'Against Karnataka Industrial Area Development Act': High Court Sets Aside Land Acquisition, Says It Was Done For Private Entity's Expansion

The Karnataka High Court set aside state's land acquisition proceedings with respect to Indian Machine Tool Manufacturers' Association (IMTMA), observing that the proceedings were 'colourable exercise of power' as it was not for a public purpose and a 'fraud on the statute' to divest owners of their land in favour of a profit-making private entity.The Division Bench of Justice D K Singh and Justice T M Nadaf has on June 3 [Wednesday] accordingly allowed a batch of 12 appeals filed by landowners whose lands were acquired under the Karnataka Industrial Area Development Act, 1966 (KIAD Act) for setting up a multi‑level car parking facility for the Bangalore International Exhibition Centre (BIEC) led by IMTMA. “…Setting up an industrial area is a public purpose and acquiring the land for a profit making entity for its expansion would not be in the line of the objects of the KIAD Act, and it is nothing but a fraud committed on statute by the authorities to divest the landowners from their land holdings for a pittance in favour of a private entity for expansion of its business and making more and more profit. This kind of exercise of power is a statutory and constitutional fraud by the State Authorities...,”, the court observed.The Court reasoned that the objective of the KIAD Act is to acquire land for setting up industrial areas, not to acquire land for an individual entity. “…After setting up an industrial area, the Government may allot the land to an applicant for setting up the industries in the industrial area. The Government cannot acquire the land for an individual entity of its choice at the expense and cost of the poor landowners. The object of the Act is public purpose in creating industrial areas for development of the industries and industrialisation of the State. The Government cannot acquire the land for an individual person/entity of its choice by exercising the power of eminent domain…”."Looking at the facts of the case, we are of the view that the entire exercise of acquiring the land in question for IMTMA was vitiated under the constitutional scheme. As no award has been made determining the compensation for 14 long years from the date of the final notification, we are of the view that the land acquisition proceedings have lapsed. The State could not have acquired the land for the purpose of a private entity which is profitable venture, as is evident from the financial statements mentioned above for 4-5 years," the court added. For context, the IMTMA had sought acquisition of lands in various survey numbers of Madanayakanahalli village for construction of a multi‑level car parking facility, part of its exhibition centre. The government had issued a preliminary notification under Section 28(1) of the KIAD Act on 19.08.2010. Similarly, the final notification under Section 28(4) was issued on 02.05.2012 restricting land acquisition to 17.38 acres.The landowners challenged the acquisition before the Writ Court. The single judge observed that in the guise of acquisition, Government should not support the activities of IMTMA or any other similarly situated persons to go for excess acquisition at the cost of poor farmers/agriculturists. It however upheld land acquisition proceedings in respect of the 7 acres of land out of 17.38 acres, but there are no demarcations such as survey numbers etc. in respect of which the land acquisition for 7 acres has been upheld. Thus Karnataka Industrial Area Development Board, IMTMA and land owners all filed appeals before the division bench. The division bench pointed out that the private entity was a profitable venture, evident from the financial statements of the company from past 4 or 5 years. Even then, the state, chose to acquire 17.38 acres of land from the farmers of Mandayakanahalli, court opined.Noting the inordinate delay of 14 years in disbursing compensation since the final notification dated 02.05.2012 under Section 28(4) of the KIAD Act, 1966, the court quashed the impugned acquisition notifications.“It is also not in dispute that no award has been passed and no compensation has been deposited or paid to the landowners till date despite there being no interim order for not to pass the award and assess the compensation and deposit the same ….As no award has been made determining the compensation for 14 long years….we are of the view that the land acquisition proceedings have lapsed….”, the cRelying on Supreme Court judgments in K.T. Plantation Pvt. Ltd. v. State of Karnataka ([2011] 9 SCC 1) and Kolkata Municipal Corporation v. Bimal Kumar Shah ([2024] 10 SCC 533), the Division Bench underscored that the right to property under Article 300A is not only a constitutional right but also a human right.“…Article 300A of the Constitution of India provides that "no person shall be deprived of his property except by authority of law"... Though it is not a basic feature of the Constitution or fundamental rights, the human rights are considered to be in the...

'Against Karnataka Industrial Area Development Act': High Court Sets Aside Land Acquisition, Says It Was Done For Private Entity's Expansion

Sebin James

HC: Nothing but Fraud committed on statute by authorities to divest Landowners from their holdings for a Pittance in favour of Private Entity

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Sebin James

'Against Karnataka Industrial Area Development Act': High Court Sets Aside Land Acquisition, Says It Was Done For Private Entity's Expansion

Sebin James

HC: Nothing but Fraud committed on statute by authorities to divest Landowners from their holdings for a Pittance in favour of Private Entity

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Sebin James

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