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2024 Supreme(Telangana) 73
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
ALOK ARADHE, ANIL KUMAR JUKANTI, JJ.
IMG Academies Bharata Private Limited – Appellant
Versus
Government of Telangana and others - Respondents
Writ Petition No.24781 of 2006
Decided on : 07-03-2024
Advocate Appeared:
For the Appellant : Mr. Vedula Venkataramana
For the Respondents: Mr. A.Sudarshan Reddy,
State legislature has the competence to annul contracts in public interest, and legislation affecting individual parties can be valid under constitutional scrutiny if reasonable classification is demonstrated.
Headnote:(A) Constitution of India - Articles 14 and 298 - Telangana Government Property (Preservation, Protection and Resumption) Act, 2007 - Constitutional validity challenged - Court reiterated that legislative powers include annulment of contracts in public interest, and legislation can impact single individuals - The petitioner's sale deed was annulled under the Act due to fraud and non-transparency - The legislature was found competent to enact the law despite claims of arbitrariness. (Paras 16, 20, 24, 30)
(B) Legislation Validity - Classification and Discrimination - Law can be valid even if it relates to one individual, provided it is based on reasonable classification and public interest - Court emphasized burden of proof lies on petitioner to show discrimination which was not established. (Paras 22, 25)
| Table of Content |
|---|
| 1. constitutional validity of 2007 act challenged. (Para 1 , 2 , 3) |
| 2. petitioner argues legislative competence is lacking. (Para 4 , 5) |
| 3. state defends enactment citing public interest. (Para 6 , 7 , 8 , 9) |
| 4. petitioner disputes state’s claim of legislative competence. (Para 10) |
| 5. court reviews legislative history and context. (Para 11 , 12 , 13 , 14 , 15) |
| 6. issues surrounding competence of state legislature. (Para 16 , 17 , 18) |
| 7. examining impact on individual versus public interest. (Para 19 , 20 , 21) |
| 8. legal tests for classification and constitutionality. (Para 22 , 23 , 24) |
| 9. court affirms legislative action under scrutiny. (Para 25 , 26 , 27) |
| 10. reaffirmation of legislative authority on annulment. (Para 28 , 29) |
| 11. writ petition dismissed; no costs. (Para 30) |
ORDER :
ALOK ARADHE, J.
(i) FACTS:
The petitioner, a private limited company, in this writ petition has assailed the constitutional validity of the Telangana Government Property (Preservation, Protection and Resumption) Act, 2007. In order to appreciate the petitioner’s grievance, the relevant facts need mention which are stated infra.
2. The petitioner is a company incorporated on 05.08.2003 under the provisions of the Companies Act, 1956. The composite State of Andhra Pradesh on 09.08.2003 had entered into a Memorandum of Understanding (MoU) with the petitioner. Under the aforesaid MoU, the State of Andhra Pradesh identified the petitioner as an expert organisation which can produce and train champions in various sports. The MoU acknowledges the fact that the petitioner is renowned in the field of events, entertainment and marketing. The erstwhile Government of Andhra Pradesh (hereinafter referred to as, “the State”) under the MoU agreed that it shall sell Acs.400.00 of land in Survey No.25 of Gachibowli, Serlingampalli Mandal, Ranga Reddy District, to the petitioner to build, develop, own and operate sports academies.
3. The State further agreed to sell another extent of land measuring Acs.450.00 in Survey No.99/1 of Mamidipalli Village, Saroornagar Mandal, Ranga Reddy District to enable the petitioner to build, operate and for extension of facilities and activities relating to sports academies and also agreed to sell land measuring Ac.1.00 to Acs.5.00 in the area on main road from Banjara Hills, Hyderabad to Shilparamam, Madhapur, Ranga Reddy District to build an international class office headquarters with a condition that the petitioner shall not alienate such lands. Acting in furtherance of MoU dated 09.08.2003, the State executed a registered sale deed in favour of the petitioner on 10.02.2004 in respect of land measuring Acs.400.00 at the rate of Rs.50,000/- per acre, for a consideration of Rs.2.00 crores. Thereafter, the State Legislature initially issued an Ordinance, namely Ordinance No.12 of 2006, which was subsequently enacted as Act No.11 of 2007, namely the Andhra Pradesh Government Property (Preservation, Protection and Resumption) Act, 2007 (hereinafter referred to as “the 2007 Act”). Under the 2007 Act, the MoU dated 09.08.2003 and sale deed dated 10.02.2004 and other benefits available to the petitioner under the MoU were annulled. Consequent on annulment of transactions and instruments under Section 2 of the 2007 Act, the transferee i.e., the petitioner was held entitled to reasonable compensation along with interest @ 12% per annum. In the aforesaid factual background, the petitioner has assailed the constitutional validity of the 2007 Act.
(ii) SUBMISSIONS ON BEHALF OF PETITIONER:
4. Learned Senior Counsel for the petitioner, at the outset, submitted that the issue of validity of the 2007 Act be examined in the context of the provisions of the 2007 Act and cannot be examined on the basis of plea taken in the counter affidavit or subsequent pleading. It is urged that Section 2 of the 2007 Act does not lay down any legislative policy as to why only the two transactions to which petitioner was a party alone have been brought within th
