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CASE NO.: Appeal (civil)  3492-3494 of 2005

PETITIONER: State of Karnataka & Anr.

RESPONDENT: All India Manufacturers Organization & Ors.

DATE OF JUDGMENT: 20/04/2006

BENCH: Ruma Pal, B. N. Srikrishna & Dalveer Bhandari

JUDGMENT: J U D G M E N T

with Civil Appeal Nos. 3497/05, 3842-3844/05, 3848-3884/05,               3889-4127/05, 4128-4366/05, 4575-4576/05, 5399-5401/05, 5402/05, 5746- 5747/05, 5759/05, 5797-5799/05, 6098/05, 6099/05, 5092-5093/05, 7024- 7040/05, 7591/05, 7592/05, 61/06, 73/06, 74-76/06 and  Civil Appeal Nos.        /06 @ SLP Nos. 1562-63/06.

SRIKRISHNA, J.

       Leave granted in Special Leave Petition (C) Nos. 1562-63/06.  

       Since this matter consists of two sets of distinct but related appeals,  for the sake of convenience, they may be considered under the two heads of:  (i) the Main Matters and (ii) the Land Acquisition Matters.

The Main Matters  (Civil Appeal Nos. 3492-3494/2005, 3497/2005, 3842-3844/2005)

The Background   

       These appeals are directed against a common judgment of the High  Court of Karnataka (dated 3.5.2005) by which three Public Interest  Litigations being Writ Petition Nos. 45334/04 (All India Manufacturers  Organisation v. State of Karnataka and Ors.), 45386/04 (J.C. Madhuswamy  and Ors. v. State of Karnataka and Ors.) and 48981/04 (Dakshinamurthy and  Anr. v.  State of Karnataka and Ors.) were disposed of resulting in dismissal  of Mr. J.C. Madhuswamy’s writ petition and a direction to the State of  Karnataka to continue to implement a certain project known as the  "Bangalore-Mysore Infrastructure Corridor Project" (hereinafter "the  Project").

       A brief statement regarding the Project: Bangalore is the capital of the  State of Karnataka and a rapidly developing city, which is projected to be  the IT boom town in the country. As a result of the pressures of urbanisation  and industrialisation, the infrastructure in and around Bangalore was found  to be inadequate. The traffic situation in Bangalore and on the roads leading  into and out of the city was found to be chaotic and hardly conducive to the  important role that the city is expected to play in the near future. The  Government of Karnataka, realising the importance of rapidly developing  the city of Bangalore, and also for developing its transport and  communication systems, conceived of the Project. The Project had twin  objectives: firstly, to provide for an express highway linking Bangalore with  Mysore, the former capital of the erstwhile State of Mysore, which is now  coming up as an industrial town, and for developing infrastructure along the  corridor and in and around Bangalore city. The Project is a massive

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undertaking, which requires design, construction, maintenance and operation  of an Express Highway between Bangalore and Mysore. Equally, the Project  is to also develop infrastructure around the periphery of Bangalore and all  along the Bangalore-Mysore Express Highway, which is about hundred  years old and has become incapable of handling the heavy volume of  vehicular traffic.

       On 28.9.1988, the State of Karnataka invited tenders for  implementation of such an Express Highway. There was no satisfactory  response to the tenders called for. There was only one tenderer and the  tenderer insisted on certain conditions which were not acceptable to the  Government of Karnataka. Thus, the bid of the tenderer was not accepted. A  survey was conducted by the Asian Development Bank and its report  pointed out that the projected population of Bangalore city would be about  8.2 million by the year 2011 and, therefore, there was an urgent need for  improvement of the Bangalore-Mysore Corridor. It was also suggested that  the State Government bear 20% of the project cost, along with the cost of  land acquisition, if such a project was to be implemented. The State  Government did not have sufficient means and had to look for other  alternative ways for implementing this project. The State Government then  decided to take up the project on a Build-Own-Operate-Transfer (hereinafter  "BOOT") basis with any consortium. The consortium was to carry out the  development of the project from its own resources and recoup its investment  by collection of tolls along the Express Highway.

       On 20.2.1995, a Memorandum of Understanding (hereinafter "MOU")  was entered into between the State Government and the Consortium of  Vanasse Hangen Brustlin Inc. USA (hereinafter "VHB"), Kalyani Group of  Companies (hereinafter "Kalyani") and SAB Engineering and Construction  Inc. USA (hereinafter "SAB"). The Governor of the State of Massachusetts,  U.S.A., Mr. William Weld, and Mr. H.D. Deve Gowda, the then Chief  Minister of the State of Karnataka were present and appended their  signatures thereto. It was agreed that the State Government would extend  support for the development of the Bangalore-Mysore Expressway, provided  commercial viability, competitiveness and feasibility of the project was  established to the satisfaction of the State Government. The Consortium  submitted a Project Report for review by the State Government.  

       On 5.6.1995, a "High Level Committee" (hereinafter "the HLC") was  formed under the Chairmanship of the Minister for Public Works. The HLC  consisted of the Principal Secretary, Commerce and Industries Department;  Principal Secretary, Housing and Urban Development; Secretary, Public  Works Department; Chief Engineer C and B (South Zone, Bangalore). The  Chairman and Managing Director, Karnataka State Industrial Investment  Development Corporation, were official members and the Chairman,  Technical Advisory Committee (Irrigation)\026one K.C. Reddy\027was a non- official member. The HLC met from time to time and reviewed the progress  made in the implementation of the Project. On 26.8.1995, the Consortium  presented the details of the Project to the HLC. After detailed consideration  of the Project, on 12.10.1995 the HLC submitted its report to the  Government. The Project was considered in detail by the State Cabinet Sub- Committee, which recommended that the matter be placed before the  Cabinet for consideration. The report of the HLC and the Project Report  made by the Consortium was accepted by the Cabinet, subject to the  modification that instead of seven townships as proposed in the Project  Report, only five townships were to be developed.  

A Government Order (No. PWD 32 CSR 95, Bangalore, dated  20.11.1995) ensued, which in terms pointed out that the implementation of  the Project was to be done by a private consortium. The Preamble to the  Government Order recited that the Project work was to be completed by the  Consortium with their own resources and that the Consortium would keep  the Project going for thirty years, so as to get a return of the expenditure,  profit, etc. through collection of tolls. It is important to note that the land  acquisition expenditure was also to be borne by the Consortium. To make

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the Project economically viable, the Consortium had proposed development  of seven townships, which as already stated, was reduced to five by the  Cabinet. It is also important to note that the Government Order specifically  permitted the development of five townships along with the construction of  the Express Highway. As already stated, the Consortium was to recoup its  expenditure and obtain profits through tolls\027the first system of its kind in  Karnataka. Consequently, it was felt that the modification of the existing  laws might become necessary. The necessary legal changes were to be  examined by the concerned administrative departments, who would take  "\005necessary action and also extend co-operation for implementation of the  Project."  

The three members of the Consortium\027VHB, Kalyani and SAB\027 entered into a "Consent and Acknowledgement Agreement" (hereinafter  "the CAA") dated 9.9.1996, specially assigning their respective rights under  the Government Order (dated 20.11.1995) and the MOU with regard to the  Project, in favour of Nandi Infrastructure Corridor Enterprises Ltd.  (hereinafter "Nandi"). Nandi had been registered on 16.1.1996 as a company  under the Companies Act, 1956, to serve as a corporate vehicle for the  development and implementation of the Project. On 21.12.1996, the CAA  was forwarded to the State Government for necessary action. The State  Government was advised by its Law Department (through Opinion No. 182  OPN II/97 dated 3/4.3.1997) that since the Government was finalising a  separate agreement with Nandi, there was no need to specifically consent to  the CAA. Consequently, the State Government took no further action except  noting it.  

