/2022 INSC 0897/
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No(s). 4678 OF 2021
(arising out of SLP (Civil) No. 23353 of 2012)
M/S. M.S.P.L. LIMITED        …Appellant(s)
 VERSUS
THE STATE OF KARNATAKA AND ORS.      …Respondent(s)
WITH
CIVIL APPEAL No(s).           OF 2022
(arising out of SLP (Civil) No. 23351 of 2012)
SRI SYED AHMED       …Appellant(s)
 VERSUS
THE STATE OF KARNATAKA AND ORS.  …Respondent(s)
CIVIL APPEAL No(s).  4699­4719  OF 2021 
(arising out of SLP (Civil) Nos. 20866­20886 of 2012
THE KARNATAKA INDUSTRIAL AREA 
DEVELOPMENT BOARD AND ANOTHER    …Appellant(s)
 VERSUS
SRI KAKARAL RAVIKUMAR AND OTHERS  …Respondent(s)
1

CIVIL APPEAL No(s).  4679­4698  OF 2021 
(arising out of SLP (Civil) Nos. 21310­21329 of 2012
M/S. AARESS IRON & STEEL LTD.     …Appellant(s)
 VERSUS
THE STATE OF KARNATAKA AND ORS.
ETC.   …Respondent(s)
AND WITH
CIVIL APPEAL No(s).  4745­4747 OF 2021 
(arising out of SLP (Civil) Nos. 21915­21917 of 2013
THE STATE OF KARNATAKA AND ANOTHER     …Appellant(s)
 VERSUS
SRI KAKARAL RAVIKUMAR AND OTHERS  …Respondent(s)
 
J U D G M E N T
Vikram Nath, J.
1. Leave granted in SLP(C) No. 23351/2012.
2. The   State   of   Karnataka   (Civil   Appeal   No.   4745­4747   of
2021),   the   Karnataka   Industrial   Area   Development   Board   (Civil
Appeal No. 4699­4719 of 2021), M/S MSPL Limited (Civil Appeal
No. 4678 of 2021) and AARESS Iron & Steel Limited (Civil Appeal
No.   4679­4698   of   2021)   have   jointly   assailed   the   correctness   of
the   judgement   and   order   dated   22.03.2012   passed   by   the
2

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, 1966 1
 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 judgement 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   Judgement   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
1  In short “the 1966 Act”
3

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, 2002 2
. 
(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 ;”
2  In short “the 2002 Act”
4

5. The   acquisition   is   for   two   companies   viz.   M/s   MSPL
Ltd. 3 
and M/s AARESS Iron and Steel Ltd. 4
, 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
petitions   held   less   than   10%   of   the   total   land   acquired   for
AISL. For sake of convenience facts from the appeal of MSPL
have   been   recorded.   It   covers   the   relevant   facts   of   the   AISL
appeal also.
________________
3
 In short “MSPL”
4
 In short “AISL”
5

Chronology of events :
i. MSPL   moved   an   application   on   23.03.2005   before   the
State High Level Clearance Committee 5
 under the 2002
Act for approval of project to set up palletisation plant
and   an   integrated   steel   plant   in   Koppal   Taluk   of
Koppal District in the State of Karnataka.
ii. The SHLCC  in its meeting  dated 06.06.2005 approved
the   proposal   of   the   project   of   MSPL   to   establish   1.20
million   TPA   iron   ore   pellet   plant   and   1   million   TPA
speciality steel plant (an integrated steel plant with an
initial capacity of 1 million TPA) with a total cost of Rs.
2296.26 Crores for both the plants.
iii. The   SHLCC   also   approved   infrastructural   facilities   for
the   aforesaid   project   which   included   acquisition   of
1034   acres   of   land   by   Karnataka   Industrial   Area
Development Board 6 3
 setup under the 1966 Act.
iv. Government   of   Karnataka   on   the   aforementioned
recommendations issued a Government Order dated
3 5
 In short “SHLCC”
6
 In short “KIADB”
6

22.12.2005   permitting   MSPL   to   setup   the   project
and   also   approved   the   infrastructural   facilities,
including   1034   acres   of   land   to   be   acquired   by   the
KIADB.
v. MSPL   on   04.01.2006   transferred   all   applications
made to the Government of Karnataka for setting up
of palletisation and iron and steel plant to AISL.
vi. Consequent   to   the   above,   AISL   on   09.01.2006
applied for all applications submitted by MSPL to be
transferred in its name. 
vii. On   16.01.2006,   a   further   restructuring   was   made
by   MSPL   and   it   was   communicated   to   the
Department   of   Industries   that   the   palletisation
project   was   to   be   done   by   MSPL   whereas   the   iron
and steel project was to be done by AISL.
viii. On   28.01.2006,   the   Land   Audit   Committee   granted
approval of 1034 acres of land for acquisition.
ix. On   15.02.2006,   Karnataka   Udyog   Mitra   conveyed
the                 
decision   dated   28.01.2006   to   KIADB   to   give   1034
acres of land for the project.
x. The   Government   of   Karnataka   issued   another
7

Government   Order   dated   22.03.2006   modifying
already   approved   project   for   pellet   plant   in   favour   of
the   MSPL   and   integrated   steel   plant   in   the   name   of
AISL.
 xi. The   State   Government   issued   notifications   under
Section 1(3), 3(1) and 28(1) of the 1966 Act somewhere
between 09.11.2006 till 07.05.2007.
xii.   The   Karnataka   State   Pollution   Control   Board 7
  4
on
19.10.2006   forwarded   its   inspection   report   for   the
palletisation plant of MSPL.  
xiii.The   Special   Land   Acquisition   Officer,   KIADB   on
20.11.2006   issued   notice   to   the   land   owners   under
Section 28(2) of 1966 Act inviting their objections.
xiv.     On   12.04.2007,   the   Special   Land   Acquisition   Office,
KIADB   issued   an   order   under   Section   28   (3)   of   1966
Act after dealing with each of the objections.
xv.     Thereafter,   notifications   under   Section   28(4)   of   1966
Act   was   issued   on   17.05.2007,   13.03.2008   and
17.04.2007   for   a   total   area   of   110   acres   24   guntas
4 7
 In short KSPCB
8

required   by   MSPL.   (Similar   notifications   were   issued
for the land required for AISL)
xvi.     The   compensation   under   Section   29   (2)   of   1966   Act
was     determined   at   a   sum   of   Rs.   3,64,98,000/­   for
MSPL.
 xvii.  The Special Land Acquisition Officer, KIADB issued its
orders   determining   compensation   of   land   in   two
categories: Rs. 3 lac per acre for dry land and Rs. 3.50
lacs per acre for irrigated lands.  The land owners were
requested to collect their compensation.
xviii.   Writ   Petition   No.   10501   of   2007   and   10   other
petitions   were   filed   praying   for   quashing   of   the
notifications   issued   under   Section   28(4)   of   the   1966
Act   for   MSPL   and   AISL.     It   would   be   relevant   to
mention that more than 90 per cent of the land owners
covering 90 per cent of the area acquired accepted the
compensation.     It   was   only   10   per   cent   or   less   of   the
land   owners   who   had   filed   the   above   11   petitions.     In
Writ   Petition   No.   6304   of   2008   challenge   was   also
made   to   the   grant   under   Sections   1(3)   and   3(1)   of   the
9

1966 Act.   The area of petitioners therein sought to be
acquired   is   only   4   acres   and   34   guntas.     Further   the
Writ Petition No. 6304 of 2008 was with respect to the
land   for   the   pelletisation   plant   being   set   up   by   MSPL
The   other   10   petitions   were   for   the   land   acquired   for
AISL.  
xix.     On   31.01.2008,   the   Government   of   Karnataka   issued
an order for transfer of land with respect to 110 acres
and 24 guntas.
xx.         The   transfer   of   possession   took   place   on   10.03.2008
and   both   the   companies  MSPL   and  AISL   were   handed
over possession.
xxi.     MSPL   entered   into   an   agreement   with   KIADB   on
11.03.2008.
xxii.      KSPCB   gave   its  consent  to   MSPL   to   establish   pellet
plant on 02.08.2008 and 01.12.2008.
xxiii.    Further the Ecology and Environment Department of
Government   of   Karnataka   gave   environmental
clearance on 01.10.2010.
10

xxiv.       On   17.03.2009,   the   learned   Single   Judge   dismissed
all the 11 petitions.  
xxv.    Judgment of the Single Judge was challenged by way
writ appeals before the Division Bench. 
xxvi.     The Division Bench vide judgment dated 22.03.2012
allowed   the   appeals   and   quashed   the   acquisition
proceedings   for   the   entire   areas   which   was   not   even
challenged.  
xxvii.       Special   Leave   Petitions   filed   in   this   Court   with   a
request   for   interim   order   in   favour   of   MSPL.     This
Court   granted   interim   protection   on   27.07.2012   by
staying   operation   of   the   impugned   judgment   of   the
Division Bench.
xxviii.       The   Ministry   of   Environment   and   Forest   issued   an
order   dated   08.09.2014   providing   that   the   plant   may
be continued to operate.
xxix.    The KSPCB issued an order dated 16.10.2014 asking
MSPL   to   apply   for   Terms   of   Reference   (TOR)   by
07.12.2014   and   also   to   obtain   environment   clearance
11

