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2022 Supreme(SC) 1026
SUPREME COURT OF INDIA
HEMANT GUPTA, VIKRAM NATH, JJ.
M/s. M.S.P.L. Limited - Appellant
Versus
The State Of Karnataka And Ors. - Respondents
Civil Appeal No(s). 4678 of 2021 (arising out of SLP (Civil) No. 23353 of 2012)
With
Sri Syed Ahmed - Appellant
Versus
The State Of Karnataka And Ors. - Respondents
Civil Appeal No(s). of 2022 (arising out of SLP (Civil) No. 23351 of 2012)
The Karnataka Industrial Area Development Board And Another - Appellants
Versus
Sri Kakaral Ravikumar And Others - Respondent
Civil Appeal No(s). 4699-4719 of 2021 (arising out of SLP (Civil) Nos. 20866-20886 of 2012
With
M/s. Aaress Iron & Steel Ltd. - Appellant
Versus
The State Of Karnataka And Ors. Etc. - Respondents
Civil Appeal No(s). 4679-4698 of 2021 (arising out of SLP (Civil) Nos. 21310-21329 of 2012
With
The State Of Karnataka And Another - Appellants
Versus
Sri Kakaral Ravikumar And Others - Respondents
Civil Appeal No(s). 4745-4747 of 2021 (arising out of SLP (Civil) Nos. 21915-21917 of 2013
Decided on : 11-10-2022
For the parties : Mr. Krishnan Venugopal, Sr. Adv. Mr. Mahesh Agarwal, Adv. Mr. M. S. Ananth, Adv. Mr. Abhinabh Garg, Adv. Mr. Rohan Talwar, Adv. Mr. Shaswat Singh, Adv. Mr. E. C. Agrawala, Adv. Mr. Udaya Holla, Sr. Adv. Mr. Ajit S. Bhasme, Sr. Adv. Mr. Sanjay Kumar Visen, Adv. Ms. Ritu Rastogi, Adv. Ms. Mohini Kumari, Adv. Mr. Aman, Adv. Mr. Sandeep Joshi, Adv. Mr. Shekhar Naphade, Sr. Adv. Mr. P. V. Sarvanaraja, Adv. Mr. Anantha Narayana M.G., Adv. Mr. V. C. Shukla, Adv. Ms. Farah A., Adv. Dr. Prashant Pratap, Adv. Mr. Kumar Mitakshar, Adv. Mr. Tarun Gulia, Adv. Mr. Sushant Bajaj, Adv. Mr. M. L. Gopalkrishna, Adv. Mr. Ranjit Kumar, Sr. Adv. Mr. Gurukrishna Kumar, Sr. Adv. Mr. Nishanth Patil, Adv. Mr. M. V. Mukunda, Adv. Mr. Sabyasachi Banerjee, Adv. Mr. Guntur Prabhakar, Adv. Ms. Kiran Suri, Sr. Adv. Mr. Nishanth Patil, Adv. Mr. Guntur Prabhakar, Adv. Mr. Ayush P. Shah, Adv. Ms. Rekha Dayal, Sr. Adv. Mr. Hitesh Kumar Sharma, Adv. Ms. Sirdyal Koomar Samy, Adv. Ms. Kamini Inamdar, Adv. Mr. V. Krishna Patil, Adv. Ms. Sandya Parvathi, Adv. Mr. S. K. Kulkarni, Adv. Mr. M. Giresh Kumar, Adv. Mr. Ankur S. Kulkarni, Adv. Ms. Uditha Chakravarthy, Adv. Mr. P. V. Dinesh, Adv. Mr. Rahul Raj Mishra, Adv. Mr. Bineesh K., Adv. Mr. Ashwini Kumar Singh, Adv. Mr. A. V. S. Raju, Adv. Mr. D. Srinivas, Adv. Mr. K. P. Mavi, Adv. Mr. Somanatha Padhan, AOR Mr. V. N. Raghupathy, AOR Mohd. Apzal Ansari, Adv. Mr. Guntur Prabhakar, AOR Mr. Ankur S. Kulkarni, AOR Mrs. Shubhangi Tuli, AOR Mr. Balaji Srinivasan, AOR Mr. Krishan Pal Mavi, AOR Mr. Ankur S. Kulkarni, AOR Ms. Anjana Chandrashekar, AOR Mr. P. V. Dinesh, AOR Mr. Sanjay Kumar Visen, AOR
Headnote:(A) Karnataka Industrial Areas Development Act, 1966 - Sections 1(3), 3(1), and 28(1) - Karnataka Industries (Facilitation) Act, 2002 - Acquisition of land for industrial projects - Challenges to notifications quashed by the High Court citing procedural violations, lack of public purpose, and environmental clearance issues. (Paras 2, 10, 12, 50)
(B) Public Purpose - Land acquisition must adhere to legal framework and is not valid if primarily benefiting private entities without proper justification or public need. (Paras 4, 10, 46)
(C) Judicial Review - Courts exercise precise and pervasive review on administrative actions to ensure compliance with statutory provisions - Improper exercise of power constitutes illegality. (Paras 46, 52)
Facts of the case:
Multiple appeals concerning the acquisition of agricultural lands for setting up industrial facilities for two companies, challenged on the grounds of procedural lapses and absence of public interest. The High Court had set aside the acquisitions; however, the Supreme Court questioned this judgment.