       In February 1997, Nandi submitted a draft of the Framework  Agreement (hereinafter "the FWA") to be executed between it and the State  Government. This draft FWA was considered by the Core Committee, which  had been set up to negotiate the terms with Nandi. It was also referred to the  Cabinet Sub-Committee, which suggested certain modifications to the FWA.  After due incorporation of such modifications, the Government of Karnataka  approved the FWA on 17.3.1997 and the same was signed between Nandi  and the State Government on 3.4.1997.  

Under Clause 4.1.1 of the FWA, the State Government set up an  "Empowered Committee" headed by the Chief Secretary of the State to  oversee the Project and its implementation keeping in mind the importance  of timely completion. The Empowered Committee included technical  experts and held about ten meetings from time to time, the last one being on  24.7.2004. The main task of the Empowered Committee was to remove  administrative bottlenecks and to ensure the smooth execution of the Project.  The Empowered Committee was the State’s agent of coordination and  carried out the State Government’s obligations under the FWA.  

One of the key obligations of the State Government under the FWA  was to make available approximately 20,193 acres of land. As set out in  Schedule I to the FWA, 6,956 acres was Government land and the remaining  13,237 acres was private land, which was to be acquired by the State  Government. There was also an undertaking by the State Government under  the FWA to carry out appropriate amendments to its laws, rules and  regulations so that the massive Project could be implemented fully and  within a time-bound schedule. Accordingly, the provisions of the Karnataka  Industrial Areas Development Act, 1966 ("the KIAD Act") were amended  by Act No. 11 of 1997 so that the land required for the Project could be  acquired expeditiously. The Karnataka Industrial Areas Development Board  ("KIAD Board") set up under the KIAD Act, entered into an agreement with  Nandi on 14.10.1998 for acquisition of private land. Notifications were  issued from time to time for acquiring lands for the Project.

The Litigation in Somashekar Reddy          While all these frenetic activities were going on for the successful and  timely implementation of the Project, the FWA was challenged in a Public  Interest Writ Petition No. 29221/97 in November 1997 (reported as H.T.

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Somashekar Reddy v. Government of Karnataka and Anr. ) by one H.T.  Somashekar Reddy, a retired Chief Engineer. The State Government and  Nandi were the two respondents thereto. The FWA was challenged on all  conceivable grounds and the writ petition was vigorously opposed by the  State Government and also by Nandi. Both the State Government and Nandi  contended that the FWA was valid and that it had been entered into in larger  public interest. It was also successfully pleaded on the part of the State  Government that it had agreed to provide the "minimum extent of land"  for  the Project, which was 20,193 acres of land and that no excess land was  being acquired.

       The Division Bench of the Karnataka High Court hearing the said writ  petition formulated for its consideration, the following questions:  "(a)    Whether the Government has acted arbitrarily in entering  into the agreement with Respondent No. 2? (b)     Whether agreement is illegal as being opposed to public  policy? (c)     Whether the agreement contravenes any Constitutional  provisions or other existing enactments? (d)     Whether the agreement is vitiated by mala fides? (e)     Whether the rights of any individual or groups of  individuals is being illegally affected by the execution of the  agreement? (f)             Scope and extent of judicial review in matters of State  Policy."

For the purpose of the present litigation, it is important to note that  one of the main grounds of challenge to the FWA in Somashekar Reddy  (supra) was that land was being acquired far in excess of what was required  for the Project. In fact, it was specifically stated in the Writ Petition that  Article 7 of the FWA (that provides for construction of townships) was the  "most damaging provision detrimental to the owners of land". Further, it was  stated in the Writ Petition that the land requirement in Schedule I of the  FWA was "highly exaggerated" and would illegally create "huge profits" for  Nandi.  It was prayed that the FWA be quashed and further, since the FWA  was purportedly the result of "offences of breach of trust", for institution of  a Central Bureau of Investigation (hereinafter "CBI") enquiry into the whole  project.  

       Each of the questions was answered in favour of the respondents i.e.  State of Karnataka and Nandi. It was held that the FWA was not arbitrarily  entered into by the State Government; that it was not opposed to public  policy; that it was not unconstitutional or illegal; that it was not vitiated by  mala fides; that no rights of any individual or individuals had been illegally  affected by the execution of the agreement. Finally, the court found that it  could not exercise its power of judicial review to interfere with the FWA  which was in reality a policy choice of the Government.

       Further, as we shall discuss subsequently, the argument of excess land  being acquired, was not acceded to by the High Court which found that the  Project envisaged, in addition to the construction of an expressway between  Bangalore and Mysore, other connected developmental activities, such as: "(i) Development of area between Bangalore-Mysore. (ii) Divergence of traffic from Mysore-Chennai; Chennai-  Bombay. (iii) Construction of elected road from Sirsi Circle upto 9.4  Kms. (iv) Construction of 2 truck terminals. (v) Development of five identified local areas into townships  with all infrastructure for habitation and economic activities. (vi) Utilisation of sewage water being put to no productive use  by BWSSB. (vii) Development of tourism to augment the State’s  revenues."

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Thus, through an exhaustive consideration of all the background  material and documents presented to it, the High Court dismissed the writ  petition by holding against the petitioner on all the contentions urged. The  judgment in Somashekar Reddy (supra) was challenged before this Court  (in SLP (Civil)\005CC 1423/99) but was dismissed in limine on 26.3.1999.  The judgment in Somashekar Reddy (supra) thus reached finality.  

The Present Litigation          Although the writ petition in Somashekar Reddy (supra) was  dismissed by the High Court by its judgment dated 21.9.1998, it is of  relevance to notice that between November 1997, when this writ petition  was filed, and when the petition was dismissed, the work of implementing  the Project was going on in view of the stand of the State Government and  Nandi. Accordingly, a number of notifications were issued for acquisition of  the land required under the FWA. Many landowners challenged the  acquisition of their lands before the High Court. Although the issue of the  landowners will be dealt with in the second part of our judgment, it will be  useful to note that the Government supported the stand of Nandi before the  Single Judge, who partially allowed the land owners’ petitions. It was during  the writ appeal stage that the Government reversed its stance and opposed  Nandi.  

        Even while the said writ appeals filed in the land acquisition matters  were pending before the High Court, a second round of writ petitions  challenging the Project itself was filed before the High Court. Despite the  High Court’s go-ahead for the Project in 1997, and after seven years of  implementation, suddenly in the year 2004, these petitions were filed against  it in so-called "public interest" by two Members of the Legislative Assembly  (hereinafter "MLAs") and a "social worker" (i.e. Mr. J.C. Madhuswamy and  others). This petition prayed for a CBI enquiry and to restrain the State  Government from continuing with the Project or acquiring any further land  thereunder. Perhaps inspired by Mr. J.C. Madhuswamy and others, and also  in the so-called "public interest", All India Manufacturer’s Organisation, as  well as two ex-Mayors of Mysore (Mr. Dakshinamurthy and another),  moved the High Court for a direction to the State Government to implement  the Project according to the FWA.  

The High Court in the impugned judgment (vide Paragraph 18) raised  the following two questions for consideration in the three writ petitions: "(1)    Whether the FWA entered into between the Government  of Karnataka and Nandi was a result of any fraud or  misrepresentation as alleged by J.C. Madhuswamy and others  and the State Government?

(2)     Whether any excess land than what is required for the  Project had been acquired by the State Government and  whether it is open to it to raise such a plea?"

