Karnataka High Court
Sri.C. Jayaram vs The State Of Karnataka on 25 February, 2022
Bench: S.R.Krishna Kumar
1
IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 25TH DAY OF FEBRUARY 2022
BEFORE
THE HON'BLE MR.JUSTICE S.R.KRISHNA KUMAR
WRIT PETITION No. 11615 OF 2020 (LA-KIADB)
BETWEEN:
1. SRI.C. JAYARAM
S/O LATE CHIKKA MUNIYAPPA
AGED ABOUT 66 YEARS
R/AT BELLANDURU VILLAGE AND POST,
VARTHUR HOBLI
BANGALORE EAST - 560 034.
2. SRI M LAKSHMAPPA
AGED ABOUT 63 YEARS,
S/O LATE CHIKKA MUNIYAPPA
R/AT NO. 133M, BELANDURU VILLAGE AND POST
VARTHUR HOBLI,
BANGALORE EAST - 560 034.
3. SRI C LAKSHMANA
S/O LATE CHIKKA MUNIYAPPA
AGED ABOUT 59 YEARS,
R/AT BELLANDURU VILLAGE AND POST
VARTHUR HOBLI,
BANGALORE EAST - 560 034.
4. SRI C MUNIRAJU
AGED ABOUT 55 YEARS,
S/O LATE CHIKKA MUNIYAPPA
R/AT BELLANDURU VILLAGE AND POST
VARTHUR HOBLI
BANGALORE EAST - 560 034
...PETITIONERS
(BY SRI. MADHUSUDAN R. NAIK, SENIOR COUNSEL FOR
SRI. SRINIVASA REDDY, R.V., ADVOCATE FOR P-1 & P-2
SRI. RAMESH BABU.R., ADVOCATE FOR P-3 & P-4)
2
AND:
1. THE STATE OF KARNATAKA
BY ITS SECRETARY
DEPARTMENT OF INDUSTRY AND COMMERCE
(INDUSTRIAL DEVELOPMENT) M.S.BUILDING
BANGALORE - 560 001.
2. THE KARNATAKA INDUSTRIAL AREA
DEVELOPMENT BOARD
2ND FLOOR, RASTROTHANA PARISHAT BUILDING
NRUPATHUNGA ROAD
BANGALORE - 560 001.
BY ITS CHIEF EXECUTIVE OFFICER AND
EXECUTIVE MEMBER.
3. M/S SSSN PROJECT PVT LTD
(PREVIOUSLY NAMED M/S SRI SATHYA SAI NARAYANA
HOSPITALS PVT LTD)
NO.31, 3RD CROSS, RMV 2ND STAGE
BANGALORE - 560 094
REP BY ITS DIRECTOR
SRI SHAILESH KUMAR.
...RESPONDENTS
(BY SRI. A.C.BALARAJ, AGA FOR R-1
SRI. D.N. NANJUNDAREDDY, SENIOR COUNSEL APPEARING FOR
SRI. P.V. CHANDRASHEKAR, ADVOCATE FOR R-2
SRI. D.R. RAVISHANKAR, ADVOCATE FOR C/R-3
THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA PRAYING TO DIRECT
RESPONDENTS 1 AND 2 , TO TAKE NOTE OF THE
REPRESENTATION OF THESE PETITIONERS, (PER THEIR
COMMUNICATION DATED 18.03.2020) AS AT ANNEXURE-T AND
IN ACCORDANCE WITH THE ORDER AT PARA 27 OF THE ORDER
OF THE DIVISION BENCH DATED 22ND NOV 2012, IN W.A
NO.1735/2007, WHEREIN IT IS STATED AND ETC.
THIS W.P. IS BEING HEARD AND RESERVED ON
31.07.2021 COMING ON FOR PRONOUNCEMENT OF ORDERS
THIS DAY, THE COURT MADE THE FOLLOWING:-
3
ORDER
In this petition, petitioners have sought for the
following reliefs:-
" i. Issue a Writ of mandamus or such suitable writ
or order Directing respondents 1 and 2, to take note
of the Representation of these petitioners, (per their
communication dated 18.03.2020) as at Annexure-T;
and in accordance with the order at para 27 of the
Order of the Division Bench dated 22nd Nov 2012, in
W.A.No.1735/2007, wherein it is stated:
"If there is any violation of the terms of the
lease or if his land is used for purposes other than
putting up a Hospital, the KIADB shall cancel the
lease, reclaim the property and, the benefit of this
acquisition shall be given to the beneficiary.
...Keeping in mind 'the object' behind the
acquisition, the object with which the third
respondent has been formed and above all,
keeping in mind the public interest, the persons
who are going to be benefited by this Hospital, this
acquisition is upheld. If the object is in any way
diluted or not given effect to, the third respondent
would not be entitled to the benefit of this
acquisition".
ii. Further be pleased to direct Respondent Nos.1
and 2, to withdraw the acquisition proceedings, issued
vide Notification -I, No.Va.Kai/82/SPQ/2004 dated
06.03.2004 vide Annexure-B, Notification-II
No.Va.Kai/82/SPQ/2004 dated 08.03.2004 vide
Annexure-C, Notification No.Va.Kai/82/SPQ/2004
dated 06-03-2004 vide Annexure D and Notification
No.C1/241/SPQ/2004 dated 20-05-2004 vide
st
Annexure-E issued by the 1 Respondent, declaring
them as not for 'public purpose' and as 'impermissible
in law' and
iii. Consequently further be pleased to direct, to
withdraw 'the leases granted' pursuant to such
notification; since the 3rd Respondent is not entitled
for the benefit of acquisition under the said
notifications, and,
iv. Issue such other appropriate writ, order of
direction, as may be deemed fit in the circumstances
of the case, in the interest of justice and equity".
2. The petitioners contend that the subject land were
notified for acquisition by the State Government for the
purpose of industrial development by issuing the notices
under Sections 3(1), 1(3) and Section 28(1) of the
Karnataka Industrial Areas Development Act (for short 'the
KIAD Act'). The said notifications were issued on
06.03.2004 by the respondents. In pursuance of the same,
the final notification under Section 28(4) of the KIAD Act
was issued by the KIADB after rejecting the various
objections submitted by the petitioners and other land
owners.
2.1 Meanwhile, the Karnataka Industries (Facilitation)
Act, 2002, came into force on 17.12.2003 which provided
for constituting single window clearance procedure for
consideration of applications from entrepreneurs intending
to establish industries in the State of Karnataka. The
respondent No.3 approached the aforesaid single window
agency on 17.12.2002 requesting for grant of 5 acres of
land including the subject land for the purpose of
establishing a Multi Specialty Hospital. In pursuance of the
same, on 29.12.2003, the single window agency resolved
to recommend acquisition of 5 acres of land including the
subject land for the purpose of the respondent No.3 to
construct a Hospital.
2.2 The petitioners filed W.P.No.21408/2004 before
this Court challenging the acquisition. In the said petition,
M/s.Sri.Satya Sai Narayana Hospital (P) Ltd., - respondent
No.3 herein was arrayed as respondent No.3 while the
KIADB was arrayed as respondent No.2; the State of
Karnataka was arrayed as respondent No.1. The aforesaid
petition in W.P.No.21408/2004 was dismissed by the
learned Single Judge of this Court vide order dated
13.08.2007, thereby upholding the acquisition of the subject
land. Aggrieved by the said order, petitioners preferred writ
appeal before the Hon'ble Division Bench in
W.A.No.1735/2007. By final order dated 22.11.2012, the
Hon'ble Division Bench dismissed the said writ appeal. It is
contended by the petitioners herein that while dismissing
the writ appeal, this Division Bench has issued directions
and made observations in favour of the petitioners against
the respondents.
2.3 Aggrieved by the aforesaid order dated
22.11.2012 passed in W.A.No.1735/2007, the petitioners
herein preferred SLP No.9662/2013 which was dismissed
vide final order dated 28.01.2020 by the Apex Court. It is
contended that the Apex Court reserved liberty in favour of
the petitioners in respect of issues other than the challenge
to the order passed by this Court which attained the finality
on account of the dismissal of the special leave petition.
With this background and contending that the petitioners
have been given the liberty to file the present petition, the
petitioners are before this Court by way of the present
petition.
2.4 Petitioners have contended that subsequent to
the disposal of the matter by the Apex Court, they
submitted a representation dated 18.03.2020 to the
respondents 1 and 2 calling upon them to implement and
take necessary action against respondent No.3 for alleged
violation and non-compliance of the directions issued by
this Court in W.A.No.1735/ 2007 referred to supra. It is the
grievance of the petitioners that despite the directions
issued by this Court and liberty reserved by the Apex Court
in favour of the petitioners as well as the representation
submitted by the petitioners, the respondents 1 and 2 are
not taking any action to cancel the allotment and lease of
the subject land in favour of respondent No.3, who is guilty
of contravening and violating the orders passed by this
Court and the Apex Court. Under these circumstances,
prayer No.(a) for necessary directions have been sought for
by the petitioners as against respondents 1 and 2.
