IMPORTANT POINT
Notification issued under Section 28(1) of the Karnataka Industrial Areas Development Act cannot be challenged as illegal particularly when the notification is preliminary in nature and opportunity under the Act is to be afforded to the owners ‘of being heard’.

Headnote:Karnataka Industrial Areas Development Act, 1966—Section 28(1)—Notification issued under—Plea of mala fides—Acquisition of 120 acres of land for purpose of establishing a Watch Factory—Land admeasuring 1 acre, 38 gunthas out of 2 acres, owned by respondents was also acquired in the acquisition proceedings—Respondent’s case that HMT took possession of entire area of 2 acres even though he was entitled to take possession of land only of 1 acre, 38 gunthas—Owners filed a suit for declaration of title and also for possession of land—Suit decreed—Notification issued u/s 28(1) of the Act for proposed acquisition of land for public purpose of developing industry—Writ petition filed by owners of land alleging mala fide—High Court quashed the notification holding the case as one of ‘explanation of statutory provisions to defeat the just rights of an individual decreed by law courts’—Whether High Court committed an error of law in allowing the petition filed by the owners and in setting aside a statutory notification issued by the State—(Yes)—Whether action of State Authorities in initiating acquisition proceedings under a valid law could be said to be illegal, unlawful or in mala fide exercise of power—(No).
       Held : The High Court was not right in quashing the notification issued under the Act, particularly, when it was a preliminary notification reflecting the intention of the State to acquire land for public purpose, i.e. for the purpose of developing industry. It is, no doubt, true that the land bearing Survey No. 113/3 comprises of 2 acres, 37 gunthas and the respondents are the owners thereof. It is equally true that by notification dated June 29, 1978, 1 acre, 38 gunthas had been acquired and award was passed in respect of the said area. It is also correct that instead of acquiring and taking over possession of 1 acre, 38 gunthas, the appellants took over possession of the entire land of Survey No. 113/3 admeasuring 2 acres, 37 gunthas thereby illegally and unauthorisedly taking possession of 0 acre, 39 gunthas. Obviously, therefore, it was open to the owners to make complaint and also to take appropriate proceedings as they were illegally deprived of ownership and possession of 39 gunthas of land. When the request to return possession of the excess land was ignored by the appellants, they naturally approached a court of law and obtained a decree. It is not in dispute that the decree was confirmed in appeal and had become final. Execution proceedings were taken out and at that stage, the appellants moved the State Authorities to acquire land under the Act.(Para 9)
       Passing of a decree by a competent court is one thing and exercise of statutory power by the authority is altogether a different thing. It is possible in a given case to come to a conclusion on the basis of evidence produced and materials placed on record to conclude that the action has been taken mala fide or for a collateral purpose or in colourable exercise of power. But, in our opinion, issuance of preliminary notification after a decree by a court of law would not ipso facto make it vulnerable and exercise of power mala fide. To us, therefore, the authorities were right in raising a preliminary objection that the petition was premature as by issuance of notification under sub-section (1) of Section 28 of the Act, an intention was declared by the State to acquire the land for public purpose i.e. for developing industry.(Para 10)
       The scheme of Section 28 is thus similar to the scheme of acquisition of land under the Land Acquisition Act, 1894 under which such preliminary notification is issued, opportunity of being heard is afforded to the persons interested in the land and only thereafter final notification can be issued. At the stage of raising objections against acquisition, it is open to the respondents herein to raise all contentions. In spite of such objections, if final notification is issued by the State, it is open to them to take appropriate proceedings or to invoke jurisdiction of the High Court under Article 226 of the Constitution. Unfortunately, however, the High Court entertained the petition and quashed the preliminary notification overruling well-founded objection as to maintainability of petition raised by the State and the appellants herein.(Para 12)
       The High Court was also not right in coming to the conclusion that since a decree was passed by a competent court, no notification under the Act could have been issued by the State. The power exercised by the State was statutory in nature and irrespective of a decree in favour of the owners, such notification could be issued. (Para 13)
       In our opinion, the approach of the learned Single Judge could not be said to be legal or in consonance with law. The State authorities were not required to produce material for ‘perusal’ of the Court as to expansion of industrial area or development of industry. It was also not expected of the judgment-debtors to contend before the Executing Court that the land was required for expansion of the industry. The reason weighed with the learned Single Judge, therefore, in our opinion, could not be made basis for quashing the notification.(Para 21)

JUDGMENT

C.K. Thakker, J.—These two appeals arise out of the judgment and order dated September 8, 1998 passed by learned Single Judge of the High Court of Karnataka in Writ Petition No. 5580 of 1998 and confirmed by the Division Bench in Writ Appeal Nos. 5051-5052 of 1998 on October 28, 1998.

