Land Acquisition :
Karnataka Industrial Areas Development Act, 1966: ss. 3(1), 1(3) and 28(1) – Land acquisition by the Karnataka Industrial Area Development Board for two companies, the appellant company and its fully owned subsidiary for setting up an iron ore plant – Issuance of Notification u/ss. 1(3), 3(1) and 28(1) of the 1966 Act for land acquisition – Objections invited from land owners u/s. 28(3) of 1966 Act – Objections duly considered – Thereafter, notifications u/s. 28(4) of 1966 Act was issued for a total area required by the appellant company – Similar notifications were issued for the land required for the subsidiary company – Compensation also determined – Writ Petitions filed seeking quashing of the notifications issued u/s. 28(4) of the 1966 Act for the appellant company and its fully owned subsidiary – More than 90 per cent of the land owners covering 90 per cent of the area acquired accepted the compensation – Only 10 per cent or less of the land owners had filed the said writ petitions – Challenge was also made to the grant u/ss. 1(3) and 3(1) of the 1966 Act – Single Judge dismissed all the petitions filed by land owners – However, the Division Bench quashed the acquisition proceedings for the entire areas which was not even challenged – Also quashed the notifications issued u/ss. 1(3), 3(1) and 28(1) of the 1966 Act – On appeal, held – Division Bench erred in quashing the acquisition proceeding – Karnataka Industries (Facilitation) Act, 2002.
Acquisition of land, in absence of environmental clearance – Permissibility of – Plea that two companies did not have any Environmental Clearance, in the absence of which the land could not have been acquired for setting up the plant – Held : No objection can be raised that there is no environmental clearance certificate from the Ministry of Environment and Forest as the same has already been issued on 23.09.2016.
Land acquisition, if vitiated for non-application of mind and undue haste by competent authorities – Held : No grounds were raised nor any foundation laid in the petitions alleging mala fide – Object of the 2002 Act was primarily to provide a Single Window Clearance by the High Level Committees constituted under the 2002 Act – Reports and recommendations of the different Committees as also the State Government have been gone through – Found that all aspects of the matter have been considered and a conscious decision has been taken on the overall conspectus of the project and the proposals submitted.
s. 3(1), 1(3), 28(1) – Procedure prescribed to acquire land under – Duly followed or not – Held: Entire process as provided under the Act has been strictly followed – Division Bench in the impugned judgment apparently was swayed by its own personal views based on assumptions and having no material backing which led to the quashing of the notifications.
ss. 28, 41 – Allotment of plots in special cases – Land Acquisition for single company, if can be said to be for public purpose and could be made under 1966 Act – Held : Under the Regulation 13, the Board is empowered to allot any plot or area to any individual or company for establishment of an industry in consultation with the State Government – This provision also contemplates acquiring land for the purpose of allotment to a single company to set up an industry – In the instant case, the allotment by the Board is duly approved by the State Government. Land acquisition for a non–applicant company under the Act, without its application being routed through State High Level Clearance Committee – Permissibility of – Held : Non–applicant company is fully owned subsidiary of the applicant company – Only change sought by the applicant was the integrated steel plant be set up by non-applicant which was its own subsidiary – These are commercial matters and the State after examining the proposal for change in its wisdom accepted the same – There was no change in the project, as such, regarding the finance, employment and other infrastructures – Thus, the said objection not maintainable. AND ORS.
Reliance on Shri Ramtanu Coop. Housing Society Ltd. vs. State of Maharashtra’s case for the proposition that the acquisition under the 1966 Act was in pari materia to the Maharashtra Industrial Development Act, 1962 and, thus, the acquisition has to be for public purpose only and not for a private company – Correctness of – Held : Validity of the 1962 Act was being considered in the case of Shri Ramtanu – However, in the present litigation, there is no challenge to the validity of the 1966 Act or the 2002 Act – Purpose in 1962 Act was for establishment of industrial areas whereas in the other statute i.e 1966 Act, it was for promotion of the establishment and orderly development of industries – Thus, the reliance by the Division Bench in the impugned judgment on the case of Shri Ramtanu is misplaced – Maharashtra Industrial Development Act, 1962.