2.5 Petitioners have also contended that the
impugned acquisition proceedings purporting to allot and
convey the subject land in favour of respondent No.3, who
is intending to use the subject land for real estate business
under the guise of claiming to use it for the purpose of
Hospital is vitiated by fraud and collusion and as such, the
acquisition of the subject land pursuant to the impugned
notifications are illegal, impermissible in law and the same
deserve to be withdrawn by the respondents 1 and 2.
3. Respondent No.1 - State Government has not
filed statement of objections.
4. Respondent No.2 - KIADB has filed statement of
objections inter-alia contending that in view of the earlier
round of litigation, wherein the challenge to the acquisition
by the petitioners was rejected right up to the Supreme
Court, the petitioners does not have locus standi to file the
present petition, particularly, when the subject land had
stood vested with the State Government free from all
encumbrances. It is contended that the project of putting
up of Hospital became unworkable and unviable on
account of the ill health of Dr.A.S.Hegde, who was in-
charge of constructing the Hospital. Further, the new Multi
Specialty Hospital with large capacity have come up in the
close vicinity of subject land, thereby rendering the Hospital
project of the respondent No.3 impracticable and unviable.
Under these circumstances, the State Level Single Window
Clearance Committee resolved in its meeting dated
15.06.2019 to permit the respondent No.3 to use / utilize
the subject land to put up an IT park (Information
Technology Park) which is also an industrial infrastructure
facility as defined under Section 2(7-a) under the KIAD Act.
4.1 It is also contended that by virtue of Section
28(5) of the KIAD Act and dismissal of the earlier petitions
filed by the petitioners, the subject land has vested in the
State free from all encumbrances and the petitioners
having become persona non grata, they are not entitled to
put forth any contentions or challenge the change of user of
the land, over which they do not have any right. The KIADB
has stated that subsequent to disposal of writ appeal in
W.A.No.1735/2007 several changed circumstances and
subsequent events have transpired which necessitated the
subject land to be used for putting up an IT park and not
use the same for the purpose of Hospital. It is therefore
contended that there is no merit in the petition and that the
same is liable to be dismissed.
5. In its statement of objections, respondent No.3 in
addition to putting forth various contentions and contesting
the petition contended that in view of dismissal of the
earlier round of litigation commenced by the petitioners in
W.P.No.21408/2004, which was confirmed by the Division
Bench in W.A.No.1735/2007 and affirmed by the Apex
Court, the present petition putting forth the very same
contentions is not maintainable and barred by principles of
res judicata and constructive res judicata. It is contended
that the specific contention urged in the present petition
with regard to change of land use from putting up an
Hospital to doing real estate business by respondent No.3
was urged for the purpose of challenging acquisition, which
was negated by the Division Bench which did not quash the
acquisition nor interfere with the vesting of the land with the
KIADB in terms of Sections 28(4) and 28(5) of the KIAD
Act. So also, all the contentions urged by the petitioner to
challenge the acquisition of the subject land were rejected
by the Apex Court which confirmed the order of the Division
Bench. The Apex Court has clearly rejected the challenge
made by the petitioner to the acquisition and vesting of land
with the State and KIADB and the question of revisiting the
said contentions would not arise.
5.1 Respondent No.3 contended that once the
acquisition proceedings had attained finality, having been
confirmed by the Apex Court and the subject land having
been vested with the State Government, the petitioners
become persona non grata and there cannot be divesting
of the subject land under any circumstances; once the land
had stood vested with the State Government free from all
encumbrances, the same cannot be divested and merely
because the subject land was not utilised for the purpose
for what it was acquired, it cannot be said that the land
which had already stood vested with the Government can
be divested and returned in favour of the petitioners. It is
further contended that the petitioners do not have locus
standi to challenge the acquisition proceedings nor seek
any direction for change of land use which is a matter inter
se between the respondents.
5.2 The respondent No.3 has further contended that
a perusal of the facts and grounds urged in the
memorandum of special leave petition filed by the
petitioners against the order of the Division Bench in
W.A.No.1735/2007 will indicate that the very same grounds
urged in the present petition had already been urged and
negated by the Apex Court. The order of the Apex Court
will clearly reveals that the grounds urged by the petitioners
before the Division Bench as well as additional grounds
urged before the Apex Court have been rejected by the
Apex Court which merely reserved liberty in favour of the
petitioners to pursue such remedies other than the claims -
contentions already put forth by the Apex Court. It is
therefore contended that apart from the fact that there are
no bonafides in the present petition, permitting the
petitioners to re-agitate the very same grounds all over
again is not permissible in law.
5.3 Respondent No.3 has also contended that so
long as the Division Bench has come to the conclusion that
the property can be used for industrial purpose by putting
up an Hospital, the challenge to the acquisition cannot be
questioned by the petitioners. It is contended that change
of land use for the purpose for which the subject land was
acquired cannot be a ground to challenge the acquisition in
the light of earlier round of litigation instituted by the
petitioners themselves. Though the Hospital was a project
sought to be implemented by renowned Neurologist
Dr.A.S.Hegde, on account of the pendency of the earlier
round of litigation as well as the advanced age and health
condition of the said Doctor, the Hospital project could not
be proceeded with and all the respondents have together
decided to use the subject land to set up a software
technology park - industry, which is permissible. It is
therefore contended that apart from the fact that the
petitioners do not have locus standi to either challenge the
acquisition or question the change of land use from putting
up of Hospital to putting up an IT park, the respondent No.3
was entitled to put up an IT park on the subject land after
obtaining necessary clearances and permission from the
respondents 1 and 2, which is perfectly permissible, legal
and proper. Putting forth these contentions, respondent
No.3 has sought for dismissal of the present petition.
6. The petitioners have filed rejoinder to the
statement of objections filed by the respondent No.2-
KIADB. In the rejoinder, in addition to denying the various
contentions urged in the statement of objections and
reiterating the contentions put forth in the writ petition,
petitioners have contended that the respondents are guilty
of fraud and that the entire acquisition is vitiated by fraud.
It is contended that action of the respondent No.2
permitting change of land use from putting up of Hospital to
putting up of IT park is an abuse of power as well as
process of court. It is also contended that the respondent
No.2 is ignoring its functions under public trust of doctrine
and is seeking to confer largess on respondent No.3 as a
premium for his commission of fraud of the court. It is
contended that both respondent No.2 and respondent No.3
are guilty of violating the order of the Division Bench in the
earlier round of litigation as well as the order of the Apex
Court. The meeting of the SLSWCC was held on
15.06.2019 and the decision taken in the said meeting was
at a point in time when status quo order was passed by the
Apex Court and consequently, the said meeting and
decision are illegal, invalid and void.
6.1 The petitioners have also contended that during
the pendency of the matter before the Apex Court,
respondent No.3 has changed its memorandum of objects
and reason which was followed by a sale agreement on
31.05.2018 in favour of M/s.Anushka Investments. It is
therefore contended that the directions issued by the
Division Bench, liberty granted by the Apex Court in favour
of the petitioners as well as subsequent events that
transpired during the pendency of the matter before the
Apex Court clearly establish that the acquisition
proceedings are vitiated by fraud and collusion between
respondent Nos.2 and 3 and the acquisition proceedings
deserve to be quashed.
7. The respondent No.2 has filed additional
statement of objections inter alia contending that during the
course of enquiry under Section 28(3) of the KIAD Act,
while the other land owners filed their objections to the
preliminary notification, the petitioners did not chose to do
so and consequently, petitioners are not entitled to
challenge the acquisition. The contention of the petitioners
that they did not have opportunity to file objections to the
preliminary notification has already been considered and
negatived by the Division Bench in W.A.No.1735/2007 and
it is now not open for the petitioners to re-agitate the same
issue all over again. It is contended that pursuant to a final
notification and the notification dated 20.05.2004, the
subject land stood vested with the State Government free
from all encumbrances under Section 28(5) of the KIAD
Act. In pursuance of the same, the SLAO took possession
of the subject land on 06.07.2004 and handed over the
same to the KIADB on 07.07.2004. It is therefore
contended that the entire acquisition proceedings have
been completed and the various contentions urged on the
grounds of fraud, misrepresentation etc., cannot be re-
agitated by the same and attained finality as affirmed by the
Apex Court.
8. The petitioners have filed the rejoinder to the
additional statement of objections filed by respondent No.2
disputing that possession of the subject land has been
taken by the respondents 2 and 3. It is contended that
possession of the subject land have not been taken by the
respondents 2 and 3 and the same continuous to remain in
possession and enjoyment of the petitioners. The
documents produced by the respondents 2 and 3 are
neither legal nor valid and no reliance can be placed upon
the same in support of their contentions of respondent
No.2. The petitioners have disputed and denied the
various contentions urged in the additional statement of
objections filed by respondent No.2 and have contended
that the additional statement of objections be rejected and
the petition be allowed.
