TMI Blog2006 (4) TMI 515X X X X Extracts X X X X X X X X Extracts X X X X ..... ject 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. 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 conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 . Thus, 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. 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 pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation 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 ). 4. 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 pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt 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. 7. 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) one K.C. Reddy was 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- Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alising 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. 10. 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. 11. 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 Projec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 15. 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. 16. Each of the questions was answered in favour of the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 20. 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 impleme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 namely of fraud, misrepresentation and mala fides vitiating the entire project. Fraud and Misrepresentation 24. 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e granted to them with 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 30. It would appear that the change of mind on the part of the State Government came about co-incidentally or otherwise with a change of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 11 states: Explanation VI. 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 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. 33. 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat 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: an 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 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 e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 According 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. [Emphasis supplied] 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 39. 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. 40. 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 (s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh 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. 43. 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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. 46. 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 argument ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese 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. 49. 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quirement 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. 51. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issed 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. 56. 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: in the matter of governance of a State or in the matter of execution of a decision taken by a previous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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. 59. 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 60. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e In 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. 64. 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 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 65. The n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified 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 69. 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 wri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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