M/S. M.S.P.L. LIMITED versus THE STATE OF KARNATAKA AND ORS.
[2022] 14 S.C.R. 591, Supreme Court of India, 2022
Outcome: Disposed off
Segment: Body
A
B
C
D
E
F
G
H
591
591
   [2022] 14 S.C.R. 591
M/S. M.S.P.L. LIMITED
v.
THE STATE OF KARNATAKA AND ORS.
(Civil Appeal No(s). 4678 of 2021)
OCTOBER 11, 2022
[HEMANT GUPTA AND VIKRAM NATH, JJ.]
Land Acquisition :
Karnataka Industrial Areas Development Act, 1966:
ss. 3(1), 1(3) and 28(1) – Land acquisition by the Karnataka
Industrial Area Development Board for two companies, the appellant
company and its fully owned subsidiary for setting up an iron ore
plant – Issuance of Notification u/ss. 1(3), 3(1) and 28(1) of the
1966 Act for land acquisition – Objections invited from land owners
u/s. 28(3) of 1966 Act – Objections duly considered – Thereafter,
notifications u/s. 28(4) of 1966 Act was issued for a total area
required by the appellant company – Similar notifications were issued
for the land required for the subsidiary company – Compensation
also determined – Writ Petitions filed seeking quashing of the
notifications issued u/s. 28(4) of the 1966 Act for the appellant
company and its fully owned subsidiary – More than 90 per cent of
the land owners covering 90 per cent of the area acquired accepted
the compensation – Only 10 per cent or less of the land owners had
filed the said writ petitions – Challenge was also made to the grant
u/ss. 1(3) and 3(1) of the 1966 Act – Single Judge dismissed all the
petitions filed by land owners – However, the Division Bench
quashed the acquisition proceedings for the entire areas which was
not even challenged – Also quashed the
notifications issued u/ss.
1(3), 3(1) and 28(1) of the 1966 Act – On appeal, held – Division
Bench erred in quashing the acquisition proceeding – Karnataka
Industries (Facilitation) Act, 2002.
Acquisition of land, in absence of environmental clearance –
Permissibility of – Plea that two companies did not have any
Environmental Clearance, in the absence of which the land could
not have been acquired for setting up the plant – Held : No objection
can be raised that there is no environmental clearance certificate
A
B
C
D
E
F
G
H
592
SUPREME COURT REPORTS
[2022] 14 S.C.R.
from the Ministry of Environment and Forest as the same has already
been issued on 23.09.2016.
Land acquisition, if vitiated for non-application of mind and
undue haste by competent authorities – Held : No grounds were
raised nor any foundation laid in the petitions alleging mala fide –
Object of the 2002 Act was primarily to provide a Single Window
Clearance by the High Level Committees constituted under the 2002
Act – Reports and recommendations of the different Committees as
also the State Government have been gone through – Found that
all aspects of the matter have been considered and a conscious
decision has been taken on the overall conspectus of the project
and the proposals submitted.
s. 3(1), 1(3), 28(1) – Procedure prescribed to acquire land
under – Duly followed or not – Held: Entire process as provided
under the Act has been strictly followed – Division Bench in the
impugned judgment apparently was swayed by its own personal
views based on assumptions and having no material backing which
led to the quashing of the notifications.
ss. 28, 41 – Allotment of plots in special cases – Land
Acquisition for single company, if can be said to be for public
purpose and could be made under 1966 Act – Held : Under the
Regulation 13, the Board is empowered to allot any plot or area to
any individual or company for establishment of an industry in
consultation with the State Government – This provision also
contemplates
acquiring land for the purpose of allotment to a single
company to set up an industry – In the instant case, the allotment by
the Board is duly approved by the State Government.
Land acquisition for a non–applicant company under the Act,
without its application being routed through State High Level
Clearance Committee – Permissibility of – Held : Non–applicant
company is fully owned subsidiary of the applicant company – Only
change sought by the applicant was the integrated steel plant be
set up by non-applicant which was its own subsidiary – These are
commercial matters and the State after examining the proposal for
change in its wisdom accepted the same – There was no change in
the project, as such, regarding the finance, employment and other
infrastructures – Thus, the said objection not maintainable.
