2006 Supreme(SC) 368

2006(5) Supreme 819
SUPREME COURT OF INDIA
(From Karnataka High Court)
Ruma Pal, B.N. Srikrishna and Dalveer Bhandari, JJ.
State of Karnataka — Appellant
versus
All India Manufacturer Organization & Ors. — Respondents
Civil Appeal Nos. 3492-3494 of 2005
With
Civil Appeal Nos. 3497/2005, 3842- 3844/2005, 3848-3884/2005, 3889-4127/2005, 4128-4366/2005, 4575-4576/2005, 5399-5401/2005, 5402/2005, 5746-5747/2005, 5759/2005, 5797-5799/2005, 6098/2005, 6099/2005, 5092-5093/2005, 7024-7040/2005, 7591/2005, 7592/2005, 61/2006, 73/2006, 74-76/2006, and Civil Appeal Nos. 2141/2006 @ SLP Nos. 1562-63/2006
All Decided on 20-4-2006
Counsel for the Parties :
For the Appearing Parties : B. Parthasarthy, Advocate AG, A. Sharan, ASG (NP), Anil B. Divan, Bhaskar Gupta, M. Rama Jois, Mahabir Singh, K.K. Venugopal, S.S. Naganand, L. Nageshwar Rao (NP), Dushyant Dave, Rakesh Dwivedi, Mukul Rohtagi, Ashok H. Desai, Narasimhan Murthy, Jaideep Gupta, M.L. Verma, Sr. Advocates, Anil K. Mishra, A. Rohan Singh, Sanjay R. Hegde, Vivek Reddy, Balaji Srinivasan, S.R. Sharma, V. Sudeer, MBRS Raju, S. Srinivasan, Nikhil Jain, Ms. Madhusmita Bora, C.S.H.Saeed, Ms. Kiran Suri, Ankur Talwar, Shankar Divate, Mayur R. Shah, Rajesh Mahale, Raghavendra S. Srivastava, Naresh Kaushik, Ms. Shilpa Chohan, D.K. Sharma, Ms. Lalita Kaushik, K.K. Venujgopal, Srinivasagowda, Gaurav Kajriwal, Ms. Vandana Jalan, P. Ramashesh, S.N. Bhat, D.P. Chaturvedi, NPS Panwar, KT Anantharaman Harris Beeran, Nikhil Goel, Tarak Damani, Vasudevan Raghavan, Gaurav, Vijay Kumar, KT Anantharaman, R. Vasudevan, N. Suresh, Ms. Richa Kapoor, Ralud Narain, Ms. Meenakshi Arora, Vikas Sharma, Ms. Anil Katiyar, P. Parmeshwaran, V.K. Verma, Prashant Kumar, Ms. Triveni Potekar, Kuldip Singh, B.P.S. Patil, V.N. Raghupathy, B.S. Prasad, Rutwik Panda, Ms. Bimola Devi, CS Ashri, Ms. Sapna Malik, GV Chandrashekar, Ms. Anjana Chandrashekhar, SK Kulkarni, M. Gireesh Kumar, Radha Shyam Jena, Ms. Anjali K. Verma, Niraj Gupta, Ms. Meera Mathur, Lalit Kumar, Kh Nobin Singh, Senthil Jagadeesan, Advocates.

IMPORTANT POINTS
1. The powers under the Karnataka Industrial Areas Development Act represent the powers of eminent domain vested in the State, which may need to be exercised even to the detriment of individuals’ property rights so long as it achieves a larger public purpose.
2. Section 11, Civil Procedure Code applies to Public Interest Litigation, as long as it is shown that the previous litigation was in public interest and not by way of private grievance. The previous litigation has to be a bona fide litigation in respect of a right which is common and is agitated in common with others.

Headnote:(i) Constitution of India — Article 226 — Karnataka Industrial Areas Development Act, 1996 — Amended by Act No. 11 of 1997 — Public interest litigation — Bangalore Express Highway Project — Project had twin objections: firstly, to provide for an express highway linking Bangalore with Mysore and for developing infrastructure along the corridor and in and around Bangalore city — Project is a massive undertaking, which requires design, construction, maintenance and operation of an Express Highway — State of Karnataka invited tenders for implementation of such an Express Highway — A Memorandum of Understanding was entered into between the State Government and the Consortium of Vanasse Hangen Brustlin Inc. USA — A High Level Committee formed met from time to time and reviewed the progress made in implementation of the Project — Government Order ensued that Project work was to be completed by the Consortium with their own resources and the consortium would keep the Project going for thirty years, so as to get a return of the expenditure, profit etc. through collection of tolls — Three members of the Consortium assigned their respective rights with regard to the Project, in favour of Nandi Infrastructure, a registered company — Government of Karnataka approved the Framework Agreement executed between Nandi and the State Government — Agreement challenged in a Public Interest Writ Petition — Writ petition was opposed by the State Government and also by Nandi — It was held that FWA was not arbitrarily entered into by the State Government and that it was not unconstitutional or illegal — During writ appeal, Government reversed its stand and opposed Nandi — It was after a change in State’s political leadership — Whether High Court was justified in dismissing this petition — (Yes).