9. I have heard Sri.Madhusudhan R.Naik, learned
Senior counsel for the petitioners. I have also heard
Sri.D.N.Nanjunda reddy, learned Senior counsel for KIADB
and Sri.D.R.Ravishankar, learned counsel for respondent
No.3 as well as the learned AGA for respondent No.1 -
State and perused the material on record.
10. In addition to reiterating the various contentions
urged in the petition and referring to the material on record,
learned Senior counsel for the petitioners has made the
following submissions:-
(i) In the earlier round of litigation, the Division Bench
upheld the acquisition despite the specific contention of the
petitioners that the subject land for not being utilised for the
purpose of Hospital, since the public interest was involved
and large number of people would be benefited if a Hospital
is constructed on the subject land. It is submitted that the
upholding of the acquisition was a conditional one and only
on the ground that the purpose of acquisition for a Hospital
project was in a public interest and consequently,
interference with the acquisition proceedings was not
warranted in the facts of the instant case. However, as
specifically contended by the petitioners, subsequent to
disposal of W.A.No.1735/2007 on 22.11.2012, the
respondent No.3 has not only changed its Memorandum of
Articles of Association but has also diverted the subject
land by changing the land use from constructing a Hospital
to putting up an IT park. It is therefore contended that the
respondents are guilty of misleading the Division Bench by
portraying as if the subject land be used/utilised to put up a
Hospital with the ulterior motive/purpose of defending the
acquisition; however, the events that have occurred /
transpired subsequent to the said order passed by the
Division Bench, are sufficient to show that respondent No.3
never intended to put up a Hospital and consequently, the
entire acquisition for the alleged purpose of Hospital and
rejection of the challenge to the acquisition by portraying as
if it was intended to construct a Hospital is clearly
fraudulent and consequently, the order of the Division
Bench would not come in the way of the petitioners putting
forth the contentions in the present petition.
(ii) It is contended that the entire acquisition
proceedings and the findings recorded by the Division
Bench upholding the acquisition and confirmation of the
same by the Apex Court proceeded on the basis that
putting up of a Hospital was a noble cause and in larger
public interest. However, it has now transpired that the
petitioners were fully justified in their contention that
respondent No.3 had never intended to use the subject
land to put up a Hospital and that all along they only
intended to do real estate business which stands
established by their subsequent conduct and the
subsequent events that have transpired after the order of
the Division Bench. It is therefore contended that the entire
acquisition proceedings are vitiated by fraud and the order
of the Division Bench has been obtained by misleading and
playing fraud upon the Court which is sufficient to vitiate the
acquisition proceedings.
(iii) It is contended that after the Division Bench
upheld the acquisition after coming to the conclusion that
the acquisition was for a noble cause of constructing of
Hospital, the petitioners approached the Apex Court and an
order of status quo was passed on 18.03.2013 by the Apex
Court. The said SLP was disposed of by the Apex Court on
28.01.2020; however, in the interregnum period, on
03.03.2016, Dr.A.S.Hegde and his wife resigned from the
respondent No.3-company and one Sri.Shylesh Kumar
became the Director; the said Shylesh Kumar also a
Director of a real estate company and the respondent No.3
- company has been renamed during the pendency of the
matter before the Apex Court. It is therefore submitted that
the subsequent events that have transpired during the
pendency of the matter before the Apex Court, in which
there was an order of status quo in all respects in relation
to the subject land not only establishes fraud being played
and practiced by respondent No.3 but also vitiates the
acquisition.
(iv) Learned Senior counsel further submits that while
disposing of the petition on 28.01.2020, the Apex Court
reserved liberty in favour of the petitioners to urge other
issues which were not the subject matter of the
proceedings before the Division Bench and the Apex Court.
The various contentions urged by the petitioners in the
present petition with regard to fraud being played by
respondents 2 and 3 at the time of passing of the order by
the Division Bench and the subsequent events which
transpired during the pendency of the matter before the
Apex Court had neither been considered by the Division
Bench nor by the Apex Court which had instead reserved
liberty in favour of the petitioners to urge the said
contention. It is therefore submitted that in view of the
express / specific liberty reserved in favour of the
petitioners by the Apex Court, the present petition is
maintainable and can be entertained by this Court in the
present petition.
(v) Learned Senior counsel also submitted that when
the matter was seized by the Apex Court which had passed
an order of status quo in all respects, the SLSWCC, a
committee comprising of the KIADB, State Government and
representative of the respondent No.3 did not inform the
committee about either pendency of the matter before the
Apex Court or the order of status quo passed by the Apex
Court. It is submitted that the resolution dated 15.06.2019
passed by the SLSWCC permitting change of land use
from putting up of Hospital to an IT park is clearly in the
teeth of the order of status quo passed by the Apex Court
and in violation of the same and consequently, the said
decision taken in the SLSWCC meeting dated 15.06.2019
is non-est and a nullity.
(vi) Learned Senior counsel further submits that
since the aforesaid decision of the SLSWCC is invalid and
a nullity coupled with the fact that the direction issued by
the Division Bench to the effect that if the subject land is
used for the purpose of other than putting up of a Hospital,
the KIADB shall cancel the lease and reclaim the property
and that the benefit of the acquisition shall not be given to
the respondent No.3 - beneficiary, the KIADB has no
option but to resume and reclaim the subject land from
respondent No.3, particularly when the SLP filed by the
petitioners had been dismissed, thereby confirming the
order of the Division Bench. It is therefore contended that
necessary directions are to be issued to respondent No.2 -
KIADB to comply with, implement and give effect to the
order passed by the Division Bench and accordingly,
reclaim/resume the subject land from respondent No.3 by
canceling and revoking all leases, licences, clearances
etc., given to respondent No.3.
In support of his contentions, learned Senior counsel
has placed reliance upon the following decisions:-
(i) Union of India and others vs. Ramesh Gandhi
- (2012) 1 SCC 476;
(ii) Bhaurao Dagdu Paralkar vs. State of
Maharashtra - 2005 AIR SCW 4094;
(iii) State of Andhra Pradesh and another vs.
T.Suryachandra Rao - 2005 AIR SCW 3603;
(iv) Haribhau Siddappa Patil and others vs. The
State of Karnataka, Rep., by its Secretary, Department
of Industries and Commerce and others - ILR 2012
KAR 4691;
(v) Kishore Samrite vs. State of Uttar Pradesh
and others - (2013) 2 SCC 398;
(vi) Uddar Gagan Properties Limited vs. Sant
Singh and others - (2016) 11 SCC 378;
(vii) Greater Noida Industrial Development
Authority vs. Devendra Kumar and others - (2011) 12
SCC 375;
(viii) Vyalikaval House Building Coop. Society vs.
V.Chandrappa and others - (2007) 9 SCC 304;
(ix) Comptroller and Auditor-General of India,
Gian Prakash, New Delhi and another vs.
K.S.Jagannathan and another - (1986) 2 SCC 679;
(x) Badrinath vs. Government of Tamil Nadu and
others - AIR 2000 SC 3243;
(xi) RBF RIG Corporation, Mumbai vs.
Commissioner of Customs (Imports), Mumbai - (2011)
3 SCC 573;
(xii) Harigovind Yadav vs. Rewa Sidhi Gramin
Bank & others - (2006) 6 SCC 145;
(xiii) Thomas Patrao since deceased by his LR
and another vs. The State of Karnataka, Rep. by its
Secretary and others - ILR 2005 KAR 4199;
(xiv) Patasi Devi vs. State of Haryana and others
- 2012 AIR SCW 5294;
(xv) Raghbir Singh Sehrawat vs. State of Haryana
-(2012) 1 SCC 792;
(xvi) Sri.H.V.Nandakumar vs. The State of
Karnataka and others - W.P.No.13374/2013 dated
02.02.2016; and
(xvii) Sri. S.Srikanta and another vs. The State of
Karnataka and others - W.P.No.46004/2013 dated
10.04.2014.
11. Per contra, learned Senior counsel for the KIADB
as well as the learned counsel for respondent No.3, in
addition to reiterating the various contentions urged in the
statement of objections submit that there is no merit in the
petition and that the same is liable to be dismissed for the
following reasons:-
(i) The subject land having vested with the State
Government under Section 28(5) of KIAD Act, upon
issuance of the final notification dated 20.05.2004 under
Section 28(4) of the KIAD Act, the petitioners have become
persona non grata and have no locus standi to challenge
the acquisition of the subject land;
(ii) In view of the earlier round of litigation initiated by
the petitioners which was dismissed by this Court and
confirmed by the Apex Court, the claim of the petitioners is
barred by principles of res judicata and constructive res
judicata;
(iii) The liberty reserved by the Apex Court in favour
of the petitioners in the earlier round of litigation is
restricted and limited to the claim for compensation only
and nothing more; the said liberty has to be read and
understood in the context of the Apex Court rejecting the
claim of the petitioners not only on all the grounds urged
before this Court but also the grounds urged for the first
time before the Apex Court and consequently, the
petitioners are not entitled to the reliefs sought for in the
present petition.