A
B
C
D
E
F
G
H
593
Reliance on Shri Ramtanu Coop. Housing Society Ltd. vs. State
of Maharashtra’s case for the proposition that the acquisition under
the 1966 Act was in pari materia to the Maharashtra Industrial
Development Act, 1962 and, thus, the acquisition has to be for public
purpose only and not for a private company – Correctness of –
Held : Validity of the 1962 Act was being considered in the case of
Shri Ramtanu – However, in the present litigation, there is no
challenge to the validity of the 1966 Act or the 2002 Act – Purpose
in 1962 Act was for establishment of industrial areas whereas in
the other statute i.e 1966 Act, it was for promotion of the
establishment and orderly development of industries – Thus, the
reliance by the Division Bench in the impugned judgment on the
case of Shri Ramtanu is misplaced – Maharashtra Industrial
Development Act, 1962.
Value judgments of policy views – Significance of –
Conclusions arrived at in the impugned judgment, if vitiated on
account of inclusion of value judgments of policy views by the High
Court – Held : Division Bench introduced several value judgments
and policy views in order to interpret the provisions of the 1966 Act
and the 2002 Act – Such value judgments and policy views are
beyond the domain of the Court – Courts should refrain itself from
expressing value judgments and policy views in order to interpret
statutes – Statutes are to be read in their plain language and not
otherwise – Interpretation of Statutes.
Petition for quashing the land acquisition by a fraction of
landowners holding a fraction of acquired land which is only 10 %
or less of the total acquired land – Maintainability of – Held :
Quashing the entire acquisition at the instance of one land owner
having 4.34 acres of land out of total acquisition for applicant
company of 110 acres, would be against the public policy and public
interest – Further, in the case of non-applicant company acquisition
of 914 acres is challenged by a fraction of less than 10% land
owners – Hence, Division Bench erred in quashing the acquisition
proceedings.
Karnataka Industrial Areas Development Act, 1966 –
Karnataka Industries (Facilitation) Act, 2002 – Object/scope –
Discussed.
M/S. M.S.P.L. LIMITED v. THE STATE OF KARNATAKA
AND ORS.
A
B
C
D
E
F
G
H
594
SUPREME COURT REPORTS
[2022] 14 S.C.R.
Disposing of the matters, the Court
HELD : A. Environmental Clearance.
1. On record environmental clearance has been given on
23.09.2016 by the Ministry of Environment and Forests,
Government of India, copy of which has been filed along with I.A.
in the appeal of MSPL. Prior to it, the Ministry itself vide
Notification dated 14.09.2006 provided that no Environment
Clearance from MOEF was required for securing land. KSPCB
had given its clearance and no objection much earlier for setting
up the plant vide communication dated 02.08.2008. Further, the
Ecology and Environmental Department of Government of
Karnataka had given clearance on 01.10.2010. Further, the
Ministry of MOEF had issued an order dated 08.09.2014
providing that the plant may be continued to operate. Thereafter,
the KSPCB issued an order dated 16.10.2014 requiring MSPL
to apply for Terms of Reference by 07.12.2014 and to obtain
environment clearance from MOEF within one year. The MSPL
accordingly applied as per the Terms of Reference and was
granted the environment clearance by MOEF vide communication
dated 23.09.2016. In view of the said facts, as of date, no objection
can be raised that there is no environmental clearance certificate
from the Ministry of Environment and Forest as the same has
already been issued on 23.09.2016. [Para 25][624-H; 625-A-D]
