1. The prayers in these writ petitions are to quash the Notification dated 31.08.2006 issued under Section 28(1) of the Karnataka Industrial Areas Development Act, 1966 (“the KIAD Act”) and also to quash the declaration dated 25.01.2007 issued under Section 28(4) of the KIAD Act.

2. The survey number and extent of lands involved in these writ petitions are as under:

3. On 10.10.2005, the Fifth State High Level Clearance Committee (“the SHLC Committee”) approved the project proposal of M/s.Sapphire Infrastructure Development Private Limited—respondent No.3 herein for establishing an “Information Technology Park—Service Apartments” in Yamare Village of Anekal Taluk with an investment of Rs.581.60 crores, and in the order of approval, the SHLC Committee desired that the land requirement should be scrutinized by the Land Audit Committee and after ensuring that it was consistent with the Zoning Regulations of the BMRDA, the Karnataka Industrial Areas Development Board (“the KIADB”, for short) was to initiate consent acquisition.

4. The Committee proceeded to pass a Resolution in the following terms:

“ PROCEEDINGS OF THE 5TH STATE HIGH LEVEL CLEARANCE COMMITTEE (SHLCC) MEETING FOR CONSIDERATION OF PROJECTS OF MORE THAN RS.50.00 CRORES INVESTMENT HELD ON 10.10.2005 AT 4.00 P.M. AT “KRISHNA” BANGALORE UNDER THE CHAIRMANSHIP OF THE HON’BLE CHIEF MINISTER OF KARNATAKA

x x x

(9) PROPOSAL OF M/s. SAPPHIRE INFRASTRUCTURE DEVELOPMENT PVT. LTD. TO BUILD IT PARK, HOTEL, CLUB HOUSE & RESIDENTIAL BUILDINGS IN BANGALORE DISTRICT.

Sri C.S.Purushotham, General Manager of the Company made a brief presentation.

The applicant proposes to build an IT park-cum-service apartments along with other amenities in 158 acres of land in

Yamare Village, Anekal Taluk, Bangalore Urban Dist. Envisaged investment is of the order of 581.60 Crores. Employment will be provided to 158 persons.

The applicant has sought assistance to acquire and allot 158 acres of land: 26500 KVA of power from BESCOM; and 9,75,000 litres of water per day from BWSSB.

DECISION OF THE COMMITTEE:

Noting the observations of the Screening Committee, the Committee decided to recommend the project for approval and desired that the land requirements should be scrutinized by the Land Audit Committee and after ensuring that it was consistent with the Zoning Regulations of the BMRDA before KIADB initiate consent acquisition.”

(emphasis supplied by me)

5. Pursuant to the above Resolution, the Government examined the decision of the SHLC Committee and proceeded to pass an order dated 06.03.2006 in the following terms:

“PROCEEDINGS OF THE GOVERNMENT OF KARNATAKA

Subject: Project proposal of M/s Sapphire Infrastructure Development Private Limited, Bangalore to establish an Information Technology Park in Bangalore District-Approval for- Orders reg.

Read: Proceedings of the 5th State High Level Clearance Committee (SHLCC) Meeting held on 10-10-2005.

Preamble:

M/s Sapphire Infrastructure Development Private Limited, Bangalore has proposed to establish an Information Technology Park-cum- Service Apartments along with other amenities in 158 acres of land in Yamare Village, Anekal Taluk. Bangalore Urban District with an investment of Rs.581.60 Crores. The Project, upon development, is expected to provide employment to 158 persons.

In the proposal submitted before the 5th State High Level Clearance Committee meeting [SHLCC] held on 10-10-2005, the Company had requested for various Infrastructure facilities, incentives and concessions as envisaged in the Millennium Information Technology Policy, from the Government. The State High Level Clearance Committee, after detailed discussion of the project proposal of the said Company, recommended the project for approval as per the proceedings read above, specifying the condition that before the Karnataka Industrial Areas Development Board initiate consent acquisition the land requirement should be scrutinized by the Land Audit Committee and that it should he ensured that it was consistent with the Zoning Regulations of the Bangalore Metropolitan Regional Development Authority, Bangalore.

Government has examined the recommendations made by the State High Level Clearance Committed in its 5th Meeting held on 10.10.2005 in all aspects. Hence the following order.