The Division Bench disposed of all the writ petitions by a common  judgment by which it dismissed Writ Petition No. 45386/04 filed by Mr. J.C.  Madhuswamy and others with costs. Writ Petition Nos. 45334/04 and  48981/04 were allowed by the Division Bench directing the State of  Karnataka and all its instrumentalities, including the KIAD Board, to  execute the Project as conceived originally and to implement the FWA in  "letter and spirit". The High Court also directed the prosecution of K.K.  Misra, Chief Secretary of the Government of Karnataka and M.  Shivalingaswamy, Under Secretary, Department of Industries and  Commerce, as envisaged by Section 340 of the Code of Criminal Procedure,  1973, for certain offences which came to its notice as a result of the  affidavits filed by them. K.K. Misra and M. Shivalingaswamy have filed  separate appeals with regard to the direction of their prosecution with which  we are not concerned at present.

The Contentions of the Appellants

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The main arguments in the present Civil Appeal Nos. 3492-3494 of  2005 were addressed on behalf of the State of Karnataka by Mr. Anil B.  Divan, learned Senior Counsel, whose main contentions are as under: 1.      That the dispute between the State of Karnataka and Nandi is not  barred by the principle of res judicata, constructive res judicata or  estoppel arising from the judgment and proceedings in Somashekar  Reddy (supra). 2.      That the principle of res judicata cannot be inflexibly applied to  Public Interest Litigations, especially when a re-examination of  decided issues might be in public interest.  3.      To the bar of res judicata, it would be a successful answer that fraud  and misrepresentation had vitiated the entire transaction. Hence, there  would be no question of res judicata since the fraud was discovered  subsequent to the judgment in Somashekar Reddy (supra). 4.      That the High Court erred in brushing aside the report of the Expert  Committee headed by K.C. Reddy, which clearly demonstrated that  there was excess land, which in terms showed that the FWA was not a  bona fide agreement and, therefore, was against public interest. 5.      The High Court could not have granted the final relief in the  impugned judgment. The High Court’s order amounted to a  mandamus to specifically perform the FWA, which is an extremely  complex contract, and hence the order is incorrect.  We will examine the third contention first\027namely of fraud,  misrepresentation and mala fides vitiating the entire project.

Fraud and Misrepresentation  The main ground on which the matter was argued by the learned  counsel for the State of Karnataka before the Division Bench of the High  Court was that there was fraud and misrepresentation on the part of Nandi,  which vitiated the entire transaction. It was contended before the High Court  by the State Government that this fraud came to be noticed subsequent to the  judgment in Somashekar Reddy (supra). It is pertinent to note that this point  was put on record through the affidavits of K.K. Misra, Chief Secretary of  the Government of Karnataka, M. Shivalingaswamy, Under Secretary,  Department of Industries and Commerce, which suggested that public  interest was being affected as a result of the execution of the FWA.  It  appears that the main contention of the writ petitioners Mr. J.C.  Madhuswamy and others before the High Court was that the FWA was  vitiated as a result of fraud and/or misrepresentation. Presumably, this  contention was urged in order to get over the bar of res judicata arising from  the judgment in Somashekar Reddy (supra). When the matter was argued  before us, although Mr. Divan addressed some arguments on fraud, he  quickly abandoned them and expressly gave it up. Considering that this was  the main thrust of the State’s argument before the High Court and has been  expressly given up before us, we could have dismissed the appeals on this  narrow point alone. Nonetheless, since Mr. Divan argued the question of res  judicata with some persistence, we will deal with it subsequently.

On the merits of the argument of fraud/misrepresentation, the High  Court has gone into it at great length and has demonstrated the hollowness of  this contention. We are in complete agreement with the views expressed  therein on this issue but we wish to highlight the following aspects to  illustrate how the argument of mala fides is actually the boot on the other  foot.  

The High Court has come to the categorical conclusion that the flip- flop on the part of the State Government occurred only because of  politicians, that the mala fides, if any, appears to be on the part of the State  Government for political reasons. The High Court has pointed out that the  FWA did not materialise out of the blue. The FWA was negotiated over  several months; it came to be drafted by considering several points that the  Cabinet Sub-Committee had raised. As we have already highlighted, it was  only thereafter, when detailed deliberations had taken place at the highest  levels of the State Government that the MOU was signed and the Project  Report accepted. A Government Order (dated 20.11.1995) was issued

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requiring the Public Works Department to enter into a Memorandum of  Understanding with the Consortium of three companies, VHB, SAB and  Kalyani. On 9.9.1996, through the CAA, the three members of the  Consortium agreed to "\005unconditionally and irrevocably transfer and  assign, jointly and severally\005" to Nandi "\005all rights, interest and title  granted to them\005with respect to the Infrastructure Corridor by GOK under  the Government Order and the Memorandum of Understanding". The CAA  came to be signed by the three members of the Consortium on the one hand  and Nandi on the other; the Governor of Karnataka, on behalf of the  Government of Karnataka, was shown as the "Consenting Party". A copy of  this agreement was forwarded to the State Government along with a  forwarding letter dated 21.12.1996 requesting that the Government approve  of the same and advise of its approval so that the original agreement could  be given to the State Government for its consent. This letter was forwarded  by the Public Works Department to the Law Department through a letter  dated 22.1.1997 (No. PWD 155 CRM 96) seeking an opinion on the issue.  The State Government was advised by its Law Department (through Opinion  No. 182 OPN II/97 dated 3/4.3.1997) that since the Government was  finalising a separate agreement with Nandi, there was no need to specifically  consent to the CAA.  Thus, it would appear that the State Government had  specifically been made aware of the CAA and the fact that the members of  the Consortium had transferred their rights to Nandi. The argument made  before the High Court that the Government was unaware of the CAA, was  defrauded to execute the FWA is, therefore, utterly dishonest. We concur  with the decision of the High Court on this issue that the plea was lacking  any bona fides and that there was neither fraud nor misrepresentation on the  part of Nandi or any member of the Consortium.  

Subsequently, as we have already discussed, Nandi as the assignee of  the Consortium, submitted a draft of the FWA to the State Government  which was considered by the Core Committee that had been set up to  negotiate the terms with Nandi. The Core Committee referred the draft FWA  to the Cabinet Sub-Committee which suggested various modifications to it,  which were incorporated in the FWA. Finally, the FWA was approved by  the State Government and came to be signed on 3.4.1997. Thus, it appears  that the plea of fraud and misrepresentation was clearly an afterthought and  it was conveniently raised by the State Government through the petitioners  in Writ Petition No. 45386/04, who were rightly described by the High  Court as the State Government’s "mouth piece" (vide Paragraph 22).  

The High Court has also totally disbelieved the affidavits of the Chief  Secretary, K.K. Misra, and the Under Secretary, M. Shivalingaswamy on  this issue. We have refrained from commenting on the merits of their  affidavits since their appeals against prosecution for perjury are pending  separately. We may, however, point out that both the affidavits of the two  senior bureaucrats are on the issue that certain facts which had been  suppressed from the Government had come to light after the judgment in  Somashekar Reddy (supra) and that these indicated fraud and  misrepresentation on the part of Nandi. Indeed, this was the central argument  put forward for impugning the FWA.

       The FWA was executed on 3.4.1997 and implemented by the parties  for at least seven years. Several obligations under the FWA were carried out  by the State Government and its instrumentalities and also by Nandi, which  had invested a large amount of money in the Project. These included monies  for payment of compensation to landowners whose lands were being  acquired for the Project. Soon after the FWA was entered into, some  interested parties had raised the issue in "public interest" that the FWA was  a fraud and was nothing but a charade for a lucrative real estate business on  the part of Nandi. The Government through the then Minister for Public  Works vigilantly defended the Project against all these allegations both  inside and outside the Legislature.  