within one year.  
xxx.         The   Ministry   of   Environment   and   Forest   vide   letter
dated   23.09.2016   communicated   environmental
clearance to MSPL.  
7.   The above chronology of events is part of the written note of
the   appellant   MSPL.   No   objection   has   been   taken   by   the
respondents to the said chronology.
Proceedings before the High Court :
8. Before   the   learned   Single   Judge,   the   learned   counsels   for
land   owners   had   raised   two   points   as   recorded   in   paragraph   3
thereof; the same is reproduced below:
“Sri   Mahabaleshwar   Goud,   learned   counsel   appearing   on
behalf   of   some   of   the   petitioners   canvassed   mainly   two
points:   (a)   The  State  Government  has  not  issued  Notification
under   Section   1(3)   of   the   KIADB   Act   and   consequently,
Chapter 7 of the KIADB Act has not come into force in so far
as   it   relates   to   the   present   acquisition   is   concerned   and
therefore,   the   acquisition   notifications   issued   under   Section
28(1) and 28(4) of the  KIADB Act  are bad  in the eye of law,
and  (b)  the acquisition is in respect of only one company and
therefore,   the   same   is   not   for   public   purpose.     According   to
him,   it   is   the   case   of   colourable   exercise   of   power   and   the
action   of   the   respondents   is   fraudulent   and   therefore,   the
acquisition proceedings vitiate.”
9. Insofar   as   the   first   point   was   concerned   regarding   the
12

absence   of   notification   under   Section   1(3)   of   the   1966   Act,   the
learned counsel appearing for KIADB produced the notification of
the   Government   dated   09.01.2006   notifying   that   chapter   VII   of
the 1966 Act would come into force in the relevant area.   Insofar
as the second point is concerned that the acquisition was only for
one company and as such it could not be for public purpose, the
exercise   being   colourable   exercise   of   power   and   the   action   of
respondents   is   fraudulent   was   dealt   with   by   the   learned   Single
Judge in detail and relying upon the judgments of the Karnataka
High   Court   under   the   1966   Act   held   that   the   second   argument
would   also   fail.     The   learned   Single   Judge   has   also   recorded   in
the   last   paragraph   that   only   1/10   i.e.   10%   of   the   land   owners
submitted their grievances by filing the writ petitions.   It further
gave   reasons   for   not   accepting   their   challenge   in   larger   public
interest   relying   upon   a   judgment   of   this   Court.     The   last
paragraph of the judgment of learned Single Judge is reproduced
hereinbelow:
“As   aforementioned,   the   owners   of   only   1/10 th
  of   the   lands
which   are   sought   to   be   acquired   are   agitating   their
grievances   by   filing   these   writ   petitions.     If   the   Notifications
under   Section   28(1)   and   Section   28(4)   of   the   KIADB   Act   are
set   aside,   qua   these   pockets   of   lands,   then   the   entire
development   activity   in   the   industrial   area   will   come   to   a
grinding halt and that would not be in the interest of anyone.
It   is   not   advisable   nor   feasible   to   interfere   with   the
13

acquisition of such a large tract of lands when the occupants
of   9/10 th
  of   the   acquired   lands   have   not   thought   it   fit   to
challenge the acquisition proceedings.  The aforesaid view of
mine is supported by the judgement of the Apex Court in the
case   of   OM   PRAKASH   AND   ANOTHER   ­vs­   STATE   OF   U.P.
AND  OTEHRS  ((1998)  6  SCC  PAGE­1).  The   individual’s   right
of   the   land   owner   must   yield   place   to   the   larger   public
purposes.     In   view   of   the   same,   this   Court   declines   to
interfere I the acquisition proceedings.”
10. The   Division   Bench   allowed   the   appeals,   and   after   setting
aside   the   judgement   of   the   learned   Single   Judge   proceeded   to
quash   the   acquisition   proceedings.     In   paragraph   127,   the
Division   Bench   recorded   its   conclusions   which   are   reproduced
hereunder:
“127. In the result, we sum up our conclusions as under:
i)   In   the   Indian   context,   Judicial   review   of   administrative
action is much more precise, pervasive and accurate than as
contemplated   either   under   the   English   legal   system   or   as
developed   in  the   American  legal   system.  In   the   wake  of  our
country   having   a   written   Constitution   and   laws   made   by
competent   legislatures,   judicial   review   of   administrative
action   is   not   merely   confined   to   the   question   of   decision
making   process   on   the   parameters   of   the   same   being
affected or vitiated due to unreasonableness, arbitrariness or
irrationality,   which   concepts   are   not   capable   of   a   precise
definition   though   many   erudite   authors   have   made   good
contributions   and   administrative   law   is   very   much   part   of
jurisprudence   but   is   on   more   substantial   and   precise
parameters   such   as   on   the   touchstone   of   the   statutory
provisions   and   the   constitutional   provisions   and   therefore
any decision and the process of making such a decision, if is
not   in   conformity   with   the   relevant   statutory   provisions   and
the   constitutional   provisions,   the   decision   is   affected   and
cannot be sustained.
ii)   Acquisition   of   private   lands   even   for   a   public   purpose,
while   should   always   be   in   conformity   with   the   laws
14

governing   acquisition   proceedings   and   existence   of   public
purpose which subserve a public interest is a sine  quo none
of   such   acquisition   proceedings,   in   a   situation   where
acquisition   is   of   private   agricultural   lands   belonging   to
agriculturists   and   has   the   effect   of   affecting   their   very
livelihood   and   depriving   them   of   their   avocation,   then   the
acquisition   proceedings   will   have   to   be   tested   even   on   the
touchstone   of   the   constitutional   provisions   such   as   Articles
14,   21   and   300A   of   the   Constitution   of   India   and   though
there   is   no   corresponding   safeguard   as   is   provided   under
Article   22   of   the   Constitution   of   India   visa­vis   violations   of
Article 21, nevertheless, Courts will have to apply the test of
strict   compliance   with   procedural   requirements   and   any
deviation   even   from   procedural   requirement   will   vitiate
acquisition proceedings.
iii) Acquisition of lands under the provisions of the Karnataka
Industrial   Areas   Development   Act,   1966   can   only   be   for   the
purpose of developing the subject lands as an industrial area
and  by the  Board  and  cannot  be  for the  benefit  of  a  private
industry   or   company   or   companies,   particularly   as   the
notifications issued under the provisions of 1, 3 and 28 of the
Act,   proclaiming   that   the   subject   lands   are   notified   for
acquisition for the  purpose  of the board  and  when once it  is
so,   handing   over   of   such   lands   to   a   private   industrialist
amounts to an instance of improper exercise of power and for
a purpose other than the published and stated purpose, but
more importantly, distribution of such acquired land, whether
after development or before development, being in the nature
of distribution of largesse of the State, amounts to depriving
equal   opportunity   to   all   aspirants,   who   propose   to   set   up
industries in industrial areas and when the State hands over
acquired lands to a private individual, it is therefore violative
of   the   equality   clause   in   the   Constitution   of   India.   In   this
regard,   statement   of   law   as   enunciated   in   the   single   bench
decision of this Court in the case of Heggappanavara [supra],
later followed by another learned Single Judge in the case of
N.   Somashekar   [supra],   on   the   basis   of   the   judgment   of   the
Supreme   Court   in   the   case   of   RAMTANU   [supra],   does   not
state the correct legal position as indicated in para 21 of the
judgment   of   the   constitutional   bench   of   the   Supreme   Court,
reading as under:
21. Counsel on behalf of the petitioners contended that
there was procedural discrimination between the Land
Acquisition Act and the Act in the present case. It was
said   that   there   was   a   special   procedure   designed   by
15