GOVERNMENT ORDER

No: ITD 02 MDA 2006 (3), BANGALORE, DATED: 06-03-2006

In the circumstances explained in the preamble, Government is pleased to accord approval to M/s Sapphire Infrastructure Development Private Limited, Bangalore to establish an Information Technology: Park-cum- Service Apartments along with other amenities in 158 acres of land in Yamare Village, Anekal Taluk Bangalore Urban District with an investment of Rs.581.60 Crores with the following infrastructural facilities, incentives and concessions: -

INFRASTRUCTRE FACILITIES:

LAND:

Before the Karnataka Industrial Areas Development Board initiate consent acquisition, the Land Audit Committee should scrutinize the land requirement and that it should be ensured that it is consistent with the zoning Regulations of the Bangalore Metropolitan Regional Development Authority, Bangalore.

WATER:

Bangalore Water Supply and Sewerage Board, Bangalore to consider supply of 9,75,000 litres of Water per day. The company shall adopt the elements of the National Water Policy including water harvesting, recharging of ground water, complete recycling of water etc. The Company shall indicate its net requirement of water after taking into account the quantum of recycled water.

POWER:

Bangalore Electricity Supply Company to consider supply of 26500 KVA Power.

INCENTIVES & CONCESSIONS:

Incentives and Concessions as per the Millennium Information Technology Policy-2000 shall be extended to the Company.

Environment & Pollution Control Clearances:

The Company shall apply for and obtain pollution & environmental clearances from Karnataka State Pollution Control Board and the Ministry of Environment and Forests, Government of India, New Delhi as per the provisions of the Acts and Rules governing environmental protection.

Providing Local Employment:

The Company shall provide employment to local persons in terms of prevailing policy of the Government.

By Order and in the name of the Governor of Karnataka

Sd/- [B.V.Kumaraswamy]

Under Secretary to Government Dept of Information Technology, Biotechnology & Science and Technology.”

(emphasis in italics supplied)

6. As could be seen from the above, the Government made it clear that before the KIADB was to initiate ‘consent acquisition’, the Land Audit Committee should scrutinise the land requirement as well as ensure that it is consistent with the zoning regulations of BMRDA. It thus follows from this decision that the Government did not choose to declare that the land needed by respondent No.3 should be declared as an industrial area as provided under the KIAD Act. If it was the intention of the State Government to acquire the lands under the KIAD Act, the question of ensuring that the land requirement should be consistent with the BMRDA Zoning Regulations would not arise, simply because, on the issuance of the Notification under Section 3(1) of the KIAD Act, the area would be an industrial area and the question of applying the Zoning Regulations would not even arise.

7. Pursuant to said Resolution, the Land Audit Committee comprising of the Principal Secretary to the Government, Commerce and Industries Department; the Principal Secretary to the Government, Revenue Department; the Commissioner for Industrial Development and the Director of Industries and Commerce; the Chief Executive Officer and Executive Member, KIADB and the Managing Director, Karnataka Udyog Mitra; along with two invitees met on 28.01.2006. This meeting was in relation to the policy framework for determining the extent of land for different industries and the need of impressing upon the applicants that they would have to take recourse to Section 109 of the Karnataka Land Revenue Act to purchase the lands in open market.

8. The copy of the proceedings which are produced record that the Principal Secretary to the Government, Commerce and Industries Department, clarified certain issues, in the following terms :

“PROCEEDINGS OF THE 3RD LAND AUDIT COMMITTEE MEETING HELD ON WEDNESDAY, 28TH JANUARY, 2006 AT 3.00 PM IN THE MEETING HALL OF KARNATAKA UDYOG MITRA, # 49, 3RD FLOOR, SOUTH WING, KHANIJA BHAVAN, RACE COURSE ROAD, BANGALORE-560 001.