B. Non–-application of mind and undue haste.
2.1 The SHLCC after considering all aspects of the
matter
had resolved to approve the project and had made
recommendations accordingly. Thereafter, the KIADB accepted
the recommendations of the SHLCC and the same also had due
approval of the Government at the highest level. The division
made by MSPL (the initial applicant) for setting up the two
industries by two different entities also had due approval of the
KIADB and the Government. [Para 26][625-D-E]
2.2 The original writ petitioners (land owners) had
challenged the notifications under Section 1(3), 3(1) and 28(1) of
the 1966 Act on the ground of non-application of mind and undue
A
B
C
D
E
F
G
H
595
haste. No grounds were raised nor any foundation laid in the
petitions alleging mala fide. The object of the 2002 Act was
primarily to provide a Single Window Clearance by the High Level
Committees constituted under the 2002 Act. The Court has gone
through the reports and recommendations of the different
Committees as also the State Government and found that all
aspects of the matter have been considered and a conscious
decision has been taken on the overall conspectus of the project
and the proposals submitted. [Para 27][625-F-H]
2.3 The meeting of the SHLCC dated 06.06.2005 was
chaired by the Chief Minister, State of Karnataka, the concerned
Ministers and Secretaries were also present in the meeting. The
complete project was discussed under different heads including
the background of the promoters, background of the company,
means of finance, infrastructure facilities, environment and
pollution control clearances, local employment, water
consumption, electricity consumption and incentives &
concessions. The Government Order, thereafter, was issued on
22.12.2005 detailing the different facets of the proposal and
granting due approval for establishment of the palletization plant
as also the integrated steel plant with a total investment of
2292.26 crores and generating employment to one thousand
persons. Thereafter, under the provisions of 1966 Act, the Land
Audit Committee in its meeting of 28th January, 2006, which was
chaired by the Principal
Secretary, Department of Commerce &
Industries and Secretaries of other relevant Departments with
special invitees also took a conscious decision with respect to
the project submitted by MSPL for both the plants at subject
Item No.2.5 and recommended for acquisition of 1034 acres of
land and to intimate the same to the KIADB. It was thereafter
that the Nodal Agency of the State level i.e. Karnataka Udyog
Mitra in its meeting dated 15.02.2006 after considering the
proceedings of the SHLCC dated 6th June, 2005 and that of the
Land Audit Committee dated 28.01.2006 accepted the
recommendation for acquisition of 1034 acres of land.[Paras 28-
30][626-A-E]
2.4 In view thereof, the finding in the impugned judgment
regarding non-application of mind and the submission to the said
effect cannot be sustained. [Para 32][628-A]
M/S. M.S.P.L. LIMITED v. THE STATE OF KARNATAKA
AND ORS.
A
B
C
D
E
F
G
H
596
SUPREME COURT REPORTS
[2022] 14 S.C.R.
2.5 Insofar as the notifications under Section 1(3), 3(1) and
28(1) of 1966 Act being issued on the same date, it may be noted
that there is no embargo on the same. [Para 33][628-B]
C. Procedure Prescribed under the 1966 Act duly followed:
3.1 The due procedure had been followed. It is also to be
noticed that the objections were invited under the procedure
prescribed in Section 28 of the 1966 Act and the same were duly
considered and disposed of, as such, it cannot be alleged that the
objections have not been considered vitiating the acquisitions.
The Land Audit Committee approved the grant of 1034 acres of
land in its meeting dated 28.01.2006, which was duly accepted
and approved by the State Nodal Agency, Karnataka Udyog Mitra
in its meeting dated 15.02.2006 and duly communicated vide letter
of even date to the KIADB to start the process for acquisition. It
was thereafter that the notifications were issued under Section
3(1), 1(3) and 28(1) of the 1966 Act, on 09.11.2006. Simultaneous
publication of the said notifications has already been upheld to
be not suffering from any illegality or irregularity. [Para 35][628-
G-H; 629-A-B]
3.2 Pursuant to the notification under Section 28(1) of the
1966 Act, further steps were taken and after inviting objections
and disposing of the same, final declaration was made,
compensation was determined and thereafter possession taken.