       It would appear that the change of mind on the part of the State  Government came about \026 co-incidentally or otherwise \026 with a change of

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Government in Karnataka in 2004. In the year 2004, while the State  Government’s writ appeal was still pending before the Division Bench, a  statement was made by Mr. H.D. Deve Gowda, former Prime Minister,  making serious allegations with regard to the Project stating that it was  nothing but a charade by which Nandi had converted it into a real estate  business. It was at this stage that a note (No. PWD/E/375/2004 dated  6.7.2004) was written by the new Minister, Public Works Department, Mr.  H.D. Revanna, who is none other than the son of Mr. Deve Gowda, to the  Principal Secretary, Public Works Department. The note in terms states that  land acquisition by the State Government for the Project was to cease till the  allegation that Nandi was carrying out a real estate business was enquired  into. With this, the State Government suddenly halted/slowed all ongoing  activities for smooth implementation of the Project. Indeed, it is strange that  the State Government woke up after seven long years, and even more  strangely after a change in the State’s political leadership, to the fact that  there was fraud/ misrepresentation by Nandi or anyone else.

Pursuant to this, the Minister of the Public Works Department set up  the "Expert Committee" (headed by K.C. Reddy) to go into the allegations  of excess land acquired by the Government for implementation of the  Project. After accepting the Interim Report of the Expert Committee, the  Government withdrew its appeal filed before the High Court and the reasons  for the same are mentioned in a Government Order (PWD 155 CRM 95  BMICP Expert Committee/2004, Bangalore dated 7.1.2005). As we shall see  later in the judgment, the constitution and functioning of this Committee  also illustrates the mala fides with which the State Government has  approached the Project. Thus, the utter irresponsibility with which the theory  of fraud/misrepresentation was put forward is thoroughly exposed by the  High Court in its impugned judgment.

Res Judicata Res judicata is a doctrine based on the larger public interest and is  founded on two grounds: one being the maxim nemo debet bis vexari pro  una et eadem causa ("No one ought to be twice vexed for one and the same  cause" ) and second, public policy that there ought to be an end to the same  litigation . It is well settled that Section 11 of the Civil Procedure Code,  1908 (hereinafter "the CPC") is not the foundation of the principle of res  judicata, but merely statutory recognition thereof and hence, the Section is  not to be considered exhaustive of the general principle of law.  The main  purpose of the doctrine is that once a matter has been                                                                                                                                                                                 determined in a former proceeding, it should not be open to parties to re- agitate the matter again and again. Section 11 of the CPC recognises this  principle and forbids a court from trying any suit or issue, which is res  judicata, recognising both ’cause of action estoppel’ and ’issue estoppel’.  There are two issues that we need to consider, one, whether the doctrine of  res judicata, as a matter of principle, can be applied to Public Interest  Litigations and second, whether the issues and findings in Somashekar  Reddy (supra) constitute res judicata for the present litigation.  

Explanation VI to Section 11 states: "Explanation VI. \026 Where persons litigate bona fide in respect  of a public right or of a private right claimed in common for  themselves and others, all persons interested in such right shall,  for the purposes of this section, be deemed to claim under the  persons so litigating."

Explanation VI came up for consideration before this Court in  Forward Construction Co. and Ors. v. Prabhat Mandal and Ors.   (hereinafter "Forward Construction Co."). This Court held that in view of  Explanation VI, it could not be disputed that Section 11 applies to Public  Interest Litigation, as long as it is shown that the previous litigation was in

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public interest and not by way of private grievance.  Further, the previous  litigation has to be a bona fide litigation in respect of a right which is  common and is agitated in common with others.   

As a matter of fact, in a Public Interest Litigation, the petitioner is not  agitating his individual rights but represents the public at large. As long as the  litigation is bona fide, a judgment in a previous Public Interest Litigation  would be a judgment in rem. It binds the public at large and bars any member  of the public from coming forward before the court and raising any connected  issue or an issue, which had been raised/should have been raised on an earlier  occasion by way of a Public Interest Litigation. It cannot be doubted that the  petitioner in Somashekar Reddy (supra) was acting bona fide. Further, we  may note that, as a retired Chief Engineer, Somashekar Reddy had the special  technical expertise to impugn the Project on the grounds that he did and so, he  cannot be dismissed as a busybody. Thus, we are satisfied in principle that  Somashekar Reddy (supra), as a Public Interest Litigation, could bar the  present litigation.     

We will presently consider whether the issues and findings in  Somashekar Reddy (supra) actually constitute res judicata for the present  litigation. Section 11 of the CPC undoubtedly provides that only those  matters that were "directly and substantially in issue" in the previous  proceeding will constitute res judicata in the subsequent proceeding.  Explanation III to Section 11 provides that for an issue to be res judicata it  should have been raised by one party and expressly denied by the other: "Explanation III. \026 The matter above referred to must in the  former suit have been alleged by one party and either denied or  admitted, expressly or impliedly, by the other."

Further, Explanation IV to Section 11, states: "Explanation IV. \026 Any matter which might and ought to have  been made ground defence or attack in such former suit shall be  deemed to have been a matter directly and substantially in issue  in such suit."

The spirit behind Explanation IV is brought out in the pithy words of  Wigram, V.C. in Henderson v.  Henderson  as follows: "The plea of res judicata applies, except in special case (sic),  not only to points upon which the court was actually required  by the parties to form an opinion and pronounce a judgment,  but to every point which properly belonged to the subject of  litigation and which the parties, exercising reasonable diligence,  might have brought forward at the time."  

In Greenhalgh v. Mallard  (hereinafter "Greenhalgh"), Somervell  L.J. observed thus: "I think that on the authorities to which I will refer it would be  accurate to say that res judicata for this purpose is not confined  to the issues which the Court is actually asked to decide, but  that it covers issues or facts which are so clearly part of the  subject matter of the litigation and so clearly could have been  raised that it would be an abuse of the process of the Court to  allow a new proceeding to be started in respect of them."  

       The judgment in Greenhalgh (supra) was approvingly referred to by  this Court in State of U.P. v. Nawab Hussain . Combining all these  principles, a Constitution Bench of this Court in Direct Recruit, Class II  Engineering Officers’ Association v. State of Maharashtra  expounded on  the principle laid down in Forward Construction Co. (supra) by holding  that:  "\005an adjudication is conclusive and final not only as to the actual  matter determined but as to every other matter which the parties might  and ought to have litigated and have had (sic) decided as incidental to  or essentially connected with (sic) subject matter of the litigation and  every matter coming into the legitimate purview of the original action

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both in respect of the matters of claim and defence. Thus, the principle  of constructive res judicata underlying Explanation IV of Section 11  of the Code of Civil Procedure was applied to writ case. We,  accordingly hold that the writ case is fit to be dismissed on the ground  of res judicata."   

With these legal principles in mind, the question, therefore, arises as  to what exactly was sought in Somashekar Reddy (supra), how it was  decided by the High Court in the first round of litigation, and what has been  sought in the present litigation arising at the instance of Mr. J.C.  Madhuswamy and others. In order to show that the issue of excess land was  "directly and substantially in issue" in Somashekar Reddy (supra) we will  first examine the prayers of the parties, the cause of action, the averments of  parties and the finding of the High Court in Somashekar Reddy (supra).  