MEMBERS PRESENT (Sriyuth/Smt.):

1. LAKSHMI VENKATACHALAM, IAS - IN THE CHAIR” Principal Secretary to Government, Commerce and Industries Department

2. S.M.JAMDAR, IAS - Member Principal Secretary to Govt., Revenue Department.

3. MOHAMED SANAULLA, IAS - Member Commissioner for ID & Director of Industries & Commerce.

4. NARAYANA SWAMY, IAS - Member CEO & Executive Member, KIADB

5. H.L.SHIVANANDA -Member Secretary Managing Director, Karnataka Udyog Mitra. INVITEES:(Sriyuth)

1. N.JAYAKUMAR - Invitee CEO & Chief Adviser, TESCOK.

2. N.K.THIPPESWAMY, - Invitee Deputy Director, Rep. Director Town Planning. Members Absent:

1. Principal Secretary to Govt., -Member Urban Development

Department

The Chairperson, Land Audit Committee, welcomed the Members of the Committee & the Special Invitees to the meeting. Managing Director, Karnataka Udyog Mitra, explained the subjects as per agenda. Initially, the members of the Committee had discussions in the context of certain issue raised by the Principal Secretary, Revenue Department, relating to policy framework for determining extent of land for different industries and also the need to impress on applicants that they can take recourse to Section 109 of the Karnataka Land Revenue Act to purchase lands in open market.

The Principal Secretary to Government, C&l Dept. clarified certain issues as follows:

(1) Land Audit Committee is a recent creation to vet requirements of land required by investors / entrepreneurs in Bangalore, Mysore and Mangalore Districts in the event they wish to take recourse to acquisition under KIAD Act.

(2) While it could be very desirable to encourage entrepreneurs / investors to seek clearance under Section 109 to purchase lands for different industrial purposes, the problem of doubtful titles to land requiring extensive due diligence (specially in and around Bangalore) was driving prospective entrepreneurs to take recourse to acquisition route through KIADB as this method ensured a clear and valid title. Sometimes land owners also sought to seek acquisition route for part of the lands (integral to their requirements) due to difficulties experienced in purchasing the same. However, in single unit acquisition, KIADB was following a policy of acquisition through agreement so as to ensure land owners get the market value for the lands without recourse to litigation etc. Besides, conditions of allotment of KIADB was such that the allottee will have to put land to use to the purpose intended else, the allotment could be cancelled and land resumed.

(3) While there was admittedly no laid down policy to guide the Committee as vet, TECSOK had developed certain indicative guidelines for requirements of different industries and it was the Land Audit Committee which would have to factor in the experience gained from dealing with individual cases and develop a coherent policy in due course. So far the Land Audit Committee had only two sittings.

The Committee members also debated on the requirement of developers of IT Parks for land for recreational purposes, specifically golf courses as also luxury residences (Villas etc). It was recognized that several MNCs and other top level IT BT companies would like to have a conducive "work and live environment" where components of social infrastructure will have to be incorporated apart from good linkages to highways, airports etc. At the same time, it was felt that as the requirements of land were being met

through KIADB by declaring it to subserve a public purpose. it would be desirable to restrict the same for work spaces, essential social / recreational infrastructure and reasonable / functional housing while for other requirements like golf course / luxury villas etc. the applicants could be requested to source land without recourse to the KIADB route. Also the FAR in outlaying areas (outside BDA limits) could be a minimum of 1.00 so as to have optimum coverage.”

9. As per Clause (2) above, it could be seen that in respect of a single unit acquisition, the KIADB was following a policy of acquisition through an agreement so as to ensure that the land owners get the market value without recourse to litigation.

10. In respect of the Project of respondent No.3, the Land Audit Committee has stated as follows:

“2.3 M/s. SAPPHIRE INFRASTRUCTURE DEVELOPMENT PVT.LTD., 97/B, 1ST FLOOR, 6TH BLOCK, KORAMANGALA, BANGALORE-

560095.

The project proposal of M/s:Sapphire Infrastructure Development Pvt. Ltd., Bangalore, to establish “IT Park-cum-Serviced apartments” in Yamare Village, Anekal Taluk Bangalore Urban District, with an investment of Rs.581.60 Crores, was approved in the 5th SHLCC meeting held on 10.10.2005 an it was desired that the land requirement should be scruitinised by the Land Audit Committee and after ensuring that it was consistent with zoning regulations of BMRDA, KIADB to initiate consent acquisition.

Mr. A.Basavaraj and his team from M/S Sapphire Infrastructure Development Pvt. Ltd., appeared before the Committee and explained that, their requirement of land would be 158 acres and there would be employment opportunity for 33,000 persons. He also informed that, out of 158 acres of land required for the project, 129 acres of land is already in possession of the company/its directors and requested KIADB assistance to acquire the balance 29 acres on consent basis.

