Summary
About 1,034 acres in Koppal were acquired under the Karnataka Industrial Areas Development Act, 1966 for a pellet plant (MSPL) and a steel plant (AISL, its wholly owned subsidiary). The projects had been cleared by the High Level Clearance Committee under the Karnataka Industries (Facilitation) Act, 2002. Landowners holding under 10% of the land sued, and the Division Bench quashed the whole acquisition. The Supreme Court reversed. Section 28(1) allows acquisition for any purpose furthering the Act's objects, including for a single company. Simultaneous notifications are lawful, and the statutory procedure was followed. Environmental clearance came later, and Shri Ramtanu was distinguishable. Courts must not decide on their own policy views, and a small minority cannot unsettle an acquisition the rest of the owners accepted.
Issues
- Whether land can be acquired under Section 28 of the Karnataka Industrial Areas Development Act, 1966 for a single private company.
- Whether the acquisition was vitiated by non-application of mind, haste, simultaneous notifications under Sections 1(3), 3(1) and 28(1), or non-compliance with Section 28.
- Whether the absence of prior environmental clearance, or the inclusion of a subsidiary that had not itself applied to the SHLCC, invalidated the acquisition.
- Whether the High Court could quash the whole acquisition at the instance of landowners holding under 10% of the land, relying on Shri Ramtanu and its own policy views.
Provisions considered
- Section 28(1), Karnataka Industrial Areas Development Act, 1966Land may be acquired 'for the purpose of development by the Board, or for any other purpose in furtherance of the objects of this Act'. Read with Regulation 13 and P. Narayanappa, this permits acquisition and allotment to a single company to set up an industry. (¶¶ 37, 38, 39, 40)
- Sections 1(3), 3(1) and 28(2)-(8), Karnataka Industrial Areas Development Act, 1966No provision bars issuing the Section 1(3), 3(1) and 28(1) notifications on the same day (Mudappa). Objections were invited and decided, the final declaration followed, and compensation was determined before possession was taken. (¶¶ 33, 34, 35, 36)
- Sections 3-5, Karnataka Industries (Facilitation) Act, 2002The SHLCC, chaired by the Chief Minister, considered the project in detail as the single-window body. That approval, the Land Audit Committee's decision and the Government Orders showed conscious decision-making and no haste (BPL Ltd v S.P. Gururaja). (¶¶ 21, 26, 27, 28, 29, 30, 31, 32)
- EIA Notification dated 14.09.2006, Environment (Protection) Act, 1986The notification did not require MoEF clearance for securing land. State consents were obtained, and MoEF clearance was ultimately granted on 23.09.2016, so lack of clearance could no longer be raised. (¶ 25)
Held
- Environmental clearance was not required to secure land under the 2006 notification. State pollution and environment consents followed, and MoEF clearance was granted in 2016, so the objection did not survive. (¶ 25)
- The SHLCC, the Government, the Land Audit Committee and the State nodal agency considered every aspect of the project, and no mala fides was pleaded. The finding of non-application of mind and haste could not stand. Issuing the three notifications together is not barred. (¶¶ 26, 27, 30, 32, 33, 34)
- The Section 28 procedure was strictly followed: objections were heard, the final declaration was made, compensation was fixed and possession was taken, with the land then transferred to KIADB and leased to the companies. The High Court acted on assumptions without material. (¶¶ 35, 36)
- Section 28(1) and Regulation 13 allow acquisition and allotment for a single company's industry. Substituting AISL, MSPL's wholly owned subsidiary, for part of the project was a commercial matter that the State examined and approved, without changing finance, employment or infrastructure. (¶¶ 37, 38, 39, 40, 41)
- Shri Ramtanu concerned the validity of the Maharashtra Act, which has a different object; no validity challenge was raised here. The Division Bench's views that development destroys nature and that joint stock companies defraud creditors were policy views outside the judicial domain. Statutes must be read in their plain language. (¶¶ 42, 43, 44, 45)
- Owners of over 90% of the land had accepted compensation, and investment and employment had followed. Quashing the whole acquisition at the instance of a small minority was contrary to public interest (Om Prakash, Amarjit Singh). (¶¶ 46, 47)
Result
Appeals of MSPL, AISL, KIADB and the State allowed. The Division Bench's judgment was set aside and the Single Judge's dismissal of the writ petitions was restored. The connected landowner's appeal concerning a similar acquisition for BMM Ispat Ltd was dismissed. No costs.