       Held : The High Court has come to the categorical conclusion that the flip- flop on the part of the State Government occurred only because of politicians, that the mala fides, if any, appears to be on the part of the State Government for political reasons. The High Court has pointed out that the FWA did not materialise out of the blue. The FWA was negotiated over several months; it came to be drafted by considering several points that the Cabinet Sub-Committee had raised. As we have already highlighted, it was only thereafter, when detailed deliberations had taken place at the highest levels of the State Government that the MOU was signed and the Project Report accepted. A Government Order (dated 20.11.1995) was issued requiring the Public Works Department to enter into a Memorandum of Understanding with the Consortium of three companies, VHB, SAB and Kalyani. On 9.9.1996, through the CAA, the three members of the Consortium agreed to “... .unconditionally and irrevocably transfer and assign, jointly and severally....” to Nandi “.….all rights, interest and title granted to them... with respect to the Infrastructure Corridor by GOK under the Government Order and the Memorandum of Understanding”. The CAA came to be signed by the three members of tile Consortium on tile one hand and Nandi on the other; the Governor of Karnataka, on behalf of the Government of Karnataka, was shown as the “Consenting Party”. A copy of this agreement was forwarded to the State Government along with a forwarding letter dated 21.12.1996 requesting that the Government approve of the same and advise of its approval so that the original agreement could be given to the State Government for its consent. This letter was forwarded by the Public Works Department to the Law Department through a letter dated 22.1.1997 (No. PWD 155 CRM 96) seeking an opinion on the issue. The State Government was advised by its Law Department (through Opinion No. 182 OPN II/97 dated 3/4.3.1997) that since the Government was finalising a separate agreement with Nandi, there was no need to specifically consent to the CAA. Thus, it would appear that the State Government had specifically been made aware of the CAA and the fact that the members of the Consortium had transferred their rights to Nandi. The argument made before the High Court that the Government was unaware of the CAA, was defrauded to execute the FWA is, therefore, utterly dishonest. We concur with the decision of the High Court on this issue that the plea was lacking any bona fides and that there was neither fraud nor misrepresentation on the part of Nandi or any member of the Consortium.(Para 24)

       The FWA was executed on 3.4.1997 and implemented by the parties for at least seven years. Several obligations under the FWA were carried out by the State Government and its instrumentalities and also by Nandi which had invested a large amount of money in the Project. These included monies for payment of compensation to landowners whose lands were being acquired for the Project. Soon after the FWA was entered into, some interested parties had raised the issue in “public interest” that the FWA was a fraud and was nothing but a charade for a lucrative real estate business on the part of Nandi. The Government through the then Minister for Public Works vigilantly defended the Project against all these allegations both inside and outside the Legislature. It would appear that the change of mind on the part of the State Government came about – co-incidentally or otherwise – with a change of Government in Karnataka in 2004. (Paras 27 and 28)

       Taking an overall view of the matter, it appears that there could hardly be a dispute that the Project is a mega project which is in the larger public interest of the State of. Karnataka and merely because there was a change in the Government, there was no necessity for reviewing all decisions taken by the previous Government, which is what appears to have happened. That such an action cannot be taken every time there is a change of Government has been clearly laid down.(Para 62)

       (ii) Civil Procedure Code, 1908 — Section 11 — Doctrine of Res judicata — Applicability to Public Interest Litigation — Previous litigation has to be a bona fide litigation in respect of a right which is common and is agitated in common with others — Principle and philosophy behind Explanation IV.

       Held : Res judicata is a doctrine based on the larger public interest and is founded on two grounds: one being the maxim nemo debet bis vexari pro una et eadem causa (“No one ought to be twice vexed for one and the same cause” [P. Ramanatha Aiyer, Advanced Law Lexicon (Vol. 3, 3rd edn., 2005) at p. 3170]) and second, public policy that there ought to be an end to the same litigation [Mulla, Code of Civil Procedure (Vol. 1, 15th edn., 1995) at p.94]. It is well settled that Section 11 of the Civil Procedure Code, 1908 (hereinafter “the CPC”) is not the foundation of the principle of res judicata, but merely statutory recognition thereof and hence, the Section is not to be considered exhaustive of the general principle of law [See, Kalipada De v. Dwijapada Das, AIR 1930 PC 22 at p.23]. The main purpose of the doctrine is that once a matter has been determined in a former proceeding, it should not be open to parties to re-agitate the matter again and again. Section 11 of the CPC recognises this principle and forbids a court from trying any suit or issue, which is res judicata, recognising both ‘cause of action estoppel’ and ‘issue estoppel’. There are two issues that we need to consider, one, whether the doctrine of res judicata, as a matter of principle, can be applied to Public Interest Litigations and second, whether the issues and findings in Somashekar Reddy (supra) constitute res judicata for the present litigation. (Para 30)

       Section 11 applies to Public Interest Litigation, as long as it is shown that the previous litigation was in public interest and not by way of private grievance. Further, the previous litigation has to be a bona fide litigation in respect of a right which is common and is agitated in common with others.(Para 31