The committee took note of the land allocation made by the company for different facilities as per the project layout and informed the company representatives to rework the land required for their project

excluding the facilities like Villas included in their plan. They have agreed for the suggestion and submitted the revised details to the committee and explained that, the idea of constructing Villas is dropped, instead, they will develop Industrial Housing/Residential apartments for the IT professionals.

He also informed the committee that, they have proposed to take up the development in 129 acres of land already in their possession immediately to meet the demand for workspace by some of their MNC clients and requested KIADB sanction for the development plan of the same, on payment of necessary service charges.

After detailed discussions, the committee resolved to consider the extent of land required for the project as 158 acres and recommended to KIADB to approve the development plan for their own land of 129 acres, by collecting the necessary service charges and to acquire the balance 29 acres of land for the project on consent basis.”

(emphasis in italics supplied)

11. As can be noticed from the above extraction, the claim of respondent No.3 was that it would require 158 acres of land for their project and out of which they had already acquired 129 acres of land and were requesting the KIADB’s assistance to acquire the balance 29 acres on consent basis.

12. It has also been informed that the Company would take up the development in 129 acres of land, which was already in their possession and it was requesting the KIADB’s sanction to the development plan in this regard.

13. As could be seen from the above, the Committee ultimately resolved to consider the extent of land required for the project as 158 acres and it recommended the KIADB to approve the development plan for their own land of 129 acres and to acquire the balance 29 acres of land for the project on consent basis. Thus, the Resolution of the Land Audit Committee was that the KIADB was to acquire balance 29 acres on consent basis.

14. It has to be noticed here that the Land Audit Committee did not resolve to direct the KIADB or suggest the KIADB that the provisions of the KIAD Act were to be invoked and the lands were to be acquired under the provisions of the KIAD Act.

15. A conjoint reading of the clarifications of the Principal Secretary to the Government in the earlier part of the proceedings and the specific Resolution asking the KIADB to acquire 29 acres of land on consent basis would indicate that the lands were to be acquired by consent, and it was not even remotely suggested to the KIADB that it should invoke the provisions relating to compulsory acquisition as provided under the KIAD Act.

16. It has to be borne in mind that the Land Audit Committee comprises of the Principal Secretaries to the Government, Commissioners of the Department of Industries and Commerce and the Chief Executive Officer of KIADB, and it is obvious that if such a high-ranking body of officers wishes to recommend acquisition of land under the KIAD Act, the same would have been explicitly stated. The fact that the Committee used the expression “acquire the balance 29 acres of land for the project on consent basis” leads to the only inference that the KIADB would have to acquire the lands only by consent.

17. The question that would follow from this is would be as to whether KIADB can acquire lands by consent or whether it can acquire lands only by recourse to the provisions of Section 28 of the Act.

18. Section 14 of the KIAD Act prescribes the General Powers of the KIADB. Sub-clause (b) of Section 14 reads as follows:

“14. General powers of the Board.- Subject to the provisions of the Act, the Board shall have power,-

(a) X X X

(b) to purchase by agreement or take on lease or under any form of tenancy any land, to erect such buildings and to execute such other works as may be necessary for the purpose of carrying out its duties and functions; ”

(underlined by me)

19. It is clear that the KIADB, apart from being conferred with the specific power to purchase by agreement any land, has also been empowered to erect such buildings and to execute such other works as may be necessary for the purpose of carrying out its duties and functions under the KIAD Act. It can thus be inferred that when the Land Audit Committee indicated to the KIADB that it was to acquire 29 acres of land on consent basis, it was obviously referring to Section 14(b) of the KIAD Act.

20. As already noticed above, if the Land Audit Committee (being a body comprising high-level officers) intended to indicate that the lands were to be acquired under Chapter VII of the KIAD Act, it would have made a recommendation to the State Government to declare the area to be an industrial area and recommend issuance of a notification under Section 28(1) of the KIAD Act. The fact that the recommendation made to the KIADB is to acquire the lands by consent, it would obviously exclude the possibility of a recommendation having been made to the State Government to acquire the land under Section 28 of the KIAD Act.