From the material on record, it is apparent that
the land was
acquired in the name of the State, thereafter transferred to the
KIADB, which proceeded to allot the same to MSPL and AISL
respectively and, accordingly, lease deeds were executed. The
entire process as provided under the Act has been strictly
followed. The Division Bench in the impugned judgment
apparently was swayed by its own personal views based on
assumptions and having no material backing which led to the
quashing of the notifications. [Para 36][629-B-D]
D. Acquisition for a Single Company
4. The words for the purpose of development by the Board,
and or for any other purpose in furtherance of the objects of this
Act make it amply clear that the intention to acquire land in the
A
B
C
D
E
F
G
H
597
opinion of the State Government could be not only for the purpose
of development by the Board but for any other purpose in
furtherance of the objects of this Act. This gives power to acquire
land beyond development by KIADB. Further, the regulations
framed by the Board under Section 41 particularly deal with this
aspect in Regulation 13. Under the above regulations, the Board
is empowered to allot any plot or area to any individual or company
for establishment of an industry in consultation with the State
Government. This provision also contemplates acquiring land for
the purpose of allotment to a single company to set up an industry.
In the instant case, the allotment by the Board is duly approved
by the State Government. Therefore, the view expressed by the
Division Bench that no acquisition could be made for a single
company cannot be sustained. [Paras 37, 38, 40][629-F-G; 630-
B-C; 632-F-G]
E. Acquisition for a non-–applicant (AISL).
5. It is not disputed that AISL (non-applicant) is fully owned
subsidiary of MSPL (applicant). In effect, AISL is a new Company
promoted by the same promoters. The State Government
examined the request of MSPL and also AISL for modification of
its Government Order dated 22.12.2005. It examined the
bifurcation under various heads. State Government issued
Government Order dated 22.03.2006 splitting the infrastructures
required with further stipulation that all other terms and conditions
mentioned in the Government Order
dated 22.12.2005 would
apply as it is to both the Companies. The only change sought by
MSPL was the integrated steel plant be set up by AISL which
was its own subsidiary. These are commercial matters and the
State after examining the proposal for change in its wisdom
accepted the same. There was no change in the project, as such,
regarding the finance, employment and other infrastructures. The
objection raised to the aforesaid effect does not merit
consideration. [Para 41][632-G-H; 633-A-B]
F. Relevance of Shri Ramtanu judgment:
6. The impugned judgment has placed reliance upon the
judgment in the case of Shri Ramtanu for the proposition that the
acquisition under the 1966 Act was in pari materia to the
M/S. M.S.P.L. LIMITED v. THE STATE OF KARNATAKA
AND ORS.
A
B
C
D
E
F
G
H
598
SUPREME COURT REPORTS
[2022] 14 S.C.R.
Maharashtra Industrial Development Act, 1962 and, therefore,
the acquisition has to be for public purpose only and not for a
private company. It may be recorded that validity of the 1962 Act
was being considered in the case of Shri Ramtanu. In the present
litigation, there is no challenge to the validity of the 1966 Act or
the 2002 Act. Further, the object and purpose of the 1962 Act
was for securing the orderly establishment in industrial areas
and industrial State of industries in the State of Maharashtra
whereas the 1966 Act, the object and preamble was to promote
the establishment and orderly development of industries (in
industrial areas). Thus, it is to be noticed that the purpose in
1962 Act was for establishment of industrial areas whereas in the
other statute i.e 1966 Act, it was for promotion of the
establishment and orderly development of industries. Thus, the
reliance by the Division Bench in the impugned judgment on the
case of Shri Ramtanu is misplaced. [Para 42, 43][633-C-E; 634-
G-H]
G. Value Judgments of policy views
7. The Division Bench in the impugned judgment seems to
have been swayed by its own philosophy in due deference to the
principles of statutory interpretation. The statute is to be read in
its plain language. Setting up of industries is part of development.
There has to be a sustainable growth and existence of all facets
and, that is why, laws have been framed, cheques and balance
have
been imposed so that development takes place side by side
with the protection and preservation of nature and environment.