the Land  Acquisition Act for acquisition of land  for the
companies whereas in the present case the State was
acquiring   land   for   companies   without   adopting   the
procedure   of   the   Land   Acquisition   Act.   It   is   to   be
remembered   that   the   Act   in   the   present   case   is   a
special  one  having  the  specific  and  special  purpose  of
growth, development  and  organisation of industries in
the   State   of   Maharashtra.   The   Act   has   its   own
procedure   and   there   is   no   provision   in   the   Act   for
acquisition   of   land   for   a   company   as   in   the   case   of
Land   Acquisition   Act.   In   the   present   case,   acquisition
under   the   Act   is   for   the   purpose   of   development   of
industrial   estates   or   industrial   areas   by   the
Corporation or any other purpose in furtherance of the
objects  of the  Act. The  policy underlying the Act  is not
acquisition   of   land   for   any   company   but   for   the   one
and   only   purpose   of   development,   organisation   and
growth   of   industrial   estates   and   industrial   areas.  The
Act   is   designed   to   have   a   planned   industrial   city   as
opposed to haphazard growth of industrial areas in all
parts   of   the   State.   The   Act   is   intended   to   prevent,
growth   of   industries   in   the   developed   parts   of   the
State.   Industries   are   therefore   to   be   set   up   in   the
developing   or   new   parts   of   the   State   where   new
industrial   towns   will   be   brought   into   existence.   The
object   of   the   Act   is   to   carve   out   planned   areas   for
industries.   On   one   side   there   will   be   engineering
industries   and   on   the   other   there   will   be   chemical
industries. There will be localisation of industries with
the result that the residents and dwellers of towns and
cities   will   not   suffer   either   from   the   polluted   air   or
obnoxious chemicals of industries or the dense growth
of   industries   and   industrial   population,   within   and
near about the residential areas. The Land Acquisition
Act   is   a   general   Act   and   that   is   why   there   is   specific
provision for acquisition of land by the State for public
purpose   and   acquisition   of   land   by   the   State   For
companies.   The   present   Act   on   the   other   hand   is
designed the sole purpose of development of industrial
areas   and   industrial   estates   and   growth   and
development   of   industries   within   the   State.   Industrial
undertakings   or   persons   who   are   engaged   in
industries   all   become   entitled   to   the   facilities   on   such
industrial   growth.   Under   the   Land   Acquisition   Act
acquisition is at the instance of and for the benefit of a
company whereas under the present Act acquisition is
solely   by   the   State   for   public   purposes.   The   two   Acts
16

are dissimilar in situations and circumstances.
though   the   examination   by   the   Supreme   Court   of   the
Maharashtra   Act   was   in   the   context   of   the   Constitutional
validity   of   the   Maharashtra   Act   as   being   repugnant   to   the
Central   Enactment   ­   Land   Acquisition   Act   ­   as   we   find   the
purpose of acquisition of lands under the Maharashtra Act as
well   as   the   Karnataka   Act   is   both   for   the   purpose   of
developing industrial areas in the State, and therefore cannot
be   held   to   be   laying   down   the   correct   law   and   ratio   as
indicated   in   the   two   single   bench   decisions   of   this   Court   to
this effect is hereby overruled.
iv)   An   approval   of   the   project   proposed   by   an   entrepreneur
and   cleared   by   the   State   high   level   clearance   committee
under Section 5 of the Felicitation Act by itself cannot act as
an   insurance   against   any   possible   violations,   infractions,
illegalities   or   irregularities   in   the   matter   of   acquisition   of
private   lands   by   the   State   Government   in   exercise   of   its
power   under   any   enabling   acquisition   Acts   including   the
present   act   (KIAD   Act,   1966).   Such   clearance   cannot   and
does not absolve the State Government from adhering to the
procedural requirements envisaged tinder the Acquisition Act
and in the instant case, under the provisions of the KIAD Act
and   the   legality   or   otherwise   of   the   proceedings   for
acquisition  of  lands   has   to  bear  scrutiny  independently  and
the   mere   approval   of   the   project   by   the   State   high   level
clearance   committee   cannot   and   will   not   validate   the
illegalities   or   irregularities   in   the   matter   of   acquisit   ion   of
land.   On   such   an   independent   examination   in   the   instant
case, we find from the records that the State Government as
an   acquiring   authority   and   the   board   as   a   statutory
development   board,   have   not,   only   committed   infractions   of
statutory   provisions   of   Sections   3(1)   and   28   of   the   Act   but
having   also   merely   surrendered   to   the   decision   of   the   State
high level committee and have thereby abdicated their duties
and responsibilities under the acquiring Act.
v)   Simultaneous   issue   of   notifications   by   the   State
Government   for   declaring   an   area   as   industrial   area   under
Section   3(1)   of   the   Act   for   notifying   the   applicability   of
Chapter­VII of  the Act in respect of an industrial  area under
Section 1(3) of the Act and the State Government issuing the
notification of its intention to acquire any extent of land in an
industrial area for the purpose of development by the board,
particularly when  different  extent   of   lands  are  mentioned   in
these   notifications,   betrays   a   clear   lack   of   understanding   of
17

the statutory provisions as well as lack of awareness to the
legislative scheme in making provisions in the Act for issuing
of   not   only   notifications   but   also   to   gazette   the   same   under
these   three   different   statutory   provisions   and   unless   it   is
factually and on record that the State Government is able to
establish   a   commensurate   application   of   mind   to   the   three
different   enabling   sections   of   the   Act,   a   presumption   that
either   the   notifications   are   validly   issued   or   that   the
notifications   are   fully   in   conformity   with   the   procedural
requirement   does   not   arise.   For   a   valid   acquisition   of   lands
by   the   State   Government   in   exercise   of   its   powers   under
Section   28   of   the   Act,   unless   the   State   Government   has
adhered to the procedural requirement under sub­sections (2)
to (8) of Section 28 of the Act, the acquisition proceedings get
vitiated,   as   the   acquisition   results   in   deprivation   of   not
merely   land   of   agriculturists   but   also   their   livelihood   and
denial   of   their   avocation,   and   therefore   the   present
acquisition   of   land   becomes   unsustainable   as   procedural
requirements   under   these   statutory   provisions   are   not
adhered to in the present cases.
vi) Proceedings for acquisition of lands notified under Section
28   of   the   Act   are   also   vitiated   for   the   reason   that   the   State
Government has not shown its awareness to the mandate of
sub­rule   (3)   of   Rule   5   of   the   Environment   (Protection)   Rules,
1986, imposing restrictions and prohibitions on new projects
or   activities   based   on   their   potential   environmental   impacts
in   respect   of   the   industries   and   the   nature   of   industries
proposed to be set up by the fourth respondent in the subject
lands   before   embarking   on   acquisition   proceedings.   The
amended   Rule   has   come   into   force   as   per   notification   dated
14­9­2006   and   in   clear   and   emphatic   terms   envisages   the
procedure   for   either   granting   or   rejecting   of   prior
environmental   clearance.   In   terms   of   the   notification,   even
before   construction   of   new   projects,   it   has   to   be
approved/permitted   or cleared   by the   central  government  or
by the State level environment impact assessment authority,
constituted by the Central Government under sub­section (3)
of   Section   3   of   the   Environment   (Protection)   Act.   The
industries   proposed   to   be   set   up   by   respondents   4   and   5
having   an   annual   production   capacity   far   exceeding   20000
tonnes are a class of industries/activities within the meaning
of   column   3(a)   of   the   schedule   to   the   notification   and
therefore   prior   clearance   by   the   Central   Government   was
essential.   The   State   Government   having   embarked   on   the
acquisition   proceedings   by   issue   of   preliminary   notification
dated   9­11­2006   i.e.,   subsequent   to   the   publication   of   the
18

notification   dated   14­9­2006   under   the   provisions   of   the
Environment   (Protection)   Act,   indicates   that   the   State
Government had embarked on acquisition proceedings for the
benefit of a private company to set, up industries covered by
the   notification   even   before   it   was   known   as   to   whether   a
project   of   this   nature   can   be   cleared   by   the   Central
Government   and   therefore   the   acquisition   proceedings   get
vitiated. Acquisition of private agricultural lands by the State
Government   and   in  the   name   of   a   public   purpose   cannot   be
either   casual   or   without   being   aware   of   the   suitability   and
possibility of the acquired lands being available or otherwise
for   the   proposal.   In   this   view   of   the   matter   the   State   action
affecting rights of citizens under Articles 21 and 300A of the
Constitution   of   India   and   in   turn   violating   Article   14   also,
cannot pass muster before a constitutional Court.”
11. Based on the above conclusion, the Division Bench allowed
the bunch of appeals and quashed the notifications issued under
Sections   1(3),   3(1)   and   28(1)   of   the   1966   Act.     Aggrieved   by   the
same, the appeals have been preferred by not only the companies
for  whose benefits the land was acquired but also by the KIADB
and the State of Karnataka.  At the cost of repetition, it is pointed
out   that   Civil   Appeal   @   SLP   (C)   No.   23351   of   2012   has   been
preferred   by   a   land   owner   aggrieved   by   judgment   dated
14.12.2011,   whereby   the   writ   appeal   of   the   said   petitioner   was
dismissed,   confirming   the   dismissal   of   the   writ   petition   by   the
learned   Single   Judge   with   respect   to   a   challenge   relating   to
similar   acquisition   for   a   company   BMM   Ispat   Ltd.   on   similar
grounds.
19