21. However, the KAIDB in its 274th Board Meeting held on 01.07.2006 has proceeded to pass a Resolution in the following terms:

22. As could be noticed from the above extraction, though the recommendation by the Committee was to acquire the land by consent basis, the KIADB has resolved to initiate acquisition proceedings under the provisions of the KIAD Act.

23. Section 28(1) of the KIAD Act provides for compulsory acquisition of the land, and Section 27 of the KIAD Act categorically states that the provisions of relating to acquisition under Chapter VII of the KIAD Act would apply to such areas and from such dates, if they have been notified by the State Government under Section 1(3) of the KIAD Act.

24. Sub-section (3) of Section 1 declares that Chapter VII of the KIAD Act which relates to ‘acquisition of land’, would come into force from the date of issuance of a notification in that behalf and Section 3(1) of the KIAD Act states that the State Government can declare any area in the State to be an industrial area for the purpose of the KIAD Act by issuance of a notification under Section 3(1) of the KIAD Act.

25. It is hence clear that the State Government is first required to declare any area in the State to be an industrial area and this is required to be followed by issuance of a notification under Section 1(3) of the KIAD Act, which would enable the application of the provisions of the Chapter VII of the KIAD Act to said industrial area.

26. To state this in a different manner, it is clear that unless an area is declared to be an industrial area by the State, the question of acquiring them under Section 28 would not be permissible.

27. In the instant case, as could be seen from the proceedings of the Land Audit Committee, respondent No.3 had already acquired 129 acres of land for the purpose of establishing an Information Technology Park and it only required the acquisition of a further extent of 29 acres to make good its requirement of 158 acres. From this, it is obvious that the specific area of 129 acres was already acquired, which was not an industrial area as

defined under the KIAD Act and the question of declaring that area as an industrial area would not arise.

28. It must be stated here that the provisions of the KIAD Act cannot be utilised to acquire any deficit land requirement of an entrepreneur in a land adjoining or lying within his holding by declaring such deficit area to be an industrial area. If this is permitted, it would be basically mean that there would be a small pocket/isolated islands of industrial area and this would be a gross misuse of the objective of the KIAD Act, which is to establish an industrial area for the purposes of establishing industries. Surely, the KIADB under the Act is not envisaged to be a procurement entity for persons who desire land for their projects.

29. It is no doubt true that it is now settled law that the provisions of the KIAD Act can be applied for acquiring the land for establishing a single unit industry, but this law does not mean that the provisions of the KIAD Act can be utilized to make good the deficit land requirement of an entity. It is to be stated here that the Apex Court has affirmed the invocation of Chapter VII of the Act in cases where an entire parcel of land was needed to set up an industry, and it was not considering a case where an entrepreneur wanted the KIADB to acquire land in shortfall to its requirement of land.

30. The entire purpose of the KIAD Act is to ensure that a particular area is declared as an industrial area so as to provide for orderly development of industries, and in order to establish the industrial area, the provisions of the KIAD Act are utilized to acquire the land. The provisions of the KIAD Act cannot be used for the purpose of declaring small pockets of land in order to ensure a private entity has the requisite area of land for the purpose of establishing its project.

31. This matter can also be looked at from another angle.

32. In the year 2002, the Government enacted the Karnataka Industries (Facilitation) Act, 2002 (“the Facilitation Act”) with the following object:

“An Act to provide for the promotion of industrial development and facilitation of new investments to simplify the regulatory frame work by reducing procedural requirements and rationalising documents and to provide for an investor friendly environment in the State of Karnataka.

Whereas, it is expedient to provide for speedy implementation of industrial and other projects in the State by providing single point guidance and assistance to promoters, reducing the procedural requirements, rationalising documents and to ensure smooth operation;

Be it enacted by the Karnataka State Legislature in the Fifty third year of the Republic of India as follows: ”

33. As could be seen from the statement of objects above, the Facilitation Act was enacted to ensure that the regulatory framework is simplified, the procedural requirements are reduced, and documentation is rationalised so as to provide for an investor friendly environment in the State. The Facilitation Act was essentially designed to provide speedy implementation of industrial and other projects by providing single point guidance and assistance to promoters, thereby reducing the procedural requirements.

