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

The Supreme Court in the case M.S.P.L. LIMITED vs State of Karnataka observed that the Karnataka Industrial Area Development Board KIADB can acquire lands for a single company to set up an industry.
In the present case, the land acquisition by KIADB was for two companies named M/s MSPL Ltd. and M/s AARESS Iron and Steel Ltd. [AISL is fully owned subsidiary of MSPL]. The writ appeal filled by the land owner was allowed, the Karnataka High Court (the Division Bench) quashed the notifications under Section 3(1), Section 1 (3) and Section 28(1) of the Karnataka Industrial Areas Development Act, 1966. In the appeal one of the issues raised before the Apex Court was whether the acquisition for a single company could be stated to be for public purpose and could be made under the 1966 Act?
This issue arose since, in the impugned judgment, wherein it was held by the High Court that KIADB cannot acquire lands for a single company or for a private industrialist and the same is being improper exercise of power and is also not in public interest.
The bench comprising of Justice Hemant Gupta and Justice Vikram Nath observed while referring to Section 28(1) of the KIAD Act and has observed that the words for the purpose of development by the Board, and or for any other purpose in furtherance of the objects of this Act make it amply clear that the intention is to acquire land in the opinion of the State Government could be not only for the purpose of development by the Board but for any other purpose in furtherance of the objects of this Act. The power is given for acquiring land beyond development by KIADB.
Further, it has been noted by the court that as per the regulations framed by the Board under Section 41, the Board is empowered enough for allotting any plot or area to any individual or for a company for establishment of an industry in consultation with the State Government.
The bench stated that the provision also contemplates acquiring land for the purpose of allotment to a single company to set up an industry. It has been duly approved by the State Government for the allotment by the Board.
The Division bench while stating its view expressed that no acquisition could be made for a single company cannot be sustained.
The bench referred the decision of the court in the case P. Narayanappa Vs. State of Karnataka, wherein it was upheld that the acquisition of land is in favour of a private company under the 1966 Act.
While allowing the appeal, the other issues of the respondents has also been answered by the court.
The court observed while quashing the entire acquisition at the instance of one land owner having 4.34 acres of land out of total acquisition for MSPL of 110 acres, the same would be against the public interest and public policy. It has alone been provided by MSPL the employment to 292 persons with a substantial investment of Rs.200 crores.
An employment to approximately 300 persons by MSPL is also alleged to be double of the number of employees as projected in the proposal. However, in the case of AISL acquisition of 914 acres is challenged by a fraction of less than 10% land owners. The estimated project of AISL is approx. Rs.2092 crores and would provide employment to at least one thousand persons.