12. We   have   heard   the   learned   counsel   for   the   parties   and
perused   the   material   on   record.     Shri   Krishnan   Venugopal,
learned   Senior   counsel   appearing   for   the   MSPL,   after   taking   us
through   the   chronology   of   events,   summarised   the   findings   and
reasonings given in the impugned judgment as follows:
a. The appellant being a ‘private’ company, its interests are not
public.
b. The   appellant   MSPL   multiplied   into   two   or   three   entities
even during the process of acquisition proceedings.
c. The   2002   Act   cannot   lead   to   a   situation   that   ‘at   the   same
time   it   can   never   be   by   giving   a   go   by   to   other   statutory
requirements and procedural compliances.
d. The process followed in terms of Section 28 of the 1996 Act
was   not   proper   and   many   land   owners   were   complaining
about   being   dispossessed   or   thrown   out   of   their   land   as
procedural requirements were not complied.
e. Section 28(7) of the 1996 Act is ‘draconian’.
f. There   is   no   ‘public   purpose’   when   land   is   acquired   for   one
entity.
20

g. The   KIADB   has   not   examined   the   issue   of   Environmental
Clearance. 
h. Acquisition proceedings, in the background of the 2002 Act,
are not in accordance with law and not for public purpose.
13. Mr.   Venugopal   also   briefly   summarised   the   conclusions
given   in   paragraph   127   of   the   impugned   judgment,   which   have
already been reproduced above as follows:
i. KIADB   cannot   acquire   lands   for   a   single   company/private
industrialist and the same is improper exercise of power. It
is also not in public interest.
ii. Approval   of   project   by   SHLCC   under   the   2002   Act   is   not
immunity   against   illegalities/irregularities   in   land
acquisition.
iii. Simultaneous issuance of Notifications under Sections 1(3),
3(1) and 28(1) of the 1966 Act for declaration of the land as
‘industrial   area’   and   its   acquisition,   ‘betrays   a   clear   lack   of
understanding of the statutory provisions as well as lack of
awareness   to   the   legislative   scheme’   and   further,   ‘unless   it
is factually and on record that the State Government is able
21

to   establish   a   commensurate   application   of   mind   to   the
three   different   enabling   sections   of   the   1966   Act,   a
presumption   that   either   the   notifications   are   validly   issued
or   that   the   notifications   are   fully   in   conformity   with   the
procedural requirement does not arise’.
iv. State   Government   has   not   complied   with   the   EIA
Notification for Environmental Clearance.
14. Shri   Krishnan   Venugopal,   learned   Senior   Counsel   then
advanced   his   submissions   which   are   briefly   summarised
hereunder:
a. Failure   to   appreciate   following   facts   and   material   on
record
Approval of Project was after due consideration of material
i. The   initiation   of   the   entire   process   is   based   on   an
application   filed   by   Appellant   and   its   consideration   under
the   2002   Act.   The   Application   was   considered   on
06.06.2005.
ii. The   Government   Order   approving   the   Project   was   on
22.12.2005.     The   approval   was   not   hastily   done   and   the
22

Government Order in fact notes key features of the project.
iii. The   approval   for   modification   of   the   Government   Order   by
inclusion   of   AISL   was   based   on   an   application   filed   by
MSPL.  The details and relation between AISL and MSPL are
set out in additional documents, which discloses that MSPL
and   AISL   had   common   shareholders   and   were   under   same
management   and   ultimately,   AISL   was   a   wholly   owned
subsidiary of MSPL.
iv. Full   and   complete   disclosure   was   made   by   Applicant   and
the   same   was   duly   considered   and   not   mechanically
approved by Government of Karnataka.  The High Court has
observed:
“106…..There   is   absolutely   no   application   of   mind   at   the
subsequent  levels. A  notification  issued   under  Section  3  of  the
Act in the name of the  Act  and  for declaring an area mentions
names   of   respondent   Nos.   4   and   5.     Respondent   No.   5   was
never   an   applicant   before   the   State   High   Level   Clearance
Committee,   but,   nevertheless,   figures   in   the   notification   under
Section   3   of   the   Act.   Even   mentioning   of   the   names   do   not
reveal or spell out as to how they figure there.   No preamble or
legend is given to it. Then follows the application of chapter­VII
in respect of the land notified.”
v. The   above   observations   have   not   taken   into   consideration
the     Government   Order   dated   22.03.2006.     The   grant   of
land   is   also   approved   by   the   Land   Audit   Committee   in   its
23

meeting on 28.01.2006.
Objections of land owners duly considered
vi. Upon   approval   to   the   Project   under   the   2002   Act,   the
notifications for land acquisition are issued under the 1966
Act.  The Notifications for acquisition of land were issued on
09.11.2006:­ (A) declaration under Section 1(3) that Chapter
VII   would   apply   (B)   declaration   under   Section   3(1)   that   an
area is ‘industrial area’ for the 1966 Act and (C) acquisition
of land.
vii. Notice   is   only   thereafter   issued   under   Section   28(1)   of   the
1966 Act to the  individual  landowners  to  show  cause as to
why land should not be acquired. In the present case, notice
under   Section   28(2)   was   issued   on   20.11.2006   and   the
objections   were   duly   considered.   The   Special   Land
Acquisition   Officer   passed   an   order   under   Section   28(3)   of
the KIAD Act after considering these objections.
viii. Sample   Panchnama   has   also   been   placed   before   this
Hon’ble   Court.   Without   any   basis   and   despite   material   on
record,   the   High   court   has   concluded   that   procedure   in
terms of Section 28(3) was violated.
24

b. Failure to appreciate law
Scope of Facilitation Act
i. The   High   Court   has   erroneously   concluded   that   the   2002
Act   ‘virtually   leaves   no   option   to   all   other   agencies   of   the
State   whether   statutory   or   otherwise   and   has   produced   in
them a state of submissiveness and they have mechanically
like   robots   acted   in   a   compliant   manner.’   It   is   submitted
that   the   very   purpose   of   a   SHLCC   and   Single   Window
Clearance   Committee   would   be   defeated   if   the   approval
granted   by   such   committee   is   reviewed   again   and   again   by
other departments.  The approach of the High Court will not
only render the text of the 2002 Act otiose and unworkable,
but will defeat the very purpose of the 2002 Act as set out in
the Statement of Object and Reasons.
ii. Further, the Hon’ble High Court has completly exceeded its
jurisdiction  to   review  the  very   approval  of   the  Project  when
the only issue to have examined was – whether the mandate
of Section 28 of the 1966 Act was complied.
iii.   The   High   Court’s   conclusion   that   the   2002   Act   leads   to   a
complete   ‘go   by’   to   ‘statutory   requirements   and   procedural
25

compliances’   is   manifestly   contrary   to   the   record.   The
approval of the project by the SHLCC, the State Government
Order along with the compliances in terms of site inspection
by   KPSCB     and     even     obtaining     Environmental
Clearance,   the   approval   in   terms   of   the   2002   Act   has   not
given   a   ‘go   by’   to   statutory   requirements   and   procedural
compliances.
iv. It   is   submitted   that   the   High   Court   has   erred   in
appreciating   the   scope   of   the   Facilitation   Act.     It   is
submitted that the same is only for approval of proposal of a
project and not for construction and operation itself, which
are only subject to various other approvals.
Process under section 28 of 1966 Act
v. The   High   Court   has   concluded   that   the   power   of   State
Government to take possession of land under Section 28(7)
of   the   1966   Act   is   draconian.   However,   this   power   is
conferred   only   in   the   scenario   that   orders   are   passed   after
considering objections and further notice to the landowners
in terms of Section 28(6) of the 1966 Act.
vi. It is only on the refusal in such an event that the power to
26

forcibly acquire land is conferred on the State Government.
Single entity being eligible Applicant
vii. It   is   submitted   that   the   High   Court   has   committed   a   grave
error of jurisdiction in reconsidering the approval granted to
the   Project­   which   was   cleared   by   the   SHLCC   and   also   by
the   Land   Audit   Committee.   It   is   submitted   that   the   High
Court could not have second­guessed the policy decision to
approve a palletisation and integrated steel plant.
viii. Without prejudice to the above contention, in any event, it is
submitted   that   a   single   applicant   can   be   an   eligible
applicant and there is no bar for the same.
ix. The   conclusions   fail   to   appreciate   the   socio­economic
benefit   to   the   State   of   Karnataka   and   the   scope   of   what
constitutes ‘public purpose’. 
15. Learned   counsels   appearing   for   AISL,   State   of   Karnataka
and KIADB have majorly adopted the arguments advanced by Mr.
Krishnan   Venugopal   and   have   submitted   that   the   impugned
judgment   of   the   Division   Bench   be   set   aside.   It   is   their
submission   that   the   procedure   as   prescribed   under   the   law   has
27