34. The Facilitation Act envisaged the forming of a State High Level Clearance Committee under Section 3, the State Level Single Window Clearance Committee under Section 6, a District Level Single Window Clearance Committee, and a State Level Empowered Committee.

35. Under Section 3(2) of the Facilitation Act, the SHLC Committee was required to examine and consider the proposals received from any entrepreneurs relating to any industrial and other projects to be set up in the State, with an investment of more than Rs.500.00 Crores. In the instant case, although the initial project cost was envisaged at Rs.415.00 Crores, subsequently it was enhanced to Rs.581.60 Crores.

36. The function of the SHLC Committee was to examine the proposal of setting up of any industrial undertakings and take a decision and communicate the same to the entrepreneur and to the concerned Departments.

37. The SHLC Committee would be the final Authority in granting approvals for the projects placed before it and the approval given by the SHLC Committee would be binding on all concerned Departments/Authorities, and the Departments/Authorities would be obligated to issue the requisite clearances within the stipulated time, subject to compliance by the entrepreneur.

38. Section 2(iii) of the Facilitation Act defines “clearances” as under:

“2. Definitions.- In this Act unless the context otherwise requires,

(i) x x x

(iii) “Clearances” means grant or issue of no-objection certificate, allotments consents, approvals, permissions, registration, enrolments, licences and the like, by any Authority or authorities in connection with setting up an industrial undertaking in the State.”

39. Section 141 of the Facilitation Act provides for the prescription of a Combined Application Form for the use of entrepreneurs for obtaining clearances from the SHLC Committee or other Committees. This Combined Application Form is to be used in lieu of the existing forms prescribed under the applicable Central or State Acts and the Rules made thereunder, for obtaining the required clearances. The said provision mandates that all the Departments/Authorities concerned should accept such Combined Application Form for processing and issuing the required clearances.

40. Section 15 of the Facilitation Act mandates that every entrepreneur should furnish a self-certification at the time of submitting the duly completed application form with an undertaking that he would comply with all the applicable provisions of the relevant Acts as well as the Rules made thereunder, and said Certification furnished by him is required to be accepted by the Departments/Authorities for the purpose of issuing and granting clearances.

41. Sections 2(ia) of the Facilitation Act reads as under:

"2. Definitions.- In this Act unless the context otherwise requires,- (i) x x x

(ia) "Applicable Acts" means the Factories Act, 1948, the Boilers Act, 1923, the Contract Labour (Regulation and Abolition) Act, 1970, the Employees State Insurance Act, 1948, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965, the Payment of Wages Act, 1936, the Maternity Benefit Act, 1961, Gratuity Act, 1972, the Equal Remuneration Act, 1976 and the Karnataka Shops and Commercial Establishments Act, 1961; the Legal Metrology Act, 2009 (Central Act 1 of 2010) or rules made there under, the Karnataka Municipalities Act, 1964 (Karnataka Act 22 of 1964), the Karnataka Municipal Corporations Act, 1976 (Karnataka Act 14 of 1977), the Karnataka Grama Swaraj and Panchayat Raj Act, 1993 (Karnataka Act 14 of 1993), the Karnataka Industrial Area Development Act, 1966 (Karnataka Act 18 of 1966), the Karnataka Fire Force Act, 1964 (Karnataka Act 42 of 1964), the Karnataka preservation of Trees Act, 1976 (Karnataka Act 76 of 1976), the Karnataka Forest Rules, 1969, the Karnataka Land Revenue Act, 1964 (Karnataka Act 12 of 1964), the Karnataka Land Reforms Act, 1961 (Karnataka Act 10 of 1962), the Bangalore Development Authority Act, 1976 (Karnataka Act 12 of 1976), the Karnataka Urban Development Authorities Act, 1987 (Karnataka Act 34 of 1987), the Karnataka Town and Country Planning Act, 1961 (Karnataka Act 11 of 1963), and the policies of the Karnataka State Small scale Industries Development Corporation.”