First, learned counsel for the Respondents has pointedly drawn our  attention to the identity of the prayers made in the previous Public Interest  Litigation by Somashekar Reddy as compared to the prayers made in the  present case of Mr. Madhuswamy and others. The prayers in Somashekar  Reddy’s petition were: (a) for quashing the FWA and (b) for directing an  inquiry by the CBI in the matter and to prosecute the offenders.  In Mr.  Madhuswamy’s petition, the prayers were: (a) to direct the CBI to conduct  inquiries to various acts as enumerated by items 1 to 16 (specifically the  issue of excess land) and (b) for quashing the various agreements, and acts  done in pursuance of the Project and consequently, to denotify the land of all  farmers situated away from the peripheral road and link road. We are  therefore, satisfied that the prayers made in Somashekar Reddy (supra) and  in Mr. Madhuswamy’s writ petitions are substantially the same.  

Second, the cause of action in both Somashekar Reddy (supra) and  the present cases is the FWA, which includes the provisions for acquiring  20,193 acres of land for the Project (comprising 13,237 acres of private land  and 6,956 acres of Government land). Indeed, it was stated in Somashekar  Reddy’s Writ Petition that the land requirement in Schedule I of the FWA  was "highly exaggerated" and would illegally create "huge profits" for  Nandi. Somashekar Reddy thus prayed that the FWA be quashed \026 this  prayer was, however, specifically rejected. The very same FWA that was  upheld earlier has now been impugned in the present case.  

       Third, in both Somashekar Reddy and Mr. Madhuswamy’s petitions,  the averment was that excess land than required for the implementation of  the Project was being acquired by the State Government at the behest of  Nandi and that the Project was nothing but a camouflage to carry out a real  estate business by Nandi. The High Court records the following contention  of Somashekar Reddy’s counsel: "The next submission of the Counsel for the petitioner is that   Government of Karnataka though ostensible (sic- ostensibly)  purported to form an Express Highway has in reality allowed  the 2nd respondent to develop the townships as a developer by  conferring a huge largess (sic-largesse) by way of giving  20,000 acres of land\005According to petitioner, the land required  for the construction of four lane Highway is only 2775 acres,  whereas the remaining land would be utilized for the purpose of  development of the towns thereby permitting respondent No. 2  to develop townships as a developer and on huge profits."  

The averment of Somashekar Reddy regarding excess land came to be  considered by the High Court which records some of the opposing  contentions of the Respondent-State, in the following terms: "As a mega project like the Expressway involves considerable  extent of land, answering respondent (the State) has agreed to  provide the minimum extent of land required for the project  partly out of the land owned by the State and by acquiring the  balance. Second respondent will not only construct the  proposed Expressway but also link roads, peripheral road,

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interchanges, Service Roads, toll plazas and Maintenance area  etc., in addition to the townships."  

"It is stated that the project by its very nature requires  considerable extent of land and that is why the respondent has  agreed to provide the land to the extent available with it and  acquire the balance and make available the same to the replying  respondent. There are mutual obligations on both the parties  under the impugned agreement and Respondent-No. 1 is only  facilitating the acquisition of land for which the replying  respondent has to pay at the existing market rates."  

Crucially, two very striking findings have been made by the High  Court in Somashekar Reddy (supra) as follows: "So out of 20,193 acres, land required for the Expressway  would be 6999 acres leaving 13,000 acres for development of  townships. Government of Karnataka in its written statement  has said that it has agreed to provide minimum extent of land  for the project partly out of the land owned by the Government  and by acquiring the balance. Permission has been given to  develop the five township instead of 7, proposed by respondent  No. 2 to make the Project viable."    "The submission that the contract was entered in a clandestine  manner also cannot be accepted\005Respondents in their  statement of objections have admitted that this point was raised  on the floor of the House and the respondent made detailed  presentation on this subject in the House\005Every minute detail  was explained including the scientific method adopted by the  respondent for identification of the land for the Project."  

All of these unequivocally show that the issue of excess land (and  connected issues) was specifically raised by the petitioner in Somashekar  Reddy (supra) and was also forcefully denied by the State. In fact, the  decision in Somashekar Reddy (supra), went further with the High Court  according its imprimatur to the land requirements under the FWA amounting  to 20,193 acres, which in no small measure, resulted from the State’s  successful defence that it had provided the "bare minimum of land" for the  Project calculated by a "scientific method". The judgment also contains  copious references to the issue of land (including the acreage), the types of  land to be acquired, the land requirement for different aspects of the Project,  the scientific techniques involved in identifying the land and road alignment  etc. In these circumstances, it cannot be doubted that Explanation III to  Section 11 squarely applies. It is clear that the issue of excess land under the  FWA was "directly and substantially in issue" in Somashekar Reddy  (supra) and hence, the findings recorded therein having reached finality,  cannot be reopened in this case.   

       The principle and philosophy behind Explanation IV, namely to  prevent "the abuse of the process of the court" (as stated in Greenhalgh  (supra)) through re-agitation of settled issues, provides yet another ground to  reject the appellants’ contentions. For instance, the High Court specifically  records (vide Paragraph 29) of the impugned judgment that: "It is common case of the parties that the validity of FWA had  earlier been challenged in Somashekar Reddy’s case (supra) on  all conceivable grounds including the one that land in excess of  what is required for the Project had been acquired by the State  Government".   

In the face of such a finding by the High Court, Explanation IV to  Section 11 squarely applies as, admittedly, the litigation in Somashekar  Reddy (supra) exhausted all possible challenges to the validity of the FWA,  including the issue of excess land. Merely because the present petitioners  draw semantic distinctions and claim that the excess land not having been

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identified at the stage of the litigation in Somashekar Reddy (supra), the  Project should be reviewed, the issue does not cease to be res judicata or  covered by principles analogous thereto. If we were to re-examine the issues  that had been raised/ought to have been raised in Somashekar Reddy (supra)  it would simply be an abuse of the process of the court, which we cannot  allow.  

As we have pointed out, the cause of action, the issues raised, the  prayers made, the relief sought in Somashekar Reddy’s petition and the  findings in Somashekar Reddy (supra), and the claims and arguments in the  present petitions were substantially the same. Therefore, it is not possible to  accept the contention of the appellants before us that the judgment in  Somashekar Reddy (supra) does not operate as res judicata for the  questions raised in the present petitions.    Excess Land and the Expert Committee          There was considerable time taken by the learned counsel for the  appellants in trying to persuade us that excess land had actually been  delivered to Nandi under the FWA. A subsidiary argument was that even  though the actual area of land delivered might not have been in excess, since  land in prime areas had improperly been acquired for Nandi’s benefit, the  issue needed to be re-examined. In our view, this argument too is not open to  be agitated at this point. As we have already pointed out, the writ petition in  Somashekar Reddy (supra) was the culmination of all such allegations  which had been successfully refuted even on the floor of the Legislature.  Finally, having failed on the floor of the Legislature, a Public Interest  Litigation was filed on the ground that there was something wrong with the  FWA and that it was virtually a sell-out to Nandi. The Division Bench of the  High Court considered every argument very carefully and recorded findings  on all the issues against Mr. J.C. Madhuswamy and others. In our view,  permitting the argument on excess land to be heard again to scuttle a project  of this magnitude for public benefit would encourage dishonest politically  motivated litigation and permit the judicial process to be abused for political  ends. The High Court, therefore, has refused to answer the first part of the  second question framed for consideration on the ground that it was already  answered in Somashekar Reddy (supra) and as it was res judicata, it could  not be re-agitated. Further, that since this argument involved details of  contractual disputes, the High Court would not examine it in its writ  jurisdiction. We are not satisfied that the High Court was wrong in so  holding.  

