the
same
9 The School does not have As stated in the
playground. This institution objection the school
had been eyeing the land off does not have
the Objector. The Objector playground.
had applied to BBMP for Children of this
construction on their land school is in need of
playground and it is
a public purpose
10 Smt. Ratnamma of RMS As per the record
Internal School has written a produced by the
letter dated 5/9/2011 to Objector it is true
M.Srinivas to recommend to that the it was
the Government for acquiring recommended for
the land of the Objector for the acquiring the land of
purpose of playground the Objector
11 Sri.M.Srinivas wrote a letter RMS Education gave
dated 6/9/2011 to the a request for the
Government and wrote on the land which was
same day a letter to KIADB to considered by the
acquire the land of the Managing Director,
-: 108 :-
Objector and give it to the SLSWCC vide letter
School No.KaUM/SLSWCC/7
4/1/525/12-13 dated
12/9/2012 has
informed that the
project was
approved at the
meeting of the
Committee held on
17/8/2012.
Accordingly, land
acquisition process
has been
undertaken.
x x x
12 On 28/9/2011 the Special Land
Acquisition Officer wrote a
letter to the Deputy
Commissioner seeking
permission to acquire the land.
The Deputy Commissioner on
13/10/2011 wrote a letter to
the Government (Revenue
Department) requesting to
take permission from Single
Window
x x x
14 Government in its letter dated This direction is not
5/11/2011 has intimated that applicable to KIADB.
land cannot be acquired for the Acquisition for
purpose of school Educational
Institution has been
initiated under
KIADB Amendment
Act CI86 SPQ 96
dated 13/3/1991
x x x x x x
-: 109 :-
27 The Land of the objector is not The definition of
Industrial Land and K.I.A.D Act Services under the
is applicable for Industrial K.I.A.D Act includes
Lands only. Land cannot be Educational
acquired for the purpose of Institutions. This
playground for the school. Educational
Institution is
presently functioning
and play ground for
the children is
included in the
definition of services.
This purpose is
included in the
definition of public
purpose and as such
Notification has been
issued under section
3(1) of the K.I.A.D.
Act
x x x x x x
29 The definition of Industrial As per Government
undertaking under the Notification
Karnataka Industries No:Cl:86:SPQ:90
(Facilitation) Act, 2002 under dated 13/3/1991
which SLSWCC has approved notified in Karnataka
land acquisition does not fall Gazette dated
within the definition of 9/5/1991 part 4 2c
Industrial Area, hence (ii) Page No: 774,
Notification under Sec. 3(1) is services includes R &
challenged D Centre,
Engineering
Institutions, Training
Centres, Educational
Institutions, Power
sub stations, Diesel
Generating Stations
and Water Supply
stations. Therefore
-: 110 :-
the acquisition for
the purpose of
playground for
education institutions
falls within public
purpose. Therefore
the objection is over
ruled.
30 Land can be acquired only for On perusal of the
public purpose the instant citation is seen that
acquisition is against the ratio acquisition for
laid down in Hanume Gowda religious purpose
V/s. State of Karnataka (2005, does not amount to
Volume:1, KCCR 277) public purpose. The
present acquisition is
for the purpose of
Educational
Institution.
Therefore the
objection is over
ruled. In the said
judgment, the
influence of
politicians is
discussed in the
instant acquisition
since it is for public
purpose and for the
benefit of the school
children. The
acquisition is in
order. The
Notification under
Sec. 3(1) takes care
of social justice &
equality
31 Objector has cited decisions of In the above para
the Hon'ble High Court of the order in Hanume
Karnataka in Hanume Gowda Gowda V/s. State of
-: 111 :-
V/s. State of Karnataka and Karnataka is
Others (2005-Vol:1, discussed.
K.C.C.R:2770 and Shivaram
Udupa V/s Sharada Achar and When the Order of
Others (2002, Vol:1, KLJ: 25 Janardhan Shetty
and the Order of the Hon'ble V/s. State of
Supreme Court in Somavanthi Karnataka in
V/s. Government of Punjab) W.A.:2002. 2159
AIR:1963 SC 151 and 224/2000 in
which the order of
Somavanthi V/s.
State of Punjab is
cited were perused.
It is seen that the
acquisition was not
for public purpose.
This was totally far
private purpose and
it has been
concluded that there
was a misuse of
powers. However in
the instance case the
land acquisition is for
educational
institutions and
public purpose.
Therefore this
citation in not
applicable
ORDER
All the objections and citations provided by the objector have been perused. The present acquisition is for the play ground for a -: 112 :- school and is therefore essential and involves public purpose. Therefore, the objections filed by the objector are over ruled and I direct continuation of land acquisition process under Sec. 28(4) of the K.I.A.D. Act.
I have passed this order exercising powers granted to me under Rule 14 of K.I.A.D (Amendment) Rules read with Sec. 28(3) of K.I.A.D Act of 1966.