Value judgments of policy views – Significance of – Conclusions arrived at in the impugned judgment, if vitiated on account of inclusion of value judgments of policy views by the High Court – Held : Division Bench introduced several value judgments and policy views in order to interpret the provisions of the 1966 Act and the 2002 Act – Such value judgments and policy views are beyond the domain of the Court – Courts should refrain itself from expressing value judgments and policy views in order to interpret statutes – Statutes are to be read in their plain language and not otherwise – Interpretation of Statutes.
Petition for quashing the land acquisition by a fraction of landowners holding a fraction of acquired land which is only 10 % or less of the total acquired land – Maintainability of – Held : Quashing the entire acquisition at the instance of one land owner having 4.34 acres of land out of total acquisition for applicant company of 110 acres, would be against the public policy and public interest – Further, in the case of non-applicant company acquisition of 914 acres is challenged by a fraction of less than 10% land owners – Hence, Division Bench erred in quashing the acquisition proceedings.
Karnataka Industrial Areas Development Act, 1966 – Karnataka Industries (Facilitation) Act, 2002 – Object/scope – Discussed.
Disposing of the matters, the Court
HELD : A. Environmental Clearance.
1. On record environmental clearance has been given on 23.09.2016 by the Ministry of Environment and Forests, Government of India, copy of which has been filed along with I.A. in the appeal of MSPL. Prior to it, the Ministry itself vide Notification dated 14.09.2006 provided that no Environment Clearance from MOEF was required for securing land. KSPCB had given its clearance and no objection much earlier for setting up the plant vide communication dated 02.08.2008. Further, the Ecology and Environmental Department of Government of Karnataka had given clearance on 01.10.2010. Further, the Ministry of MOEF had issued an order dated 08.09.2014 providing that the plant may be continued to operate. Thereafter, the KSPCB issued an order dated 16.10.2014 requiring MSPL to apply for Terms of Reference by 07.12.2014 and to obtain environment clearance from MOEF within one year. The MSPL accordingly applied as per the Terms of Reference and was granted the environment clearance by MOEF vide communication dated 23.09.2016. In view of the said facts, as of date, no objection can be raised that there is no environmental clearance certificate from the Ministry of Environment and Forest as the same has already been issued on 23.09.2016. [Para 25][624-H; 625-A-D] B. Non–-application of mind and undue haste.
2.1 The SHLCC after considering all aspects of the matter had resolved to approve the project and had made recommendations accordingly. Thereafter, the KIADB accepted the recommendations of the SHLCC and the same also had due approval of the Government at the highest level. The division made by MSPL (the initial applicant) for setting up the two industries by two different entities also had due approval of the KIADB and the Government. [Para 26][625-D-E]
2.2 The original writ petitioners (land owners) had challenged the notifications under Section 1(3), 3(1) and 28(1) of the 1966 Act on the ground of non-application of mind and undue AND ORS.
