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CASE NO.:

Appeal (civil) 3492-3494 of 2005

PETITIONER:

State of Karnataka & Anr.

RESPONDENT:

All India Manufacturers Organization & Ors.

DATE OF JUDGMENT: 20/04/2006

BENCH:

Ruma Pal, B. N. Srikrishna & Dalveer Bhandari

JUDGMENT:

J U D G M E N T

with Civil Appeal Nos. 3497/05, 3842-3844/05, 3848-3884/05,

3889-4127/05, 4128-4366/05, 4575-4576/05, 5399-5401/05, 5402/05, 5746-

5747/05, 5759/05, 5797-5799/05, 6098/05, 6099/05, 5092-5093/05, 7024-

7040/05, 7591/05, 7592/05, 61/06, 73/06, 74-76/06 and

Civil Appeal Nos. /06 @ SLP Nos. 1562-63/06.

SRIKRISHNA, J.

Leave granted in Special Leave Petition (C) Nos. 1562-63/06.

Since this matter consists of two sets of distinct but related appeals,

for the sake of convenience, they may be considered under the two heads of:

(i) the Main Matters and (ii) the Land Acquisition Matters.

The Main Matters

(Civil Appeal Nos. 3492-3494/2005, 3497/2005, 3842-3844/2005)

The Background

These appeals are directed against a common judgment of the High

Court of Karnataka (dated 3.5.2005) by which three Public Interest

Litigations being Writ Petition Nos. 45334/04 (All India Manufacturers

Organisation v. State of Karnataka and Ors.), 45386/04 (J.C. Madhuswamy

and Ors. v. State of Karnataka and Ors.) and 48981/04 (Dakshinamurthy and

Anr. v. State of Karnataka and Ors.) were disposed of resulting in dismissal

of Mr. J.C. Madhuswamy's writ petition and a direction to the State of

Karnataka to continue to implement a certain project known as the

"Bangalore-Mysore Infrastructure Corridor Project" (hereinafter "the

Project").

A brief statement regarding the Project: Bangalore is the capital of the

State of Karnataka and a rapidly developing city, which is projected to be

the IT boom town in the country. As a result of the pressures of urbanisation

and industrialisation, the infrastructure in and around Bangalore was found

to be inadequate. The traffic situation in Bangalore and on the roads leading

into and out of the city was found to be chaotic and hardly conducive to the

important role that the city is expected to play in the near future. The

Government of Karnataka, realising the importance of rapidly developing

the city of Bangalore, and also for developing its transport and

communication systems, conceived of the Project. The Project had twin

objectives: firstly, to provide for an express highway linking Bangalore with

Mysore, the former capital of the erstwhile State of Mysore, which is now

coming up as an industrial town, and for developing infrastructure along the

corridor and in and around Bangalore city. The Project is a massive

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undertaking, which requires design, construction, maintenance and operation

of an Express Highway between Bangalore and Mysore. Equally, the Project

is to also develop infrastructure around the periphery of Bangalore and all

along the Bangalore-Mysore Express Highway, which is about hundred

years old and has become incapable of handling the heavy volume of

vehicular traffic.

On 28.9.1988, the State of Karnataka invited tenders for

implementation of such an Express Highway. There was no satisfactory

response to the tenders called for. There was only one tenderer and the

tenderer insisted on certain conditions which were not acceptable to the

Government of Karnataka. Thus, the bid of the tenderer was not accepted. A

survey was conducted by the Asian Development Bank and its report

pointed out that the projected population of Bangalore city would be about

8.2 million by the year 2011 and, therefore, there was an urgent need for

improvement of the Bangalore-Mysore Corridor. It was also suggested that

the State Government bear 20% of the project cost, along with the cost of

land acquisition, if such a project was to be implemented. The State

Government did not have sufficient means and had to look for other

alternative ways for implementing this project. The State Government then

decided to take up the project on a Build-Own-Operate-Transfer (hereinafter

"BOOT") basis with any consortium. The consortium was to carry out the

development of the project from its own resources and recoup its investment

by collection of tolls along the Express Highway.

On 20.2.1995, a Memorandum of Understanding (hereinafter "MOU")

was entered into between the State Government and the Consortium of

Vanasse Hangen Brustlin Inc. USA (hereinafter "VHB"), Kalyani Group of

Companies (hereinafter "Kalyani") and SAB Engineering and Construction

Inc. USA (hereinafter "SAB"). The Governor of the State of Massachusetts,

U.S.A., Mr. William Weld, and Mr. H.D. Deve Gowda, the then Chief

Minister of the State of Karnataka were present and appended their

signatures thereto. It was agreed that the State Government would extend

support for the development of the Bangalore-Mysore Expressway, provided

commercial viability, competitiveness and feasibility of the project was

established to the satisfaction of the State Government. The Consortium

submitted a Project Report for review by the State Government.

On 5.6.1995, a "High Level Committee" (hereinafter "the HLC") was

formed under the Chairmanship of the Minister for Public Works. The HLC

consisted of the Principal Secretary, Commerce and Industries Department;

Principal Secretary, Housing and Urban Development; Secretary, Public

Works Department; Chief Engineer C and B (South Zone, Bangalore). The

Chairman and Managing Director, Karnataka State Industrial Investment

Development Corporation, were official members and the Chairman,

Technical Advisory Committee (Irrigation)\026one K.C. Reddy\027was a non-

official member. The HLC met from time to time and reviewed the progress

made in the implementation of the Project. On 26.8.1995, the Consortium

presented the details of the Project to the HLC. After detailed consideration

of the Project, on 12.10.1995 the HLC submitted its report to the

Government. The Project was considered in detail by the State Cabinet Sub-

Committee, which recommended that the matter be placed before the

Cabinet for consideration. The report of the HLC and the Project Report

made by the Consortium was accepted by the Cabinet, subject to the

modification that instead of seven townships as proposed in the Project

Report, only five townships were to be developed.

A Government Order (No. PWD 32 CSR 95, Bangalore, dated

20.11.1995) ensued, which in terms pointed out that the implementation of

the Project was to be done by a private consortium. The Preamble to the

Government Order recited that the Project work was to be completed by the

Consortium with their own resources and that the Consortium would keep

the Project going for thirty years, so as to get a return of the expenditure,

profit, etc. through collection of tolls. It is important to note that the land

acquisition expenditure was also to be borne by the Consortium. To make

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the Project economically viable, the Consortium had proposed development

of seven townships, which as already stated, was reduced to five by the

Cabinet. It is also important to note that the Government Order specifically

permitted the development of five townships along with the construction of

the Express Highway. As already stated, the Consortium was to recoup its

expenditure and obtain profits through tolls\027the first system of its kind in

Karnataka. Consequently, it was felt that the modification of the existing

laws might become necessary. The necessary legal changes were to be

examined by the concerned administrative departments, who would take

"\005necessary action and also extend co-operation for implementation of the

Project."

The three members of the Consortium\027VHB, Kalyani and SAB\027

entered into a "Consent and Acknowledgement Agreement" (hereinafter

"the CAA") dated 9.9.1996, specially assigning their respective rights under

the Government Order (dated 20.11.1995) and the MOU with regard to the

Project, in favour of Nandi Infrastructure Corridor Enterprises Ltd.

(hereinafter "Nandi"). Nandi had been registered on 16.1.1996 as a company

under the Companies Act, 1956, to serve as a corporate vehicle for the

development and implementation of the Project. On 21.12.1996, the CAA

was forwarded to the State Government for necessary action. The State

Government was advised by its Law Department (through Opinion No. 182

OPN II/97 dated 3/4.3.1997) that since the Government was finalising a

separate agreement with Nandi, there was no need to specifically consent to

the CAA. Consequently, the State Government took no further action except

noting it.