A perusal of the above makes it amply clear that the Division
Bench introduced several value judgments and policy views in
order to interpret the provisions of the 1966 Act and the 2002
Act. It is only as a measure of caution that the said aspect is
being taken note of. Such value judgments and policy views are
beyond the domain of the Courts. The Courts should refrain itself
from expressing value judgments and policy views in order to
interpret statutes. Statutes are to be read in their plain language
and not otherwise. [Para 44, 45][635-A-B; 636-B-C]
H. Challenge to acquisition by a minority (10%) of land
owners.
A
B
C
D
E
F
G
H
599
8. It is admitted position that the challenge to the acquisition
of more than a thousand acres was made by a small fraction of
land owners having land less than 10% of the total acquisition.
Compensation for rest of the 90% land acquired had been
accepted by their respective land owners. The Division Bench
has quashed the entire acquisition of more than a thousand acres
at the instance of such a small fraction. Out of approx 110 acres
of land acquires for MSPL, only one land owner possessing only
4.34 acres of land, had filed the writ appeal before the Division
Bench. Quashing the entire acquisition at the instance of one
land owner having 4.34 acres of land out of total acquisition for
MSPL of 110 acres, would be against the public policy and public
interest. The MSPL alone provides employment to 292 persons
with a substantial investment of Rs.200 crores. The employment
to approximately 300 persons by MSPL is also alleged to be
double of the number of employees as projected in the proposal.
Further, in the case of AISL acquisition of 914 acres is challenged
by a fraction of less than 10% land owners. The estimated project
of AISL is approx Rs.2092 crores and would employment to at
least one thousand persons. In view thereof, the Division Bench
committed an error in quashing the acquisition proceedings. The
judgment of the Division Bench is set aside and the writ petitions
stand dismissed as ordered by the Single Judge. [Para 46- 48][636-
G; 637-A-E]
Shri
Ramtanu Co–op.Housing Society Ltd. v. State of
Maharashtra (1970) 3 SCC 323 : [1971] 1 SCR 719;
Chairman & MD, BPL Ltd. v. S.P. Gururaja (2003) 8
SCC 567 : [2003] 4 Suppl. SCR 587; Deputy General
Manager (HRM) and another v. Mudappa and others
(2007) (9) SCC 768 : [2007] 2 SCR 363; Narayanappa
v. State of Karnataka (2006) 7 SCC 578 : [2006] 4
Suppl. SCR 716; Amarjit Singh v. State of Punjab
(2010) 10 SCC 43 : [2010] 12 SCR 163; Om Prakash
v. State of U.P. (1998) 6 SCC 1 : [1998] 3 SCR 64 –
referred to.
Case Law Reference
[1971] 1 SCR 719
referred to
Para 24
[2003] 4 Suppl. SCR 587
referred to
Para 31
M/S. M.S.P.L. LIMITED v. THE STATE OF KARNATAKA
AND ORS.
A
B
C
D
E
F
G
H
600
SUPREME COURT REPORTS
[2022] 14 S.C.R.
[2007] 2 SCR 363
referred to
Para 33
[2006] 4 Suppl. SCR 716
referred to
Para 39
[2010] 12 SCR 163
referred to
Para 46
[1998] 3 SCR 64
referred to
Para 46
CIVIL APPELLATE JURISDICTION : Civil Appeal No.4678
of 2021.
From the Judgment and Orders dated 22.03.2012 of the High
Court of Karnataka at Circuit Bench at Dharwad in Writ Appeal No.6224
of 2009 (LA-KIADB)
With
Civil Appeal Nos.7167 Of 2022, 4699-4719, 4679-4698, 4745-4747
of 2021.
Ranjit Kumar, Gurukrishna Kumar, Shekhar S. Naphade, Udaya
Holla, Krishnan Venugopal,  Ms. Kiran Suri, Sr. Advs., A.V.S. Raju, D.
Srinivas, Krishan Pal Mavi, S.K. Kulkarni, M. Gireesh Kumar, Ankur S.