42. Section 5 of the Facilitation Act contemplates granting of approvals and, on such approvals being granted by the SHLC Committee, the Departments/Authorities are obligated to issue the required clearances within the stipulated time, subject to compliance of the provisions of the applicable Central and State Acts and the Rules made thereunder, by the entrepreneur. It is therefore obvious that the principal objective of the SHLC Committee is to ensure that, on the SHLC Committee approving the project, the clearances required under the applicable Acts/Rules are all automatically granted, and every Department/Authority is required to issue necessary clearances. In essence, therefore, the very purpose of the Facilitation Act is to ensure that all the clearances that are required under the applicable Acts/Rules for the purposes of starting an industry are granted the moment the approval is given by the SHLC Committee.

43. It is to be noticed here that the clearances contemplated under the Facilitation Act are for starting of the industry and this requirement of granting clearances cannot tantamount to an automatic exercise of the power of ‘eminent domain’ reserved by the State. The exercise of the power of eminent domain presupposes the existence of a clear public purpose to be satisfied before initiating the acquisition proceedings. The requirement of obtaining clearances to start an industry cannot be equated to a direction to exercise the power of eminent domain, and, as a matter of fact, there can be no direction issued to the State to exercise its power of eminent domain.

44. It is settled law that the power of eminent domain rests entirely with the state government and this cannot be exercised or be initiated at the instance of the SHLC Committee, which is constituted to grant clearances to start an industry.

45. The Combined Application Form that is contemplated under Section 14 of the Facilitation Act (prescribed as Form No.1 under the Rules) would also have to be referred to. The said Form No.1 is extracted as hereunder:

1	Name of the Firm/Company And Full Postal Address
	(i) Registered / Corporate office:
	Tel: Fax: E-mail
	(ii) Local Office:
	Tel: Fax: E-mail:
2	Address of the Factory / Proposed location of the Factory: (including Sy.No., Village, etc)
3	Details of Promoters / Partners / Proprietor / Directors

Details of Head of the Unit/Applicant/Authorised Signatory:

Sl. No.	Name	Designation	Residential Address	Tel:(O) (R)	Fax / E-mail
1.
2.
3.
4.

4	Constitution of the Firm/Company	Proprietorship / Partnership / Pvt. Ltd./ Public Ltd. / Others, if any
5	Scale /Size of Business	SSI / Medium / Large
6	Name of the products proposed to be Manufactured / Services offered :

Sl. No.	Products Services	Installed Capacity (Per annum)
1
2
3
4
5
6

7	Proposed Investment:	Land Bldg. P and M Wkg. Total Margin               Capital (Rs. In lakhs)
8	Extent of land:	Own-Agricultural…..Sq.Mtrs. /Acres (fill up whichever is applicable) (Sy. No......... , Village …. Hobli…., Tq….) Industrially converted land…. Sq.Mtrs/Acres

		KIADB-Applied…..Sq. Mtrs./Acres (Location/Industrial Area......... ) Allotted……Sq.Mtrs./Acres Rented......... Sq. Mtrs./Ft.
9	Expected date of commencement of Production / Business
10	Power Requirement:
	KPTCL:
	Captive Generation :
	Others, if any :
	Total :
11	Water Requirement:
	Industrial use	K ltrs
	Domestic use	K ltrs
	Total water requirement per day	K ltrs
12	Proposed Employment:
13	Expected Annual Turnover:
14	Particulars of PRC/PMT/IEM/LI/IL : (Copy to be enclosed)

No. / Date	Issuing authority	Validity period

15	Nearest Police Station:
16	Nearest Railway Station:

46. This would indicate that the Combined Application Form was in lieu of the eight existing forms.

47. In other words, the requirement of making eight forms under different enactments was combined and, in its place, one form in said Form No.1 was required to be submitted to obtain various clearances from the Departments or Authorities.

48. Part – B of Form No.1, which is relatable to the KIADB, reads as under:

Sl. No.	Purpose	For immediate	For future	Total
1	Factory Building
2	Actually occupied by the plant /machinery
3	Office and other ancillary buildings
4	Open space, garden, lawn or roads
5	Storage of materials / godowns
6	Disposal of effluent
7	Experimental research

2. List of Machineries :

Sl. No.	Particulars of Machinery	HP
1
2
3
4
5

49. As could be seen from said Part-B extracted above, the particulars that are required to be furnished are for the purpose of allotment of land by KIADB. There is no provision in this Combined Application Form which permits an applicant to put forth a request to the KIADB to acquire the land. Obviously, there can be no such request provided for, since the power to invoke the sovereign power of eminent domain cannot be initiated at the request of a private party. The fact that the application contemplates only for furnishing of particulars for allotment of land by the KIADB would clearly indicate that it would be open for an investor to seek allotment of land which has already been acquired by the KIADB for the purposes of an industrial area.