In February 1997, Nandi submitted a draft of the Framework

Agreement (hereinafter "the FWA") to be executed between it and the State

Government. This draft FWA was considered by the Core Committee, which

had been set up to negotiate the terms with Nandi. It was also referred to the

Cabinet Sub-Committee, which suggested certain modifications to the FWA.

After due incorporation of such modifications, the Government of Karnataka

approved the FWA on 17.3.1997 and the same was signed between Nandi

and the State Government on 3.4.1997.

Under Clause 4.1.1 of the FWA, the State Government set up an

"Empowered Committee" headed by the Chief Secretary of the State to

oversee the Project and its implementation keeping in mind the importance

of timely completion. The Empowered Committee included technical

experts and held about ten meetings from time to time, the last one being on

24.7.2004. The main task of the Empowered Committee was to remove

administrative bottlenecks and to ensure the smooth execution of the Project.

The Empowered Committee was the State's agent of coordination and

carried out the State Government's obligations under the FWA.

One of the key obligations of the State Government under the FWA

was to make available approximately 20,193 acres of land. As set out in

Schedule I to the FWA, 6,956 acres was Government land and the remaining

13,237 acres was private land, which was to be acquired by the State

Government. There was also an undertaking by the State Government under

the FWA to carry out appropriate amendments to its laws, rules and

regulations so that the massive Project could be implemented fully and

within a time-bound schedule. Accordingly, the provisions of the Karnataka

Industrial Areas Development Act, 1966 ("the KIAD Act") were amended

by Act No. 11 of 1997 so that the land required for the Project could be

acquired expeditiously. The Karnataka Industrial Areas Development Board

("KIAD Board") set up under the KIAD Act, entered into an agreement with

Nandi on 14.10.1998 for acquisition of private land. Notifications were

issued from time to time for acquiring lands for the Project.

The Litigation in Somashekar Reddy

While all these frenetic activities were going on for the successful and

timely implementation of the Project, the FWA was challenged in a Public

Interest Writ Petition No. 29221/97 in November 1997 (reported as H.T.

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Somashekar Reddy v. Government of Karnataka and Anr. ) by one H.T.

Somashekar Reddy, a retired Chief Engineer. The State Government and

Nandi were the two respondents thereto. The FWA was challenged on all

conceivable grounds and the writ petition was vigorously opposed by the

State Government and also by Nandi. Both the State Government and Nandi

contended that the FWA was valid and that it had been entered into in larger

public interest. It was also successfully pleaded on the part of the State

Government that it had agreed to provide the "minimum extent of land" for

the Project, which was 20,193 acres of land and that no excess land was

being acquired.

The Division Bench of the Karnataka High Court hearing the said writ

petition formulated for its consideration, the following questions:

"(a) Whether the Government has acted arbitrarily in entering

into the agreement with Respondent No. 2?

(b) Whether agreement is illegal as being opposed to public

policy?

(c) Whether the agreement contravenes any Constitutional

provisions or other existing enactments?

(d) Whether the agreement is vitiated by mala fides?

(e) Whether the rights of any individual or groups of

individuals is being illegally affected by the execution of the

agreement?

(f) Scope and extent of judicial review in matters of State

Policy."

For the purpose of the present litigation, it is important to note that

one of the main grounds of challenge to the FWA in Somashekar Reddy

(supra) was that land was being acquired far in excess of what was required

for the Project. In fact, it was specifically stated in the Writ Petition that

Article 7 of the FWA (that provides for construction of townships) was the

"most damaging provision detrimental to the owners of land". Further, it was

stated in the Writ Petition that the land requirement in Schedule I of the

FWA was "highly exaggerated" and would illegally create "huge profits" for

Nandi. It was prayed that the FWA be quashed and further, since the FWA

was purportedly the result of "offences of breach of trust", for institution of

a Central Bureau of Investigation (hereinafter "CBI") enquiry into the whole

project.

Each of the questions was answered in favour of the respondents i.e.

State of Karnataka and Nandi. It was held that the FWA was not arbitrarily

entered into by the State Government; that it was not opposed to public

policy; that it was not unconstitutional or illegal; that it was not vitiated by

mala fides; that no rights of any individual or individuals had been illegally

affected by the execution of the agreement. Finally, the court found that it

could not exercise its power of judicial review to interfere with the FWA

which was in reality a policy choice of the Government.

Further, as we shall discuss subsequently, the argument of excess land

being acquired, was not acceded to by the High Court which found that the

Project envisaged, in addition to the construction of an expressway between

Bangalore and Mysore, other connected developmental activities, such as:

"(i) Development of area between Bangalore-Mysore.

(ii) Divergence of traffic from Mysore-Chennai; Chennai-

Bombay.

(iii) Construction of elected road from Sirsi Circle upto 9.4

Kms.

(iv) Construction of 2 truck terminals.

(v) Development of five identified local areas into townships

with all infrastructure for habitation and economic activities.

(vi) Utilisation of sewage water being put to no productive use

by BWSSB.

(vii) Development of tourism to augment the State's

revenues."

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Thus, through an exhaustive consideration of all the background

material and documents presented to it, the High Court dismissed the writ

petition by holding against the petitioner on all the contentions urged. The

judgment in Somashekar Reddy (supra) was challenged before this Court

(in SLP (Civil)\005CC 1423/99) but was dismissed in limine on 26.3.1999.

The judgment in Somashekar Reddy (supra) thus reached finality.

The Present Litigation

Although the writ petition in Somashekar Reddy (supra) was

dismissed by the High Court by its judgment dated 21.9.1998, it is of

relevance to notice that between November 1997, when this writ petition

was filed, and when the petition was dismissed, the work of implementing

the Project was going on in view of the stand of the State Government and

Nandi. Accordingly, a number of notifications were issued for acquisition of

the land required under the FWA. Many landowners challenged the

acquisition of their lands before the High Court. Although the issue of the

landowners will be dealt with in the second part of our judgment, it will be

useful to note that the Government supported the stand of Nandi before the

Single Judge, who partially allowed the land owners' petitions. It was during

the writ appeal stage that the Government reversed its stance and opposed

Nandi.

Even while the said writ appeals filed in the land acquisition matters

were pending before the High Court, a second round of writ petitions

challenging the Project itself was filed before the High Court. Despite the

High Court's go-ahead for the Project in 1997, and after seven years of

implementation, suddenly in the year 2004, these petitions were filed against

it in so-called "public interest" by two Members of the Legislative Assembly

(hereinafter "MLAs") and a "social worker" (i.e. Mr. J.C. Madhuswamy and

others). This petition prayed for a CBI enquiry and to restrain the State

Government from continuing with the Project or acquiring any further land

thereunder. Perhaps inspired by Mr. J.C. Madhuswamy and others, and also

in the so-called "public interest", All India Manufacturer's Organisation, as

well as two ex-Mayors of Mysore (Mr. Dakshinamurthy and another),

moved the High Court for a direction to the State Government to implement

the Project according to the FWA.

The High Court in the impugned judgment (vide Paragraph 18) raised

the following two questions for consideration in the three writ petitions:

"(1) Whether the FWA entered into between the Government

of Karnataka and Nandi was a result of any fraud or

misrepresentation as alleged by J.C. Madhuswamy and others

and the State Government?

(2) Whether any excess land than what is required for the

Project had been acquired by the State Government and

whether it is open to it to raise such a plea?"

