LAKEVIEW TOURISM CORPORATION, NO. 10/1, LAKSHMINARAYANA COMPLEX, GROUND FLOOR. PALACE ROAD, BANGALORE - 560 052. REPRESENTED BY ITS PARTNER SRI. P. DAYANAND PAI Vs. THE STATE OF KARNATAKA, REPRESENTED BY ITS CHIEF SECRETARY TO GOVERNMENT, VIKASA

JUDGEMENT

(1.) THE facts of the case are as follows: The petitioner is said to be a partnership firm. It is the case of the petitioner that the State Government of Karnataka had hosted a Global Investors Meet in the year 2000. The petitioner had participated at the said Meet and had offered to set up a tourism project proposing to invest a cum of Rs. 250 Crore, indicating the land requirement, for the project, at about 70 acres. The petitioner had identified willing sellers of agricultural land in Hebbal and Hebbal Ammannikere villages, Bangalore North Taluk, comprised in land bearing Survey Nos. 59/1 to 75, 82 to 87 and 102 to 109, apart from other lands of those villages measuring about 33 acres. The State Government is said to have accepted the proposal. In accordance with the procedure that was prescribed to process such proposals, the petitioner had submitted the proposal to a Single Window Agency, known as the State Level High Power Committee (Hereinafter referred to as the 'SLHPC', for brevity), headed by the Minister of Industries and the said Committee, at its meeting held on 28.6.2000, had approved the project. Though initially, it was proposed that the petitioner would acquire, through direct negotiation with the land holders, 33 acres of land and that the State Government would be required to acquire the remaining extent of 37 acres that was required for the project, it was decided by the said SLHC, at its meeting dated 14.8.2001, to acquire the entire extent of 70 acres required for the project, at the cost of the petitioner. Accordingly, it was agreed that the acquisition would be made under the provisions of the Karnataka Industrial Areas Development Act, 1966 (Hereinafter referred to as the 'KIAD Act', for brevity) and he was called upon to deposit 40% of the estimated cost, which was assessed at over Rs. 1.00 Crore. The petitioner had deposited such amount. The petitioner was thereafter called upon to pay certain service charges and he had paid a further sum of Rs. 76,15,700/ -, on that account. The KIADB issued a declaration under Section 3(1) of the Karnataka Industrial Areas Development Act, 1966 (Hereinafter referred to as the 'KIAD Act', for brevity), declaring an area of 63 acres 33 guntas as an industrial area and also issued a preliminary notification under Section 28(1) of the KIAD Act dated 25.11.2000. It transpires that subsequent to the issuance of the notification under Section 28(1) of the KIAD Act, a preliminary notification under Section 17(1) and (3) of the Bangalore Development Authority Act, 1976 (Hereinafter referred to as the 'BDA Act', for brevity) dated 3.2.2003, proposing to acquire large extents of land, for the formation of a housing layout known as 'Arkavathy Layout', including the portion of lands, which were already notified under Section 28(1) of the KIAD Act, as aforesaid, was issued. The KIADB immediately addressed the BDA in this regard, and had requested the deletion of lands, which were sought to be notified, from the acquisition proceedings under the BDA Act. This was also taken up by the State Government with the BDA. In the meanwhile, the petitioner was required to deposit a further amount of Rs. 8,53,45,237/ -, which was promptly deposited as on 24.4.2004. The KIADB had then issued a final notification dated 11.5.2004, in respect of 55 acres 13 guntas of land. A mahazar was also drawn up as to taking possession of the said land in terms of Section 28(8) of the KIAD Act, after following the due process of law contemplated under Section 28(6) and 28(7) of the KIAD Act and possession of the land was handed over to the KIADB. Thus, the lands had vested absolutely with the State" and possession was also delivered to KIADB. There were attempts at encroachment on the land during the said period and action was also initiated in respect of the same. On the other hand, it transpires that the BDA, inspite of the infirmity in the acquisition proceedings under the BDA Act, as aforementioned, seeking to include the lands, which were already covered by the acquisition proceedings under the KIAD Act, had proceeded to issue a final notification under Section 19(1) of the BDA Act, inclusive of the lands which were not available, as already stated. Therefore, the petitioner was compelled to challenge the action of the BDA by way of writ proceedings in WP 46785/2004. The said writ petition was allowed by an order dated 23.10.2010 and the acquisition under the BDA Act was quashed insofar as it overlapped the lands acquired under the KIAD Act. The BDA had filled an appeal challenging the said order. However, the appeal was dismissed. It transpires that the third respondent, which is said to be a partnership firm, is said to have approached the Karnataka Udyog Mitra, seeking approval of a tourism project proposed to be established over the lands of Hebbal Ammannikere village vide application dated 23.1.2005, which is said to have been rejected as on 1.6.2005, while finding that the petitioner's project had already been approved in respect of the very lands, which was also sought to be included in the proposed project of respondent no. 3. The said respondent had preferred a writ petition in WP 25741/2005, wherein the petitioner was said to be a respondent, But, however, that writ petition was withdrawn as on 2.2,2010, on the basis of a memo filed by the said third respondent that the State Government had decided to de -notify the lands in question, which were the subject matter of the writ petition. The State Government on 3.2.2010, is purported to have issued a notification under Section 4 of the KIAD Act de -notifying an extent of land measuring 4 acres 4.25 guntas in Hebbal Village, which were part of the lands acquired by the KIADB for the petitioner's project. The said lands were actually in Hebbal Ammannikere village, which has been subsequently corrected by issuing a Corrigendum Notification. It is this action of the State Government, which is the subject matter of the present writ petition.