2. By the impugned order, the High Court upheld the contention of the original petitioners and quashed notification dated November 13, 1997 issued by the State of Karnataka under sub-section (1) of Section 28 of the Karnataka Industrial Areas Development Act, 1966 (hereinafter referred to as “the Act”).

3. To appreciate the controversy raised in the appeals, it is necessary to state relevant facts. The respondents are heirs and legal representatives of deceased Akkahonnamma who died somewhere in the year 1993. She was the owner of land bearing Survey No. 113/3 admeasuring 2 acres, 37 gunthas situated in Devarayapatna, Tumkur Taluk. In the year 1978, the Industrial Area Development Board, Karnataka (‘Board’ for short) acquired 120 acres of land of different survey numbers situated in Devarayapatna for the purpose of establishing a Watch Factory, namely, H.M.T. Ltd. (appellant herein). The land admeasuring 1 acre, 38 gunthas out of 2 acres, 37 gunthas of Survey No. 113/3 owned by the respondents was also acquired in the acquisition proceedings. The remaining land to the extent of 39 gunthas was not acquired. It was, however, the case of the respondents that the General Manager, H.M.T. took possession of the entire area of 2 acres, 37 gunthas even though he was entitled to take possession of land only of 1 acre, 38 gunthas. He thereby unauthorisedly took over possession of 39 gunthas of land. A request was, therefore, made to the General Manager, H.M.T. to return possession of 39 gunthas to the owners. He, however, refused to hand over possession. By a communication dated July 20, 1984, the Board called upon the owners of the land to show cause as to why the actual extent of acquired land should not be continued to be occupied by the H.M.T. The owners did not oblige the Board and filed a suit against the authorities, being O.S. No. 341 of 1985 for declaration of title and also for possession of land. The suit was decreed by the Trial Court. An appeal filed against the said decree came to be dismissed by the First Appellate Court. The said order was not challenged and the decree became final. Execution proceedings had been initiated by the owners and by an order dated June 13, 1997, the Executing Court directed H.M.T. to hand over actual and peaceful possession of the land to the owners. The order passed by the Executing Court was challenged by the H.M.T. by filing a revision which came to be allowed and the matter was remanded to the Executing Court with a direction to the Executing Court to afford an opportunity to H.M.T. of hearing and to pass an appropriate order in accordance with law. Meanwhile, however, H.M.T. appears to have requested the State Government to acquire land and a notification under sub-section (1) of Section 28 of the Act for proposed acquisition of land for public purpose, viz. for developing industry came to be issued on November 13, 1997 which was published in Official Gazette on December 11, 1997. The owners of the land came to know about the issuance of notification and they invoked the jurisdiction of the High Court of Karnataka under Article 226 of the Constitution by filing a Writ Petition. It was alleged that the notification had been issued mala fide in order to deprive the owners of their rights to recover possession and to defeat the decree passed by a court of competent jurisdiction. A prayer was made for quashing and setting aside the notification, directing the authorities to hand over possession of 39 gunthas of land of Survey No. 113/3 to the owners in view of the decree passed by a competent court which had become final.

4. Before the learned Single Judge, it was contended on behalf of the appellants

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2007 Supreme(SC) 154

IMPORTANT POINTNotification issued under Section 28(1) of the Karnataka Industrial Areas Development Act cannot be challenged as illegal particularly when the notification is preliminary in nature and opportunity under the Act is to be afforded to the owners ‘of being heard’.

Cases Referred (1)

IMPORTANT POINT
Notification issued under Section 28(1) of the Karnataka Industrial Areas Development Act cannot be challenged as illegal particularly when the notification is preliminary in nature and opportunity under the Act is to be afforded to the owners ‘of being heard’.