The Division Bench disposed of all the writ petitions by a common

judgment by which it dismissed Writ Petition No. 45386/04 filed by Mr. J.C.

Madhuswamy and others with costs. Writ Petition Nos. 45334/04 and

48981/04 were allowed by the Division Bench directing the State of

Karnataka and all its instrumentalities, including the KIAD Board, to

execute the Project as conceived originally and to implement the FWA in

"letter and spirit". The High Court also directed the prosecution of K.K.

Misra, Chief Secretary of the Government of Karnataka and M.

Shivalingaswamy, Under Secretary, Department of Industries and

Commerce, as envisaged by Section 340 of the Code of Criminal Procedure,

1973, for certain offences which came to its notice as a result of the

affidavits filed by them. K.K. Misra and M. Shivalingaswamy have filed

separate appeals with regard to the direction of their prosecution with which

we are not concerned at present.

The Contentions of the Appellants

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The main arguments in the present Civil Appeal Nos. 3492-3494 of

2005 were addressed on behalf of the State of Karnataka by Mr. Anil B.

Divan, learned Senior Counsel, whose main contentions are as under:

1. That the dispute between the State of Karnataka and Nandi is not

barred by the principle of res judicata, constructive res judicata or

estoppel arising from the judgment and proceedings in Somashekar

Reddy (supra).

2. That the principle of res judicata cannot be inflexibly applied to

Public Interest Litigations, especially when a re-examination of

decided issues might be in public interest.

3. To the bar of res judicata, it would be a successful answer that fraud

and misrepresentation had vitiated the entire transaction. Hence, there

would be no question of res judicata since the fraud was discovered

subsequent to the judgment in Somashekar Reddy (supra).

4. That the High Court erred in brushing aside the report of the Expert

Committee headed by K.C. Reddy, which clearly demonstrated that

there was excess land, which in terms showed that the FWA was not a

bona fide agreement and, therefore, was against public interest.

5. The High Court could not have granted the final relief in the

impugned judgment. The High Court's order amounted to a

mandamus to specifically perform the FWA, which is an extremely

complex contract, and hence the order is incorrect.

We will examine the third contention first\027namely of fraud,

misrepresentation and mala fides vitiating the entire project.

Fraud and Misrepresentation

The main ground on which the matter was argued by the learned

counsel for the State of Karnataka before the Division Bench of the High

Court was that there was fraud and misrepresentation on the part of Nandi,

which vitiated the entire transaction. It was contended before the High Court

by the State Government that this fraud came to be noticed subsequent to the

judgment in Somashekar Reddy (supra). It is pertinent to note that this point

was put on record through the affidavits of K.K. Misra, Chief Secretary of

the Government of Karnataka, M. Shivalingaswamy, Under Secretary,

Department of Industries and Commerce, which suggested that public

interest was being affected as a result of the execution of the FWA. It

appears that the main contention of the writ petitioners Mr. J.C.

Madhuswamy and others before the High Court was that the FWA was

vitiated as a result of fraud and/or misrepresentation. Presumably, this

contention was urged in order to get over the bar of res judicata arising from

the judgment in Somashekar Reddy (supra). When the matter was argued

before us, although Mr. Divan addressed some arguments on fraud, he

quickly abandoned them and expressly gave it up. Considering that this was

the main thrust of the State's argument before the High Court and has been

expressly given up before us, we could have dismissed the appeals on this

narrow point alone. Nonetheless, since Mr. Divan argued the question of res

judicata with some persistence, we will deal with it subsequently.

On the merits of the argument of fraud/misrepresentation, the High

Court has gone into it at great length and has demonstrated the hollowness of

this contention. We are in complete agreement with the views expressed

therein on this issue but we wish to highlight the following aspects to

illustrate how the argument of mala fides is actually the boot on the other

foot.

The High Court has come to the categorical conclusion that the flip-

flop on the part of the State Government occurred only because of

politicians, that the mala fides, if any, appears to be on the part of the State

Government for political reasons. The High Court has pointed out that the

FWA did not materialise out of the blue. The FWA was negotiated over

several months; it came to be drafted by considering several points that the

Cabinet Sub-Committee had raised. As we have already highlighted, it was

only thereafter, when detailed deliberations had taken place at the highest

levels of the State Government that the MOU was signed and the Project

Report accepted. A Government Order (dated 20.11.1995) was issued

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requiring the Public Works Department to enter into a Memorandum of

Understanding with the Consortium of three companies, VHB, SAB and

Kalyani. On 9.9.1996, through the CAA, the three members of the

Consortium agreed to "\005unconditionally and irrevocably transfer and

assign, jointly and severally\005" to Nandi "\005all rights, interest and title

granted to them\005with respect to the Infrastructure Corridor by GOK under

the Government Order and the Memorandum of Understanding". The CAA

came to be signed by the three members of the Consortium on the one hand

and Nandi on the other; the Governor of Karnataka, on behalf of the

Government of Karnataka, was shown as the "Consenting Party". A copy of

this agreement was forwarded to the State Government along with a

forwarding letter dated 21.12.1996 requesting that the Government approve

of the same and advise of its approval so that the original agreement could

be given to the State Government for its consent. This letter was forwarded

by the Public Works Department to the Law Department through a letter

dated 22.1.1997 (No. PWD 155 CRM 96) seeking an opinion on the issue.

The State Government was advised by its Law Department (through Opinion

No. 182 OPN II/97 dated 3/4.3.1997) that since the Government was

finalising a separate agreement with Nandi, there was no need to specifically

consent to the CAA. Thus, it would appear that the State Government had

specifically been made aware of the CAA and the fact that the members of

the Consortium had transferred their rights to Nandi. The argument made

before the High Court that the Government was unaware of the CAA, was

defrauded to execute the FWA is, therefore, utterly dishonest. We concur

with the decision of the High Court on this issue that the plea was lacking

any bona fides and that there was neither fraud nor misrepresentation on the

part of Nandi or any member of the Consortium.

Subsequently, as we have already discussed, Nandi as the assignee of

the Consortium, submitted a draft of the FWA to the State Government

which was considered by the Core Committee that had been set up to

negotiate the terms with Nandi. The Core Committee referred the draft FWA

to the Cabinet Sub-Committee which suggested various modifications to it,

which were incorporated in the FWA. Finally, the FWA was approved by

the State Government and came to be signed on 3.4.1997. Thus, it appears

that the plea of fraud and misrepresentation was clearly an afterthought and

it was conveniently raised by the State Government through the petitioners

in Writ Petition No. 45386/04, who were rightly described by the High

Court as the State Government's "mouth piece" (vide Paragraph 22).

The High Court has also totally disbelieved the affidavits of the Chief

Secretary, K.K. Misra, and the Under Secretary, M. Shivalingaswamy on

this issue. We have refrained from commenting on the merits of their

affidavits since their appeals against prosecution for perjury are pending

separately. We may, however, point out that both the affidavits of the two

senior bureaucrats are on the issue that certain facts which had been

suppressed from the Government had come to light after the judgment in

Somashekar Reddy (supra) and that these indicated fraud and

misrepresentation on the part of Nandi. Indeed, this was the central argument

put forward for impugning the FWA.

The FWA was executed on 3.4.1997 and implemented by the parties

for at least seven years. Several obligations under the FWA were carried out

by the State Government and its instrumentalities and also by Nandi, which

had invested a large amount of money in the Project. These included monies

for payment of compensation to landowners whose lands were being

acquired for the Project. Soon after the FWA was entered into, some

interested parties had raised the issue in "public interest" that the FWA was

a fraud and was nothing but a charade for a lucrative real estate business on

the part of Nandi. The Government through the then Minister for Public

Works vigilantly defended the Project against all these allegations both

inside and outside the Legislature.

