Karnataka Industrial Area Development Board Can Acquire Land For A Single Company To Set Up An Industry: Supreme Court

The Supreme Court observed that there Karnataka Industrial Area Development Board KIADB can acquire lands for a single company to set up an industry.

In this case, the land acquisition by KIADB was for two companies viz. M/s MSPL Ltd. and M/s AARESS Iron and Steel Ltd. [AISL is fully owned subsidiary of MSPL]. Allowing writ appeal filed by a land owner, the Karnataka High Court (Division Bench) quashed the notifications under Sections 3(1), 1(3) and 28(1) of the Karnataka Industrial Areas Development Act, 1966. One of the issues that were raised in appeal before the Apex Court was whether the acquisition for a single company could be said to be for public purpose and could be made under the 1966 Act? This issue arose since, in the impugned judgment, the High Court held that KIADB cannot acquire lands for a single company/private industrialist and the same is improper exercise of power and also not in public interest.

To answer this issue, the bench of Justices Hemant Gupta and Vikram Nath referred to Section 28(1) of the KIAD Act and observed:

"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."

The court noted that, as per  regulations framed by the Board under Section 41,  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...Therefore, the view expressed by the Division Bench that no acquisition could be made for a single company cannot be sustained.", the bench said.

The bench also referred to the decision in P. Narayanappa Vs. State of Karnataka  (2006) 7 SCC 578, where the acquisition of land in favour of a private company under the 1966 Act was upheld.

The court also answered other issues against the respondents. While allowing the appeal, the court observed:

"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"

Case details

M.S.P.L. LIMITED vs State of Karnataka | 2022 LiveLaw (SC) 886 | CA 4678 OF 2021 | 11 October 2022 | Justices Hemant Gupta and Vikram Nath 

Headnotes

Karnataka Industrial Areas Development Act, 1966 ; Section 28(1), 41 -  Power to acquire land beyond development by KIADB - Regulations framed by the Board under Section 41 also contemplates acquiring land for the purpose of allotment to a single company to set up an industry. (Para 37-39)

Karnataka Industrial Areas Development Act, 1966 ; Sections 1,3,28- Appeal against judgment of Karnataka High Court quashing the notifications for acquisition of land - Allowed - Division Bench committed an error in quashing the acquisition proceedings.

Interpretation of Statutes - 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 45)

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