BANGALORE MYSORE INFRASTRUCTURE CORRIDOR AREA PLANNING AUTHORITY & ANR. versus NANDI INFRASTRUCTURE CORRIDOR ENTERPRISE LIMITED & ORS. on 19 May 2020

SUPREME COURT REPORTS

[2020] 8 S.C.R.

ABANGALORE MYSORE INFRASTRUCTURECORRIDOR AREA PLANNING AUTHORITY & ANR.

v.

NANDI INFRASTRUCTURE CORRIDORENTERPRISE LIMITED & ORS.

B

(Civil Appeal Nos. 2116-2128/2020)

MAY 19, 2020

[A.M. KHANWILKAR AND DINESH MAHESHWARI, JJ.]

Karnataka Town and Country Planning Act, 1961 –CDevelopment of Integrated Infrastructure Corridor and FinanceProject (IICFP) between Bangalore and Mysore, Karnataka,consisting of residential, industrial and commercial facilities –Framework Agreement (FWA) executed between State andrespondent no.1, followed by Supplementary agreements and aDTripartite agreement between the State, respondent nos.1 & 2 (bothjointly called Project Proponents) – Modified development plansubmitted by Project Proponents for permission to set up grouphousing scheme at location other than those demarcated forTownships in the FWA and Infrastructure Corridor ProjectTechnical Report (PTR) – Eventually, the Planning AuthorityErejected the modified plan – High Court quashed the saidcommunication; directed the Planning Authority to issueCommencement Certificate to the Project Proponents – Held: PTRsuggested creation of seven Townships but, in the final FWA, onlyfive Townships were approved – Project Proponents are obligedFto construct the five Townships at the demarcated location(s) onlyand to the extent of land specified therefor in the PTR, whichapplies proprio vigore to the expression “Townships” in the FWA– Modified proposal submitted by the Project Proponents fordeveloping 42 acres 30 guntas of land as group housing schemewas not for setting up of Township as such – Neither the PTR norGthe FWA envisaged construction of standalone group housingscheme, that too at a location other than demarcated location(s)for five Townships – Thus, it was a clear case of deviation fromthe stipulations contained therein – To relax or modify the same,prior permission of the State was mandatory in terms of Article 7.1,HFWA – No proposal for the same was submitted to the State by the Project Proponents – Further, Project Proponents could not havedirectly approached the Planning Authority for approval ofmodified proposal replete with deviations – Judgment of High Courtset aside – Project Proponents at liberty to approach the State forprior permission allowing them to deviate from the stipulations/specifications in the FWA and the PTR – Karnataka IndustrialAreas Development Act, 1966 – Acquiescence/Waiver.

Allowing the appeals, the Court

Conclusion

HELD: 1.1 The Outline Development Plan (ODP)/MasterPlan was prepared by the Planning Authority for the new planningarea and had received approval of the State. In the backdrop ofthe stated agreements, ODP/Master Plan and the amendmentto Zonal Regulations of ODP/Master Plan, the ProjectProponents submitted an application to the Planning Authorityfor sanction of group housing scheme in 53 acres 5 guntas ofland, which included lands transferred to the Project Proponentsunder sale deeds and notified under Section 28(4) of theKarnataka Industrial Areas Development Act, 1966. Later on,the Project Proponents submitted modified development plan forpermission to set up group housing scheme in 42 acres 30guntas of land by excluding the lands in respect of which no saledeed was executed in their favour. The present (fifth) round oflitigation is by the Project Proponents themselves, who hadapplied to the Planning Authority for grant of permission forconstruction of group housing scheme at the stated location(s).That permission having been rejected, subject writ petitionswere filed before the High Court, which have been disposed ofby the common judgment and order of the Division Bench. TheHigh Court posed wrong questions to itself and that led to theerroneous and untenable conclusion deduced by it. Thefundamental issue is: whether the subject modified plansubmitted by the Project Proponents directly to the PlanningAuthority for approval is replete with deviations and/or violationof the stipulations and specifications in the FWA? In that, theFWA had circumscribed the user of the land in terms of thelocation(s), as well as, the area thereof for implementation of theProject. If so, was it imperative for the Project Proponents underthe FWA to obtain prior approval of the State including that of AB