(iv) Since the petitioners do not have any manner of
right, title, interest or possession over the subject land, they
do not have any locus standi to seek any directions to the
KIADB to take action against the respondent No.3;
accordingly, apart from the fact that the prayer for quashing
the acquisition proceedings is liable to be rejected, the
prayer for a direction to the KIADB to take necessary steps
against respondent No.3 also cannot be granted in favour
of the petitioners, who do not have locus standi to seek the
said relief.
(v) There is no merit in the claim made by the
petitioners with regard to fraud and misrepresentation and
in the absence of pleading and proof in this regard, even
this claim of the petitioners is liable to be rejected.
(vi) The claim of the petitioners is also barred by
Explanation-(v) to Section 11 CPC which envisages that
any relief claimed by the petitioners which was not
expressly granted by this Court or the Apex Court was
deemed to have been refused; in this context, it is
contended that since all the claims put forth by the
petitioners before this Court as well as for the first time
before the Apex Court were rejected in the earlier round of
litigation, the present petition seeking to re-agitate the very
same claims / contentions is not maintainable and is liable
to be rejected.
In support of their contentions, learned Senior
counsel for KIADB and learned counsel for respondent
No.3 have placed reliance upon the following decisions:-
(i) C.Padma and others vs. Deputy Secretary to
the Govt. of T.N. and others - (1997) 2 SCC 627;
(ii) Northern Indian Glass Industries vs. Jaswant
Singh and others - (2003) 1 SCC 335;
(iii) Sulochana Chandrakant Galande vs. Pune
Municipal Transport and others - (2010) 8 SCC 467;
(iv) Smt.Ranee Govindram Hassanand vs. The
Chief Secretary of Karnataka, Bangalore and others -
(2011) 6 KLJ 591.
(v) The State of Tamil Nadu vs. Vasanthi
Veerasekaran - (2019) 7 SCC 342;
(vi) V.Chandrasekaran and another vs. The
Administrative Officer and others - (2012) 12 SCC 133;
(vii) State of Kerala and others vs. M.Bhaskaran
Pillai and another - (1997) 5 SCC 432;
(viii) Smt. Sulochana Chandrakant Galande vs.
Pune Municipal Transport and others - (2010) 8 SCC
467;
(ix) Khoday Distilleries Limited and others vs.
Sri.Mahadeshwara Sahakara Sakkare Kharkane
Limited, Kollegal - (2019) 4 SCC 376;
(x) Devilal Modi vs. Sales Tax Officer, Ratlam and
others - AIR 1965 SC 1150;
12. Before adverting to the rival contentions, it is
relevant to extract the decision of the Division Bench in
W.A.No.1735/2007, wherein it is held as under:-
"JUDGMENT
This appeal is preferred against the order of the
learned single Judge dismissing the Writ Petition where
acquisition of their land by the Government was upheld.
2. The subject matter of this appeal is land bearing
Sy. No. 38/8P measuring an extent of 1 acre 2 guntas
situated at Bellandur Village, Varthur Hobli, Bangalore
East Taluk. The said land belonged to late
Chikkamuniyappa who died on 5.2.1983. After his
death, the petitioners who are his sons have inherited
the property. Katha has been made out in their names.
RTC stands in their name. It is their joint Hindu Family
property. The said land is situated within half kilometer
of the gramathana. They have constructed residential
premises and they are residing there. The Government
of Karnataka issued a notification under Section 3(1),
1(3) and 28(1) of the Karnataka Industrial Areas
Development Act, 1966 (for short hereinafter referred to
as 'the Act') notifying several survey numbers, in all a
total extent of 5 acres 5 guntas for industrial purposes.
The grievance of the petitioners is, without giving an
opportunity to them to file objections, the said lands are
acquired by issuing a final notification under Section 28
(4) of the Act. In fact, the President of the Gram
Panchayath on their behalf and others had filed
objections. Without considering their objections, 28(4)
notification came to be issued. The land owners filed 7
Writ Petitions which covered an extent of 4 acres 9
guntas challenging the said notification on various
grounds. The learned single Judge on consideration of
all the grounds raised by all the landlords clubbed all
the Writ Petitions together and by a common order
dismissed the same upholding the acquisition. This
appeal is preferred in W.P. No. 21408/2004 challenging
the order of the learned single Judge. At the time of
arguments it is submitted 4 appeals had been preferred
against the impugned order. Except this appeal all other
appeals are settled. Out of 5 acres 5 guntas of land,
now the acquisition in so far as 4 acres 3 guntas is
concerned, has been upheld, possession of the land is
taken by the Government and handed over to the
beneficiary of the acquisition. Therefore, the subject
matter of this appeal is only acquisition of land in Sy.
No. 38/P measuring 1 acre 2 guntas.
3. Sri Anant Mandagi, the learned Senior counsel
appearing for the appellants assailed the impugned
order on several grounds. Firstly he contended the
petitioners were not served with the notice of the
acquisition. They have not been given a personal
hearing and therefore the acquisition is vitiated for
violation of principles of natural justice. Secondly, he
contended the land which is sought to be acquired is an
agricultural land. It is acquired for an industrial use. This
Court has held that, unless an order for change of land
use is obtained, acquisition proceedings cannot be
initiated for industrial purpose in respect of an
agricultural land. Therefore, on that ground also the
acquisition is bad. He further contended this notification
is issued to acquire land for the benefit of the third
respondent - M/s Sri Sathya Sai Narayana Hospitals
Private Limited. Acquisition of land for the purpose of
one individual or company is not permissible under the
Act. Therefore, the acquisition is liable to be set aside.
The Single Window Agency constituted under the
Karnataka Industries (Facilitation) Act, 2002 has no
power to recommend the land for acquisition. As the
entire acquisition in the case is initiated on the basis of
such recommendation, the acquisition is bad. The
proposed acquisition is for the establishment of a
Hospital. Hospital is neither an industry nor an
infrastructure and therefore acquisition for a Hospital
under the Act is bad. Lastly he contended petitioners
are all poor agriculturists. They are eking out their
livelihood from agriculture. This is only the piece of land
owned by them. If the said land is
acquired for the benefit of the third respondent, virtually
the Board is acting as an estate agent which is not
permissible under law. Therefore, seen from any angle,
the acquisition is liable to be set aside. He also
contended that, during the pendency of this appeal, an
application is filed bringing to the notice of the Court
that the respondents have now handed over the land so
far acquired for a real estate agent. The said application
and affidavit is not controverted to by the third
respondent by filing any objection.
4. Sri Ashok Haranahalli, the learned Senior
counsel appearing for the Board contended that, all the
contentions which are raised in this appeal are
considered by the learned single Judge and by a
common order all of them have been negatived as
almost all the issues are covered either by the judgment
of the High Court or the Apex Court. In the Writ Petition
the petitioners have not pleaded that they have not
been served. The contention taken is that, they have
not been heard. When the petitioners have not filed any
objections to the acquisition, question of hearing the
objector would not arise. It is settled law that, only after
the acquisition is complete, before the land could be put
for industrial use, the requisite permission by way of
change of land use is to be taken and an order of
change of land use is not a condition precedent for
initiation of acquisition proceedings. It is settled law that
acquisition could be for an individual or a company,
provided the said beneficiary uses the land for an
industrial purpose. The Single Window Agency is
constituted under the Karnataka Industries (Facilitation)
Act, 2002 to enable the entrepreneur to obtain all
sanctions at one counter so that there could be
expeditious development of industries in Karnataka.
The acquisition proceedings are initiated by the State
Government on being satisfied that the lands are
required for establishment of an industry by the third
respondent. Incidentally, the third respondent has
approached the Single Window Agency who have
examined their project and they have made their
recommendation. Therefore, there is no illegality in the
acquisition proceedings on that ground. It is too late in
the day for the petitioners to contend that the
acquisition for a Hospital is not for industrial purpose,
as requisite notification under Section 2(1) is issued by
the Government as far back as in the year 1991 itself.
Therefore, he submits there is no merit in any of these
contentions.
5. Sri P.S. Dinesh Kumar, the learned counsel for
the beneficiary contended that, they have filed
objections in Court without serving a copy on the
appellants. Therefore, office has returned their
objections for compliance of the office objections.