been strictly adhered to.
16. On   behalf   of   the   respondent   no.8   in   the   Appeal   of   MSPL,
Shri   Shekhar   S.   Naphade,   learned   Senior   counsel   made
submissions.  Other counsels appearing for other land owners in
the appeal of AISL have adopted the same.  Briefly the arguments
advanced   on   behalf   of   the   private   respondents   are   reproduced
below:
a. MSPL and AISL did not have any Environmental Clearance,
in   the   absence   of   which   the   land   could   not   have   been
acquired for setting up the plant.
b. The   land   owner–respondents   have   not   accepted   any
compensation.
c. Just   because   90%   of   acquirees   have   accepted
compensation, that does not validate an illegal acquisition.
d. This   is   a   colourable   exercise   of   power   since   the   1996   Act
does not contemplate acquisition for a private party directly.
An   area   has   to   be   set   up   as   an   industrial   area   in   which
private industry can be set up later. In the present case, the
procedure   has   been   shortened   at   the   behest   of   private
28

parties. 
e. AISL was not even before the SHLCC and the only applicant
was MSPL. Hence, the acquisition for AISL is bad in law.
f. Division   Bench   considered   the   issues   in   detail   and   has
rightly quashed the notifications under 1966 Act. It does not
call   for   any   interference.   The   appeal   deserves   to   be
dismissed.
17. In   so   far   as   Civil   Appeal   @   SLP   (C)   No.   23351   of   2012   is
concerned,   Shri   Ankur   S.   Kulkarni,   learned   counsel,   supported
the   arguments   of   Mr.   Shekhar   S.   Naphade.   He   has   further
submitted that judgment of the Division Bench dated 22.03.2012
is correct on law and facts as such the Division Bench dismissing
the   writ   appeal   by   the   impugned   judgement   dated   14.12.2011
committed an error and, therefore, needs to be set aside.  
18. It   may   be   noted   here   that   depending   upon   the   outcome   of
the decision in the appeals filed by MSPL, AISL, KIADB and State
of Karnataka in which the judgment of the Division Bench dated
22.03.2012   is   under   challenge,   the   fate   of   the   aforesaid   Civil
Appeal of Syed Ahmad would rest.
29

19. Before proceeding to deal with the respective submissions, a
brief   outline   of   the   two   state   enactments   i.e.   1966   Act   and   the
2002 Act, is spelled out.  
1966 Act.
20.       The   object   of   the   1966   Act   is   already   reproduced   in   the
earlier   part   of   this   order.   It   is   for   securing   the   establishment   of
industrial areas and generally to promote the establishment and
orderly   development   of   industries   therein   within   the   state   of
Karnataka.
(i) Under   section   1(3),   it   is   provided   that   the   Act   would   come
into   force   at   once   except   Chapter   VII   which   shall   come   into
force in such area and from such date as the State Government
may from time to time by notification specify on this behalf.
(ii) Section 2 deals with the definitions of the various words and
phrases used in the Act. 
(iii)   Under   section   3(1),   the   State   Government   by   Notification
may   declare  any   area   in   the  State   to  be  an  industrial   area   for
purposes of the Act.
(iv) Under section 6, a Board is to be established chaired by the
Secretary,   Commerce   and   Industries   Department.   Its
30

constitution is provided therein and comprises of the following
as members:
● The Secretary, Finance Department;
● The Secretary, Housing and Urban Development;
● The Commissioner, Industrial Development;
● Director, Industries and Commerce;
● The   Chairman   and   Managing   Director,   Karnataka   State
Industrial   Investment   and   Development   Corporation
Limited;
● The Chairman, Karnataka State Pollution Control Board;
● The Director, Town Planning;
● The   Managing   Director,   Karnataka   State   Small   Industries
Development Corporation Limited;
● The   Managing   Director,   Karnataka   State   Financial
Corporation;
● The Executive Member of the Board; and  
● Two nominees of the Industrial Development Bank of India;
(v) The   functions   of   the   Board   are   enumerated   in   section   13
and   further   general   powers   of   the   Board   are   spelled   out   in
section   14   of   the   1966   Act.   The   same   are   reproduced
hereunder:
31

“13.   Functions.­   The   functions   of   the   Board   shall
be,­
  (i)   generally   to   promote   and   assist   in
the   rapid   and   orderly   establishment,
growth   and   development   of   industries
[and   to   provide   industrial   infrastructural
facilities   and   amenity]   in   industrial
areas , and
(ii)   in   particular,   and   without   prejudice
to the generality of clause (i), to,­
 
(a)   develop   industrial   areas
declared   by   the   State   Government   and
make them available for undertakings to
establish themselves;
(b)   establish,   maintain,   develop,
and   manage   industrial   estates   within
industrial areas;
(c)   undertake   such   schemes   or
programmes of works, either jointly with
other corporate bodies or institutions, or
with   the   Government   or   local   or
statutory   authorities,   or   on   an   agency
basis,   as   it   considers   necessary   or
desirable,   for   the   furtherance   of   the
purposes   for   which   the   Board   is
established   and   for   all   purposes
connected therewith.
14.   General   powers   of   the   Board.­   Subject   to   the
provisions of the Act, the Board shall have power,­
  (a) to acquire and hold such property, both movable
and   immovable   as   the   Board   may   deem   necessary
for   the   performance   of   any   of   its   activities   and   to
lease,   sell,   exchange   or   otherwise   transfer   any
property   held   by   it   on   such   conditions   as   may   be
deemed proper by the Board;
(b)   to   purchase   by   agreement   or   take   on   lease   or
under   any   form   of   tenancy   any   land,   to   erect   such
buildings   and   to   execute   such   other   works   as   may
be   necessary   for   the   purpose   of   carrying   out   its
duties and functions;
32

(c)   to   provide   or   cause   to   be   provided   amenities
[industrial   infrastructural   facilities]   and   common
facilities   in   industrial   areas   and   construct   and
maintain   or   cause   to   be   maintained   works   and
buildings therefor;
(d)   to   make   available   buildings   on   lease   or   sale   or
lease­cum­sale to industrialists  or persons  intending
to start industrial undertakings;
(e)   to   construct   buildings   for   the   housing   of   the
employees of industries;
(f)  (i)   to   allot   to   suitable   persons   [premises   or   parts
thereof]   including   residential   tenements   in   the
industrial   areas   established   or   developed   by   the
Board;
(ii)   to   modify   or   rescind   such   allotments,
including   the   right   and   power   to   evict   the
allottees   concerned   on   breach   of   any   of   the
terms or conditions of their allotment;  
(iii)   to   resume   possession   of   premises   or   part
thereof   including   residential   tenements   in   the
industrial   area,   or   industrial   estate   in   the
manner provided in section 34B.
(g)   to   delegate   any   of   its   powers   generally   or
specially to the Executive Member;  
(h)  to   enter  into  and  perform   all   such  contracts   as  it
may consider necessary or expedient for carrying out
any of its functions; and
(i) to do such other things and perform such acts as it
may   think   necessary   or   expedient   for   the   proper
conduct   of   its   functions,   and   the   carrying   into   effect
the purposes of this Act. 
                                                                                                                                         
                                                                                                                                         
                                                                             
(vi)   Chapter   VII   deals   with   the   acquisition   and   disposal   of   the
land.   Section   27   provides   that   the   areas   notified   by   the   State
33

Government   under   section   1(3)   would   be   applicable   to   this
Chapter   with   effect   from   the   date   specified   in   the   notification.
Section   28   and   its   sub­sections   (i)   to   (viii)   provide   the
procedure   for   acquisition   of   land.   Section   29   provides   for
determination of compensation of the land acquired. Section 30
provides   that   Land   Acquisition   Act,   1894   would   mutatis
mutandis   apply   with   respect   to   the   provisions   therein   for
inquiry   and   award   by   the   Deputy   Commissioner,   reference   to
Court,   apportionment   and   payment   of   compensation.   Section
40 confers powers on the State Government to make rules and
section   41   confers   power   on   the   Board   to   frame   regulations
with the previous approval of the State Government.  
2002 Act:
21. This   Act   was   promulgated   for   promotion   of   industrial
development   and   facilitation   of   new   investments   to   simplify   the
regulatory   framework.   Statement   of   objects   and   reasons   is
reproduced below:­
“ STATEMENT   OF   OBJECTS   AND   REASONS.­   It   is
considered necessary to provide for the promotion of
industrial   development   and   facilitation   of   new
34

investments,   to   simplify   the   regulatory   frame   work,
by   reducing   the   procedural   requirements   and
rationalising   documents   and   to   provide   for   an
investor   friendly   environment   in   the   State   of
Karnataka. The Bill  among other things  provides  for
the following, namely:­  
1.   Constitution   of   State   High   Level   Clearance
Committee,   State   Level   Single   Window   Clearance
Committee   and   District   Level   Single   Window
Clearance Committee for consideration of application
from   entrepreneurs   intending   to   establish   industries
in the State.  
2.   Appointment   of   Karnataka   Udyoga   Mitra   as   a
Nodal   Agency   at   State   Level   and   the   District
Industries   Centre   at   Nodal   Agency   at   the   District
level   to   undertake   investment   promotional   activities
and to render necessary guidance and assistance to
entrepreneurs  to  setup  industrial   undertaking  in  the
State.  
3.   Providing   Combined   Application   Form   in   lieu   of
existing forms prescribed under various laws.  
4.   Facilitating   entrepreneurs   by   furnishing   a   self
certification   at   the   time   of   submitting   the   combined
application form to the Nodal Agency.  
5. Rationalising inspections by various authorities.
6. Providing for deemed approval by the departments
or authorities in case of delay.  
7. Penalty for entrepreneurs  who fail to comply with
the conditions of undertaking in the self certification.
”
(i) Section   3(1)   provided   for   establishment   of   a   SHLCC
consisting   of   such   members   as   may   be   notified   by   the   State
Government   to   work   as   a   single   point   clearance   committee.
Under sub­section (2), the SHLCC was to examine and consider
35