(2.) THE Statement of objections filed by the respondents are to the following effect: That the State Government has issued a notification to delete the lands in question, as it is to be utilized by the third respondent for the purpose of tourism development. Since there was no allotment made in favour of the petitioner, nor was possession handed over, there was no impediment for issuance of such a notification and that there is no illegality committed by the state Government. The third respondent, in turn, questions the locus standi of the petitioner to challenge the impugned notifications, as the petitioner had not acquired any right over the property, as in the eye of law, the acquisition is for the benefit of the KIADB and not for the benefit of the petitioner. It is further contended that the rigour of the provisions of the Land Acquisition Act, 1894 (Hereinafter referred to as the 'LA Act', for brevity) would not be applicable to the acquisition made under the KIADB Act and there is no prohibition to withdraw from acquisition under the provisions of the KIAD Act unlike under the provisions of the LA Act. In any event, the petitioner cannot question the same. The third respondent claims as the owner of the land and since the third respondent also seeks to utilize the land for a public purpose, albeit by setting up a project in the tourism industry, there is no illegality in the impugned notification. It is claimed that the third respondent had purchased 10 acres 78 guntas of land in various survey numbers of Hebbal Ammannikere village and it is thereafter that an application was made before the SLHPC seeking approval of its project as per application dated 25.1.2095. Pursuant to which, the application was rejected on the ground that another project of similar nature had already been approved. Though the third respondent had challenged that order by way of a writ petition, it had also filed an application before the State Government seeking deletion of land to an extent of 4 acres 1/4 gunta of Hebbal Ammannikere Village owned by the respondent, which was the subject matter of the acquisition under the KIAD Act. Since it had not been allotted to any entity and was in the possession of the KIADB, the same has been deleted from the acquisition proceedings. The third respondent has also questioned the bona fides" of the petitioner - firm and its constitution and therefore, seeks to question the very intention and object of its partners, in seeking to obtain the benefit of the lands that were subject matter of the acquisition proceedings, including the land which has now been de -notified. Though, those acquisition proceedings are claimed to have been initiated at the instance of the petitioner, the petitioner approached the State Government or the authority constituted under the Karnataka Facilitation Act, 2002 (Hereinafter referred to as the 'KF Act', for brevity), would not enable the petitioner to claim that any approval granted by any such authority in respect the proposed acquisition of any particular land, could be linked to independent acquisition proceedings under the KIAD Act, which has no reference of the petitioner being the ultimate beneficiary and therefore, the petitioner would not be entitled to question the inclusion or exclusion of any item of land in the said acquisition proceedings.

