Unexplained Two-Decade Delay in Passing Awards Vitiates Land Acquisition Despite Absolute Statutory Vesting

The Bengaluru-Mysuru Infrastructure Corridor Project (BMICP) was initiated under a Framework Agreement (FWA) dated 03.04.1997 between the Government of Karnataka and Nandi Infrastructure Corridor Enterprises Ltd (NICE).

Between 1998 and 2009, approximately 20,193 acres were notified for acquisition under Section 28(1) of the Karnataka Industrial Areas Development (KIAD) Act, with final declarations issued under Section 28(4) between 2003 and 2009.

While the Supreme Court previously upheld the project’s legality in State of Karnataka v. All India Manufacturers Organisation and M. Nagabhushana v. State of Karnataka, the respondent-landowners filed writ petitions challenging the continued validity of the acquisition on the grounds that no awards had been passed nor compensation paid for over 23 years.

The learned Single Judge quashed the acquisition notifications for the petitioners' lands due to inordinate delay in passing awards.

The appellant-NICE and KIADB appealed, arguing that since the land vested absolutely in the State under Section 28(5) of the KIAD Act, the acquisition could not be invalidated by subsequent delay.

1. Whether acquisition proceedings under the KIAD Act can be sustained when the authorities have failed to pass awards or determine compensation for over two decades despite statutory vesting

2. Whether earlier Supreme Court judgments upholding the project operate as res judicata to bar challenges based on subsequent administrative inaction

3. Whether deviations from the FWA and commercial exploitation of project lands disentitle the appellants from seeking equitable relief

The Court applied the "Rule of Law" doctrine and the constitutional mandate of Article 300A, which requires deprivation of property to be just, fair, and reasonable.

It relied on K.T. Plantation Pvt. Ltd. v. State of Karnataka, establishing that Article 300A implies a right to compensation and a fair procedure.

It further applied the "reasonable time" principle from Kolkata Municipal Corporation v. Bimal Kumar Shah, which identifies seven sub-rights under Article 300A, including the right to an efficient and expeditious process.

Statutory vesting under Section 28(5) of the KIAD Act was balanced against the obligation to pass an award under Section 29.

The court also applied Anil Kumar Gupta v. State of Bihar, holding that different stages of acquisition can generate fresh and distinct causes of action.

The Court rejected the appellants' contention that statutory vesting under Section 28(5) of the KIAD Act immunizes the acquisition from challenge.

It reasoned that while the KIAD Act prescribes no specific timeline for awards, every statutory power must be exercised within a "reasonable time".

A delay of 11 to 23 years is inherently unreasonable and renders the deprivation of property under Article 300A illusory and arbitrary.

On the issue of res judicata, the Court held that the landowners’ grievance was not the original legality of the project—which had indeed attained finality—but the fresh cause of action arising from decades of post-notification inaction.

Regarding the project’s execution, the Court scrutinized the ISEC Report and financial statements, noting that NICE had constructed only 5 km of the 111 km expressway in 25 years while simultaneously monetizing acquired lands through Joint Development Agreements and registered sale deeds with private entities. Such commercial exploitation without fulfilling the primary public purpose of the FWA was termed a "fraud on the statute".

It held that the inordinate and unexplained delay in passing awards vitiates the acquisition proceedings regardless of statutory vesting.

The Court characterized the project’s implementation as a potential "scam" that prioritized private profit over public interest and recommended an independent forensic audit and expert investigation. All pending interlocutory applications were disposed of as they did not survive for consideration.