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2023 Supreme(Kar) 769

IN THE HIGH COURT OF KARNATAKA
Krishna S.Dixit, J.
M/s Moola Investments (india) Pvt Ltd. & Ors. – Appellants
Versus
State of Karnataka & Ors. – Respondents
Writ Petition No. 15452 of 2007 (LA-KIADB), 40343, 40382 of 2004, 11727 of 2006, 21456 of 2009 (LA-KIADB)
Decided On : 23-01-2023

Advocates appeared:
Ajesh Kumar S, Advocate, R Srinivasa Gowda, Advocate, H L Pradeep Kumar, Advocate, Nalina K, Advocate, S K Venkata Reddy, Advocate, Sharath S Gowda, Advocate, P V Chandrashekar, Advocate, Srinivasa Gowda, Advocate, Vivek Holla, Advocate

The main legal point established in the judgment is the limited scope for judicial interference in the Executive's opinion on the requirement of land for public purpose under the Karnataka Industrial Areas Development Act, 1966.

Headnote:

ACQUISITION - Karnataka Industrial Areas Development Act, 1966 - 28(1), 28(3), 28(4), 28(6) - The court discussed the challenge to the acquisition proceedings under the Karnataka Industrial Areas Development Act, 1966, and the denotification of lands from the acquisition process. It highlighted the legal provisions of the Act, including the process of acquisition, vesting of land in the State, and the power to drop acquisition proceedings. The court's decision was influenced by the interpretation of these provisions and their application to the facts of the case.

Fact of the Case:

The land owners challenged the acquisition proceedings, arguing that the lands were not required for the notified purpose, and the acquisition process was vitiated by malafide and lack of valid scheme. The beneficiary of acquisition sought to challenge the notifications dropping the subject lands from acquisition, alleging malafide and lack of jurisdiction. The government maintained equidistance from the parties and made legal submissions based on the Statement of Objections.

Finding of the Court:

The court declined interference in the challenge to the acquisition by the land owners but granted indulgence in the challenge to denotification of the land by the beneficiary of acquisition. It found that the beneficiary had locus standii to challenge the denotification and discussed the legal position regarding the vesting of land in the State under the Act. The court also found the denotification to be incompetent and actuated by legal malafide.

Issues: The issues included the requirement of the lands for the notified purpose, malafide in denotification, and lack of jurisdiction in the issuance of notifications. The court also addressed the challenge to the acquisition process, including the involvement of middlemen and lack of valid scheme.

Ratio Decidendi: The court held that the beneficiary had locus standii to challenge the denotification, discussed the legal position regarding vesting of land, and found the denotification to be incompetent and actuated by legal malafide. It also emphasized the role of the Executive in forming an opinion on the requirement of land for public purpose and the limited scope for judicial interference.

Final Decision: The court dismissed the land owners' challenge to the acquisition and allowed the companion cases of the beneficiaries of acquisition, quashing the impugned notifications and issuing a writ of mandamus to accomplish the acquisition process.

JUDGMENT/ORDER

Krishna S Dixit, J. - There are two sets of challenge in these Petitions: in W.P.Nos. 40343/2004 & 40382/2004, the land owners have laid a challenge to the acquisition proceedings taken up under the provisions of the Karnataka Industrial Areas Development Act, 1966, which commenced with the issuance of Preliminary Notification dated 10.12.2001 issued u/s 28(1) followed by the enquiry under Section 28(3) dated 18.11.2003 and culminating in the issuance of the Final Notification dated 7.5.2004 u/s 28(4) and eventually resulting into the issuance of Possession Delivery Notice dated 3.9.2004 u/s 28(6) of the 1966 Act.

2. Learned counsel appearing for the Petitioner-land owners argued that these lands are not required for the purpose for which they are notified for acquisition; this fact becomes pronounced by virtue of denotification of these lands from the acquisition process; initially, the acquisition was for the benefit of INFOSYS, which has given up its claim; subsequently there being no named beneficiary, Final Notification could not have been issued; the acquisition process is continued only to benefit real estate agents and thus, the same is vitiated by colourable exercise of power; there is no valid scheme preceding the acquisition; even the very Notification declaring the petition lands and other lands as an 'industrial area' itself is without due application of mind; the entire process of acquisition is vitiated because of the involvement of middlemen; part of the lands are reserved as park and open spaces under the provisions of the Bangalore Development Authority Act, 1976 and therefore, these lands cannot be acquired. So contending, they seek invalidation of the acquisition proceedings.

3. In the companion three cases i.e., W.P.No.11727/2006,W.P.No.15452/2007& W.P.No.21456/2009, the beneficiary of acquisition seeks to lay a challenge to the three Notifications dated 21.03.2006, 12.09.2007 & 3.5.2008 issued by the government whereby, the subject lands have been dropped from acquisition process. Learned counsel for the Petitioner vehemently argued that these Notifications are issued with malafide; they are issued without jurisdiction & jurisdictional facts; they are bad in being unilaterally issued with no notice to Petitioner-Company which has already paid a huge money; once the objections of the land owners were overruled and Final Notification was issued, the government is absolutely not justified in issuing the impugned Notifications; the then Deputy Chief Minister/Minister is instrumental in all this for obvious reasons. So contending, he seeks invalidation of the said Notifications, so that the acquisition process would be accomplished and land would fall into the hands of his client.

4. Learned AGA appearing for the government maintained equidistance from the land owners and the beneficiary of acquisition. He made legal submissions substantially based upon the Statement of Objections filed in the Writ Petitions of the land owners. Learned counsel appearing for the beneficiary made submissions in justification of the acquisition process and for the invalidation of denotification of the lands. The contentions which he took up to oppose the land owners petitions are broadly the contentions which the beneficiaries have taken up in its Writ Petitions. Since common questions of law & facts are involved, all these petitions with the concurrence of the Bar were taken up for hearing. Having heard the learned counsel for the parties and having perused the Petition Papers, this Court is inclined to grant indulgence in the challenge to de-notification of the land and to decline interference in the challenge to the acquisition, for the following reasons:

    (A) AS TO CHALLENGE BY THE BENEFICIARY COMPANY TO THE DENOTIFICAITON OF LANDS:

    (i) The vehement contention of advocates appearing for the land owners that the 's

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