This order was dictated to the
Stenographer, typed, corrected and
pronounced in the open court on 30/9/2013." Thus, SLAO-II of KIADB concluded that the present acquisition was for a play ground for a school and was essential as it involved a public purpose.
78. We have perused the objections filed by the appellant under sub-section (3) read with sub-section (2) of Section 28 of the Act, relevant portions of which are extracted above, pursuant to the directions of the learned Single Judge and the manner in which the said objections have been considered. In Column 27 of the order passed -: 113 :- under sub-section (3) of Section 28 of the KIAD Act, it is stated that running of an Educational Institution is for a public purpose and therefore, land has been notified under sub-section (1) of Section 3 of the Act, as an industrial area. Referring to Government Order dated 13/03/1991, passed under KIAD Act, it has been stated at Column 29 that Educational Institution is included therein and therefore, the objection that the land does not come within the definition of "Industrial Area", is over-ruled. In the operative portion of the order, it is stated that the acquisition of the scheduled land is for a play ground to be used for a school and essentially involves for a public purpose. Hence, objections raised for acquisition are over ruled and a direction is issued for publication of the declaration under sub-section (4) of Section 28 of the KIAD Act. The consideration of the case of the petitioner under sub-section (3) of Section 28 is wholly vitiated as it is contrary to the provisions of the Act, for the reasons stated supra. The approach of the SLAO in considering the objections is vitiated as he thinks that acquisition of land -: 114 :- for an educational institution under the provisions of KIAD Act is for a public purpose. The SLAO has totally ignored the objects and scope of KIAD Act and the fact that acquisition of land for an educational institution in an area declared to be an industrial area without development of any industry is ultra vires the provisions of the KIAD Act. Therefore, we hold that the very initiation of acquisition in the instant case is illegal, as it is contrary to the provisions of the KIAD Act and being wholly based on the decision of the third respondent, which did not possess jurisdiction to consider the proposal of the fifth respondent. Thus, exercise of power by the concerned authorities is ultra vires the provisions of the Act and hence, declared to be non-est, illegal and vitiated.
79. Learned counsel on both sides have relied upon certain decisions in support of their arguments.
a) N.Venkatesha Gowda and Another v. State of Karnataka and Others [2011 (4) KLJ 79] and Pujari Pedanna v. State of Karnataka and Others [2009 (5) -: 115 :- KLJ 556], have been cited to contend that the KIADB cannot act as a real estate agent and acquire land for the benefit of private persons de hors the object of the act. In the second case, it was held that acquisition of land for private Engineering College was not in furtherance of the objects of the KIAD Act and without authority of law. In that case, 1 Acre 35 Guntas of land was sought to be acquired for housing P.G.Block, Electrical Block, Staff Quarters and Boys Hostel, for an Engineering College.
b) In Sri Ramachandrappa v. State of Karnataka and Others [2013 (1) KCCR 133 (DB)], the Division Bench delineated the scheme of the KIAD Act and having regard to the facts of that case held that acquisition was for the purpose of providing a road to a private entrepreneur. Para 16 and 17 are relevant and read as under:-
"16. Under the scheme of the Act, first Notification under Section 3(1) is to be issued declaring a particular area as an industrial area. It is thereafter, Chapter VII of the Act is -: 116 :- to be made applicable by issuing Notification under Section 1(3) of the Act. It is thereafter, preliminary Notification under Section 28(1) of the Act is to be issued. Therefore it follows that first, the Government should specify a particular area as an industrial area. It is not incumbent on the Government to acquire entire area shown as industrial area by issuing Notification under Section 28(1) of the Act. After specifying the area, depending upon the requirement, the Government has to issue Notification under Section 1(3) of the Act, making Chapter VII of the Act applicable to that area, which is proposed to be acquired. It is thereafter, by way of Notification under Section 28(1) of the Act, the land proposed for industrial development is to be acquired.
17. If we keep this scheme in the background, in the instant case, admittedly 7 guntas of land in Yamalur Village and 26 guntas of land in Kempapura Village is notified for acquisition. Thus, in all 33 guntas of land is not sufficient for an industrial area. No industry can be set up in an area of 33 guntas of land. As is clear from the statement of the -: 117 :- third respondent, the said land is acquired for the purpose of formation of a road to give access to his land measuring 4 Acres where he intends putting up Resort/Hotel. Therefore this acquisition of land is not for public purpose. It is not for setting up an industrial estate and not for establishment of industrial area, for which the Act is enacted. Acquisition proceedings are initiated under the Act for the purpose of providing road to a private entrepreneur."
c) Learned senior counsel appearing for KIADB, contended that the challenge to the acquisition made by the appellant is premature, as no declaration in the form of a final Notification has been issued under sub-section (4) of Section 28 of the KIAD Act and in support of that contention, reliance was placed on Geomin Minerals and Marketing Private Limited v. State of Orissa and Others [2013 (7) SCC 571], which judgment of the Hon'ble Supreme Court has been followed by this Court in Nandhi Minerals v. State of Karnataka and Others (W.P.No.18174/2004 disposed of on 29/11/2013). -: 118 :- The challenge to acquisition has been considered in these appeals in the context of the initiation of acquisition under the provisions of KIAD Act. The challenge to preliminary Notification issued under sub-section (1) of Section 28 of KIAD Act is not being considered from the point of view of procedural irregularity but from the point of view of the same being ultra vires KIAD Act, such a challenge as in the instant case is maintainable having regard to the glaring facts of the present case. Therefore, the aforesaid judgments are not applicable herein.