Kulkarni, Ms. Uditha Chakravarthy, G.V. Chandrashekar, N.K. Verma,
Ms. Anjana Chandrashekar, P. V. Dinesh, Ashwini Kumar Singh, Bineesh
K., Rahul Raj Mishra, Somanatha Padhan, Mrs. Shubhangi Tuli, V. N.
Raghupathy, Balaji Srinivasan, Nishanth Patil, M.V. Mukunda, Guntur
Prabhakar, Dr. P. V. Saravanaraja, Anantha Narayana M.G., Ms.
Aishwarya Dash, Ms. Farah Hashm, Dr. Prashant Pratap, Kumar
Mitakshar, Ajit S. Bhasme, Sanjay Kumar Visen, Suresh Kumar Bhan,
Ms. Asmita Dwivedi, Ms. Swati Yadav, Mahesh Agarwal, M.S. Ananth,
Rohan Talwar, Shaswat Singh, E. C. Agrawala, Nishanth Patil, Ms.
Aishwarya Kumar, Advs. for the appearing parties.
The Judgment of the Court was delivered by
VIKRAM NATH, J.
1. Leave granted in SLP(C) No. 23351/2012.
2. The State of Karnataka (Civil Appeal No. 4745-4747 of
2021),
the Karnataka Industrial Area Development Board (Civil Appeal No.
4699-4719 of 2021), M/S MSPL Limited (Civil Appeal No. 4678 of 2021)
and AARESS Iron & Steel Limited (Civil Appeal No. 4679-4698 of
2021) have jointly assailed the correctness of the judgement and order
dated 22.03.2012 passed by the Division Bench of the Karnataka High
A
B
C
D
E
F
G
H
601
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, 19661 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
(LA-KIDAB)} 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
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, 20022.
(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:
1 In short “the 1966 Act”
2 In short “the 2002 Act”
M/S. M.S.P.L. LIMITED v. THE STATE OF KARNATAKA
AND ORS. [VIKRAM NATH, J.]
A
B
C
D
E
F
G
H
602
SUPREME COURT REPORTS
[2022] 14 S.C.R.
“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;”
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.
Chronology of events:
i.
MSPL moved an application on 23.03.2005 before the State
High Level Clearance Committee5 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
3 In short “MSPL”
4 In short “AISL”
35 In short “SHLCC”
A
B
C
D
E
F
G
H
603
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 Board63
setup under the 1966 Act.
iv.
Government of Karnataka on the aforementioned
recommendations issued a Government Order dated
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 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 Board74on 19.10.2006
forwarded its inspection report for the palletisation plant of
MSPL.
 6 In short “KIADB”
47 In short KSPCB
M/S. M.S.P.L. LIMITED v. THE STATE OF KARNATAKA
AND ORS. [VIKRAM NATH, J.]
A
B
C
D
E
F
G
H
604
SUPREME COURT REPORTS
[2022] 14 S.C.R.
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 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 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.
A
B
C
D
E
F
G
H
605
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.
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 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:
M/S. M.S.P.L. LIMITED v. THE STATE OF KARNATAKA
AND ORS. [VIKRAM NATH, J.]
A
B
C
D
E
F
G
H
606
SUPREME COURT REPORTS
[2022] 14 S.C.R.
“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 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 1/10th 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 acquisition of such a large tract of lands
when the occupants of 9/10th of the acquired lands have not
A
B
C
D
E
F
G
H
607
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 PAGE-1).
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 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
M/S. M.S.P.L. LIMITED v. THE STATE OF KARNATAKA
AND ORS. [VIKRAM NATH, J.]
A
B
C
D
E
F
G
H
608
SUPREME COURT REPORTS
[2022] 14 S.C.R.
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 visa-
vis 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
A
B
C
D
E
F
G
H
609
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 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
M/S. M.S.P.L. LIMITED v. THE STATE OF KARNATAKA
AND ORS. [VIKRAM NATH, J.]
A
B
C
D
E
F
G
H
610
SUPREME COURT REPORTS
[2022] 14 S.C.R.