such   proposals   received   from   any   entrepreneur   relating   to
setting   up   of   any   industrial   or   any   other   project   in   the   State
with   the   minimum   investment   of   Rs.100   Crores   or   above.   The
functions   of   the   SHLCC   are   provided   in   section   4   and   its
powers are provided in section 5. 
(ii) Under   section   6,   a   State   Level   Single   Window   Clearance
Committee (SLSWCC) is to be notified by the State Government
which   has   the   power   to   deal   with   the   proposals   with   the
investment   of   more   than   Rs.15   Crores   but   less   than   Rs.100
Crores. 
The powers of SLSWCC are provided in section 7 and section 8.
(iii) Similarly,   there   would   be   a   District   Level   Single   Window
Clearance   Committee   (DLSWCC)   dealing   with   investments   up
to   Rs.15   Crores   and   its   functions   and   powers   spelled   out   in
paragraphs 10 and 11. 
(iv) Under   section   11(A),   the   Government   could   constitute   a
State Level Empowered Committee which was to be chaired by
the Chief Secretary of the State, with Principal Secretaries of 10
different   departments,   Chairman   of   KSPCB,   Director­General
and Inspector­General of Police & State Fire Extinguishing and
Emergency   Services,   Chief   Executive   Officer   &   Executive
36

Member   of   KIADB   and   the   Commissioner   for   Industrial
Development & the Director for Industries and Commerce as its
members. 
(v) There   was   also   provision   made   for   Nodal   Agencies,
Karnataka Udyog Mitra at the State Level under section 12 and
its functions enumerated under section 13.
(vi) Section   14   provides   for   a   Combined   Application   Form   for
use   of   entrepreneurs   for   obtaining   clearance   to   be   prescribed
by the State Government to all the Clearance Committees. 
(vii) Section   17   provides   for   deemed   approval   in   case
clearance is not issued within stipulated time.
(viii) Section   18   provided   for   an   appeal   by   any   person
aggrieved by the decision of the above­mentioned committees.  
22. In   the   present   case   as   stated   in   the   chronology   of   events,
the MSPL had initially moved an application under the 2002 Act.
During   the   consideration   of   the   said   application   by   the   State
Government,   MSPL   shared   its   projects   of   the   two   industries   by
inducting   AISL   a   fully   owned   subsidiary   of   MSPL.   The
introduction of AISL was accepted by the State Government and
necessary  applications were given by AISL also. The SHLCC  had
37

earlier   approved   both   the   projects   and   one   of   the
recommendations was for acquisition of land under the 1966 Act.
The   KIADB   considered   the   recommendations   of   the   SHLCC,
Karnataka Udyog Mitra & the State Government and accordingly
acquired the land as per the procedure prescribed under section
28 of the 1966 Act.  
23. It   is   this   acquisition   of   land   for   MSPL   and   AISL   which   is
under challenge in these proceedings. The Division bench having
quashed   the   acquisition   as   also   the   notifications   under   section
1(3) and section 3(1) along with section 28 of 1966 Act is now for
consideration in the present group of appeals.
24. Based   upon   the   arguments   advanced   by   the   learned
counsels,   the   following   issues   arise   in   these   appeals   for   our
consideration:
(I)   Whether   in   the   absence   of   environmental   clearance,   the
acquisition in question could have taken place?  
(II)   Whether   the   acquisition   was   vitiated   in   view   of   the
undue   haste   and   non­application   of   mind   by   the   competent
authorities?
38

(III)   Whether   the   procedure   prescribed   under   the   1966   Act
was duly followed?
(IV)   Whether   the   acquisition   for   a   single   company   could   be
said to be for public purpose and could be made under the 1966
Act? 
(V)   Whether   acquisition   could   be   made   for   a   non­applicant
AISL   under   the   1966   Act   without   its   application   being   routed
through SHLCC.
(VI)   Whether   the   comparison   with   the   Maharashtra
Industrial   Development   Act,   1962,   placing   reliance   on   the
judgment   of   this   Court   in   the   case   of   Shri   Ramtanu   Co­
op.Housing Society Ltd. Vs. State of Maharashtra ,   
reported  in
(197) 3 SCC 323 in the impugned judgment is correct?
(VII)   Whether   the   conclusions   arrived   at   in   the   impugned
judgment are vitiated on account of inclusion of value judgments
of policy views by the High Court?
(VIII) Whether the entire acquisition could be quashed upon
a   petition   by   a   fraction   of   landowners   holding   a   fraction   of
acquired   land   which   is   only   10   %   or   less   of   the   total   acquired
land?
A.   Environmental Clearance.
39

25. 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.
No.118035 of 2017 in the appeal of MSPL. Prior to it, the Ministry
itself   vide   paragraph­2   of   the   Notification   dated   14.09.2006
provided   that   no   Environment   Clearance   from   MOEF   was
required   for   securing   land.   It   may   also   be   relevant   to   note   here
that   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  above   facts,  as
of date, no objection can be raised that there is no environmental
40

clearance certificate from the Ministry of Environment and Forest
as the same has already been issued on 23.09.2016.
B.   Non­application of mind and undue haste.
26. From  the  chronology  of events what  is to  be noted is that
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. 
27. 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   non­application   of   mind   and   undue   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.   We   have   gone   through   the
reports and recommendations of the different Committees as also
41

the State Government and we find 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.
28. 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. 
29. 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. 
42

30. Thereafter, under the provisions of 1966 Act, the Land Audit
Committee   in   its   meeting   of   28 th
  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   6 th
  June,   2005   and   that   of   the   Land   Audit
Committee   dated   28.01.2006   accepted   the   recommendation   for
acquisition of 1034 acres of land. 
31. These aspects were examined by this Court in   Chairman &
MD, BPL Ltd. Vs. S.P. Gururaja,  reported in   (2003) 8 SCC 567 .
This   Hon’ble  Court   was  dealing   with  a   similar  situation   where  a
State   High   Level   Committee   was   constituted   to   grant   approvals
and   acquire   land   to   the   appellant   therein.   This   process   was
challenged in a public interest litigation. This Court was pleased
to dismiss the writ petition finding that:
43

17.   The   Company   intended   to   set   up   more   than   one   unit.
For   the   purpose   of   achieving   the   objective   of   economic
development of the State, the State is entitled to deal with
the   applications   of   the   entrepreneurs   in   an   appropriate
manner. For the said purpose a High Level Committee was
constituted.   The   said   Committee   held   its   meeting   on
10.10.1994   wherein   not   only   the   members   referred   to
hereinbefore   but   also   various   other   officers   were   present.
Presumably,   prior   thereto   the   applications   filed   by   the
Company   were   scrutinized   by   the   competent   authorities.
After   detailed   discussions,   the   High   Level   Committee
resolved: (a) to permit the unit to change the location from
Malur Indl. Area. to Dobespet Industrial Area; (b) to allot a
total of 500 acres of land for the three projects viz., Colour
Picture   Tube, Colour  Televisions   and   Battery,  in Dobespet
Industrial   Area,   Nelamangala   to,   in   lieu   of   the   earlier
allotment   of   100   acres   of   land   at   Malur   Indl   Area   for   the
Colour TV  sets project, subject to  the  promoters  indicating
the   individual   land   requirement   for   Colour   Picture   Tube
project,   Colour   TV   project   and   the   battery   project   duly
justifying   the   requirement   with   necessary   plans,   block
diagrams, etc. 
18. Similar considerations were made in respect of Colour
Television   Picture   Tube   Project   of   the   Company   and
Manufacture   of   Batteries.  The   matter  relating  to  allotment
of land is a statutory function on the part of the Board. In
terms   of   the   provisions   of   the   Act,   consultations   with   the
State   Government   is   required   if   Regulation   13   of   the
Regulations   in   place   of   Regulation   7   is   to   be   taken
recourse to. Does it mean that  consultations  must be held
in   a   particular   manner,   i.e.   by   exchange   of
correspondences   and   in   no   other?   Answer   to   the   said
questions   must   be   rendered   in   negative.   The   High   Level
Committee   was   chaired   by   the   Minister   who   in   terms   of
the Rules of Executive Business framed under Article 166
of   the   Constitution   of   India   was   entitled   to   represent   the
State.   Once   a   consultation   takes   place   by   mutual
discussion   and   a   consensus   is   arrived   at   between
different   authorities   performing   different   functions   under
the statutes, the purpose for which consultation was to be
made   would   stand   satisfied.   Under   the   Act   or   the
Regulations   framed   thereunder,   no   procedure   for   holding
such consultations had been laid down. In that situation it
was open to the competent authorities to evolve their own
procedure.   Such   a   procedure   of   taking   a   decision   upon
44