It would appear that the change of mind on the part of the State

Government came about \026 co-incidentally or otherwise \026 with a change of

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Government in Karnataka in 2004. In the year 2004, while the State

Government's writ appeal was still pending before the Division Bench, a

statement was made by Mr. H.D. Deve Gowda, former Prime Minister,

making serious allegations with regard to the Project stating that it was

nothing but a charade by which Nandi had converted it into a real estate

business. It was at this stage that a note (No. PWD/E/375/2004 dated

6.7.2004) was written by the new Minister, Public Works Department, Mr.

H.D. Revanna, who is none other than the son of Mr. Deve Gowda, to the

Principal Secretary, Public Works Department. The note in terms states that

land acquisition by the State Government for the Project was to cease till the

allegation that Nandi was carrying out a real estate business was enquired

into. With this, the State Government suddenly halted/slowed all ongoing

activities for smooth implementation of the Project. Indeed, it is strange that

the State Government woke up after seven long years, and even more

strangely after a change in the State's political leadership, to the fact that

there was fraud/ misrepresentation by Nandi or anyone else.

Pursuant to this, the Minister of the Public Works Department set up

the "Expert Committee" (headed by K.C. Reddy) to go into the allegations

of excess land acquired by the Government for implementation of the

Project. After accepting the Interim Report of the Expert Committee, the

Government withdrew its appeal filed before the High Court and the reasons

for the same are mentioned in a Government Order (PWD 155 CRM 95

BMICP Expert Committee/2004, Bangalore dated 7.1.2005). As we shall see

later in the judgment, the constitution and functioning of this Committee

also illustrates the mala fides with which the State Government has

approached the Project. Thus, the utter irresponsibility with which the theory

of fraud/misrepresentation was put forward is thoroughly exposed by the

High Court in its impugned judgment.

Res Judicata

Res judicata is a doctrine based on the larger public interest and is

founded on two grounds: one being the maxim nemo debet bis vexari pro

una et eadem causa ("No one ought to be twice vexed for one and the same

cause" ) and second, public policy that there ought to be an end to the same

litigation . It is well settled that Section 11 of the Civil Procedure Code,

1908 (hereinafter "the CPC") is not the foundation of the principle of res

judicata, but merely statutory recognition thereof and hence, the Section is

not to be considered exhaustive of the general principle of law. The main

purpose of the doctrine is that once a matter has been

determined in a former proceeding, it should not be open to parties to re-

agitate the matter again and again. Section 11 of the CPC recognises this

principle and forbids a court from trying any suit or issue, which is res

judicata, recognising both 'cause of action estoppel' and 'issue estoppel'.

There are two issues that we need to consider, one, whether the doctrine of

res judicata, as a matter of principle, can be applied to Public Interest

Litigations and second, whether the issues and findings in Somashekar

Reddy (supra) constitute res judicata for the present litigation.

Explanation VI to Section 11 states:

"Explanation VI. \026 Where persons litigate bona fide in respect

of a public right or of a private right claimed in common for

themselves and others, all persons interested in such right shall,

for the purposes of this section, be deemed to claim under the

persons so litigating."

Explanation VI came up for consideration before this Court in

Forward Construction Co. and Ors. v. Prabhat Mandal and Ors.

(hereinafter "Forward Construction Co."). This Court held that in view of

Explanation VI, it could not be disputed that Section 11 applies to Public

Interest Litigation, as long as it is shown that the previous litigation was in

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public interest and not by way of private grievance. Further, the previous

litigation has to be a bona fide litigation in respect of a right which is

common and is agitated in common with others.

As a matter of fact, in a Public Interest Litigation, the petitioner is not

agitating his individual rights but represents the public at large. As long as the

litigation is bona fide, a judgment in a previous Public Interest Litigation

would be a judgment in rem. It binds the public at large and bars any member

of the public from coming forward before the court and raising any connected

issue or an issue, which had been raised/should have been raised on an earlier

occasion by way of a Public Interest Litigation. It cannot be doubted that the

petitioner in Somashekar Reddy (supra) was acting bona fide. Further, we

may note that, as a retired Chief Engineer, Somashekar Reddy had the special

technical expertise to impugn the Project on the grounds that he did and so, he

cannot be dismissed as a busybody. Thus, we are satisfied in principle that

Somashekar Reddy (supra), as a Public Interest Litigation, could bar the

present litigation.

We will presently consider whether the issues and findings in

Somashekar Reddy (supra) actually constitute res judicata for the present

litigation. Section 11 of the CPC undoubtedly provides that only those

matters that were "directly and substantially in issue" in the previous

proceeding will constitute res judicata in the subsequent proceeding.

Explanation III to Section 11 provides that for an issue to be res judicata it

should have been raised by one party and expressly denied by the other:

"Explanation III. \026 The matter above referred to must in the

former suit have been alleged by one party and either denied or

admitted, expressly or impliedly, by the other."

Further, Explanation IV to Section 11, states:

"Explanation IV. \026 Any matter which might and ought to have

been made ground defence or attack in such former suit shall be

deemed to have been a matter directly and substantially in issue

in such suit."

The spirit behind Explanation IV is brought out in the pithy words of

Wigram, V.C. in Henderson v. Henderson as follows:

"The plea of res judicata applies, except in special case (sic),

not only to points upon which the court was actually required

by the parties to form an opinion and pronounce a judgment,

but to every point which properly belonged to the subject of

litigation and which the parties, exercising reasonable diligence,

might have brought forward at the time."

In Greenhalgh v. Mallard (hereinafter "Greenhalgh"), Somervell

L.J. observed thus:

"I think that on the authorities to which I will refer it would be

accurate to say that res judicata for this purpose is not confined

to the issues which the Court is actually asked to decide, but

that it covers issues or facts which are so clearly part of the

subject matter of the litigation and so clearly could have been

raised that it would be an abuse of the process of the Court to

allow a new proceeding to be started in respect of them."

The judgment in Greenhalgh (supra) was approvingly referred to by

this Court in State of U.P. v. Nawab Hussain . Combining all these

principles, a Constitution Bench of this Court in Direct Recruit, Class II

Engineering Officers' Association v. State of Maharashtra expounded on

the principle laid down in Forward Construction Co. (supra) by holding

that:

"\005an adjudication is conclusive and final not only as to the actual

matter determined but as to every other matter which the parties might

and ought to have litigated and have had (sic) decided as incidental to

or essentially connected with (sic) subject matter of the litigation and

every matter coming into the legitimate purview of the original action

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both in respect of the matters of claim and defence. Thus, the principle

of constructive res judicata underlying Explanation IV of Section 11

of the Code of Civil Procedure was applied to writ case. We,

accordingly hold that the writ case is fit to be dismissed on the ground

of res judicata."

With these legal principles in mind, the question, therefore, arises as

to what exactly was sought in Somashekar Reddy (supra), how it was

decided by the High Court in the first round of litigation, and what has been

sought in the present litigation arising at the instance of Mr. J.C.

Madhuswamy and others. In order to show that the issue of excess land was

"directly and substantially in issue" in Somashekar Reddy (supra) we will

first examine the prayers of the parties, the cause of action, the averments of

parties and the finding of the High Court in Somashekar Reddy (supra).

First, learned counsel for the Respondents has pointedly drawn our

attention to the identity of the prayers made in the previous Public Interest

Litigation by Somashekar Reddy as compared to the prayers made in the

present case of Mr. Madhuswamy and others. The prayers in Somashekar

Reddy's petition were: (a) for quashing the FWA and (b) for directing an

inquiry by the CBI in the matter and to prosecute the offenders. In Mr.