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 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
A
B
C
D
E
F
G
H
611
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 Chapter-VII 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 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 sub-sections (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
sub-rule (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
M/S. M.S.P.L. LIMITED v. THE STATE OF KARNATAKA
AND ORS. [VIKRAM NATH, J.]
A
B
C
D
E
F
G
H
612
SUPREME COURT REPORTS
[2022] 14 S.C.R.
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
14-9-2006 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 sub-section (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 9-11-2006 i.e.,
subsequent to the publication of the notification dated 14-9-
2006 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.
A
B
C
D
E
F
G
H
613
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.
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.
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.
M/S. M.S.P.L. LIMITED v. THE STATE OF KARNATAKA
AND ORS. [VIKRAM NATH, J.]
A
B
C
D
E
F
G
H
614
SUPREME COURT REPORTS
[2022] 14 S.C.R.
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 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
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
A
B
C
D
E
F
G
H
615
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 chapter-
VII 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 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.
M/S. M.S.P.L. LIMITED v. THE STATE OF KARNATAKA
AND ORS. [VIKRAM NATH, J.]
A
B
C
D
E
F
G
H
616
SUPREME COURT REPORTS
[2022] 14 S.C.R.
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
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
A
B
C
D
E
F
G
H
617
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
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 second-guessed 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 socio-economic 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 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.
M/S. M.S.P.L. LIMITED v. THE STATE OF KARNATAKA
AND ORS. [VIKRAM NATH, J.]
A
B
C
D
E
F
G
H
618
SUPREME COURT REPORTS
[2022] 14 S.C.R.
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
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.
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.
A
B
C
D
E
F
G
H
619
(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 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:
“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,-
M/S. M.S.P.L. LIMITED v. THE STATE OF KARNATAKA
AND ORS. [VIKRAM NATH, J.]
A
B
C
D
E
F
G
H
620
SUPREME COURT REPORTS
[2022] 14 S.C.R.
(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;
(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 lease-
cum-sale
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;
A
B
C
D
E
F
G
H
621
(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
Government under section 1(3) would be applicable to this Chapter
with effect from the date specified in the notification. Section 28
and its sub-sections (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 investments,
to simplify the regulatory frame work, by reducing the
M/S. M.S.P.L. LIMITED v. THE STATE OF KARNATAKA
AND ORS. [VIKRAM NATH, J.]
A
B
C
D
E
F
G
H
622
SUPREME COURT REPORTS
[2022] 14 S.C.R.
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 sub-section
(2), the SHLCC was to examine and consider 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
A
B
C
D
E
F
G
H
623
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, Director-General
and Inspector-General of Police & State Fire Extinguishing and
Emergency Services, Chief Executive Officer & Executive
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 above-mentioned 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 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
M/S. M.S.P.L. LIMITED v. THE STATE OF KARNATAKA
AND ORS. [VIKRAM NATH, J.]
A
B
C
D
E
F
G
H
624
SUPREME COURT REPORTS
[2022] 14 S.C.R.
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 non-application of mind by the competent
authorities?
(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 non-applicant
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.
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
A
B
C
D
E
F
G
H
625
the appeal of MSPL. Prior to it, the Ministry itself vide paragraph-2 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 clearance
certificate from the Ministry of Environment and Forest as the same has
already been issued on 23.09.2016.
B. Non-application 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 non-application 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 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.
M/S. M.S.P.L. LIMITED v. THE STATE OF KARNATAKA
AND ORS. [VIKRAM NATH, J.]
A
B
C
D
E
F
G
H
626
SUPREME COURT REPORTS
[2022] 14 S.C.R.
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.
