AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2007 (2) TMI 734
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....legal representatives of deceased Akkahonnamma who died somewhere in the year 1993. She was the owner of land bearing Survey No. 113/3 admeasuring 2 acres, 37 gunthas situated in Devarayapatna, Tumkur Taluk. In the year 1978, the Industrial Area Development Board, Karnataka ('Board' for short) acquired 120 acres of land of different survey numbers situated in Devarayapatna for the purpose of establishing a Watch Factory, namely, H.M.T. Ltd. (appellant herein). The land admeasuring 1 acre, 38 gunthas out of 2 acres, 37 gunthas of Survey No. 113/3 owned by the respondents was also acquired in the acquisition proceedings. The remaining land to the extent of 39 gunthas was not acquired. It was, however, the case of the respondents that the General Manager, H.M.T. took possession of the entire area of 2 acres, 37 gunthas even though he was entitled to take possession of land only of 1 acre, 38 gunthas. He thereby unauthorisedly took over possession of 39 gunthas of land. A request was, therefore, made to the General Manager, H.M.T. to return possession of 39 gunthas to the owners. He, however, refused to hand over possession. By a communication dated July 20, 1984, the Board cal....
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....t the owners had failed to even prima facie satisfy the Court that the action was mala fide and the power was exercised for colourable or collateral purpose. The land was sought to be acquired for public purpose, namely, for developing industry through Board and allegation of legal mala fide was baseless. It was also urged that Civil Court had reserved the liberty to acquire the land in accordance with law. But even otherwise, the decree passed by a court could not take away power of the State. Moreover, the land was covered by the provisions of the Official Secrets Act, 1923 having declared it as 'prohibited area'. 3. The learned Single Judge described the case as one of 'exploitation of statutory provisions to defeat the just rights of an individual decreed by the law Courts, in the name of public purpose' and held that the power had been exercised by the authorities mala fide and the action was liable to be quashed and set aside. The Court noted that the respondents had no right, title or interest in the land in question and yet it continued to retain possession of the land for about 18 years. It refused to vacate the property though request was made by the ow....
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.... of power under Sub-section (1) of Section 28 of the Act. He submitted that it was within the power of the State Government to issue statutory notification for acquisition of land and the High Court was wrong in quashing it on the ground of mala fide exercise of power. So far as decree for possession is concerned, it was submitted by the counsel that irrespective of the decree of a court of law, statutory power could be exercised by the State under the Act. The notification was preliminary in nature reflecting the intention of the State to acquire the land and the owners were to get an opportunity to raise objections, if any, and thereafter the final notification was to be issued. It was, therefore, urged that preliminary objection raised on behalf of the authorities that the petition was premature ought to have been upheld by granting liberty to the owners to raise all objections against the proposed action. It was also submitted that H.M.T. needed the land for expansion of the factory. Moreover, the land in question was covered by the provisions of the Official Secrets Act, 1923 having declared the land as 'prohibited area' and on that ground also, acquisition of land was....
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....ad been acquired and award was passed in respect of the said area. It is also correct that instead of acquiring and taking over possession of 1 acre, 38 gunthas, the appellants took over possession of the entire land of Survey No. 113/3 admeasuring 2 acres, 37 gunthas thereby illegally and unauthorisedly taking possession of 0 acre, 39 gunthas. Obviously, therefore, it was open to the owners to make complaint and also to take appropriate proceedings as they were illegally deprived of ownership and possession of 39 gunthas of land. When the request to return possession of the excess land was ignored by the appellants, they naturally approached a court of law and obtained a decree. It is not in dispute that the decree was confirmed in appeal and had become final. Execution proceedings were taken out and at that stage, the appellants moved the State Authorities to acquire land under the Act. The question, however, is whether the action of the State Authorities in initiating acquisition proceedings under a valid law could be said to be illegal, unlawful or in mala fide exercise of power? So far as the High Court is concerned, it held that the course adopted by the authorities was contr....
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....on issued under Sub-section (1), a declaration shall, by notification in the official Gazette, be made to that effect. (5) On the publication in the official Gazette of the declaration under Sub-section (4), the land shall vest absolutely in the State Government free from all encumbrances. (6) Where any land is vested in the State Government under Sub-section (5), the State Government may, by notice in writing, order any person who may be in possession of the land to surrender or deliver possession thereof to the State Government or any person duly authorized by it in this behalf within thirty days of the service of the notice. (7) If any person refuses or fails to comply with an order made under Sub-section (5), the State Government or any officer authorized by the State Government in this behalf may take possession of the land and may for that purpose use such force as may be necessary. (8) Where the land has been acquired for the Board, the State Government, after it has taken possession of the land, may transfer the land to the Board for the purpose for which the land has been acquired. Bare reading of the above provision makes it abundant....
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....n of property to G within a particular period. The State then took out proceedings under the Land Acquisition Act, 1894 for acquiring the property for public purpose, namely, for a school. G challenged the proceedings as mala fide. The High Court upheld the contention observing that there was 'malice in law' inasmuch as the proceedings were initiated to scuttle a valid decree passed by a competent court. The State approached this Court. Allowing the appeal and setting aside the order of the High Court, this Court held that the school was there since 1954 and was catering to the educational needs of children residing in the heart of the city. It could not, therefore, be contended that there was no genuine public purpose. Exercise of power under the Act in the facts and circumstances, therefore, could not be held mala fide. The Court also explained the concept of legal mala fide. By referring to Words and Phrases Legally Defined, 3rd Edn., London Butterworths, 1989, the Court stated; The legal meaning of malice is "ill-will or spite towards a party and any indirect or improper motive in taking an action". This is sometimes described as "malice in fact". "Legal ....
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....9;Acquisition and Disposal of Land'. Chapter II deals with 'Industrial Areas'. Section 3 provides for 'declaration of industrial areas' as defined in Sub-section (6) of Section 2 of the Act. Sub-section (1) of Section 3 enables the State Government to declare any area as 'industrial area'. It reads; (1) The State Government may, by notification, declare any area in the State to be an industrial area for the purposes of this Act. It is on record that notifications under Sub-section (3) of Section 1 and Sub-section (1) of Section 3 were issued by the State. The learned Single Judge, however, observed that it is only after the Executing Court directed the judgment-debtors to deliver possession of the property that the latter persuaded the State to issue such notifications. He also found fault with the State Authorities in not producing material for the perusal of the Court for the alleged expansion of the industry. The learned Judge noted that it was not the case of the judgment-debtors in execution proceedings that the land was needed for development of industry and, therefore, a decision was taken to acquire the land. According to the learned ....
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....ed in page 255. In page No. 256 also the same schedule is published the purpose of which is not known. 11. Section 3(1) of the Act requires that the State Government shall declare any area as an industrial area by a notification and a notification under Sub-section (3) of Section 1 of the Act is required to be issued to extend the provisions of Chapter VII in respect of the area declared as an industrial area under Sub-section (1) of Section 3 of the Act by the notification. It is, therefore, clear that there shall be two different and independent notifications issued under two different provisions of the Act. The composite notification issued as per Annexure-D under Sub-section (1) of Section 3 without mentioning the particulars of the land, and Sub-section (3) of Section 1 of the Act is impermissible in law, consequently the notification issued under Section 28(1) of the Act is illegal, void and invalid. 16. The learned Single Judge was conscious of the fact that notification under Section 28(1) was merely a preliminary notification and in the nature of proposal. He, however, negatived preliminary objection raised by the authorities and observed; 12. It was c....