Madhuswamy's petition, the prayers were: (a) to direct the CBI to conduct

inquiries to various acts as enumerated by items 1 to 16 (specifically the

issue of excess land) and (b) for quashing the various agreements, and acts

done in pursuance of the Project and consequently, to denotify the land of all

farmers situated away from the peripheral road and link road. We are

therefore, satisfied that the prayers made in Somashekar Reddy (supra) and

in Mr. Madhuswamy's writ petitions are substantially the same.

Second, the cause of action in both Somashekar Reddy (supra) and

the present cases is the FWA, which includes the provisions for acquiring

20,193 acres of land for the Project (comprising 13,237 acres of private land

and 6,956 acres of Government land). Indeed, it was stated in Somashekar

Reddy's Writ Petition that the land requirement in Schedule I of the FWA

was "highly exaggerated" and would illegally create "huge profits" for

Nandi. Somashekar Reddy thus prayed that the FWA be quashed \026 this

prayer was, however, specifically rejected. The very same FWA that was

upheld earlier has now been impugned in the present case.

Third, in both Somashekar Reddy and Mr. Madhuswamy's petitions,

the averment was that excess land than required for the implementation of

the Project was being acquired by the State Government at the behest of

Nandi and that the Project was nothing but a camouflage to carry out a real

estate business by Nandi. The High Court records the following contention

of Somashekar Reddy's counsel:

"The next submission of the Counsel for the petitioner is that

Government of Karnataka though ostensible (sic- ostensibly)

purported to form an Express Highway has in reality allowed

the 2nd respondent to develop the townships as a developer by

conferring a huge largess (sic-largesse) by way of giving

20,000 acres of land\005According to petitioner, the land required

for the construction of four lane Highway is only 2775 acres,

whereas the remaining land would be utilized for the purpose of

development of the towns thereby permitting respondent No. 2

to develop townships as a developer and on huge profits."

The averment of Somashekar Reddy regarding excess land came to be

considered by the High Court which records some of the opposing

contentions of the Respondent-State, in the following terms:

"As a mega project like the Expressway involves considerable

extent of land, answering respondent (the State) has agreed to

provide the minimum extent of land required for the project

partly out of the land owned by the State and by acquiring the

balance. Second respondent will not only construct the

proposed Expressway but also link roads, peripheral road,

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interchanges, Service Roads, toll plazas and Maintenance area

etc., in addition to the townships."

"It is stated that the project by its very nature requires

considerable extent of land and that is why the respondent has

agreed to provide the land to the extent available with it and

acquire the balance and make available the same to the replying

respondent. There are mutual obligations on both the parties

under the impugned agreement and Respondent-No. 1 is only

facilitating the acquisition of land for which the replying

respondent has to pay at the existing market rates."

Crucially, two very striking findings have been made by the High

Court in Somashekar Reddy (supra) as follows:

"So out of 20,193 acres, land required for the Expressway

would be 6999 acres leaving 13,000 acres for development of

townships. Government of Karnataka in its written statement

has said that it has agreed to provide minimum extent of land

for the project partly out of the land owned by the Government

and by acquiring the balance. Permission has been given to

develop the five township instead of 7, proposed by respondent

No. 2 to make the Project viable."

"The submission that the contract was entered in a clandestine

manner also cannot be accepted\005Respondents in their

statement of objections have admitted that this point was raised

on the floor of the House and the respondent made detailed

presentation on this subject in the House\005Every minute detail

was explained including the scientific method adopted by the

respondent for identification of the land for the Project."

All of these unequivocally show that the issue of excess land (and

connected issues) was specifically raised by the petitioner in Somashekar

Reddy (supra) and was also forcefully denied by the State. In fact, the

decision in Somashekar Reddy (supra), went further with the High Court

according its imprimatur to the land requirements under the FWA amounting

to 20,193 acres, which in no small measure, resulted from the State's

successful defence that it had provided the "bare minimum of land" for the

Project calculated by a "scientific method". The judgment also contains

copious references to the issue of land (including the acreage), the types of

land to be acquired, the land requirement for different aspects of the Project,

the scientific techniques involved in identifying the land and road alignment

etc. In these circumstances, it cannot be doubted that Explanation III to

Section 11 squarely applies. It is clear that the issue of excess land under the

FWA was "directly and substantially in issue" in Somashekar Reddy

(supra) and hence, the findings recorded therein having reached finality,

cannot be reopened in this case.

The principle and philosophy behind Explanation IV, namely to

prevent "the abuse of the process of the court" (as stated in Greenhalgh

(supra)) through re-agitation of settled issues, provides yet another ground to

reject the appellants' contentions. For instance, the High Court specifically

records (vide Paragraph 29) of the impugned judgment that:

"It is common case of the parties that the validity of FWA had

earlier been challenged in Somashekar Reddy's case (supra) on

all conceivable grounds including the one that land in excess of

what is required for the Project had been acquired by the State

Government".

In the face of such a finding by the High Court, Explanation IV to

Section 11 squarely applies as, admittedly, the litigation in Somashekar

Reddy (supra) exhausted all possible challenges to the validity of the FWA,

including the issue of excess land. Merely because the present petitioners

draw semantic distinctions and claim that the excess land not having been

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identified at the stage of the litigation in Somashekar Reddy (supra), the

Project should be reviewed, the issue does not cease to be res judicata or

covered by principles analogous thereto. If we were to re-examine the issues

that had been raised/ought to have been raised in Somashekar Reddy (supra)

it would simply be an abuse of the process of the court, which we cannot

allow.

As we have pointed out, the cause of action, the issues raised, the

prayers made, the relief sought in Somashekar Reddy's petition and the

findings in Somashekar Reddy (supra), and the claims and arguments in the

present petitions were substantially the same. Therefore, it is not possible to

accept the contention of the appellants before us that the judgment in

Somashekar Reddy (supra) does not operate as res judicata for the

questions raised in the present petitions.

Excess Land and the Expert Committee

There was considerable time taken by the learned counsel for the

appellants in trying to persuade us that excess land had actually been

delivered to Nandi under the FWA. A subsidiary argument was that even

though the actual area of land delivered might not have been in excess, since

land in prime areas had improperly been acquired for Nandi's benefit, the

issue needed to be re-examined. In our view, this argument too is not open to

be agitated at this point. As we have already pointed out, the writ petition in

Somashekar Reddy (supra) was the culmination of all such allegations

which had been successfully refuted even on the floor of the Legislature.

Finally, having failed on the floor of the Legislature, a Public Interest

Litigation was filed on the ground that there was something wrong with the

FWA and that it was virtually a sell-out to Nandi. The Division Bench of the

High Court considered every argument very carefully and recorded findings

on all the issues against Mr. J.C. Madhuswamy and others. In our view,

permitting the argument on excess land to be heard again to scuttle a project

of this magnitude for public benefit would encourage dishonest politically

motivated litigation and permit the judicial process to be abused for political

ends. The High Court, therefore, has refused to answer the first part of the

second question framed for consideration on the ground that it was already

answered in Somashekar Reddy (supra) and as it was res judicata, it could

not be re-agitated. Further, that since this argument involved details of

contractual disputes, the High Court would not examine it in its writ

jurisdiction. We are not satisfied that the High Court was wrong in so

holding.

