Failure to serve mandatory notice on interested persons vitiates acquisition proceedings under Section 28 of the KIAD Act.

The appellant sought to establish an Information Technology Park at Kadubeesanahalli, Bengaluru, involving an investment of approximately ₹43,000 crores. The State Level Single Window Clearance Committee approved the project and directed acquisition of 8.5 acres of land. The appellant deposited ₹38,06,500 with the Karnataka Industrial Areas Development Board (“KIADB”), following which a preliminary notification under Section 28(1) of the Karnataka Industrial Areas Development Act, 1966 (“KIAD Act”) was issued on 9 March 2004 and a final notification under Section 28(4) was issued on 7 September 2004.

The landowners challenged the acquisition. In the first round of litigation, the High Court set aside the final notification and directed the landowners and the appellant to submit objections and representations before the Special Land Acquisition Officer (“SLAO”). The SLAO thereafter accepted the landowners’ objections and dropped their lands from acquisition. The appellant challenged those proceedings in writ petitions. The learned Single Judge directed the respondents to provide alternative land and permitted the appellant to seek damages before an appropriate forum.

During the appeals, the KIADB stated that the alternative lands earlier offered in Devanahalli and Dabaspet were no longer available as an unlitigated single plot of approximately 8 acres. The Chief Executive Officer filed an affidavit confirming this position. A title dispute also existed between the private respondents concerning portions of the notified land. A civil court had declared Smt. Rajeswaramma to be the owner in O.S. No. 6021/2004, but the decree was under challenge in R.F.A. No. 895/2009.

1. Whether the acquisition proceedings undertaken under Section 28 of the KIAD Act complied with the statutory requirements of notice, consideration of objections, and hearing?

2. Whether the requirement of obtaining the landowners’ consent invalidated the acquisition process or defeated the appellant’s claim?

3. Whether the SLAO’s order dated 22 December 2009 violated the earlier directions of the learned Single Judge requiring consideration of the parties’ objections and representations?

4. Whether promissory estoppel or legitimate expectation entitled the appellant to compel allotment of the notified lands or alternative land?

5. What relief should be granted in view of the absence of available alternative land and the subsequent acts concerning the subject property?

Section 28 of the KIAD Act provides a complete acquisition procedure: preliminary notification, notice to owners and persons interested, opportunity to object and be heard, consideration of objections, final declaration, vesting, possession, and transfer to the KIADB.

The requirement under Section 28(2) to notify all persons known or believed to be interested is mandatory, and the hearing contemplated by Section 28(3) is an integral statutory safeguard; non-compliance vitiates the acquisition. The Court relied on A. Janardhan Shetty v. Shantamma and Balasaheb v. Government of Karnataka for this principle.

It further applied the rule that a party cannot claim violation of hearing where it failed to avail the opportunity within the time and procedure provided, relying on Alok Kotahwala v. Jaipur Metro Rail Corporation Ltd.

Promissory estoppel and legitimate expectation cannot compel a statutory authority to act contrary to statute or create a right unsupported by law; mandamus requires an existing legal right and corresponding legal duty, as held in Mani Subrat Jain v. State of Haryana and State of U.P. v. Harish Chandra. Under Section 47 of the Registration Act, 1908, a registered document may operate from the date on which it would have operated had registration not been required, while Section 48 of the Transfer of Property Act, 1882 gives priority to earlier-created rights.

The Court upheld the KIADB’s authority to impose prior consent as a project-related condition because the condition did not conflict with Section 28 of the KIAD Act; the appellant admittedly failed to obtain such consent.

It rejected the argument that the SLAO violated the earlier remand directions, holding that the appellant had been given an opportunity to submit its representation but filed it only on 31 December 2009, after the proceedings had progressed.

However, the Court found that Respondent No. 7, who was a person interested in the land, had not been served notice under Section 28(2). Since notice was a mandatory precondition to an effective opportunity under Section 28(3), the acquisition proceedings were procedurally defective and could not be sustained. The Court also held that the appellant could not use promissory estoppel to compel acquisition or allotment of specific private land, particularly where the statutory process itself was defective, title was disputed, and no alternative land was available. Nevertheless, considering the appellant’s expenditure and altered position arising from the State authorities’ actions, the Court considered monetary restitution appropriate.

The appellant was not entitled to a writ compelling allotment of the notified lands or alternative land, as no such enforceable right existed and no suitable alternative land was available.

In lieu of alternative land, the respondents were directed to refund the amount deposited by the appellant, together with interest at 8% per annum from 28 December 2009—the date of the SLAO’s order—until actual payment, within eight weeks of the judgment. The payment was directed to be without prejudice to the parties’ rights in R.F.A. No. 895/2009 and was not to be treated as a final adjudication of title.