Findings of Court:
Acquisition notifications were deemed lawful and procedural requirements were followed according to the applicable statutory provisions.
Issues: The main issues were whether the acquisition served a public purpose, if proper procedures were followed, and the validity of notifications impacting only a fractional portion of landowners.
Ratio Decidendi: The court concluded that procedural compliance is essential for valid acquisitions, emphasizing that acquisitions for individual companies must align with public interest and statutory provisions.
Result: Appeals allowed; the judgment of the Division Bench dated 22.03.2012 set aside.
JUDGMENT :
Vikram Nath, J.
1. Leave granted in SLP(C) No. 23351/2012.
2. The State of Karnataka (Civil Appeal No. 4745-4747 of 2021), the Karnataka Industrial Area Development Board (Civil Appeal No. 4699-4719 of 2021), M/S MSPL Limited (Civil Appeal No. 4678 of 2021) and AARESS Iron & Steel Limited (Civil Appeal No. 4679-4698 of 2021) have jointly assailed the correctness of the judgment and order dated 22.03.2012 passed by the Division Bench of the Karnataka High Court, Circuit Bench at Dharwad in a group of writ appeals filed by the land owners. By the said judgment, the Division Bench allowed the writ appeals, set aside the order of the learned Single Judge dated 17.03.2009 and the writ petitions were allowed. The notifications under Sections 3 (1), 1(3) and 28(1) of the Karnataka Industrial Areas Development Act, 19661[In short “the 1966 Act”] were quashed.
3. Civil Appeal @ SLP (C) No. 23351 of 2012 is filed by a land owner Syed Ahmed challenging the judgment dated 14.12.2011 passed by the Division Bench of the Karnataka High Court, Circuit Bench at Dharwad in Writ Appeal No. 6098 of 2009 whereby the writ appeal was dismissed and the judgment of the learned Single Judge dated 23.06.2008 dismissing the writ petition {bearing number W.P.No. 18617 of 2007 (LAKIDAB)} was affirmed. As the argument of the appellant is based upon the Division Bench Judgment of the Karnataka High Court dated 22.03.2012 which is impugned in the group of Civil Appeals referred to above, this matter has been taken up analogous with the above said appeals.
Background
4. Two State Acts legislated in the State of Karnataka are relevant for determination of issues in the present case. Karnataka Industrial Areas Development Act, 1966 and the Karnataka Industries (Facilitation) Act, 20022[In short “the 2002 Act”].
(i) The 1966 Act came up with the following preamble/object:
“An Act to make special provisions for securing the establishment of industrial areas in the 1[State of Karnataka]1 and generally to promote the establishment and orderly development of industries therein, and for that purpose to establish an Industrial Areas Development Board and for purposes connected with the matters aforesaid. WHEREAS it is expedient to make special provisions for securing the establishment of industrial areas in the 1 [State of Karnataka]1 and generally to promote the establishment and the orderly development of industries in such industrial areas, and for that purpose to establish an Industrial Areas Development Board and for purposes connected with the matters aforesaid;”
(ii) The 2002 Act was enacted with the following preamble/object:
“An Act to provide for the promotion of industrial development and facilitation of new investments to simplify the regulatory frame work by reducing procedural requirements and rationalising documents and to provide for an investor friendly environment in the State of Karnataka. Whereas, it is expedient to provide for speedy implementation of industrial and other projects in the State by providing single point guidance and assistance to promoters, reducing the procedural requirements, rationalising documents and to ensure smooth operation;”
5. The acquisition is for two companies viz. M/s MSPL Ltd. 3[In short “MSPL”] and M/s AARESS Iron and Steel Ltd. 4[In short “AISL”], for setting up an iron ore palletisation plant and an integrated steel plant respectively.
6. Before setting out the facts it is relevant to note that challenge to the notifications under Section 1 (3) and 3(1) of 1966 Act is made only in W.P. No.6304 of 2008. This petition relates to the land acquired for MSPL. The land owner in this petition S. Narayana Reddy owned only 4.35 acres whereas the total land acquired for MSPL was approx: 110 acres. Thus, S.Narayana Reddy owned a fraction of land being less than 4% of the total acquisition for MSPL. Rest of the 10 petitions challenged the notification under Section 28 of 1966 Act. The writ petitioners therein in all the 10