The High Court's finding on this issue only gains strength if we were

to examine the factual matrix in which the State took its stand that excess

land had been acquired for the Project. As we have previously stated,

pursuant to the objections raised to the Project by the new Minister for

Public Works, an "Expert Committee" was setup in 2004 to review the

Project. The Expert Committee was conveniently headed by K.C. Reddy,

who was the Advisor to the Public Works Minister. This K.C. Reddy was

the same gentleman, who as a member of the previous HLC, had scrutinised

the Project threadbare and had given it the green signal. Surprisingly

however, at this stage, he appeared to be all willing to find faults and flaws

in the Project and the FWA, despite the fact that there was an Empowered

Committee that was required to monitor the implementation of the Project.

The High Court rightly pointed out that the Expert Committee was

constituted virtually in supersession of Clause 4.1.1 of the FWA.

The Expert Committee suddenly woke up to the alleged fact that

excess land was being acquired. Like the State Government, the Expert

Committee also made flip-flops and came out with a report saying that there

was acquisition of excess land. Crucially, it left the actual identification of

the excess lands to the KIAD Board. Surprisingly, the State Cabinet in its

meeting dated 26.10.2004 accepted the report but reaffirmed its support to

the Project and expressed some reservations on the acquisition of more lands

than what was necessary for the Project. In this regard, the High Court

critically comments (vide Paragraph 26) that:

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"By constituting this Committee the State Government has

ensured that the Project gets stalled. It is interesting to note that

Sri K.C. Reddy who is the Chairman of the Expert Committee

was also a Member of the HLC which had approved the Project

and was associated with it till the signing of the FWA which

provides for 20,193 acres of land to be made available. Sri K.C.

Reddy did not record his dissent in those proceedings and at no

stage did he ever point out that the land that was sought to be

provided for the Project was in excess of what was required but

now as the Chairman of the Expert Committee he has, without

identifying the excess lands which he has left for the Board to

identify, opined that excess land has been acquired for the

Project. We cannot appreciate such a conduct."

We too cannot appreciate the conduct on the part of K.C. Reddy or the

State Government. The inference drawn by the High Court is that the plea of

fraud and misrepresentation sought to be raised was not only an afterthought

but also false to the knowledge of the State Government. The High Court,

therefore, observed (vide Paragraph 27): "It is unfortunate that the

petitioners and the State Government have chosen to raise this bogie (sic\027

bogey) to defeat the public project subserving public interest."

Interestingly, neither the interim report nor the final report of the

Expert Committee identified the excess land but in fact, left it for the KIAD

Board. The counsel for the KIAD Board handed over a set of documents,

which purportedly identified the specific excess lands. It was the grievance

of the KIAD Board that they had not been given the opportunity for placing

these documents before the High Court. Since the date of documents showed

that they were drawn subsequent to the date on which the High Court had

delivered its judgment, the learned Senior Counsel for KIAD Board Mr.

K.K. Venugopal candidly admitted that this exercise was carried out after

the impugned judgment had been delivered. It is a moot point whether the

person, who swore this affidavit on behalf of the KIAD Board stating that no

opportunity had been given to the KIAD Board to place these documents on

the record of the High Court, needs to be considered for prosecution under

Section 340 read with Section 195 of the Code of Criminal Procedure, 1973.

We strongly deprecate such misleading or false affidavits on the part of the

KIAD Board.

According to Mr. Venugopal, Article 300A of the Constitution, as

well as the KIAD Act, would be violated if the KIAD Board were to directly

acquire or acquiesce in the acquisition of land in excess of what is required

for the Project. In our view, this is nothing but a repetition of the arguments

made by the State of Karnataka. As we have elaborately discussed, that the

land was not in excess has been held by the Division Bench of the High

Court on two occasions and we agree with it. Thus, there was no question of

the land being acquired for a purpose other than a public purpose or there

being any contravention of Article 300A. In fact, we are somewhat surprised

that this type of argument must come from the KIAD Board, which was

intimately involved, from the very beginning, with the process of acquiring

land. Further, the State and its instrumentalities (including the KIAD Board)

were enjoined by Clause 5.1.1.1 of the FWA, to make "best efforts" to

acquire the land required for the Project. Indeed, till the State itself changed

its stand with regard to the Project, nothing was heard from the KIAD Board

about lands being acquired in excess of the public purpose. Further, as an

instrumentality of the State, the KIAD Board cannot have a case to plead

different from that of the State of Karnataka. Thus, we are unable to

countenance the arguments of Mr. Venugopal on behalf of the KIAD Board.

Considering the facts as a whole, the High Court came to the

conclusion that since the Project had been implemented and Nandi had

invested a large amount of money and work had been carried out for more

than seven years, the State Government could not be permitted to change its

stand and to contend that the land allotted for the Project was in excess of

what was required. Having perused the impugned judgment of the High

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Court, we are satisfied that there is no need for us to interfere therewith.

Thus, there is no merit in this contention, which must consequently fail.

The Relief Granted by the High Court

One final argument was made by Mr. Divan as regards the relief

granted by the High Court. To appreciate the argument, it is necessary to

look at the relief granted in terms of Paragraph 42.2, which is as follows:

"Writ petitions nos. 45334 and 48981 of 2004 are allowed

directing the State of Karnataka and all its Instrumentalities

including the Board to forthwith execute the Project as

conceived originally and upheld by this court in Somashekar

Reddy's case (supra) and implement FWA in letter and spirit.

Consequently, Government Orders dated 4.11.2004 and

17.12.2004 constituting the Review Committee and Expert

Committee are quashed. The report submitted by these

committees in pursuance to these orders and all subsequent

actions taken incidental thereto are also quashed. Nandi is also

directed to implement the Project as expeditiously as possible.

Parties will bear their own costs in these two cases."

Mr. Divan strongly urged that the relief granted was wholly beyond

the jurisdiction of the High Court under Article 226 of the Constitution, as it

would amount to granting a decree for specific performance in writ

jurisdiction. A reading of the relief granted by the High Court does not

persuade us that it is so. The High Court merely directed that the Project and

the FWA, as conceived originally and upheld by the High Court in

Somashekar Reddy (supra), should be implemented "in letter and spirit". In

other words, the High Court said that there is no scope for raising frivolous

and mala fide objections for ulterior purposes. This, the High Court was

fully entitled to do. It is trite law that when one of the contracting parties is

"State" within the meaning of Article 12 of the Constitution, it does not

cease to enjoy the character of "State" and, therefore, it is subjected to all the

obligations that "State" has under the Constitution. When the State's acts of

omission or commission are tainted with extreme arbitrariness and with

mala fides, it is certainly subject to interference by the Constitutional Courts

in this country. We may refer to Gujarat State Financial Corporation v.

M/s Lotus Hotels Pvt. Ltd., in which a statutory corporation (the Gujarat

State Financial Corporation) arbitrarily refused to grant the sanction of loans

to entrepreneurs who had already acted on the basis of the sanction and had

incurred expenditure and liabilities. The argument that the transaction was

purely a contractual arrangement between the parties and, therefore, not

amenable to writ jurisdiction, was categorically rejected by the following

observations:

"Now if appellant entered into a solemn contract in discharge

and performance of its statutory duty and the respondent acted

upon it, the statutory corporation cannot be allowed to act

arbitrarily so as to cause harm and injury, flowing from its

unreasonable conduct, to the respondent. In such a situation, the

court is not powerless from holding the appellant to its promise

and it can be enforced by a writ of mandamus directing it to

perform its statutory duty. A petition under Article 226 of the

Constitution would certainly lie to direct performance of a

statutory duty by 'other authority' as envisaged by Article

12."