The High Court’s finding on this issue only gains strength if we were  to examine the factual matrix in which the State took its stand that excess  land had been acquired for the Project. As we have previously stated,  pursuant to the objections raised to the Project by the new Minister for  Public Works, an "Expert Committee" was setup in 2004 to review the  Project. The Expert Committee was conveniently headed by K.C. Reddy,  who was the Advisor to the Public Works Minister. This K.C. Reddy was  the same gentleman, who as a member of the previous HLC, had scrutinised  the Project threadbare and had given it the green signal. Surprisingly  however, at this stage, he appeared to be all willing to find faults and flaws  in the Project and the FWA, despite the fact that there was an Empowered  Committee that was required to monitor the implementation of the Project.  The High Court rightly pointed out that the Expert Committee was  constituted virtually in supersession of Clause 4.1.1 of the FWA.  

The Expert Committee suddenly woke up to the alleged fact that  excess land was being acquired. Like the State Government, the Expert  Committee also made flip-flops and came out with a report saying that there  was acquisition of excess land. Crucially, it left the actual identification of  the excess lands to the KIAD Board. Surprisingly, the State Cabinet in its  meeting dated 26.10.2004 accepted the report but reaffirmed its support to  the Project and expressed some reservations on the acquisition of more lands  than what was necessary for the Project. In this regard, the High Court  critically comments (vide Paragraph 26) that:

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"By constituting this Committee the State Government has  ensured that the Project gets stalled. It is interesting to note that  Sri K.C. Reddy who is the Chairman of the Expert Committee  was also a Member of the HLC which had approved the Project  and was associated with it till the signing of the FWA which  provides for 20,193 acres of land to be made available. Sri K.C.  Reddy did not record his dissent in those proceedings and at no  stage did he ever point out that the land that was sought to be  provided for the Project was in excess of what was required but  now as the Chairman of the Expert Committee he has, without  identifying the excess lands which he has left for the Board to  identify, opined that excess land has been acquired for the  Project. We cannot appreciate such a conduct."  

We too cannot appreciate the conduct on the part of K.C. Reddy or the  State Government. The inference drawn by the High Court is that the plea of  fraud and misrepresentation sought to be raised was not only an afterthought  but also false to the knowledge of the State Government. The High Court,  therefore, observed (vide Paragraph 27): "It is unfortunate that the  petitioners and the State Government have chosen to raise this bogie (sic\027 bogey) to defeat the public project subserving public interest."  

Interestingly, neither the interim report nor the final report of the  Expert Committee identified the excess land but in fact, left it for the KIAD  Board. The counsel for the KIAD Board handed over a set of documents,  which purportedly identified the specific excess lands. It was the grievance  of the KIAD Board that they had not been given the opportunity for placing  these documents before the High Court. Since the date of documents showed  that they were drawn subsequent to the date on which the High Court had  delivered its judgment, the learned Senior Counsel for KIAD Board Mr.  K.K. Venugopal candidly admitted that this exercise was carried out after  the impugned judgment had been delivered. It is a moot point whether the  person, who swore this affidavit on behalf of the KIAD Board stating that no  opportunity had been given to the KIAD Board to place these documents on  the record of the High Court, needs to be considered for prosecution under  Section 340 read with Section 195 of the Code of Criminal Procedure, 1973.  We strongly deprecate such misleading or false affidavits on the part of the  KIAD Board.   

According to Mr. Venugopal, Article 300A of the Constitution, as  well as the KIAD Act, would be violated if the KIAD Board were to directly  acquire or acquiesce in the acquisition of land in excess of what is required  for the Project.  In our view, this is nothing but a repetition of the arguments  made by the State of Karnataka. As we have elaborately discussed, that the  land was not in excess has been held by the Division Bench of the High  Court on two occasions and we agree with it. Thus, there was no question of  the land being acquired for a purpose other than a public purpose or there  being any contravention of Article 300A. In fact, we are somewhat surprised  that this type of argument must come from the KIAD Board, which was  intimately involved, from the very beginning, with the process of acquiring  land. Further, the State and its instrumentalities (including the KIAD Board)  were enjoined by Clause 5.1.1.1 of the FWA, to make "best efforts" to  acquire the land required for the Project. Indeed, till the State itself changed  its stand with regard to the Project, nothing was heard from the KIAD Board  about lands being acquired in excess of the public purpose. Further, as an  instrumentality of the State, the KIAD Board cannot have a case to plead  different from that of the State of Karnataka. Thus, we are unable to  countenance the arguments of Mr. Venugopal on behalf of the KIAD Board.  

Considering the facts as a whole, the High Court came to the  conclusion that since the Project had been implemented and Nandi had  invested a large amount of money and work had been carried out for more  than seven years, the State Government could not be permitted to change its  stand and to contend that the land allotted for the Project was in excess of  what was required. Having perused the impugned judgment of the High

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Court, we are satisfied that there is no need for us to interfere therewith.  Thus, there is no merit in this contention, which must consequently fail.

The Relief Granted by the High Court         One final argument was made by Mr. Divan as regards the relief  granted by the High Court. To appreciate the argument, it is necessary to  look at the relief granted in terms of Paragraph 42.2, which is as follows: "Writ petitions nos. 45334 and 48981 of 2004 are allowed  directing the State of Karnataka and all its Instrumentalities  including the Board to forthwith execute the Project as  conceived originally and upheld by this court in Somashekar  Reddy’s case (supra) and implement FWA in letter and spirit.  Consequently, Government Orders dated 4.11.2004 and  17.12.2004 constituting the Review Committee and Expert  Committee are quashed. The report submitted by these  committees in pursuance to these orders and all subsequent  actions taken incidental thereto are also quashed. Nandi is also  directed to implement the Project as expeditiously as possible.  Parties will bear their own costs in these two cases."

       Mr. Divan strongly urged that the relief granted was wholly beyond  the jurisdiction of the High Court under Article 226 of the Constitution, as it  would amount to granting a decree for specific performance in writ  jurisdiction. A reading of the relief granted by the High Court does not  persuade us that it is so. The High Court merely directed that the Project and  the FWA, as conceived originally and upheld by the High Court in  Somashekar Reddy (supra), should be implemented "in letter and spirit". In  other words, the High Court said that there is no scope for raising frivolous  and mala fide objections for ulterior purposes. This, the High Court was  fully entitled to do. It is trite law that when one of the contracting parties is  "State" within the meaning of Article 12 of the Constitution, it does not  cease to enjoy the character of "State" and, therefore, it is subjected to all the  obligations that "State" has under the Constitution. When the State’s acts of  omission or commission are tainted with extreme arbitrariness and with  mala fides, it is certainly subject to interference by the Constitutional Courts  in this country. We may refer to Gujarat State Financial Corporation v.  M/s Lotus Hotels Pvt. Ltd.,  in which a statutory corporation (the Gujarat  State Financial Corporation) arbitrarily refused to grant the sanction of loans  to entrepreneurs who had already acted on the basis of the sanction and had  incurred expenditure and liabilities. The argument that the transaction was  purely a contractual arrangement between the parties and, therefore, not  amenable to writ jurisdiction, was categorically rejected by the following  observations: "Now if appellant entered into a solemn contract in discharge  and performance of its statutory duty and the respondent acted  upon it, the statutory corporation cannot be allowed to act  arbitrarily so as to cause harm and injury, flowing from its  unreasonable conduct, to the respondent. In such a situation, the  court is not powerless from holding the appellant to its promise  and it can be enforced by a writ of mandamus directing it to  perform its statutory duty. A petition under Article 226 of the  Constitution would certainly lie to direct performance of a  statutory duty by ’other authority’ as envisaged by Article  12."  