Hence, it is not correct to say that they have not filed
the objections. They had entered into an agreement
with M/s SJR Developers for the purpose of putting up
a construction to build the Hospital as all the promoters
of the Company are Surgeons and Doctors who have
no expertise in building construction. In fact, though
they have entered into an agreement, because of the
delay in completion of the acquisition proceedings, the
contractor has gone back and the contract is rescinded
and now they have to look out for another contractor.
Therefore, he submits there is no merit in the said
submission. He reiterates all the contentions urged by
the counsel for the Board.
6. In the light of the aforesaid material on record and
the rival contentions, the question that arise for our
consideration in this appeal is :-
Whether the acquisition of
land by the Government for the
benefit of the third respondent is
vitiated and liable to be quashed?
7. In the Writ Petition, the petitioners have nowhere
stated that they have not been served with the notice of
the acquisition proceedings. On the contrary, what is
asserted is, after publication of the said notification, the
respondents without giving an opportunity to the
aggrieved persons including the petitioners to file
objections to the same have issued notification under
Section 28(1) of the Act for acquisition of the lands in
question. It is further stated that, without considering
the detailed objections filed by the President of the
Gram Panchayath on behalf of the petitioners and
others have issued notification under Section 28(4) of
the Act without showing the purpose of acquisition for
which it is made. From the aforesaid averment it is clear
the petitioners have no grievance of non-service of
notice. Their grievance is non-consideration of the
objections filed by the Gram Panchayath on their
behalf.
8. The order passed by the Land Acquisition
Officer under Section 28(3) is before the Court. It
discloses that the Land Acquisition Officer has set out
in the said order the particulars of the land which are
notified for acquisition, the names of the owners,
person in whose name the katha stands, person who is
enjoying the property, survey number, extent.
Thereafter, he has set out the objections filed by each
one of the land owners and consideration by him.
Thereafter, he has stated in so far as Sy.No.38/8P
measuring 1 acre 2 guntas which is the subject matter
of this proceedings is concerned, he has not received
any objections from any one. Therefore, this order
clearly shows that not only notices were served on all
the land owners, but also, all the land owners except
the petitioners filed the objections. The Gram
Panchayath of the village who had no right to file
objections also filed objections on behalf of the
petitioners, which were considered and over- ruled. In
so far as the petitioners are concerned, as they had not
filed objection, question of issue of notice of enquiry,
permitting them to participate in the enquiry, hearing did
not arise and therefore they proceeded to pass an order
holding that the land is required for industrial purposes
and consequently 28 (4) notification was issued.
Therefore, the contention that the acquisition
proceedings violates the principles of natural justice is
contrary to the material on record and without any
substance.
9. The learned counsel for appellant relying on the
judgment of a Division Bench of this Court in the case
of SPECIAL LAND ACQUISITION OFFICER, KIADB,
BANGALORE AND ANOTHER vs STATE OF
KARNATAKA [ILR 2007 KAR 4891] contended that, a
land in a residential zone cannot be notified for
industrial purpose. It only shows lack of application of
mind. It was contended that unless the change of land
use is obtained, such a notification could not have been
issued. In fact, the said judgment is the subject matter
of appeal before the Apex Court.
10. The Apex Court in the case of S.S.DARSHAN vs
STATE OF KARNATAKA AND OTHERS [AIR 1996
SC 671] repelling the contention that the user of the
acquired land shown in the master plan being different,
there cannot be a conversion of the user except in
accordance with the provisions for making the change
in the land use, held that, it is not a case of change of
user by the owner of the land but one of acquisition by
the State under the provisions of the Land Acquisition
Act, 1894.
11. In fact, the Apex Court in the case of BHAGAT
SINGH vs STATE OF U.P. AND OTHERS [AIR 1999
SC 436] has held as under: -
"22. .... there is no need that the land
proposed to be acquired by the
Government for a particular public
purpose should be for the same purpose
or use mentioned in the Master Plan or
Zonal Plan for the said area. Nor will the
acquisition be invalid merely because the
land proposed to be acquired is for a
purpose other than the one permitted by
the Master Plan or Zonal Plan applicable
to that locality. Acquisition will be valid if it
is for a public purpose even if it is not for
the type of user permitted by the Master
plan or Zonal plan in force at the time the
acquisition is made. It will be for the
beneficiary of the acquisition to move the
competent authority under the
Development Act and obtain the sanction
of the said authority for suitable
modification of the Master Plan so as to
permit the use of the land for the public
purpose which the land is acquired. In
fact, it may be difficult for the beneficiary
of the acquisition to move the competent
authority under the Development Act
seeking permission to change of land use
even before the land is acquired or before
possession is given to the beneficiary. On
the principle stated in Aflatoon's case, it is
clear that acquisition for a public purpose
and obtaining permission from competent
authority under the concerned
Development Act for change of land use
are different from one another and the
former is not dependent upon the latter."
12. Therefore, the change of land use is required before
the said land is put to use for a purpose other than that
mentioned in the master plan. Change of land user is
not a condition precedent for initiation of acquisition
proceedings. It is only after acquiring a land, vested
with the Government, transferred to the beneficiary, if
the beneficiary wants to put the land to the use which is
other than specified in the master plan, then without the
permission he cannot use the land for industrial
purposes. Therefore, we do not find any substance in
the said contention.
13. Next, it was contended by the learned Senior
Counsel for appellant that, the entire land measuring 5
acres 5 guntas is meant for third respondent-a private
limited company. Under the scheme of the Act there
cannot be an acquisition for an individual or a company.
He further submitted a Division Bench of this Court
over-ruling two earlier judgments of the learned single
Judges has held that such an
acquisition is not permissible. In support of this
contention reliance is placed on a judgment of the
Division Bench of this Court in the case of Kakaral
Ravikumar and others V/s. State of Karnataka and
others decided on 22nd March 2012 in W.A. Nos. 6193-
6195/2009 and other connected matters.
14. In the aforesaid judgment, the notification issued
under the Act, specifically mentions the names of two
private companies for setting up their Steel Plant. It is in
that context, the Division Bench held the land is
acquired only for the purpose of the Board as the Board
is not developing the acquired land and allotting to the
aspiring industrialists. If the industries proposed to be
set up in the area is either not feasible or does not get
environmental clearance, the very purpose of
acquisition fails. Having regard to the nature of the
industry proposed to be set up, prior environmental
clearance as per the Environment Protection Act, 1986
and the Environment Protection Rules, 1986 is a must.
The State was embarking on acquisition of private land
by exercise of statutory power of the State to acquire
private lands which is equivalent to exercise of power of
eminent domain of the State, even in a situation where
there is no real public purpose and even without
applying its mind to the relevant aspects. It is a clear
instance of not only a colourable exercise of power but
also arbitrary exercise of power violative of Article 14 of
the Constitution of India. Therefore, it was held on a
overall examination of the acquisition proceedings and
in the background of the operation of the provision of
the Karnataka Industries (Facilitation) Act, 2002, the
acquisition proceedings cannot be sustained as it is
neither law conformant nor procedural conformant and
not for a genuine public purpose.
15. The judgment of the Hon'ble Supreme Court in
the case of Ramtanu Co-operative Housing Society
Limited, was referred to, and the law laid down by the
two Single Bench decisions in HEGGAPPANAVAR
MARKHANDAPPA AND OTHERS vs. STATE OF
MYSORE AND OTHERS, reported in 1974 (1) KAR
LJ 71 and N. SOMESHAKAR AND OTHERS vs.
STATE OF KARNATAKA, reported in 1997 (7) KAR
LJ 410, were over-ruled. From the reading of the
aforesaid judgment, it cannot be inferred that under the
Act, the land cannot be acquired by the Board for the
purpose of developing industrial area by an individual
entrepreneur. What is laid down in the aforesaid
judgment is that under the Act, land cannot be acquired
for an industrial entrepreneur mentioning that purpose
for which the land is sought to be acquired. Therefore,
after acquiring that land for industrial purpose, such
acquired land cannot be given for setting up of one
industry or by one individual or a company.
16. The Constitutional Bench of the Supreme Court in
the aforesaid case of Ramtanu Co-operative Housing
Society Limited has laid down the law as under:-
"21. Counsel on behalf of the petitioners
contended that there was procedural
discrimination between the Land
Acquisition Act and the Act in the present
case. It was said that there was a special
procedure designed by the Land
Acquisition Act for acquisition of land for
the companies whereas in the present
case the State was acquiring land for
companies without adopting the
procedure of the Land Acquisition Act. It is
to be remembered that the Act in the
present case is a special one having the
specific and special purpose of growth,
development and organisation of
industries in the State of Maharashtra.
The Act has its own procedure and there
it no provision in the Act for acquisition of
land for a company as in the case of Land
Acquisition Act. In the present case,
acquisition under the Act is for 19 the
purpose of development of industrial
estates or industrial areas by the
Corporation or any other purpose in
furtherance of the objects of the Act. The
policy underlying the Act is not acquisition
of land for any company but for the one
and only purpose of development,
organisation and growth of industrial
estates and industrial areas. The Act is
designed to have a planned industrial city
as opposed to haphazard growth of
industrial areas in all parts of the State.
