Special industrial acquisition law upheld as coexisting with land acquisition legislation, with notifications and compensation terms sustained.

Sections 28(4) and 28(5) of the Karnataka Industrial Areas Development Act, 1966, together with Chapter VII, were upheld as valid after the 2013 land acquisition regime. The Court treated the Act as a special State industrial development law operating in a different field from the central statute, and rejected the challenges based on repugnancy, Article 14, and Article 254. It also found the compensation machinery under Sections 28, 29 and 30 sufficient, noting that acquisition for industrial purposes could proceed lawfully. The impugned notifications under Sections 28(1) and 28(4) were sustained, and compensation was to be aligned with the 2013 Act in terms of the Board's undertaking.

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Issues: (i) Whether Sections 28(4) and 28(5) of the Karnataka Industrial Areas Development Act, 1966 and Chapter VII of that Act are unconstitutional or void after the enactment of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 on the ground of repugnancy and inconsistency with Articles 14, 31A and 254(1) of the Constitution of India; (ii) Whether the notifications issued under Sections 28(1) and 28(4) of the Karnataka Industrial Areas Development Act, 1966 could be sustained and whether the petitioners were entitled to compensation in terms of the 2013 Act.

Issue (i): Whether Sections 28(4) and 28(5) of the Karnataka Industrial Areas Development Act, 1966 and Chapter VII of that Act are unconstitutional or void after the enactment of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 on the ground of repugnancy and inconsistency with Articles 14, 31A and 254(1) of the Constitution of India.

Analysis: The acquisition scheme under the Karnataka Industrial Areas Development Act, 1966 was examined as a special enactment intended for planned industrial development under the State List, with acquisition being ancillary to that object. The provisions in Chapter VII were found to form a complete code governing acquisition, vesting, possession and compensation. The Court held that the 2013 Act and the Karnataka Industrial Areas Development Act, 1966 operate in different fields and can co-exist. The challenge based on Article 31A failed because the Act had Presidential assent and the compensation machinery under Sections 28, 29 and 30 ensured payment at not less than market value. The repugnancy contention also failed because the State enactment was traceable to its own legislative competence and did not displace the central statute in the manner alleged.

Conclusion: Sections 28(4) and 28(5) and Chapter VII of the Karnataka Industrial Areas Development Act, 1966 were held to be intra vires and not void after the 2013 Act.

Issue (ii): Whether the notifications issued under Sections 28(1) and 28(4) of the Karnataka Industrial Areas Development Act, 1966 could be sustained and whether the petitioners were entitled to compensation in terms of the 2013 Act.

Analysis: The notifications were upheld because the acquisition was for a lawful industrial purpose and the Act provided a valid acquisition and vesting mechanism. At the same time, the Board's resolution and undertaking before the Court removed the grievance regarding compensation disparity by stating that compensation for acquisitions after 01.01.2014 would be aligned with the 2013 Act, with consent awards under Section 29(2) and determination under Section 29(3) if consent failed. In view of that undertaking, the petitioners' compensation-related objection was treated as addressed.

Conclusion: The notifications were held legally valid and enforceable, and the petitioners were held entitled to compensation in terms of the 2013 Act in accordance with the Board's undertaking.

Final Conclusion: The constitutional challenge to the industrial area acquisition provisions failed, the impugned acquisition notifications were sustained, and the writ petitions stood dismissed, while the petitioners retained the benefit of compensation aligned with the 2013 Act.

Ratio Decidendi: A special State industrial development enactment with an independent acquisition and compensation framework can coexist with the land acquisition legislation, and its acquisition provisions are not invalid merely because they permit vesting before payment so long as the statute provides a lawful compensation mechanism and the two enactments operate in their respective fields.

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