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Athe Empowered Committee? And if that was declined or grantedin part, should they take recourse to remedy of resolution ofdisputes or through arbitration mechanism, as provided in theFWA itself? If all these questions were to be answered in favourof the Project Proponents, only then the Court could be calledupon to examine the justness of the four reasons recorded byBthe Planning Authority. The High Court hastened to examine thejustness of the reasons given by the Planning Authority forrejecting the proposal, vide the impugned communication dated7.2.2015. The Integrated Infrastructure Corridor and FinanceProject (the Project) was conceived and formalised to constructCa privately financed infrastructure corridor and seven newTownships between Bangalore city and Mysore city in KarnatakaState. The Project also included construction of the southernsection of the Bangalore City Outer Peripheral Road. Theinfrastructure corridor was to include a modern, four-lane(extendable to six-lane) limited access expressway; potableDwater, sewage treatment, and electric power transmissionfacilities; and fibre optic communication cables. The southernsection of the Outer Peripheral Road was to link theinfrastructure corridor with the region’s entire highway network.The report (PTR) plainly sets out that the seven new TownshipsEwere to be organic, self-sufficient communities, each with its ownunique economic base and directly served by the infrastructurecorridor. All this would fulfil the National and State policy goalsfor population dispersion, infrastructure modernisation andeconomic development, and inevitably, economic andinfrastructure privatisation. As a limited-access expressway withFa continuous barrier on either side, the road was intended toprevent ribbon development, increase efficiency of individualtravel and cargo movement, and improve vehicle safety. It alsonotes that it was intended to provide access to existing andproposed Townships, for which nine (9) interchanges were to beGconstructed along the length of the expressway. Location(s) ofthe interchanges, as well as, the “Townships” area were clearlydemarcated in the PTR. Section I of the report (PTR) deals withtopics such as Socio- Economic Profile, Highway PlanningIssues, Recommended Scheme, Traffic Data and Analysis,Engineering Design, Bridges, Initial Environmental Examination,H

Cost Estimate, Privatisation of Highway Projects, Appendix-I andAppendix-II. Under topic “Recommended Scheme”, the detailsof the Expressway, Underpasses/Overpasses, CattleUnderpasses, Utilities Road, Interchanges, Service Areas, TollPlazas, Central Administrative Complex, Express Lighting, CityCentre Access etc. have been duly elaborated including theirexact location and other essential specifications. The projectreport (PTR) was deliberated and eventually translated into aformal decision of the State with some modifications and changesto the recommendations made therein. Finally, the FrameworkAgreement (FWA) was executed between the State and NICE.Even this agreement at the outset - in the recitals,unambiguously refers to the PTR and the necessity to implementthe Project as finally approved by the Government in largerpublic interest. The underlying concern of the State was aboutthe increasing urbanisation problems and to assuage the hardshipcaused on that account to the general public. The Project, asenvisaged and finalised was intended to achieve the objectiveof orderly development of Bangalore as a major industrial,commercial and residential city. [Paras 7, 11-14, 36-40][799-E-G; 800-A-C; 820-D-H; 821-A; 825-B-C; 835-G-H; 836-A; 838-E-F]

1.2 The PTR had suggested creation of seven Townships,but in the final decision, as noted in the FWA, only fiveTownships have been approved as part of the Project beingTownships 1, 2, 4, 5 and 7. It was a conscious decision taken bythe State to have limited number of self-sustaining Townshipsin the entire belt, so as to fulfil the National and State policy goalsof population dispersion and to ensure proper functionality in theregion. In other words, the FWA predicates that the ProjectProponents will be allowed to develop only five Townships atthe demarcated locations and which are self-sustaining withsufficient infrastructure for ensuring smooth and accident-freetraffic on Bangalore-Mysore Expressway stretched to about 140kilometres. There is no room for giving liberal meaning to thestipulations and specifications which would inevitably defeat andfrustrate the underlying objective of the Project- of orderlydevelopment of Bangalore City and to address the ever-increasing urbanisation problems. The FWA executed between ABC