The Act is intended to prevent growth of
industries in the developed parts of the
State. Industries are therefore to be set up
in the developing or new parts of the State
where new industrial towns will be brought
into existence. The object of the Act is to
carve our planned areas for industries. On
one side there will be engineering
industries and on the other there will be
chemical industries. There will be
localisation of industries with the result
that the residents and dwellers of towns
and cities will not suffer either from the
polluted air or obnoxious chemicals of
industries or the dense growth of
industries and industrial population, within
and near about the residential areas. The
Land Acquisition Act is a general Act and
that is why there is specific provision for
acquisition of land by the State for public
purpose and acquisition of land by the
State for companies. The present Act on
the other hand is designed for the sole
purpose of development of industrial
areas and industrial estates and growth
and development of industries within the
State. Industrial undertakings or persons
who are engaged in industries all become
entitled to the facilities on such industrial
growth. Under the Land Acquisition Act
acquisition is at the instance of and for the
benefit of a company whereas under the
present Act acquisition is solely by the
State for public purposes. The two Acts
are dissimilar in situations and
circumstances."
17. Following above judgment, the learned Single
Judge of this Court in the case of Heggappanavara
Markhandappa & others vs. State of Mysore &
others reported in 1974(1) Kar.L.J. 71, held as
under:-
"As long as the acquisition of the land is for
the purpose of the Act, that negotiations were
made with individuals concerned before taking
steps for acquisition under the Act cannot, by itself,
be regarded as a circumstances justifying an
inference that there has been a fraud on power.
The essential question to be determined is, as to
whether the acquisition is really for the purpose of
the Act or it is only a camouflage for achieving
some other object. As already mentioned, a
notification was issued by the State Government
declaring the area in question as an industrial
area. The lands were acquired for the purpose of
establishing an industry. The expression 'industrial
estate' means any site selected by the State
Government where factories and other buildings
are built for use by any industries or class of
industries. Even if in a particular place, a single
industry is established, the same would answer the
definition of the expression 'industrial estate', as
defined in S.2(7) of the Act. The preamble itself
clearly states that one of the objects of the Act is to
promote the establishment and orderly
development of industries in industrial areas. If,
therefore, the lands in question were acquired for
the purpose of establishing an industry by M/s.
Harihar Polyfibres with a view to secure a planned
and orderly development of industries in that
particular area, it cannot be said that the action
taken for acquisition of the lands amounts to fraud
on power".
18. It is to be noted that in the aforesaid judgment, the
lands were acquired for the benefit of M/s. Harihar
Polyfibres. The challenge was on the ground that the
real object of acquisition of land is not a development of
industrial area, but for the benefit of a particular
company which is not the object of the Act repealing the
said contention.
19. Then, after referring to the judgment of the
Constitutional Bench, in Ramtanu (supra) this Court
held as under:-
"The Supreme Court upheld the validity of
the Maharashtra Industrial Development
Act, 1961, which, in many respects, is
similar to the Act with which we are
concerned. Their Lordships of the
Supreme Court have emphasized that
under the Industrial Development Act, the
policy underlying is not acquisition of land
for any company, but for the one and only
purpose of development, organization and
growth of industrial estates and industrial
areas. If acquisition of land is made under
the Act for the purpose of development,
organization and growth of industrial
estates and industrial areas, the fact that a
single industry belonging to a single
company or institution was established in a
particular area does not mean that the
acquisition of the land was for the
particular individual or institution and not
for the purpose of development,
organization and growth of industrial
estates and industrial areas. On the facts, I
have no hesitation in coming to the
conclusion that the lands in question were
acquired for the purpose of development,
organization and growth of industrial
estates and industrial areas in the area in
question and not for a particular company.
As the acquisition of the lands is for the
purpose of the Act, I do not find it possible
to accede to the contention of Shri.
Venkataranga Iyengar that there has been
fraud on power".
20. The Apex Court in the case of P. Narayanappa and
another Vs. State of Karnataka and others [(2006) 7
SCC 578] was considering the acquisition where a land
can be acquired under the Act in order to benefit the
Company. without mentioning the particulars of the said
company and its 24 need in the notification. After
referring to the definition clause and Sections 3, 5, 14,
28 and 29 of the Act as well as the preamble, it was
held as under:-
"An entrepreneur or a company may give
proposal to the State Government for
setting up an industry or infrastructural
facility and the Government may thereafter
acquire the land and give it to the Board. It
is also possible that after the land has
already been acquired and developed by
the Board, it may be allotted to an
entrepreneur or a company for setting up an
industry or infrastructural facility. Therefore,
the scheme of the Act does not show that at
the time of acquisition of the land and
issuing a preliminary notification under
Section 28(1) of the Act, the complete
details of the nature of the industry or
infrastructural facility proposed to be
set up should also be mentioned. At this
stage what is to be seen is whether the land
is acquired for development by the Board or
for any other purpose in furtherance of the
objects of the Act, as mentioned in Sub-
Section (1) of Section 28 of the Act. In fact,
if the contention raised by the learned
Senior Counsel for the appellants is
accepted, it would mean that even at the
stage of preliminary notification under
Section 28(1) of the Act, nature of the
activity which may be done by some
entrepreneur or a company which may give
a proposal for setting up an industry or
infrastructural facility much after land has
been acquired should also be taken note of
and specifically mentioned in the
notification, which is well-nigh impossible.
While interpreting the provisions of the Act,
the Court should not only take into
consideration the facts of the present case
but should also have in mind all possible
contingencies. Therefore, on a plain reading
of the language used in the Act, it is not
possible to accept the contention of the
learned Senior Counsel for the appellants
that the impugned notification is vague and
cryptic as the complete details of the project
which was proposed to be established by
Vikas Telecom Limited (P) Ltd.,
(Respondent No.9) were not mentioned and
on account of the aforesaid lacuna, the land
owners deprived of their right to make a
proper representation or to show-cause
against the proposed acquisition".
21. Therefore, from the aforesaid judgment, it is clear
that the Board can acquire land for the benefit of a
single entrepreneur. The only condition to be fulfilled is
it should be for the development of an industry. In the
light of the aforesaid law, we do not find any merit in the
contention of the appellants that the acquisition for the
benefit of third respondent is not permissible.
22. In the instant case, merely because the Single
Window Agency has made a recommendation for
acquisition of land by the Government, the acquisition
would not get vitiated. The Karnataka Legislature has
passed the Karnataka Industries (Facilitation) Act, 2002
to provide for the promotion of industrial development
and facilitation of new investments, to simplify the
regulatory frame work, by reducing the procedural
requirements and rationalizing documents and to
provide for an investor friendly environment in the State
of Karnataka. Accordingly, under the Act a Single
Window Clearance Committee is constituted at the
State Level as well as at the District Level. These State
Level and District Level Committees shall meet at such
times and such places and shall examine the proposals
for setting up industrial undertakings and shall take a
decision and communicate its decision to the
entrepreneur and the concerned departments or
authorities within such time as may be prescribed. The
Committee shall be the final authority in granting
approvals for the projects placed before it. The
approvals given by the Committee shall be binding on
the departments or authorities concerned and such
departments or authorities shall issue the required
clearance within the stipulated time subject to
compliances by the entrepreneurs with the provisions of
the applicable Central or State Acts or rules made there
under.
23. Therefore, any entrepreneur who intends to set up
an industry has to approach this Single Window
Agency. After examining the proposals, not only they
will communicate to the entrepreneur their approval,
they will also call upon all the agencies to assist the
entrepreneur in establishing the undertaking. It is in this
background, the third respondent approached the
Single Window Agency with a request to grant about 5
acres of land to establish a Multi Specialty Hospital.
Along with the said application, the third respondent
also enclosed a copy of the Memorandum of
Association of their company as well as Articles of
Association. The said documents disclose that the third
respondent wanted to establish and maintain one or
more Hospitals for the treatment of persons suffering
from illness, mental or other diseases or for the
reception and treatment of persons during
convalescence or Hospitalization. They also wanted to
engage in medical research by engaging in research
and development of all fields of Medical Sciences. The
first directors of the Company are Dr. Hegde A.S.,
Neuro Surgeon, presently visiting Sri Sathya Sai
Institute of Higher Medical Sciences, Whitefield,
Bangalore and Manipal Hospital, Bangalore. He has
earlier worked in NIMHANS, Bangalore. He is a
consultant in many Hospitals in Bangalore and runs his
own clinic. He has about two decades of experience in
the Neuro Surgery Specialty. He has been conferred
'Rajyotsava Award' by the Government of Karnataka for
his meritorious services in the field of medicine. He has
published several research papers on Neurology and
Surgery in association with other colleagues, delivered
a number of guest lectures in various prestigious
institutions, both in India and abroad. His medical skills,
experience in establishing Hospitals and sound
financial background is adequate in establishing the
proposed Hospital successfully. His wife - Dr. Sridevi
Hegde is also a doctor presently working in Manipal
Hospital as the Head and Senior Consultant of
Genetics Department. She has earlier worked with St.