deliberations   does   not   fall   foul   of   Article   14   of   the
Constitution of India. No malice of fact has been alleged in
the instant case.”
32. In view of the above, the finding in the impugned judgment
regarding   non­application   of   mind   and   the   submission   of   Mr.
Naphade to the aforesaid effect cannot be sustained.
33. 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.   The   statutes   do   not
prohibit the same. Moreover, this issue has also been dealt with
by this Court in the case of  Deputy General Manager (HRM) and
another   Vs.   Mudappa   and   others   reported   in   2007   (9)   SCC
768 . Para 30 of the said judgment is reproduced hereunder:
“In   our   judgment,   the   learned   Single   Judge   was
wholly in error in taking such view and quashing the
notification.   Upholding   of   such   view   would   make
statutory   provisions   under   the   Act   or   similar
provisions   in   other   laws,   (for   example,   the   Land
Acquisition   Act,   1894)   nugatory   and   otiose.   We   are
also   of   the   view   that   the   learned   Single   Judge
was   not   right   in   finding   fault   with   the   State
Authorities   in   issuing   notifications   under
Section   1(3),   Section   3(1)   and   Section   28(1)
simultaneously .   There   is   no   bar   in   issuing   such
notifications   as   has   been   done   and   no   provision   has
been   shown   to   us   by   the   learned   counsel   for   the
contesting   respondents   which   prevented   the   State
from   doing   so.   Even   that   ground,   therefore,   cannot
help the land­owners”. 
45

34. The above view has the approval of this Court in its recent
order   dated   28.01.2020   passed   in       Special   Leave   Petition   (c)
No(s).9662   of   2013   (C.   Jayaram   and   others   Vs.   The   State   of
Karnataka and others) .
C.  Procedure Prescribed under the 1966 Act duly followed:
35. As already noted above from the chronology of events given
in   the  earlier   part  of  the   judgment,  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.   In   this   respect   it   would   be   relevant   to
mention   that   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
46

has already been upheld to be not suffering from any illegality or
irregularity. 
36. 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. It would be also
relevant   to   state   here   that   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.  
D.   Acquisition for a Single Company.
37. Section 28(1) of the KIAD Act is reproduced below:
“28.   Acquisition   of   land.­   (1)   if   at   any   time,   in   the
opinion of the State Government, any land is required
for  the   purpose   of   development   by  the   Board,   or   for
any   other   purpose   in   furtherance   of   the   objects
47

of   this   Act ,   the   State   Government   may   by
notification,   given   notice   of   its   intention   to   acquire
such land.”  [ Emphasis Provided ]
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
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 which reads as under;
“Allotment of Plots in Special Cases: Notwithstanding
anything   contained   in   these   regulations,   the   Board
in consultation with the State Government   may allot
any   plot   or   area   other   than   those   in   respect   of
which   applications   are   called   for   under   Regulation   7
to   any   individual   or   company   for   the
establishment of an industry  or for the provision of
any   amenity   required   in   the   Industrial   area.”
[ Emphasis Provided ]
38. 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
48

industry. In the present case, the allotment by the Board is duly
approved by the State Government.
39. In   the   same   context,   it   would   be   relevant   to   refer   to   a
judgment of this Court in the case of    P. Narayanappa Vs. State
of Karnataka  reported in  (2006) 7 SCC 578 , where it upheld the
acquisition of land in favour of a private company under the 1966
Act.   Paragraphs   6,   13   and   14   of   the   said   judgment   are
reproduced below:
“6.   Shri   Shanti   Bhushan,   learned   senior   counsel   for
the   appellants,   has   challenged   the   impugned
notifications   on   several   grounds   and   the   principal
ground is that the land has been acquired in order to
benefit   a   company,   namely,   Vikas   Telecom   (P)   Ltd.
(respondent no.9) who had submitted a project report
for   setting   up   a   software   technology   park   which
included   an   I.T.   Training   Institute/Engineering
College,   Research   and   Development   Centre,
Educational   Centre,   Commercial   and   Residential
Buildings   and   Service   Apartments,   Convention
Centre, Hotel, Shopping Mall, etc……
…………
13. The provision for acquisition of land under the Act
is   contained   in   Section   28   which   is   somewhat
different  from  the  provisions  contained  in   Sections  4 ,
5A   and   6   of the Land Acquisition Act. The legislature
in   its   wisdom   thought   it   proper   to   make   a   specific
provision   for   acquisition   of   the   land   in   the   Act   itself
rather than to take recourse to  Sections 4  and  6  of the
Land   Acquisition   Act.   A   plain   reading   of   sub­
section   (1)   of      Section   28      would   show   that   land
can   be   acquired   for   the   purpose   of   (i)
development   by   the   Board,   or   (ii)   for   any   other
purpose in furtherance of the objects of the Act.
Sub­section   (3)   of   Section   28   is   similar   to   Section   5A
of   the   Land   Acquisition   Act   and   the   final   notification
49

is   issued   under   sub­section   (4)   of   Section   28 .   The
necessary   precondition   for   a   valid   notification
under   sub­section   (4)   of      Section   28      is   that   the
State   Government   should   be   satisfied   that   the
land is required for the purpose specified in the
notification  issued  under  sub­section  (1),   viz., for
the purpose of (i) development by the Board, or (ii)  for
any   other   purpose   in   furtherance   of   the   objects
of the Act.  Therefore, in order to judge the validity of
the   notification   what   is   to   be   seen   is   whether   the
acquisition   of   land   is   being   made   for   securing   the
establishment   of   industrial   areas   or   to   promote   the
establishment or orderly development of industries in
such   areas.   In   view   of   wide   definition   of   the
words   "industrial   infrastructural   facilities"   as
contained in     Section 2     (7a) of the Act, making of
a   technology   park,   research   and   development
centre, townships, trade and tourism centres or
making   provisions   for   marketing   and   banking
which   would   contribute   to   the   development   of
industries   will   meet   the   objectives   of   the   Act
and   acquisition   of   land   for   such   a   purpose
would be perfectly valid.
14………. Sub­section   (1)   of      Section   28      clearly
shows   that   the   land   can   be   acquired   for   (i)
development   by   the   Board;   or   (ii)   for   any   other
purpose in furtherance of the objects of the Act.
Under   sub­section   (8)   of   Section   28 ,   the   State
Government   is   empowered,   after   it   has   taken
possession of land, to transfer the same to the Board
for the purpose for which the land has been acquired.
Section   32   empowers   the   State   Government   to   place
at the disposal of the Board any land vested in it and
the   Board   is   enjoined   to   deal   with   the   land   in
accordance with the regulations made and directions
given   by   the   State   Government   in   this   behalf.   This
stage when the Board gets the authority to deal with
the   land   comes   at   a   later   stage   which   is   after   the
land  has  been developed  by it.   An  entrepreneur  or
a   company   may   give   a   proposal   to   the   State
Government   for   setting   up   an   industry   or
infrastructural facility and the Government may
thereafter   acquire   the   land   and   give   it   to   the
Board. It is also possible that after the land has
50

already   been   acquired   and   developed   by   the
Board,   it   may  be   allotted   to   an   entrepreneur   or
a   company   for   setting   up   an   industry   or
infrastructural   facility.   Therefore,   the   scheme   of
the   Act   does   not  show  that  at  the   time  of  acquisition
of   the   land   and   issuing   a   preliminary   notification
under  Section 28(1)  of the Act, the complete details of
the   nature   of   the   industry   or   infrastructural   facility
proposed   to   be   set   up   should   also   be   mentioned.   At
that   stage   what   is   to   be   seen  is   whether   the   land   is
acquired   for   development   by   the   Board   or   for   any
other purpose in furtherance of the objects of the Act,
as   mentioned   in   sub­section   (1)   of   Section   28   of   the
Act.   In   fact,   if   the   contention   raised   by   the   learned
senior counsel for the appellants is accepted, it would
mean   that   even   at   the   stage   of   preliminary
notification under   Section 28(1)   of the Act, the  nature
of   the   activity   which   may   be   done   by   some
entrepreneur   or   a   company   which   may   give   a
proposal   for   setting   up   an   industry   or   infrastructural
facility   much   after   land   has   been   acquired   should
also   be   taken   note   of   and   specifically   mentioned   in
the   notification,   which   is   well   nigh   impossible.   While
interpreting the provisions of the Act, the Court should
not   only   take   into   consideration   the   facts   of   the
present   case   but   should   also   have   in   mind   all
possible   contingencies.   Therefore,   on   a   plain
reading of the language used in the Act, it is not
possible to accept  the  contention  of the learned
senior   counsel   for   the   appellants   that   the
impugned notification is vague or cryptic as the
complete   details   of   the   project   which   was
proposed   to   be  established   by  Vikas   Telecom   (P)
Ltd.   (respondent   no.9)   were   not   mentioned     and
on   account   of   the   aforesaid   lacuna,   the   landowners
were   deprived   of   their   right   to   make   a   proper
representation or to show cause against the proposed
acquisition.”  [ Emphasis Provided ]  
40. Therefore,   the   view   expressed   by   the   Division   Bench   that
no   acquisition   could   be   made   for   a   single   company   cannot   be
sustained. 
51