Kumari Shrilekha Vidyarthi and Ors. v. State of U.P. and Ors. is

another authority for the proposition that the State Government has to act

reasonably and without arbitrariness even with regard to the exercise of its

contractual rights. In M/s Dwarkadas Marfatia and Sons v. Board of

Trustees of the Port of Bombay the situation was one in which a lease

between the Bombay Port Trust and certain parties was terminated in

exercise of contractual rights and the lease rent was abnormally increased. It

was held that there was always an obligation on the part of public authorities

in their acts of omission and commission to be reasonable. In Biman

Krishna Bose v. United India Insurance Co. Ltd. and Anr. the question

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was whether an insurance company could arbitrarily and unreasonably

refuse the renewal of a policy. Considering that the insurance company, as a

result of State-monopoly in the insurance sector, had become "State" under

Article 12 of the Constitution, this Court held that:

"\005it (the insurance company) requires (sic) to satisfy the

requirement of reasonableness and fairness while dealing with

the customers. Even in an area of contractual relations, the State

and its instrumentalities are enjoined with the obligations to act

with fairness and in doing so, can take into consideration only

the relevant materials. They must not take any irrelevant and

extraneous consideration while arriving at a decision.

Arbitrariness should not appear in their actions or decisions."

Thus, it appears that no exception could be taken to relief granted in

the judgment of the High Court impugned before us. All that the High Court

has done is to reaffirm and require the State Government and its

instrumentalities, as "State" under the Constitution, to act without

arbitrariness and mala fides, especially in the matter of land acquisition. It is

pertinent to note that the State had agreed (vide Clause 5.1.1.1 of the FWA)

in respect of the lands required under the FWA, that:

"GOK shall use its best efforts and cause its Governmental

Instrumentalities to use their best efforts, to exercise its and

their legal right of eminent domain (or other right of similar

nature) under the Laws of India to acquire the Acquired Land.

Prior to acquiring any Acquired Land, GOK will obtain from

the company written confirmation of its willingness to purchase

such Acquired Land from GOK at the purchase price (whether

in the form of cash or comparable land) required under the

Laws of India (the "Acquired Land Compensation"). GOK shall

offer to the ex-propriated owners of the land the Rehabilitation

package specifically worked out for this Infrastructure Corridor

Project with mutual consultation of the consortium and the

Revenue Authorities in accordance with the applicable rules".

In these circumstances, we find no reason to interfere with the said

directions of the High Court. In the future also, we make it clear that while

the State Government and its instrumentalities are entitled to exercise their

contractual rights under the FWA, they must do so fairly, reasonably and

without mala fides; in the event that they do not do so, the Court will be

entitled to interfere with the same.

The High Court also found, justifiably in our view, that the writ

petitioners had been sponsored by the State Government to put forward its

changed stand in the garb of a Public Interest Litigation. In the opinion of

the High Court (vide Paragraph 29):

"The court cannot allow its process to be abused by politicians

and others to delay the implementation of a public project

which is in larger public interest nor can the court allow anyone

to gain a political objective. These legislators who have not

been successful in achieving their objective on the floor of the

Assembly have now chosen this forum to achieve their political

objective which cannot be allowed."

Although this should have really put an end to the writ petitions filed

by Mr. Madhuswamy and others, the High Court had to consider the

petitions filed by Mr. Dakshinamurthy and the All India Manufacturer's

Organisation, who were also before the court by way of Public Interest

Litigation and sought a Mandamus of the continuation of the Project. A

grievance was made before the High Court that these were persons put up by

Nandi and that they were virtually projecting the viewpoint of Nandi. The

High Court having taken note of the same has said that despite this, larger

public interest required the implementation of the Project. We see no reason

to differ with the High Court on this point.

Writ Petition No. 45386/04 (Mr. J.C. Madhuswamy and others) was

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rightly dismissed as raising the very same issues which had been concluded

by the decision in Somashekar Reddy (supra). Writ Petition Nos. 45334/04

and 48981/04 were rightly allowed and the order to implement the Project in

its letter and spirit had been made in exercise of the writ jurisdiction of the

High Court. We refrain from dealing with the third relief granted, namely

directing the prosecution of K.K. Misra and M. Shivalingaswamy, as their

appeals shall be independently dealt with by this Court.

Taking an overall view of the matter, it appears that there could hardly

be a dispute that the Project is a mega project which is in the larger public

interest of the State of Karnataka and merely because there was a change in

the Government, there was no necessity for reviewing all decisions taken by

the previous Government, which is what appears to have happened. That

such an action cannot be taken every time there is a change of Government

has been clearly laid down in State of U.P. and Anr. v. Johri Mal and in

State of Haryana v. State of Punjab and Anr. where this court observed

thus:

"\005in the matter of governance of a State or in the matter of

execution of a decision taken by a previous Government, on the

basis of a consensus arrived at, which does not involve any

political philosophy, the succeeding Government must be held

duty-bound to continue and carry on the unfinished job rather

than putting a stop to the same."

The Land Acquisition Matters

(Civil Appeal Nos. 3848-3884/2005, 3889-4127/2005, 4128-4366/2005,

4575-4576/2005, 5399-5401/2005, 5402/2005, 5746-5747/2005, 5759/2005,

5797-5799/2005, 6098/2005, 6099/2005, 5092-5093/2005, 7024-7040/2005,

7591/2005, 7592/2005, 61/2006, 73/2006, 74-76/2006, SLP 1562-63/2006).

The Background

In all these appeals, another attempt by a side wind, was made to

scuttle the Project. The attempt, this time, was primarily on the part of the

landowners, whose lands were acquired for implementation of the Project

and who challenged the same before the High Court of Karnataka. A learned

Single Judge of the Karnataka High Court, through judgment dated

18.12.2003, disposed of these petitions. The learned Judge took the view that

acquisition of 60% of the land by the State Government, insofar as it related

to the formation of roads and infrastructure development was valid, while

the acquisition of the remaining 40% meant for the development of

townships and convention centres was invalid and to that extent the

acquisition was quashed. The landowners, the State Government, the KIAD

Board and also Nandi were aggrieved by the judgment of the learned Single

Judge and filed separate writ appeals challenging the judgment. The stand of

the State Government in its writ appeal was that the learned Single Judge

was wrong in quashing 40% of the acquisition of land. This was also the

stand of the KIAD Board. Nandi also challenged the said part of the order.

Thus, it would appear that the State Government, KIAD Board and Nandi

were ad idem in their writ appeals that the learned Single Judge had erred in

interfering and quashing 40% of the land as not being in public interest.

Sometime in August 2004, when the writ appeals came up for hearing

before the Division Bench of the High Court, the State Government and the

KIAD Board withdrew their appeals, because by then, as we have already

discussed, the State Government appeared to have second thoughts about the

Project and felt that the land acquisitions were far in excess of the Project's

requirements. Even though they were also respondents under the writ appeal

filed by Nandi, they did not contest the claim and addressed no arguments

before the Division Bench of the High Court. Those appeals were disposed

of by an order dated 28.2.2005. The appeals filed by Nandi and the Indian

Machine Tools Manufacturers Association (hereinafter "the IMTMA") were

allowed, whereas those filed by the landowners were dismissed, and the

order of the learned Single Judge was set aside and the entire acquisition was

upheld.

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Various connected appeals against the order of the learned Single

Judge came to be disposed of by orders of the High Court dated 29.6.2005

and 18.11.2005, in terms of the detailed judgment and order of a Division

Bench of the High Court dated 28.2.2005 (hereinafter in the Land

Acquisition Matters "the impugned judgment").