Martha's Hospital. She has 25 years of experience in
the medical field. The other doctor is Dr. Shailesh
Kumar who is also a Neuro Surgeon with vast
experience and is associated with Dr. A.S. Hegde for
the last 7 - 8 years. He is actively involved in
establishment of the proposed Hospital project. Then
they have given the particulars regarding where they
intend to locate the Hospital, extent of land required,
extent of building to be constructed, power requirement,
water requirement, effluents, man power, equipments
and Hospital furniture. They have also enclosed letters
received by Vijaya Bank - the financial institution who
have given permission to give a loan of Rs.25 crores.
They have also produced documents showing the cost
of construction of 200 bedded Hospital. They have also
produced invoice of LG Health Air Shoppee showing
the equipment which they intend installing in the said
Hospital. It is on consideration of all these material, the
Single Window Agency by their letter dated 29.12.2003
informed the third respondent that their project has
been approved. They also informed that they have
resolved to recommend to KIADB to acquire 5 acres of
land as a single unit complex in IT corridor along the
Outer Ring Road, Bangalore, for the project. KIADB
was requested to help the promoters in identifying
suitable land with survey numbers for the project. It is
thereafter, after identification of the land, proceedings
were initiated for acquisition of 5 acres 5 guntas of land.
Therefore, the contention that the Single Window
Agency has no power and that the procedure adopted
is all illegal, which vitiates the acquisition, is without any
basis.
24. Next, it was contended that Hospital is not an
industry. The said contention also has no substance. In
this context, it is necessary to look at the object of the
Act and the definition of an industrial area, industrial
estate and industrial infrastructural facilities as defined
under the Act. Section 2(6) defines 'Industrial area'
means any area declared to be an industrial area by the
State Government by notification which is to be
developed and where industries are to be
accommodated and industrial infrastructural facilities
and amenities are to be provided and includes, an
industrial estate. It is by Act No.11 of 1997, Industrial
infrastructural facilities and amenities are included in
the definition of industrial area, infrastructural facilities
is also defined in Section 2(7a) as under :-
"industrial infrastructural facilities' means
facilities which contribute to the
development of industries established in
industrial area such as research and
development, communication, transport,
Banking, Marketing, Technology parks and
Townships for the purpose of establishing
trade and tourism centres; and any other
facility as the State Government may by
notification specify to be an industrial
infrastructural facility for the purposes of this
Act".
25. Therefore, it is clear, the State Government is
vested with the power to specify what are the
amenities which are to be provided in an industrial
area. In fact, Section 2(1) defines 'Amenity'. The
amenity includes road, supply of water or electricity,
street lighting, drainage, sewerage, conservancy and
such other convenience, as the State Government
may by notification specify to be an amenity for the
purposes of this Act. By virtue of the said Sub-Section
(1) of Section 2, Government of Karnataka has issued
a notification on 13th March 1991 specifying what are
the amenities for the purpose of the Act. The said
notification includes R & D Centres, Technical
Institutes, Training Institutes, Educational Institutions,
Power Sub-Stations and Diesel Power generating
stations and water supply works, Hospitals,
dispensaries, Hotels, Motels and Holiday Resorts and
cinema theatres. Therefore, a Hospital would fall within
the definition of amenity and the land in question is
acquired for the purpose of setting up the said amenity
which is an industrial purpose under the Act.
26. Lastly, it was contended that the third respondent
has entered into an agreement with a builder and it is a
real estate venture and not establishment of a
Hospital. A counter has been filed by the third
respondent pointing out that they do not have requisite
expertise to put up construction of a Hospital as all of
them are doctors. Therefore, they had to enter into an
agreement with the contractor for putting up the
construction. The construction to be put is exclusively
for a Super Specialty Hospital. In fact, it was
contended at the time of argument that, because of the
delay in execution of the terms of the contract, with
steep increase in the cost of construction, the
contractor has backed out. It is only after getting
possession of the entire land, they would be in a
position to put up a Hospital. In fact they have kept the
plans ready. Once the plan is sanctioned, they will
have to construct within 2 years, therefore they have
with-held the submission of the plan to the competent
authority. Out of 5 acres 5 guntas, excluding an extent
of 1 acre 2 guntas, now they are put in possession,
they have leveled the ground, enclosed the entire land
and awaiting the judgment in this case so that once
they get possession of the land which is the subject
matter of these proceedings they could submit the
sanctioned plan, enter into an agreement with the
contractor to put up construction and proceed
expeditiously in establishing the Hospital. Therefore,
they submit there is no substance in the said
contention.
27. The acquisition of land is for setting up a Multi
Speciality Neuro Hospital. We quite understand when
the total extent of land is 5 acres 5 guntas, 7 Writ
Petitions were filed challenging acquisition, now 6 Writ
Petitions are disposed of, it has attained finality. The
possession of 4 acres 3 guntas of land is delivered to
the third respondent. 1 acre 2 gunta which is the
subject matter of this appeal, once it is handed over to
the third respondent they should be in a position to
implement the project. Unless the entire extent of land
is handed over to the third respondent they cannot
think of putting up the construction. The pendency of
this litigation before the Court is the cause for a delay
in obtaining sanction of the plan and putting up
construction. As all the persons who are involved in
the Company are doctors of high repute and the
financial institutions have come forward to extend the
financial benefit, once the land is made available to
them by the Board, we do not see any impediment for
establishment of the said Hospital. But, nonetheless
once the land is acquired and possession is delivered
to the third respondent, the third respondent shall use
the entire extent of land only for the purpose of setting
up a Hospital. In fact, the said land is to be given to
them on lease-cum-sale agreement. If there is any
violation of the terms of the lease or if this land is used
for purposes other than putting up a Hospital, the
KIADB shall cancel the lease, reclaim the property and
the benefit of this acquisition shall not be given to the
beneficiary. Keeping in mind the object behind the
acquisition, the object with which the third respondent
has been formed and above all keeping in mind the
public interest, the persons who are going to be
benefited by this Hospital, this acquisition is upheld. If
the object is in any way diluted or not given effect to,
the third respondent would not be entitled to the
benefit of this acquisition.
Hence, we pass the following order:-
Writ Appeal is dismissed.
Sri K. Krishna, the learned AGA, is permitted to
file memo of appearance for respondent No.1 within
four weeks.
Parties to bear their own costs".
13. Aggrieved by the same, petitioners preferred SLP
No.9662/2013 before the Apex Court. By interim order
dated 18.03.2013, the Apex Court passed an order of
status-quo, which reads as under:-
"Issue notice.
Mr.Kiran Suri, advocate-on-record, and
Mr.T.V.Ratnam, advocate-on-record, waive service
for respondent Nos.2 and 3 respectively.
Learned Senior counsel and learned
counsel for the parties are ad idem that an
opportunity may be given to the parties to have their
disputes resolved through the process of mediation.
As prayed by them, the matter is referred to
the Bangalore Mediation Centre.
The parties are directed to appear before
the coordinator, Bangalore Mediation Centre on
April 2, 2013.
The coordinator, Bangalore Mediation
Centre shall submit the report within two months of
the appearance of the parties.
List the matter thereafter.
In the meanwhile, the parties, including the
petitioners, are directed to maintain status quo with
regard to the subject land in all respects".
14. Subsequently, on 28.01.2020, the Apex Court
dismissed the petition filed by the petitioners by holding as
under:-
"Only two points are urged before us by the
learned counsel for the petitioners. The first point is
that simultaneous notification cannot be issued under
the Karnataka Industrial Area Development Act, 1966,
namely, under Sections 1(3), 3(1) and 28(1). This
point is already answered against the petitioner in
HMT Ltd. represented by its Dy. General Manager
(HRM) & Anr. Vs. Mudappa & Ors.-2007 (9) SCC 768
(paragraph 30).
The second point is that no acquisition for
individual entity can be countenanced as per the
Scheme of the subject Act. We are not impressed by
this submission. Concededly, the notifications
impugned in the writ petition do not reflect that the
acquisition was for an individual entity but to notify the
area as industrial area.
We do not find any merit in this petition.
Learned counsel for the petitioners was at pains to
urge other points which were neither pleaded nor
argued before the High Court.
We decline to entertain those grounds, for the
first time, in this court.
The Special Leave Petition is dismissed
accordingly.
The petitioners are free to pursue such other
remedies as may be permissible in law in respect of
issues other than the challenge, which has attained
finality on account of dismissal of the special leave
petition.
Pending applications, if any, stand disposed of".