E­ Acquisition for a non­applicant (AISL).
41. It   is   not   disputed   that   AISL   (non­applicant)   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  by   Mr.  Naphade   to   the  aforesaid  effect   does  not
merit consideration.
F.  Relevance of Shri Ramtanu judgment:
52

42. The   impugned   judgment   has   placed   reliance   upon   the
judgment in the case of  Shri   Ramtanu   (supra)  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. At the outset, it may be recorded that validity of
the 1962 Act was being considered in the case of   Shri   Ramtanu
(supra) .   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). This Court
while dealing with the 1962 Act discussed this aspect in para 21
of  Shri   Ramtanu (supra) , which is reproduced hereunder:
Counsel   on   behalf   of   the   petitioners   contended   that
there   was   procedural   discrimination   between
the   Land   Acquisition   Act   and   the   Act   in   the   present
case. It  was said that there was a special procedure
designed   by   the   Land   Acquisition   Act   for   acquisition
of   land   for   the   companies   whereas   in   the'   present
case   the   State   was   acquiring   land   for   companies
without   adopting   the   procedure   of,   the   Land
Acquisition Act. It is to be remembered that the Act in
the   present   case   is   a   special   one   having   the   specific
53

and   special   pur­   pose   of   growth,   development   and
Organisation   of   industries   in   the   State   of
Maharashtra.   The   Act   has   its   own   procedure   and
there is no provision in the Act for acquisition of land
for a company as in the case of Land Acquisition Act.
In the present case, acquisition under the Act is
for   the   purpose   of   development   of
industrial        estates   or   industrial   areas   by   the
Corporation or any other purpose in furtherance
of   the  objects   of  the  Act.   The  policy  underlying,
the   Act   is   not   acquisition   of   land   for   any
company   but   for   the   one.   and   only   purpose   of
development,   Organisation   and   growth   of
industrial   estates   and   industrial   areas.   The
Act        is   designed   to   have   a   planned   industrial
city   as   opposed   to   haphazard   growth   of
industrial   areas   in   all   parts   of   the   State.        The
Act        is intended to prevent ,.growth of industries
in the developed parts of the State.  Industries are
therefore to be set up in the developing or, new parts
of   the   State   where   new   industrial   towns   will   be
brought   into   existence.   The   object   of,   the  Act   is   to
carve   out   planned   areas   for   industries .   On   one
side   there   Will   be   engineering   industries   and   on   the
other   there   will   be   chemical   industries.  There   will   be
localisation   of   industries   with   the   result   that   the
residents   and   dwellers   of   towns   and   cities   will   not
suffer   either   from   the   polluted   air   or   obnoxious.
chemicals   of   industries   or   the   dense   growth   of
industries and industrial population, within and near
about   the   residential   areas.   The   Land   Acquisition
Act   is  a  general  Act  and  that  is  why there  is  specific
provision   for   acquisition   of   land   by   the,   State   for
public   purpose   and   acquisition   of   land   by   the   State
for companies.  The present Act on the other hand
is   designed   the   sole   purpose   of   development   of
industrial   areas   and   industrial   estates   and
growth   and   development   of   industries   within
the   State .   Industrial   undertakings   or   persons   who
are   engaged   in   industries   all   become   entitled   to   the'
facilities   on   such   industrial   growth.   Under   the   Land
Acquisition   Act   acquisition   is   at   the   instance   of   and
for   the   benefit   of   a   company   whereas   under   the
present Act acquisition is solely by the State for public
54

purposes.   The   two   acts   are   dissimilar   in   situations
and circumstances."  [ Emphasis Provided ]
43. 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 (supra)  is misplaced.
G.   Value judgments of policy views.
44. 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.   Certain   extracts   from   the   impugned   judgment
wherein   the   Division   Bench   had   expressed   its   personal   policy
views and value judgments are reproduced hereunder:
55

  “Though the word ‘development’ is used, when this word
is   examined   in   an   objective   manner,   in   an   impassionate
manner,   it   is   nothing   but   interference   with   the   existing
state of nature and destroying naute !” (P.90­91)
“Any   industry   inevitably   creates   and   causes   pollution   of
the land, air and water….” (P.91)
“Unfortunately,   by   and   large,….courts   have   been   pro
acquisition   and   have   generally   approved   or   upheld
acquisition   proceedings   in   the   name   of   public   interest.”
(P.96)
“When examined on such a touchstone and such tests are
applied,   we   find   that   the   present   acquisition   proceedings
cannot   stand.   The   affectation   is   very   adverse   and   the
benefit   if   at   all   is   a   return   because   of   future   development
of   any   industry   with   some   potential   for   employment   and
may be a little revenue to the State. The affectation to the
livelihood   and   dignified   life   of   thousands   of   people   which
is not examined even it is not the  focal point, it should be
at least be given due attention which it deserved” (P.105)
“…..[A]nd   with   the   history   of   limited   companies   being   too
well­known, though the British claim the invention of joint
stock   company   is   the   genius   of   English   legal   mind   when
the concept is examined from the  perception as  it prevails
in   this   country   and   in   the   society   and   examine   from   the
ethos   of   our   society,   it   is   nothing   short   of   deception   or
playing fraud.” (P.106)
“A   joint   stock   company   is   invented   only   to   defraud
creditors.”   (P.106­107)
“Let   us  not  lose  our   souls  in  the  name  of  development  by
depriving land holders of their land holdings.” (P.108)
45. 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
56

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.   Reference   may   be   had   to   the   following
decisions:
(i) Regina   Vs.   Barnet   London   Borough   Council;
(1983) 1 AII ER 226;
(ii) Union   of   India   Vs.   Elphinstone   Spinning   and
Weaving   Company   Ltd.;   (2001)   4   SCC   139   (Para
17)
(iii)       D.R.   Venkatachalam   Vs.   Transport
Commissioner; (1977) 2 SCC 273 (Para 29)
(iv)  Padma Sundara  Rao Vs. State of  Tamil  Nadu;
(2002) 3 SCC 533 (Para 13);
(v) Harbhajan   Singh   Vs.   Press   Council   of   India;
(2002) 3 SCC 722 (Para 11) and 
(vi) Unique   Butyle   Tube   Industries   Vs.   U.P.
Financial   Corporation;   (2003)   2   SCC   455   (Para
12).
H.     Challenge   to   acquisition   by   a   minority   (10%)   of   land
owners.
46. 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
57

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. This aspect has been dealt
with   by   this   Court   in   the   case   of   Amarjit   Singh   Vs.   State   of
Punjab   reported   in   (2010)   10   SCC   43   and   Om   Prakash   Vs.
State   of   U.P.   reported   in   ( 1998)   6   SCC   1 .   The   learned   Single
Judge   had   placed   reliance   on   the   judgment   of   Om   Prakash
(supra) .   It   is   also   worthwhile   to   mention   that   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. 
58

47. In   view   of   the   above   analysis,   we   are   of   the   view   that   the
Division   Bench   committed   an   error   in   quashing   the   acquisition
proceedings. Accordingly, the appeals filed by MSPL, AISL, KIADB
and State of Karnataka are allowed. 
48. The   judgment   of   the   Division   Bench   dated   22.03.2012   is
set aside and the writ petitions stand dismissed as ordered by the
learned Single Judge vide judgment dated 17.03.2009.
49. Insofar as the claim of Syed Ahmed is concerned, which is
in   respect   of   similar   acquisition   for   M/S   BMM   Ispat   Ltd.   on
similar  grounds based upon the judgment of the Division Bench
dated 22.03.2012 impugned in the other appeals, deserves to be
dismissed   as   we   have   already   set   aside   the   said   judgment.
Relevant to state here that Syed Ahmed was owner of 14.35 acres
out of total land measuring 705.99 acres acquired for M/S BMM
Ispat   Ltd.,   which   is   less   than   2%.   The   appeal   of   Syed   Ahmed   is
accordingly dismissed.
50. There shall be no order as to costs.
59

51. Pending application(s), if any, is/are disposed of.
…..…….......................... J.
[HEMANT GUPTA]
………….........................J.
[VIKRAM NATH]
NEW DELHI
OCTOBER 11, 2022. 
60