haste. No grounds were raised nor any foundation laid in the petitions alleging mala fide. The object of the 2002 Act was primarily to provide a Single Window Clearance by the High Level Committees constituted under the 2002 Act. The Court has gone through the reports and recommendations of the different Committees as also the State Government and found that all aspects of the matter have been considered and a conscious decision has been taken on the overall conspectus of the project and the proposals submitted. [Para 27][625-F-H]
2.3 The meeting of the SHLCC dated 06.06.2005 was chaired by the Chief Minister, State of Karnataka, the concerned Ministers and Secretaries were also present in the meeting. The complete project was discussed under different heads including the background of the promoters, background of the company, means of finance, infrastructure facilities, environment and pollution control clearances, local employment, water consumption, electricity consumption and incentives & concessions. The Government Order, thereafter, was issued on 22.12.2005 detailing the different facets of the proposal and granting due approval for establishment of the palletization plant as also the integrated steel plant with a total investment of 2292.26 crores and generating employment to one thousand persons. Thereafter, under the provisions of 1966 Act, the Land Audit Committee in its meeting of 28th January, 2006, which was chaired by the Principal Secretary, Department of Commerce & Industries and Secretaries of other relevant Departments with special invitees also took a conscious decision with respect to the project submitted by MSPL for both the plants at subject Item No.2.5 and recommended for acquisition of 1034 acres of land and to intimate the same to the KIADB. It was thereafter that the Nodal Agency of the State level i.e. Karnataka Udyog Mitra in its meeting dated 15.02.2006 after considering the proceedings of the SHLCC dated 6th June, 2005 and that of the Land Audit Committee dated 28.01.2006 accepted the recommendation for acquisition of 1034 acres of land.[Paras 2830][626-A-E]
2.4 In view thereof, the finding in the impugned judgment regarding non-application of mind and the submission to the said effect cannot be sustained. [Para 32][628-A]
2.5 Insofar as the notifications under Section 1(3), 3(1) and 28(1) of 1966 Act being issued on the same date, it may be noted that there is no embargo on the same. [Para 33][628-B] C. Procedure Prescribed under the 1966 Act duly followed:
3.1 The due procedure had been followed. It is also to be noticed that the objections were invited under the procedure prescribed in Section 28 of the 1966 Act and the same were duly considered and disposed of, as such, it cannot be alleged that the objections have not been considered vitiating the acquisitions. The Land Audit Committee approved the grant of 1034 acres of land in its meeting dated 28.01.2006, which was duly accepted and approved by the State Nodal Agency, Karnataka Udyog Mitra in its meeting dated 15.02.2006 and duly communicated vide letter of even date to the KIADB to start the process for acquisition. It was thereafter that the notifications were issued under Section 3(1), 1(3) and 28(1) of the 1966 Act, on 09.11.2006. Simultaneous publication of the said notifications has already been upheld to be not suffering from any illegality or irregularity. [Para 35][628G-H; 629-A-B]
3.2 Pursuant to the notification under Section 28(1) of the 1966 Act, further steps were taken and after inviting objections and disposing of the same, final declaration was made, compensation was determined and thereafter possession taken. From the material on record, it is apparent that the land was acquired in the name of the State, thereafter transferred to the KIADB, which proceeded to allot the same to MSPL and AISL respectively and, accordingly, lease deeds were executed. The entire process as provided under the Act has been strictly followed. The Division Bench in the impugned judgment apparently was swayed by its own personal views based on assumptions and having no material backing which led to the quashing of the notifications. [Para 36][629-B-D] D. Acquisition for a Single Company
4. The words for the purpose of development by the Board, and or for any other purpose in furtherance of the objects of this Act make it amply clear that the intention to acquire land in the AND ORS.
opinion of the State Government could be not only for the purpose of development by the Board but for any other purpose in furtherance of the objects of this Act. This gives power to acquire land beyond development by KIADB. Further, the regulations framed by the Board under Section 41 particularly deal with this aspect in Regulation 13. Under the above regulations, the Board is empowered to allot any plot or area to any individual or company for establishment of an industry in consultation with the State Government. This provision also contemplates acquiring land for the purpose of allotment to a single company to set up an industry. In the instant case, the allotment by the Board is duly approved by the State Government. Therefore, the view expressed by the Division Bench that no acquisition could be made for a single company cannot be sustained. [Paras 37, 38, 40][629-F-G; 630B-C; 632-F-G]