Kumari Shrilekha Vidyarthi and Ors. v. State of U.P. and Ors.  is  another authority for the proposition that the State Government has to act  reasonably and without arbitrariness even with regard to the exercise of its  contractual rights.  In M/s Dwarkadas Marfatia and Sons v. Board of  Trustees of the Port of Bombay  the situation was one in which a lease  between the Bombay Port Trust and certain parties was terminated in  exercise of contractual rights and the lease rent was abnormally increased. It  was held that there was always an obligation on the part of public authorities  in their acts of omission and commission to be reasonable. In Biman  Krishna Bose v. United India Insurance Co. Ltd. and Anr.  the question

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was whether an insurance company could arbitrarily and unreasonably  refuse the renewal of a policy. Considering that the insurance company, as a  result of State-monopoly in the insurance sector, had become "State" under  Article 12 of the Constitution, this Court held that: "\005it (the insurance company) requires (sic) to satisfy the  requirement of reasonableness and fairness while dealing with  the customers. Even in an area of contractual relations, the State  and its instrumentalities are enjoined with the obligations to act  with fairness and in doing so, can take into consideration only  the relevant materials. They must not take any irrelevant and  extraneous consideration while arriving at a decision.  Arbitrariness should not appear in their actions or decisions."  

       Thus, it appears that no exception could be taken to relief granted in  the judgment of the High Court impugned before us. All that the High Court  has done is to reaffirm and require the State Government and its  instrumentalities, as "State" under the Constitution, to act without  arbitrariness and mala fides, especially in the matter of land acquisition. It is  pertinent to note that the State had agreed (vide Clause 5.1.1.1 of the FWA)  in respect of the lands required under the FWA, that: "GOK shall use its best efforts and cause its Governmental  Instrumentalities to use their best efforts, to exercise its and  their legal right of eminent domain (or other right of similar  nature) under the Laws of India to acquire the Acquired Land.  Prior to acquiring any Acquired Land, GOK will obtain from  the company written confirmation of its willingness to purchase  such Acquired Land from GOK at the purchase price (whether  in the form of cash or comparable land) required under the  Laws of India (the "Acquired Land Compensation"). GOK shall  offer to the ex-propriated owners of the land the Rehabilitation  package specifically worked out for this Infrastructure Corridor  Project with mutual consultation of the consortium and the  Revenue Authorities in accordance with the applicable rules".      

In these circumstances, we find no reason to interfere with the said  directions of the High Court. In the future also, we make it clear that while  the State Government and its instrumentalities are entitled to exercise their  contractual rights under the FWA, they must do so fairly, reasonably and  without mala fides; in the event that they do not do so, the Court will be  entitled to interfere with the same.    

The High Court also found, justifiably in our view, that the writ  petitioners had been sponsored by the State Government to put forward its  changed stand in the garb of a Public Interest Litigation. In the opinion of  the High Court (vide Paragraph 29): "The court cannot allow its process to be abused by politicians  and others to delay the implementation of a public project  which is in larger public interest nor can the court allow anyone  to gain a political objective. These legislators who have not  been successful in achieving their objective on the floor of the  Assembly have now chosen this forum to achieve their political  objective which cannot be allowed."  

Although this should have really put an end to the writ petitions filed  by Mr. Madhuswamy and others, the High Court had to consider the  petitions filed by Mr. Dakshinamurthy and the All India Manufacturer’s  Organisation, who were also before the court by way of Public Interest  Litigation and sought a Mandamus of the continuation of the Project. A  grievance was made before the High Court that these were persons put up by  Nandi and that they were virtually projecting the viewpoint of Nandi. The  High Court having taken note of the same has said that despite this, larger  public interest required the implementation of the Project. We see no reason  to differ with the High Court on this point.

Writ Petition No. 45386/04 (Mr. J.C. Madhuswamy and others) was

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rightly dismissed as raising the very same issues which had been concluded  by the decision in Somashekar Reddy (supra). Writ Petition Nos. 45334/04  and 48981/04 were rightly allowed and the order to implement the Project in  its letter and spirit had been made in exercise of the writ jurisdiction of the  High Court. We refrain from dealing with the third relief granted, namely  directing the prosecution of K.K. Misra and M. Shivalingaswamy, as their  appeals shall be independently dealt with by this Court.  

       Taking an overall view of the matter, it appears that there could hardly  be a dispute that the Project is a mega project which is in the larger public  interest of the State of Karnataka and merely because there was a change in  the Government, there was no necessity for reviewing all decisions taken by  the previous Government, which is what appears to have happened. That  such an action cannot be taken every time there is a change of Government  has been clearly laid down in State of U.P. and Anr.  v.  Johri Mal  and in  State of Haryana v. State of Punjab and Anr.  where this court observed  thus:  "\005in the matter of governance of a State or in the matter of  execution of a decision taken by a previous Government, on the  basis of a consensus arrived at, which does not involve any  political philosophy, the succeeding Government must be held  duty-bound to continue and carry on the unfinished job rather  than putting a stop to the same."  

The Land Acquisition Matters (Civil Appeal Nos. 3848-3884/2005, 3889-4127/2005, 4128-4366/2005,  4575-4576/2005, 5399-5401/2005, 5402/2005, 5746-5747/2005, 5759/2005,  5797-5799/2005, 6098/2005, 6099/2005, 5092-5093/2005, 7024-7040/2005,  7591/2005, 7592/2005, 61/2006, 73/2006, 74-76/2006, SLP 1562-63/2006).  

The Background In all these appeals, another attempt by a side wind, was made to  scuttle the Project. The attempt, this time, was primarily on the part of the  landowners, whose lands were acquired for implementation of the Project  and who challenged the same before the High Court of Karnataka. A learned  Single Judge of the Karnataka High Court, through judgment dated  18.12.2003, disposed of these petitions. The learned Judge took the view that  acquisition of 60% of the land by the State Government, insofar as it related  to the formation of roads and infrastructure development was valid, while  the acquisition of the remaining 40% meant for the development of  townships and convention centres was invalid and to that extent the  acquisition was quashed. The landowners, the State Government, the KIAD  Board and also Nandi were aggrieved by the judgment of the learned Single  Judge and filed separate writ appeals challenging the judgment. The stand of  the State Government in its writ appeal was that the learned Single Judge  was wrong in quashing 40% of the acquisition of land. This was also the  stand of the KIAD Board. Nandi also challenged the said part of the order.  Thus, it would appear that the State Government, KIAD Board and Nandi  were ad idem in their writ appeals that the learned Single Judge had erred in  interfering and quashing 40% of the land as not being in public interest.

       Sometime in August 2004, when the writ appeals came up for hearing  before the Division Bench of the High Court, the State Government and the  KIAD Board withdrew their appeals, because by then, as we have already  discussed, the State Government appeared to have second thoughts about the  Project and felt that the land acquisitions were far in excess of the Project’s  requirements. Even though they were also respondents under the writ appeal  filed by Nandi, they did not contest the claim and addressed no arguments  before the Division Bench of the High Court. Those appeals were disposed  of by an order dated 28.2.2005. The appeals filed by Nandi and the Indian  Machine Tools Manufacturers Association (hereinafter "the IMTMA") were  allowed, whereas those filed by the landowners were dismissed, and the  order of the learned Single Judge was set aside and the entire acquisition was  upheld.

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       Various connected appeals against the order of the learned Single  Judge came to be disposed of by orders of the High Court dated 29.6.2005  and 18.11.2005, in terms of the detailed judgment and order of a Division  Bench of the High Court dated 28.2.2005 (hereinafter in the Land  Acquisition Matters "the impugned judgment").    