50. In other words, it will be open for an investor to seek the allotment of land in an existing industrial area as provided under the Allotment Rules of the KIADB by making a Combined Application Form instead of filing a separate application form for allotment of land by KIADB. This facility of seeking allotment of land from the KIADB cannot be translated into a direction being issued by the SHLC Committee to initiate the process of acquisition under the provisions of the KIAD Act.

51. It has to be borne in mind that the working of the provisions of the KIAD Act for the formation of an industrial area would have absolutely no relationship with the granting of clearances under the Facilitation Act. If the Facilitation Act is meant only to provide for the grant of approvals/clearances, any approval granted by the SHLC Committee cannot ipso facto trigger the KIADB into initiating acquisition proceedings under the KAID Act. It is hence clear that even if it is assumed that the SHLC Committee granted its approval for starting of a project, that would not lead to an inference that the KIADB would have to initiate acquisition proceedings whenever an applicant/investor seeks allotment of land.

52. It has to be reiterated here that the facility to request allotment of a land in an industrial area cannot be equated or translated into making a request for initiating acquisition proceedings under the KIAD Act.

53. The State Government can, no doubt, independently exercise its sovereign power and initiate acquisition proceedings, not only for the purposes of establishing an industrial area but also for providing land to a single unit, but this power cannot emanate from the SHLC Committee, which is only constituted for the purposes of granting clearances under the applicable Acts/Rules.

54. It is therefore clear that the approval granted by the SHLC Committee can never tantamount to issuance of a direction to the KIADB to acquire the land.

55. As already noticed above, the SHLC Committee while granting the approval for the projects on 10.10.2005 and the State Government while examining the approval granted by the SHLC Committee, have both categorically stated that the KIADB is required to initiate consent acquisition, thereby meaning that the KIADB can acquire lands only by consent. It is obvious that if there is no consent for acquisition, the KIADB cannot acquire the lands. Merely because the word “acquisition” is used in the decision of the SHLC Committee and the Government, that would not enable the KIADB to initiate proceedings for compulsory acquisition under the KAID Act.

56. It must be kept in mind that there is a stark and a glaring difference between the terms “consent acquisition” and “compulsory acquisition”.

57. In cases of compulsory acquisition, the question of consent of the land owners would not be necessary. In cases of consent acquisition, however, the acquisition can only be by way of consent. If it is noticed that the KIADB has been conferred with the power to purchase lands for executing any projects or for furthering the objects of the Facilitation Act, it is clear that the order of the Government and the SHLC Committee was to direct the KIADB to purchase the requisite 29 acres. It is obvious that if the KIADB cannot purchase 29 acres of land from the land owners, it cannot fall back upon the provisions of the KIAD Act to facilitate the acquisition of such land.

58. It is no doubt true that an argument can be made that the State Government intended for the project to go through and consequently directed the KIADB to acquire the land, and that since the word “acquisition” was used, the provisions of the KIAD Act can be invoked.

59. As already noticed above, if it was the intent of the State to suggest for acquisition of land under the provisions of the KIAD Act, the question of it directing that the land requirement be scrutinised by the Land Audit Committee and it should be ensured that the land met the Zoning Regulations of the BMRDA, would never have been incorporated in its order.

60. An argument has also been advanced that the term “acquisition by consent” means the consent that is contemplated under Section 29(2) of the KIAD Act i.e., for payment of compensation.

61. This argument is also misconceived, because, if the land owners do not agree for the compensation/land value determined, then it is obvious that the acquisition cannot go through.

62. Section 29(2) of the KIAD Act enables fixation of land price voluntarily and that cannot amount to consent acquisition. The consent under Section 29(2) of the KIAD Act refers to consent to the value of the land and not to the acquisition as such.

63. It is thus clear that the impugned notifications have been issued on a glaring misconception by the KIADB and the same cannot be sustained. Consequently, they are quashed insofar as the lands of the petitioners are concerned.

64. Accordingly, the present writ petitions are allowed.