       As a matter of fact, in a Public Interest Litigation, the petitioner is not agitating his individual rights but represents the public at large. As long as the litigation is bona fide, a judgment in a previous Public Interest Litigation would be a judgment in rem. It binds the public at large and bars any member of the public from coming forward before the court and raising any connected issue or an issue, which had been raised should have been raised on an earlier occasion by way of a Public Interest Litigation. It cannot be doubted that the petitioner in Somashekar Reddy (supra) was acting bona fide. Further, we may note that, as a retired Chief’ Engineer, Somashekar Reddy had the special technical expertise to impugn the Project on the grounds that he did and so, he cannot be dismissed as a busybody. Thus, we are satisfied in principle that Somashekar Reddy (supra), as a Public Interest Litigation, could bar the present litigation.(Para 32)

       Explanation IV to Section 11 squarely applies as, admittedly, the litigation in Somashekr Reddy (supra) exhausted all possible challenges to the validity of the FWA, including the issue of excess land. Merely because the present petitioners draw semantic distinctions and claim that the excess land not having been identified at the stage of’ the litigation in Somashekar Reddy (supra), the Project should be reviewed, the issue does not cease to be res judicata or covered by principles analogous thereto. If we were to re-examine the issues that had been raised/ought to have been raised in Somashekar Reddy (Supra) it would simply be an abuse of the process of’ the court, which we cannot allow. (Para 45)

       As we have pointed out, the cause of action, the issues raised, the prayers made, the relief’ sought in Somashekar Reddys petition and the findings in Somashekar Reddy (supra), and the claims and arguments in the present petitions were substantially the same. Therefore, it is not possible to accept the contention of the appellants before us that the ,judgment in Somashekar Reddy (supra) does not operate as res judicata for the questions raised in the present petitions.(Para 46)

       (iii) Karnataka Industrial Areas Development Act, 1966 — Section 28 — Land acquisition for Bangalore Mysore Express Highway Project — Allegations that excess lands are being acquired — Landowners case that notice of acquisition was vague — Argument that no notice was served on the landowners u/s 28(1) of the Act was factually incorrect — High Court was justified in holding that since the Project had been implemented and Nandi had invested a large amount of money and work had been carried out for more than seven years, State Government was not permitted to change its stand.

       Held : The land was not in excess has been held by the Division Bench of the High Court on two occasions and we agree with it. Thus, there was no question of the land being acquired for a purpose other than a public purpose or there being any contravention of Article 300A. In fact, we are somewhat surprised that this type of argument must come from the KIAD Board, which was intimately involved, from the very beginning, with the process of acquiring land. Further, the State and its instrumentalities (including the KIAD Board) were enjoined by Clause 5.1.1.1 of the FWA, to make “best efforts” to acquire the land required for the Project. Indeed, till the State itself changed its stand with regard to the Project, nothing was heard from the KIAD Board about lands being acquired in excess of the public purpose. Further as an instrumentality of the State, the KIAD Board cannot have a case to plead different from that of the State of Karnataka. Thus, we are unable to countenance the arguments of Mr. Venugopal on behalf of the KIAD Board.(Para 52)

       Considering the facts as a whole, the High Court came to the conclusion that since the Project had been implemented and Nandi had invested a large amount of money and work had been carried out for more than seven years, the State Government could not be permitted to change its stand and to contend that the land allotted for the Project was in excess of what was required. Having perused the impugned judgment of the High Court, we are satisfied that there is no need for us to interfere therewith. Thus, there is no merit in this contention, which must consequently fail .(Para 53)

       It is difficult to accept that the landowners were not aware of the purpose of the acquisition nor can it be accepted that they were unable to file their objections on this ground. As a matter of fact, as the High Court has concurrently found, they did file their objections before the competent authorities. We do not see any prejudice caused to them as a result of the wordings of the notification of acquisition. The concerned authority also heard them on the objections filed after affording them an opportunity to file such objections under Section 28(2) of the KIAD Act. Thus, there is no substance in the contention of the appellants that the notification was vague and hence that the State did not comply with the principles of natural justice.(Para 71)

       The Project is an integrated infrastructure development project and not merely a highway project. The Project as it has been styled, conceived and implemented was the Bangalore-Mysore Infrastructure Corridor Project, which conceived of the development of roads between Bangalore and Mysore, for which there were several interchanges in and around the periphery of the city of Bangalore, together with numerous developmental infrastructure activities along with the highway at several points. As an integrated project, it may require the acquisition and transfer of lands even away from the main alignment of the road.(Para 73)

       We agree with the decision of the Division Bench that the acquisition of the entire land for the Project was carried out in consonance with the provisions of the KIAD Act for a public project of great importance for the development of the State of Karnataka. We do not think that a Project of this magnitude and urgency can be held up by individuals raising frivolous and untenable objections thereto. The powers under the KIAD Act represent the powers of eminent domain vested in the State, which may need to be exercised even to the detriment of individuals’ property rights so long as it achieves a larger public purpose. Looking at the case as a whole, we are satisfied that the Project is intended to represent the larger public interest of the State and that is why it was entered into and implemented all along.(Para 77)