The Contentions of the Appellants         Though there are a number of appellants before us, the contentions  raised before the High Court and us were principally as under: first, that no  notice was served on the landowners under Section 28(1) of the KIAD Act;  secondly, that the notice of acquisition was vague and consequently  prejudiced any effective objection being raised by the landowners whose  lands were sought to be acquired and finally, that the land acquisition was  not for a public purpose, or for a purpose as specified in the KIAD Act, and  was also in excess of the Project’s requirement.    

Although other contentions have also been raised, we will not deal  with them here as they have already been dealt with in the first part of our  judgment.  

Non-Service of Notice          The argument that no notice was served on the landowners under  Section 28(1) of the KIAD Act, appears to be factually incorrect. Even the  learned Single Judge who partially allowed the writ petition came to the  conclusion (vide Paragraph 22) in his judgment (dated 18.12.2003) that the  "\005petitioners in all these cases have filed objections on several grounds."  Even in the appeal before the Division Bench, the High Court observed (vide  Paragraph 30) that it was "\005not in dispute that the land owners were served  with notices and the objections filed by them have been considered." Even  before us, when these appeals were argued, no attempt was made by any of  the learned counsel to satisfy us that the appellants had not actually been  served notice of the acquisition. Neither was the finding of the learned  Single Judge or the Division Bench impugned on this point.  We are,  therefore, unable to accept the contention that notices were not served on the  appellants as required under Section 28(1) of the KIAD Act.

Vagueness of Notice of Acquisition  The next contention is that the notice of acquisition was vague and  consequently prejudiced any effective objection being made by the  landowners whose lands were sought to be acquired. The vagueness of the  notification, it is contended, has vitiated the notice itself, according to the  learned counsel for some of the landowners.  

       The notification in the instant case states that the lands were being  acquired for the purposes of "industrial development" i.e. establishing and  developing industrial areas by the KIAD Board. In our opinion, the purpose  indicated in the notifications is sufficiently precise and is not affected by the  vice of vagueness as alleged. Our attention was drawn to the judgment of  this Court in Aflatoon v. Lt. Governor of Delhi  where this Court pointed  out as follows: "The question whether the purpose specified in a notification  under Section 4 is sufficient to enable an objection to be filed  under Section 5A would depend upon the facts and  circumstances of each case\005In the case of an acquisition of a  large area of land comprising several plots belonging to  different persons, the specification of the purpose can only be  with reference to the acquisition of the whole area. Unlike in  the case of an acquisition of a small area, it might be practically  difficult to specify the particular public purpose for which each  and every item of land comprised in the area is needed."  

       It is difficult to accept that the landowners were not aware of the  purpose of the acquisition nor can it be accepted that they were unable to file  their objections on this ground. As a matter of fact, as the High Court has

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concurrently found, they did file their objections before the competent  authorities. We do not see any prejudice caused to them as a result of the  wordings of the notification of acquisition. The concerned authority also  heard them on the objections filed after affording them an opportunity to file  such objections under Section 28(2) of the KIAD Act. Thus, there is no  substance in the contention of the appellants that the notification was vague  and hence that the State did not comply with the principles of natural justice.

Purpose of Acquisition         The next contention urged on behalf of the landowners is that the  lands were not being acquired for a public purpose. The counsel who have  argued for the landowners have expatiated in their contention by urging that  land in excess of what was required under the FWA had been acquired; land  far away from the actual alignment of the road and periphery had been  acquired, consequently, it is urged that even if the implementation of the  Highway Project is assumed to be for a public purpose, acquisition of land  far away therefrom would not amount to a public purpose nor would it be  covered by the provisions of the KIAD Act.  

       In our view, this was an entirely misconceived argument. As we have  pointed out in the earlier part of our judgment, the Project is an integrated  infrastructure development project and not merely a highway project.  The  Project as it has been styled, conceived and implemented was the Bangalore- Mysore Infrastructure Corridor Project, which conceived of the development  of roads between Bangalore and Mysore, for which there were several  interchanges in and around the periphery of the city of Bangalore, together  with numerous developmental infrastructure activities along with the  highway at several points. As an integrated project, it may require the  acquisition and transfer of lands even away from the main alignment of the  road.  

The various changes brought about to the KIAD Act, also reflect the  intention of the State’s Legislature to provide for land acquisition for the  Project. The expressions "Industrial area" and "Industrial Infrastructural  facilities" as defined under the KIAD Act, definitely include within their  ambit establishment of facilities that contribute to the development of  industries. We cannot forget that, as originally enacted, the KIAD Act had a  different, narrower definition of "Industrial area" in Section 2(6). In 1997,  the definition was broadened to also include "industrial infrastructural  facilities and amenities". Further, Section 2(7-a) was added to define  "Industrial Infrastructural facilities" in a manner broad enough to take into  its sweep the land acquisition for the Project.

The learned Single Judge erred in assuming that the lands acquired  from places away from the main alignment of the road were not a part of the  Project and that is the reason he was persuaded to hold that only 60% of the  land acquisition was justified because it pertained to the land acquired for  the main alignment of the highway. This, in the view of the Division Bench,  and in our view, was entirely erroneous. The Division Bench was right in  taking the view that the Project was an integrated project intended for public  purpose and, irrespective of where the land was situated, so long as it arose  from the terms of the FWA, there was no question of characterising it as  unconnected with a public purpose. We are, therefore, in agreement with the  finding of the High Court on this issue.  

Civil Appeal No. 7024-25/05         As regards these appeals, the impugned judgment of the High Court  (vide Paragraph 32) specifically records that the appellants did not have any  right or interest in the land in question on the date that they filed the writ  petitions before the High Court. The counsel too admitted the same before  the High Court. The High Court accordingly found that the writ petitions  were not maintainable. Since the writ petition proceeded on this footing, we  cannot permit the appellants to take a different stand before us, contrary to  what had been stated before the High Court. Since we have not been  convinced otherwise, the writ petitions were not maintainable and the High

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Court was justified in the view that it took.

       In summary, having perused the well considered judgment of the  Division Bench which is under appeal in the light of the contentions  advanced at the Bar, we are not satisfied that the acquisitions were, in any  way, liable to be interfered with by the High Court, even to the extent as  held by the learned Single Judge. We agree with the decision of the Division  Bench that the acquisition of the entire land for the Project was carried out in  consonance with the provisions of the KIAD Act for a public project of great  importance for the development of the State of Karnataka. We do not think  that a Project of this magnitude and urgency can be held up by individuals  raising frivolous and untenable objections thereto. The powers under the  KIAD Act represent the powers of eminent domain vested in the State,  which may need to be exercised even to the detriment of individuals’  property rights so long as it achieves a larger public purpose. Looking at the  case as a whole, we are satisfied that the Project is intended to represent the  larger public interest of the State and that is why it was entered into and  implemented all along. The Final Orders In the result, we find that the judgment of the High Court (dated  3.5.2005) impugned before us in the Main Matter, is not liable to be  interfered with. There is no merit in the appeals and they are hereby  dismissed. Considering the frivolous arguments and the mala fides with  which the State of Karnataka and its instrumentalities have conducted this  litigation before the High Court and us, it shall pay Nandi costs quantified at  Rupees Five Lakhs, within four weeks of this order.  Appellants in C.A. No. 3497/2005 (J.C. Madhuswamy and others), in  addition to the costs already ordered by the High Court, shall pay to the  Supreme Court Legal Services Authority costs quantified at Rupees Fifty  Thousand within four weeks of this order. A copy of this order be sent to the  Member-Secretary of the Supreme Court Legal Services Authority for  his/her information.  In the Land Acquisition Matters, the appeals challenging the  judgments of the High Court dated 28.2.2005, 29.6.2005 and 18.11.2005 are  dismissed as without substance. However, in the circumstances, there shall  be no order as to costs.