30. Thereafter, under the provisions of 1966 Act, the Land Audit
Committee in its meeting of 28th January, 2006, which was chaired by
the Principal Secretary, Department of Commerce & Industries and
Secretaries of other relevant Departments with special invitees also took
a conscious decision with respect to the project submitted by MSPL for
both the plants at subject Item No.2.5 and recommended for acquisition
of 1034 acres of land and to intimate the same to the KIADB. It was
thereafter that the Nodal Agency of the State level i.e. Karnataka Udyog
Mitra in its meeting dated 15.02.2006 after considering the proceedings
of the SHLCC dated
6th June, 2005 and that of the Land Audit Committee
dated 28.01.2006 accepted the recommendation for acquisition of 1034
acres of land.
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:
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
A
B
C
D
E
F
G
H
627
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 deliberations does not fall foul of Article 14 of
the Constitution of India. No malice of fact has been alleged
in the instant case.”
M/S. M.S.P.L. LIMITED v. THE STATE OF KARNATAKA
AND ORS. [VIKRAM NATH, J.]
A
B
C
D
E
F
G
H
628
SUPREME COURT REPORTS
[2022] 14 S.C.R.
32. In view of the above, the finding in the impugned judgment
regarding non-application 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 land-owners”.
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,
A
B
C
D
E
F
G
H
629
Karnataka Udyog Mitra in its meeting dated 15.02.2006 and duly
communicated vide letter of even date to the KIADB to start the process
for acquisition. It was thereafter that the notifications were issued under
Section 3(1), 1(3) and 28(1) of the 1966 Act, on 09.11.2006. Simultaneous
publication of the said notifications has already been upheld to be not
suffering from any illegality or irregularity.
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 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
M/S. M.S.P.L. LIMITED v. THE STATE OF KARNATAKA
AND ORS. [VIKRAM NATH, J.]
A
B
C
D
E
F
G
H
630
SUPREME COURT REPORTS
[2022] 14 S.C.R.
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 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. Sub-section
A
B
C
D
E
F
G
H
631
(3) of Section 28 is similar to Section 5A of the Land
Acquisition Act and the final notification is issued under sub-
section (4) of Section 28. The necessary precondition for a
valid notification under sub-section (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 sub-section (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……….Sub-section (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 sub-section (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 already
been acquired and developed by the Board, it may be allotted
to an entrepreneur or a company for setting up an industry
M/S. M.S.P.L. LIMITED v. THE STATE OF KARNATAKA
AND ORS. [VIKRAM NATH, J.]
A
B
C
D
E
F
G
H
632
SUPREME COURT REPORTS
[2022] 14 S.C.R.
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 sub-section (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.
E- Acquisition for a non-applicant (AISL).
41. It is not disputed that AISL (non-applicant) is fully owned
subsidiary of MSPL (applicant). In effect, AISL is a new Company
promoted by the same promoters. The State Government examined the
request of MSPL and also AISL for modification of its Government
Order dated 22.12.2005. It examined the bifurcation under various heads.
State Government issued Government Order dated 22.03.2006 splitting
A
B
C
D
E
F
G
H
633
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:
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 ShriRamtanu (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 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,
M/S. M.S.P.L. LIMITED v. THE STATE OF KARNATAKA
AND ORS. [VIKRAM NATH, J.]
A
B
C
D
E
F
G
H
634
SUPREME COURT REPORTS
[2022] 14 S.C.R.
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 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.
A
B
C
D
E
F
G
H
635
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:
 “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.90-91)
“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
well-known, 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)
M/S. M.S.P.L. LIMITED v. THE STATE OF KARNATAKA
AND ORS. [VIKRAM NATH, J.]
A
B
C
D
E
F
G
H
636
SUPREME COURT REPORTS
[2022] 14 S.C.R.
“A joint stock company is invented only to defraud creditors.”
(P.106-107)
“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 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 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
A
B
C
D
E
F
G
H
637
Vs. State of U.P. reported in (1998) 6 SCC1. 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.
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.
51. Pending application(s), if any, is/are disposed of.
Nidhi Jain
Matters disposed of.
(Assisted by : Tamana, LCRA)
M/S. M.S.P.L. LIMITED v. THE STATE OF KARNATAKA
AND ORS. [VIKRAM NATH, J.]