STATE OF KARNATAKA AND ANR. versus ALL INDIA MANUFACTURERS ORGANIZATION AND ORS.

Citation: [2006] SUPP. 1 S.C.R. 86 · Decided: 20-04-2006 · Supreme Court of India · Bench: RUMA PAL · Disposal: Dismissed

Judgment (excerpt)

A 
B 
STATE OF KARNATAKA AND ANR. 
v. 
ALL INDIA MANUFACTURERS ORGANIZATION AND ORS. 
APRIL 20, 2006 
[RUMA PAL, B.N. SRIKRISHNA AND DALVEERBHANDARI,JJ.] 
Constitution of India-Article 300A-Code of Civil Procedure, 1908-
Seclion 11-Karanataka Industrial Areas Development Act, 1966---Sections 
C 2(7-a) and 28(/)-Memorandum of Understanding entered into by State 
wi1h a Private Consortium for an Infrastructure Corridor Project-Nodal 
Company set up by the Consortium to implement the Project-Framework 
Agreement entered into under which !he Stale has to make available agreed 
acres of land lo the nodal company for the Project-State made requisite 
amendments in State laws for acquiring private land-Public /meres! 
D litigation Petition filed before High Court contending that the Agreement 
was viliated by rnala tides and opposed 10 public policyr--High Court dismissed 
the Writ Petirion--Notifications issued by the State for acquisition of land--
landowners filed Writ Petitions before High Court challenging the 
notifications contending rhat excess land are acquired than required for the 
E Project--Single Judge partly allowed the Writ Petitions but the judgment was 
ser aside in Writ Appeals---Allegations came to be made against the nodal 
company for committing fraud by diverting the acquired land to its real 
estate business--State stalled the land acquisition proceedings and set up 
an Enquiry Commirtee to look into the allegations-Public Interest litigations 
peritions filed before High Court on the ground !hat !he Agreement was 
F viliated by fraud and/or misrepresentation and that excess land are acquired 
for the Project-High Court dismissed the Writ Petitions on the ground of res 
judicata and on facts--Correcrness of-Held, Writ petitions were barred by 
res judicata---On jilcls, the plea of lhe Stare offraud and misrepresentation 
cvmmiued by the nodal company was lacking any bona tides-Land was 
G bemg acquired for a public purpose and hence there is no contravention of 
Article 300A and the Act. 
State conceived Bangalore-Mysore Infrastructure Corridor Project with 
twin objectives-firstly, to provide for an express highway linking Bangalore 
with Mysore and secondly for developing infrastructure along the corridor 
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STATE OF KARNA I AKA v. ALL!NDIA MANUFACTURERS ORGN 
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and in and around Bangalore city. The State entered into a Memorandum of A 
Understanding (MOU) with a Private Consortium of three members to take 
up the project on a Build-Own-Operate-Transfer (BOOT) basis. The State 
agreed to extend full support for the development of the Project provided 
commercial viability, competitiveness and feasibility of the project was 
established to the satisfaction of the State. A High Level Committee was formed B 
by the State to implement the Project. The Consortium presented a Project 
Report to the Committee, which submitted its report to the State. The State 
accepted the Committee report and the Project Report of the Consortium and 
issued a Government Order. 
The members of the Consortium entered into a 'Consent and C 
Acknowledge Agreement' (CAA) and assigned their respective rights with 
regard to the Project to a nodal company, which was formed to implement the 
Project. The nodal company and the State entered into a Framework 
Agreement (FW A) under which the State has to make available approximately 
20, 193 acres of land to the Project. The State made amendments in the 
Karnataka Industrial Areas Development Act, 1966 and the Board under the D 
Act entered into an agreement with the nodal company for acquisition of 
private land. 
A Writ Petition was filed before High Court as a Public Interest 
Litigation against the State and the nodal company for quashing the FWA on 
the ground that it was vitiated by malafides and was opposed to public policy. E 
The High Court, after considering all the materials on record, dismissed the 
Writ Petition. The High Court held that the required land was necessary not 
only for the construction of an expressway but also for other connected 
developmental activities [H. T. Somashelwr Reddy v. Government of Karnatalw 
and Anr., (1999) I KLD 500 (DB)). 
p 
The State issued Notifications for acquisition of land required for the 
Project. Many landowners filed Writ Petitions against the State and the nodal 
company before the High Court challenging the notifications on the ground 
that excess land were being acquired than required for the Project. 

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