80. The summary of our findings/conclusions are as follows:-
1. That the expression "other projects" in Section 6 of the Facilitation Act, 2002, though does not find a place in the definition of "industrial undertaking" in clause (vii) of Section 2 of that Act, must be read contextually and having regard to the objects of that Act only such of those projects which are specified in the Notification dated 20/07/2006 issued by the State Government in exercise of -: 119 :- the powers conferred by clause (vii) of Section 2 of that Act, could be considered for approval within the scope of that Act and not any other project.
2. That the project proposal submitted by the fifth respondent - Educational Trust cannot be considered to be an 'industrial undertaking', within the meaning of clause
(vii) of Section 2 of the Facilitation Act.
3. That only an 'entrepreneur', as defined under clause (vi) of Section 2 of the Facilitation Act, 2002, is entitled to apply for grant of approval of an industrial undertaking under the provisions of that Act and not any one else.
4. That the fifth respondent - Educational Trust cannot be considered to be an "entrepreneur" within the meaning and definition in clause (vi) of Section 2 of the Facilitation Act, 2002.
5. In view of the conclusion Nos.2 and 4 above, KUM and third respondent - SLSWCC did not have -: 120 :- jurisdiction to consider the project proposal of fifth respondent - Educational Trust.
6. Besides the conclusion at No.5 above, there was a clear a violation of Rule 4 of Facilitation Rules, 2003 in considering the project proposal of respondent No.5 in the instant case.
7. That having regard to the facts of the present case and the chronology of events, there has been colourable exercise of power in the instant case and discretion vested in respondent No.3 has not been exercised in accordance with law and therefore, the grant of approval to fifth respondent's project is vitiated.
8. For all the aforesaid reasons, the approval of the project of fifth respondent is illegal and hence, Annexure "M" and "N" have to be quashed.
9. The declaration of the scheduled land as an industrial area as well as the initiation of acquisition proceedings, based on the recommendation of third -: 121 :- respondent - SLSWCC and Notifications issued under Section 3(1), 1(3) and Section 28(1) of the KIAD Act being vitiated, would have to be quashed.
10. That acquisition of land under the provisions of KIAD Act cannot be made only for the purpose of establishing "amenities" defined and notified under that Act in the absence of there being any industries already established or to be established in an industrial area. In other words, in the absence of any industries or infrastructural facilities set up or to be set up or developed in an industrial area, land cannot be acquired for the purpose of establishing only an amenity.
11. Thus, the project of the fifth respondent - Trust cannot be construed as an "amenity" under sub-section (1) of Section 2 of KIAD Act, in the absence of any industry being set up in the scheduled land.
12. That the project of the fifth respondent - Trust also cannot be construed as an "industrial infrastructural -: 122 :- facility" as defined under sub-section (7-a) of Section 2 of KIAD Act.
13. That the scheduled land could not have been acquired by the State Government as an 'industrial area' as defined in sub-section (vi) of Section 2 of KIAD Act, as no industry is being developed in that area, by the fifth respondent - Trust.
14. Thus, for all the aforesaid reasons, the invocation of the KIAD Act for the acquisition of the scheduled land for the purpose of the fifth respondent -
Trust, is ultra vires the KIAD Act and is vitiated. The very initiation of acquisition being bad in law, the Notifications issued under KIAD Act would also have to be quashed.
15. The very initiation of acquisition under KIAD Act being vitiated, the exercise of power under sub-section (3) of Section 28 of KIAD Act, is also vitiated apart from being redundant and therefore, the order dated -: 123 :- 30/09/2013, passed under sub-section (3) of Section 28 of the Act, would also have to be quashed.
81. In the result, the appeals are allowed by setting aside the impugned judgment in the following terms:-
1. The grant of approval by third respondent -
SLSWCC to the fifth respondent - Trust at its 74th Meeting is quashed as being ultra vires the provisions of the Facilitation Act, 2002 and for the other reasons referred to above.
Consequently, Communications dated 12/09/2012 (Annexure "M) and 17/09/2012 (Annexure "N"), are also quashed.
2. The initiation of acquisition under KIAD Act being vitiated, Notifications issued under Sections 1(3), 3(1) and Section 28(1) of that Act are declared to be unenforceable.
-: 124 :-
3. Consequently, order passed under sub- section (3) of Section 28 of KIAD Act is declared to be otiose/redundant.
4. Parties to bear their respective costs.
Sd/-
CHIEF JUSTICE Sd/-
JUDGE *mvs