The Contentions of the Appellants

Though there are a number of appellants before us, the contentions

raised before the High Court and us were principally as under: first, that no

notice was served on the landowners under Section 28(1) of the KIAD Act;

secondly, that the notice of acquisition was vague and consequently

prejudiced any effective objection being raised by the landowners whose

lands were sought to be acquired and finally, that the land acquisition was

not for a public purpose, or for a purpose as specified in the KIAD Act, and

was also in excess of the Project's requirement.

Although other contentions have also been raised, we will not deal

with them here as they have already been dealt with in the first part of our

judgment.

Non-Service of Notice

The argument that no notice was served on the landowners under

Section 28(1) of the KIAD Act, appears to be factually incorrect. Even the

learned Single Judge who partially allowed the writ petition came to the

conclusion (vide Paragraph 22) in his judgment (dated 18.12.2003) that the

"\005petitioners in all these cases have filed objections on several grounds."

Even in the appeal before the Division Bench, the High Court observed (vide

Paragraph 30) that it was "\005not in dispute that the land owners were served

with notices and the objections filed by them have been considered." Even

before us, when these appeals were argued, no attempt was made by any of

the learned counsel to satisfy us that the appellants had not actually been

served notice of the acquisition. Neither was the finding of the learned

Single Judge or the Division Bench impugned on this point. We are,

therefore, unable to accept the contention that notices were not served on the

appellants as required under Section 28(1) of the KIAD Act.

Vagueness of Notice of Acquisition

The next contention is that the notice of acquisition was vague and

consequently prejudiced any effective objection being made by the

landowners whose lands were sought to be acquired. The vagueness of the

notification, it is contended, has vitiated the notice itself, according to the

learned counsel for some of the landowners.

The notification in the instant case states that the lands were being

acquired for the purposes of "industrial development" i.e. establishing and

developing industrial areas by the KIAD Board. In our opinion, the purpose

indicated in the notifications is sufficiently precise and is not affected by the

vice of vagueness as alleged. Our attention was drawn to the judgment of

this Court in Aflatoon v. Lt. Governor of Delhi where this Court pointed

out as follows:

"The question whether the purpose specified in a notification

under Section 4 is sufficient to enable an objection to be filed

under Section 5A would depend upon the facts and

circumstances of each case\005In the case of an acquisition of a

large area of land comprising several plots belonging to

different persons, the specification of the purpose can only be

with reference to the acquisition of the whole area. Unlike in

the case of an acquisition of a small area, it might be practically

difficult to specify the particular public purpose for which each

and every item of land comprised in the area is needed."

It is difficult to accept that the landowners were not aware of the

purpose of the acquisition nor can it be accepted that they were unable to file

their objections on this ground. As a matter of fact, as the High Court has

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concurrently found, they did file their objections before the competent

authorities. We do not see any prejudice caused to them as a result of the

wordings of the notification of acquisition. The concerned authority also

heard them on the objections filed after affording them an opportunity to file

such objections under Section 28(2) of the KIAD Act. Thus, there is no

substance in the contention of the appellants that the notification was vague

and hence that the State did not comply with the principles of natural justice.

Purpose of Acquisition

The next contention urged on behalf of the landowners is that the

lands were not being acquired for a public purpose. The counsel who have

argued for the landowners have expatiated in their contention by urging that

land in excess of what was required under the FWA had been acquired; land

far away from the actual alignment of the road and periphery had been

acquired, consequently, it is urged that even if the implementation of the

Highway Project is assumed to be for a public purpose, acquisition of land

far away therefrom would not amount to a public purpose nor would it be

covered by the provisions of the KIAD Act.

In our view, this was an entirely misconceived argument. As we have

pointed out in the earlier part of our judgment, the Project is an integrated

infrastructure development project and not merely a highway project. The

Project as it has been styled, conceived and implemented was the Bangalore-

Mysore Infrastructure Corridor Project, which conceived of the development

of roads between Bangalore and Mysore, for which there were several

interchanges in and around the periphery of the city of Bangalore, together

with numerous developmental infrastructure activities along with the

highway at several points. As an integrated project, it may require the

acquisition and transfer of lands even away from the main alignment of the

road.

The various changes brought about to the KIAD Act, also reflect the

intention of the State's Legislature to provide for land acquisition for the

Project. The expressions "Industrial area" and "Industrial Infrastructural

facilities" as defined under the KIAD Act, definitely include within their

ambit establishment of facilities that contribute to the development of

industries. We cannot forget that, as originally enacted, the KIAD Act had a

different, narrower definition of "Industrial area" in Section 2(6). In 1997,

the definition was broadened to also include "industrial infrastructural

facilities and amenities". Further, Section 2(7-a) was added to define

"Industrial Infrastructural facilities" in a manner broad enough to take into

its sweep the land acquisition for the Project.

The learned Single Judge erred in assuming that the lands acquired

from places away from the main alignment of the road were not a part of the

Project and that is the reason he was persuaded to hold that only 60% of the

land acquisition was justified because it pertained to the land acquired for

the main alignment of the highway. This, in the view of the Division Bench,

and in our view, was entirely erroneous. The Division Bench was right in

taking the view that the Project was an integrated project intended for public

purpose and, irrespective of where the land was situated, so long as it arose

from the terms of the FWA, there was no question of characterising it as

unconnected with a public purpose. We are, therefore, in agreement with the

finding of the High Court on this issue.

Civil Appeal No. 7024-25/05

As regards these appeals, the impugned judgment of the High Court

(vide Paragraph 32) specifically records that the appellants did not have any

right or interest in the land in question on the date that they filed the writ

petitions before the High Court. The counsel too admitted the same before

the High Court. The High Court accordingly found that the writ petitions

were not maintainable. Since the writ petition proceeded on this footing, we

cannot permit the appellants to take a different stand before us, contrary to

what had been stated before the High Court. Since we have not been

convinced otherwise, the writ petitions were not maintainable and the High

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Court was justified in the view that it took.

In summary, having perused the well considered judgment of the

Division Bench which is under appeal in the light of the contentions

advanced at the Bar, we are not satisfied that the acquisitions were, in any

way, liable to be interfered with by the High Court, even to the extent as

held by the learned Single Judge. We agree with the decision of the Division

Bench that the acquisition of the entire land for the Project was carried out in

consonance with the provisions of the KIAD Act for a public project of great

importance for the development of the State of Karnataka. We do not think

that a Project of this magnitude and urgency can be held up by individuals

raising frivolous and untenable objections thereto. The powers under the

KIAD Act represent the powers of eminent domain vested in the State,

which may need to be exercised even to the detriment of individuals'

property rights so long as it achieves a larger public purpose. Looking at the

case as a whole, we are satisfied that the Project is intended to represent the

larger public interest of the State and that is why it was entered into and

implemented all along.

The Final Orders

In the result, we find that the judgment of the High Court (dated

3.5.2005) impugned before us in the Main Matter, is not liable to be

interfered with. There is no merit in the appeals and they are hereby

dismissed. Considering the frivolous arguments and the mala fides with

which the State of Karnataka and its instrumentalities have conducted this

litigation before the High Court and us, it shall pay Nandi costs quantified at

Rupees Five Lakhs, within four weeks of this order.

Appellants in C.A. No. 3497/2005 (J.C. Madhuswamy and others), in

addition to the costs already ordered by the High Court, shall pay to the

Supreme Court Legal Services Authority costs quantified at Rupees Fifty

Thousand within four weeks of this order. A copy of this order be sent to the

Member-Secretary of the Supreme Court Legal Services Authority for

his/her information.

In the Land Acquisition Matters, the appeals challenging the

judgments of the High Court dated 28.2.2005, 29.6.2005 and 18.11.2005 are

dismissed as without substance. However, in the circumstances, there shall

be no order as to costs.