(3.) IN the backdrop of the above contentions, the learned Senior Advocate Shri Jayakumar S Patil, appearing for the Counsel for the petitioner seeks to canvass the following: - It is contended that the State Government, by its notification dated 3.2.2010, has sought to withdraw acquisition of the lands mentioned therein. This, it is stated, is outside the power of the State Government when once the possession of the lands has been taken by the Land Acquisition Officer, as, provided under the KIAD Act. The fact of possession having been taken is evidenced by a mahazar, which is available on record and possession was also handed over to the KIADB. This is an admitted circumstance as evident from the pleadings in WP 46785/2004. The petitioner being denied the benefit of the lands, as being opposed to the principle of promissory estoppel, has been endorsed by a Division Bench of this court, to the knowledge of the State Government and which is a binding decision insofar as the State Government is concerned. Attention is drawn to Paragraph -9 of the said Division Bench judgment in WA 3725/2002. Hence, it is contended that from the tenor of Section 28(4) of the KIADB Act, the land having vested in the State, any notification under Section 4 of the KIAD Act, which is sought to be pressed into service, could only be issued prior to the said notification under Section 28(4) of the KIAD Act, when such power is unavailable subsequent thereto. The learned Senior Advocate would draw attention to a decision in M. Nagabhushana Vs. State of Karnataka and Others, AIR 2011 SC 1113 , with particular reference to Paragraphs - 28 to 35, to emphasize the position of law, as endorsed by the apex court, that the land stand vested with the State immediately after the issuance of the notification under Section 28(4) of the KIAD Act and in comparison, under the provisions of the LA Act, the land vests only after the possession is taken and after passing of an award and issuance of a notification under Section 16 of the LA Act. It is further contended that the third respondent is said to have purchased the lands in question subsequent to the issuance of the preliminary and final notifications under Section 28(1) and 28(4) of the KIAD Act and therefore, would have had no right to seek withdrawal from the acquisition proceedings by the State Government and was at best entitled to seek compensation and no other relief in respect of the lands in question. In this regard, reliance is placed on a decision in Vasanth Sreedhar Kulkarni and Others Vs. State of Karnataka and Others, JT (2011) 12 SC 258 . Insofar as the allegation against the petitioner - firm that its constitution is doubtful, in that, Shri Dayananda Pai, the partner, after having sold the property to M/s Mantri Group, is seeking to pursue the present petition is denied. It is asserted that the petitioner is a firm consisting of M/s Shivashakthi Estate and Investments Private Limited, represented by one Sushil Mantri and M/s Ashwitha Property Developers Private Limited, represented by Shri Dayanand Pai, as partners, which firm has been in existence since the year 1999. The firm had its office at Jayanagar, but later shifted to Vittal Mallya Road, Bangalore in the year 2004. Therefore, the allegations of mala fides and the doubt sought to be cast on the manner in which the petitioner has been conducting its business, is misleading and false. It is further contended that insofar as the argument that the SLHPC having approved the project of the petitioner, requiring the KIADB to acquire the land, the notifications issued under the KIADB Act, did not specify that the lands were being acquired for the benefit of the petitioner and as such, the petitioner did not have any locus standi to claim that he is the beneficiary or to question the actions of the State, is held to be untenable. The learned Senior Advocate would draw attention to the case of P. Narayanappa and Another Vs. State of Karnataka and Others, AIR 2006 SC 3001 , wherein it is held that an entrepreneur or a company may give a proposal to the State Government for setting up an industry or infrastructural facilities and the Government can thereafter acquire the land and hand it over to the Board and thereafter be allotted to an entrepreneur for setting up an industry or infrastructural facilities. In any event, in the present case on hand, it is pointed out that a Division Bench of this court has already endorsed that the ultimate beneficiary of the acquisition was the present petitioner and that the State Government was estopped from denying the benefit of the lands to the petitioner, especially, after the petitioner has invested substantial sums of money at a very early point of time and to deny the petitioner the benefit of the lands by the summary withdrawal of the lands from acquisition proceedings, is no longer available to the State. It is further emphasized that two items of land, in respect of which, the State has sought withdrawal from the acquisition proceedings, had been purchased by respondent no. 3, after the preliminary notification and six items of land were purchased by the third respondent after the final notification. These transactions were clearly in violation of Section 3 of the Karnataka Land (Restriction on Transfer) Act, 1991, as the lands had vested in the State Government upon the final notification under Section 28(4) of the KIAD Act having been published. The law contemplates criminal proceedings to be initiated against the seller of such properties and any subsequent purchaser could, at best, proceed to seek compensation having stepped into the shoes of the original owner. Therefore, the State Government was not justified in issuing the impugned notifications. The State Government has also sought to overlook the circumstance that respondent no. 3 had made an application, seeking approval of its project including the lands that are now the subject matter of the impugned notifications. Such application was rejected by the competent authority, while noticing that the project of the petitioner was duly approved at a prior point of time in respect of the very lands in question. Therefore, the conduct of the third respondent, having proceeded to purchase the lands subsequent to the acquisition proceedings, which were well under way and the State Government having chosen to withdraw from the acquisition proceedings at the instance of the third respondent, is clearly illegal and mala fide.