15. A perusal of the aforesaid orders passed by the
Division Bench will indicate that challenge to the acquisition
by the petitioners was rejected by this Court. In addition to
rejecting the challenge, this Court while dealing with the
contention of the petitioners that respondent No.3 was
proposing to use the land for the purpose of real estate
business and not to put up a Hospital has categorically held
that in the event the respondent No.3 were to use the land
for the purpose of other than putting up a Hospital, the
KIADB would be at liberty to resume and reclaim the land.
Even before the Apex Court, the petitioners filed an
Affidavit on 09.11.2017 putting forth additional grounds.
16. At the time of hearing, the Apex Court not only
considered the contentions urged by the petitioners in the
first instance but also the grounds and contentions urged
by them for the first time before the Apex Court. A perusal
of the order of the Division Bench in W.A.No.1735/2007,
which was confirmed by the Apex Court as stated supra,
will indicate that in unmistakable terms, both this Court as
well as the Apex Court have come to the categorical
conclusion that the challenge made by the petitioners to the
acquisition proceedings on all grounds urged before this
Court, the grounds urged before the Apex Court as well as
the grounds urged for the first time before the Apex Court
were clearly rejected by the Apex Court. Under these
circumstances, the acquisition having been upheld by the
learned Single Judge of this Court and confirmed by the
Division Bench and further affirmed by the Apex Court, the
petitioners do not have locus standi to challenge, assail or
call in question the acquisition proceedings in relation to the
subject land by re-agitating the said issues under the guise
of the present petition. It is therefore clear that challenge to
the acquisition by the petitioners in the present petition is
barred by the principles of res judicata and constructive res
judicata.
17. The contention of the petitioners that the entire
acquisition proceedings in relation to the subject land for
the benefit of respondent No.3 as well as the orders passed
by the Division Bench is essentially a disputed question of
fact; the question, whether the respondent No.3 was doing
real estate business and did not intend to use the subject
land for a Hospital has also been dealt with by the Division
Bench in paragraph-26 of its order referred to supra.
18. Except for the fact that change of land use would
attract disobedience of the directions issued by the Division
Bench, subsequent change of land use by the respondent
No.3, changed in the name of respondent No.3 and its aims
and objectives cannot be made the basis to come to the
conclusion that the acquisition proceedings are vitiated by
fraud and collusion between respondents 2 and 3.
19. The material on record and the rival contentions
between the parties are sufficient to show that the issues
regarding fraud, collusion etc., give rise to complicated and
disputed questions of law and fact and also various
contentious issues which are incapable of being
determined and adjudicated upon by this Court in the
exercise of its power under Article 226 of the Constitution of
India. Under these circumstances, this contention of the
petitioners cannot be accepted.
20. Insofar as the contention of the petitioners that
the Apex Court reserved liberty in favour of the petitioners
to pursue such other remedies is concerned, the order of
the Apex Court clearly indicates that the said liberty was
restricted and limited to only such remedies which are
permissible in law and only in respect of issues other than
the contentions / issues which had been answered against
the petitioners and attained finality on account of dismissal
of the SLP confirming the order of the Division Bench.
21. The challenge to the acquisition on all possible
grounds having been rejected by this Court as well as the
Apex Court, which dismissed the SLP, the liberty granted
by the Apex Court in favour of the petitioners to pursue
such other remedy, clearly is limited and restricted to
claims other than challenging the acquisition of the subject
land and the said liberty cannot be construed or treated as
permitting the petitioners to re-agitate the challenge to the
acquisition all over again. Under these circumstances, the
liberty granted by the Apex Court cannot be made the basis
or relied upon by the petitioners to challenge the acquisition
of land by way of the present petition.
22. It is also relevant to state that it is a well settled
principle of law that once the acquired land stands vested
in the State Government free from all encumbrances, land
losers (petitioners herein) become persona non grata and
divesting of land is impermissible in law. Viewed from this
angle also, the petitioners do not have locus standi to seek
a direction to the respondent Nos.1 and 2 to withdraw the
acquisition proceedings and consequently, even this
contention urged by the petitioners cannot be accepted.
23. Insofar as the contention of the petitioners that
the impugned acquisition of the subject land by fraud and
collusion would vitiate the acquisition itself, as stated supra,
the said contention in addition to giving rise to complicated
and disputed questions of fact and several contentious
issues, in the absence of sufficient pleading and proof with
regard to the acquisition being vitiated on account of the
fraud and collusion practiced by the petitioners, even this
contention urged by the petitioners cannot be accepted.
24. The next question that arises for consideration is,
whether the directions issued by the Division Bench in
W.A.No.1735/2007 to the respondent No.2 - KIADB have
to be complied with and given effect to the KIADB in terms
of the said order which directs the KIADB to take necessary
steps against respondent No.3 to reclaim / resume the
subject land from respondent No.3. In this context, it is
relevant to state that the said direction issued by the
Division Bench in paragraph-25 of its order which have
neither been reversed, set aside or diluted by the Apex
Court which has in fact confirmed the order of the Division
Bench.
25. Though reliance is placed by the respondents 2
and 3 on the events that have transpired subsequent to
disposal of W.A.No.1735/2007 on 22.11.2012 in order to
contend that the change of land use is permissible and that
the same will not be in violation or disobedience of the
direction issued by the Division Bench referred to supra, in
my considered view, none of the events subsequent to
22.11.2012 can be relied upon by the respondents 2 and 3
for the following reasons:-
(i) Both respondent Nos. 1 to 3 were parties to the
interim order of status quo dated 18.03.2013 passed by the
Apex Court in SLP No.9662/2013 and the said order which
remained in force till 28.01.2020 when the Apex Court
disposed of the matter is binding upon all the respondents.
(ii) The meeting of the SLSWCC held on 15.06.2019
permitting change of land use from a Hospital to an IT park
was not only during the pendency of the matter before the
Apex Court but the same was in the teeth of the interim
order of status-quo. Consequently, respondents are not
entitled to contend that change of land use was permissible
by virtue of the decision taken by the SLSWCC on
15.06.2019.
(iii) Similarly, in addition to changing its name from
Sri.Satya Sai Narayana Hospital Pvt. Ltd., to M/s.SSSN
Project Pvt. Ltd., the respondent No.3 also changes its
object by incorporating the business of real estate on
11.01.2018 when the matter was pending before the Apex
Court which had passed an order of status quo as stated
supra. Consequently, even these documents cannot be
relied upon by the respondents to contend that change of
land use was permissible and the direction issued by the
Division Bench need not be complied with / implemented /
given effect to by the KIADB resuming / reclaiming the land
from respondent No.3, if the subject land were to be used
for any purpose other than constructing a Hospital.
(iv) The final order passed in W.A.No.1735/2007,
interim order of status quo passed by the Apex Court on
18.03.2013 as well as the final order passed by the Apex
Court on 28.01.2020, dismissing the petition filed by the
petitioners lead to the inescapable conclusion that all deeds
and things done by respondents 1 to 3 and any document,
deed, transactions entered into by them subsequent to the
final order passed in W.A.No.1735/2007 will not obviate or
dispense with the specific direction to respondent No.2 -
KIADB to give effect to and implement the order of the
Division Bench.
26. Under these circumstances, I am of the
considered opinion that the directions issued by the
Division Bench at paragraph-25 in W.A.No.1735/2007 have
attained finality and are conclusive and binding upon the
petitioners as well as the respondents who have no option
but to comply with, implement and give effect to the
directions issued by this Court in the said order. To
reiterate, the respondents are not entitled to take shelter or
rely upon any document, event, act, deed or thing that have
occurred / transpired after disposal of W.A.No.1735/2007
on 22.11.2012, in order to contend that respondent No.2 -
KIADB is absolved of its responsibility or duty to comply
with and implement and give effect to the directions issued
by the Division Bench referred to supra, particularly, when
all the respondents were parties to the earlier proceedings
and the representation in this regard was submitted by the
petitioners dated 18.03.2020 to the respondents.
27. Though several decisions have been relied upon
by both sides in support of their respective contentions, in
the light of the fact that the present petition arises in the
backdrop of the earlier round of litigation and the peculiar /
special facts and circumstances obtaining in the instant
case, the said decisions cannot be made applicable to the
present case and accordingly, a detailed reference to the
same may not be required for the purpose of disposal of
this petition.
28. In the result, I pass the following:-
ORDER
(i) Petition is partly allowed.
(ii) Respondents 1 and 2 are hereby directed to
comply with, obey, implement and give effect to the
directions issued by this Court in W.A.No.1735/2007 dated
22.11.2012 against the respondent No.3 in relation to the
subject land by taking necessary steps in this regard by
taking into consideration the representation at Annexure-T
dated 18.03.2020 submitted by the petitioners and in
accordance with law, within a period of three months from
the date of receipt of a copy of this order;.
SD/-
JUDGE
Srl.