E. Acquisition for a non-–applicant (AISL).
5. It is not disputed that AISL (non-applicant) is fully owned subsidiary of MSPL (applicant). In effect, AISL is a new Company promoted by the same promoters. The State Government examined the request of MSPL and also AISL for modification of its Government Order dated 22.12.2005. It examined the bifurcation under various heads. State Government issued Government Order dated 22.03.2006 splitting the infrastructures required with further stipulation that all other terms and conditions mentioned in the Government Order dated 22.12.2005 would apply as it is to both the Companies. The only change sought by MSPL was the integrated steel plant be set up by AISL which was its own subsidiary. These are commercial matters and the State after examining the proposal for change in its wisdom accepted the same. There was no change in the project, as such, regarding the finance, employment and other infrastructures. The objection raised to the aforesaid effect does not merit consideration. [Para 41][632-G-H; 633-A-B]
F. Relevance of Shri Ramtanu judgment:
6. The impugned judgment has placed reliance upon the judgment in the case of Shri Ramtanu for the proposition that the acquisition under the 1966 Act was in pari materia to the Maharashtra Industrial Development Act, 1962 and, therefore, the acquisition has to be for public purpose only and not for a private company. It may be recorded that validity of the 1962 Act was being considered in the case of Shri Ramtanu. In the present litigation, there is no challenge to the validity of the 1966 Act or the 2002 Act. Further, the object and purpose of the 1962 Act was for securing the orderly establishment in industrial areas and industrial State of industries in the State of Maharashtra whereas the 1966 Act, the object and preamble was to promote the establishment and orderly development of industries (in industrial areas). Thus, it is to be noticed that the purpose in 1962 Act was for establishment of industrial areas whereas in the other statute i.e 1966 Act, it was for promotion of the establishment and orderly development of industries. Thus, the reliance by the Division Bench in the impugned judgment on the case of Shri Ramtanu is misplaced. [Para 42, 43][633-C-E; 634G-H] G. Value Judgments of policy views
7. The Division Bench in the impugned judgment seems to have been swayed by its own philosophy in due deference to the principles of statutory interpretation. The statute is to be read in its plain language. Setting up of industries is part of development. There has to be a sustainable growth and existence of all facets and, that is why, laws have been framed, cheques and balance have been imposed so that development takes place side by side with the protection and preservation of nature and environment. A perusal of the above makes it amply clear that the Division Bench introduced several value judgments and policy views in order to interpret the provisions of the 1966 Act and the 2002 Act. It is only as a measure of caution that the said aspect is being taken note of. Such value judgments and policy views are beyond the domain of the Courts. The Courts should refrain itself from expressing value judgments and policy views in order to interpret statutes. Statutes are to be read in their plain language and not otherwise. [Para 44, 45][635-A-B; 636-B-C] H. Challenge to acquisition by a minority (10%) of land owners.
AND ORS.
8. It is admitted position that the challenge to the acquisition of more than a thousand acres was made by a small fraction of land owners having land less than 10% of the total acquisition. Compensation for rest of the 90% land acquired had been accepted by their respective land owners. The Division Bench has quashed the entire acquisition of more than a thousand acres at the instance of such a small fraction. Out of approx 110 acres of land acquires for MSPL, only one land owner possessing only
4.34 acres of land, had filed the writ appeal before the Division Bench. Quashing the entire acquisition at the instance of one land owner having 4.34 acres of land out of total acquisition for MSPL of 110 acres, would be against the public policy and public interest. The MSPL alone provides employment to 292 persons with a substantial investment of Rs.200 crores. The employment to approximately 300 persons by MSPL is also alleged to be double of the number of employees as projected in the proposal. Further, in the case of AISL acquisition of 914 acres is challenged by a fraction of less than 10% land owners. The estimated project of AISL is approx Rs.2092 crores and would employment to at least one thousand persons. In view thereof, the Division Bench committed an error in quashing the acquisition proceedings. The judgment of the Division Bench is set aside and the writ petitions stand dismissed as ordered by the Single Judge. [Para 46- 48][636G; 637-A-E]
Shri Ramtanu Co–op.Housing Society Ltd. v. State of Maharashtra (1970) 3 SCC 323 : [1971] 1 SCR 719; Chairman & MD, BPL Ltd. v. S.P. Gururaja (2003) 8 SCC 567 : [2003] 4 Suppl. SCR 587; Deputy General Manager (HRM) and another v. Mudappa and others (2007) (9) SCC 768 : [2007] 2 SCR 363; Narayanappa v. State of Karnataka (2006) 7 SCC 578 : [2006] 4 Suppl. SCR 716; Amarjit Singh v. State of Punjab (2010) 10 SCC 43 : [2010] 12 SCR 163; Om Prakash v. State of U.P. (1998) 6 SCC 1 : [1998] 3 SCR 64 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
This page is for informational and research purposes only and does not constitute legal advice. Consult a qualified advocate for advice specific to your situation.