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Athe State and the Project Proponents delineates the nature ofcontract and the scope of work to be carried out by the ProjectProponents, as per the terms and conditions specified therein.It is an integrated project not only for construction andmanagement of Expressway, but also creation of Townships atthe demarcated location(s) as per the specifications and areaBearmarked therefor. The “Infrastructure Corridor” has beendefined as having the same meaning as set forth in the recital(4[th] WHEREAS clause) of the FWA. It means, collectively, theLand, the Toll Road, the Townships, the Power Plants, theTelecommunication Facilities, Water Supply Facilities and theCWaste Water Treatment Facilities and other developments, andthe acquisition, design, construction, engineering, financing andimplementation thereof, as referred to in the PTR. “Townships”is, therefore, an identified and well-defined component of the“Infrastructure Corridor Project”. From this definition, it isamply clear that only five Townships (each having differentDpurpose – such as Corporate Centre, Industrial Centre,Ecotourism Centre, Heritage Centre and Commercial Centre)have been envisaged in the Infrastructure Corridor Project. Thelocation(s) of these five Townships have been identified in thePTR. Besides the location(s), the extent of area to be utilisedEfor creation of each Township has also been specified in the PTR,which applies proprio vigore to the expression “Townships” inthe FWA. The term “Townships”, no doubt, includes housing,but a standalone group housing scheme cannot be regarded asa Township as such. The Townships would, however, compriseof not only housing, but also schools, hospitals, shoppingFcomplexes, parks and open spaces as noted in Schedule 4.Besides Schedule 4, it may be appropriate to advert to Schedule1, which deals with the total Land to be used for theInfrastructure Corridor Project. The bifurcation of the extent ofland to be used for different activities, such as Toll Road andGTownship areas township-wise, is also specified. To put itdifferently, the Project Proponents are obliged to construct thefive Townships at the demarcated location(s) only and to theextent of land specified therefor. Any other proposal of theProject Proponents would be nothing short of deviation from theFWA in particular. The Project Proponents are obliged toH

construct housing in the area demarcated for Townships andensure that the other socio-economic infrastructure componentssuch as schools, hospitals, shopping complexes, parks and openspaces etc. are also provided for within the Townships. Theconstruction of the essential components including housing, asexpressly provided in the FWA, must also comply with themunicipal laws governing such constructions. Indeed, whileplanning for the development of Townships, it is open to theProject Proponents to deviate from the PTR within the definednorms to the extent such deviation is required to enable theparties to realise the full benefits intended from developmentof the Project. But, that is required to be done only with priorwritten approval of the State. This is made amply clear by Article7.1 of the FWA itself. Article 3 deals with the obligations of theState for implementation of the Project referred to in the FWA.Considering the fact that the State is obliged to facilitate theProject Proponents to deviate from the PTR specificationsadopted in the FWA for the development of Townships, that doesnot mean that the Project Proponents will set up housing complexat location(s) other than those demarcated for five Townshipsincluding not providing for other components of Townships inthe proposal or limit the proposal only to one component, suchas housing and excluding the other mandatory components -schools, hospitals, shopping complexes, parks and open spacesetc. Such interpretation cannot be countenanced and ifaccepted, it would inevitably defeat the very purpose of the well-defined project intended to address the increasing urbanisationproblems and for orderly development of Bangalore Cityincluding smooth and accident-free traffic between Bangaloreand Mysore Expressway. [Paras 41-44][838-H; 839-A-F; 840-B-C; 841-H; 842-D-F; 844-D; 848-C; 850-C-D]

2.1 The next question is: whether the stipulations andspecifications in the FWA regarding the scope of work and theapplication of both parties stood modified or altered due tosupplementary agreements dated 6.10.1999 and 31.3.2000?Even on a fair reading of these agreements, there is no expressclause therein which would alter the scope of work and theobligations of both parties regarding the setting up of five self-sustaining Townships only at the demarcated location(s). The ABC

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Asupplementary agreements, however, deal with other aspectswith which the Court is not concerned nor are the same relevantto decide the matters in issue. Similarly, the TripartiteAgreement dated 9.8.2002 between the State, NICE and NECEalso does not alter or modify the stipulations and specificationsfor setting up of five self-sustaining Townships only at theBdemarcated locations. The Court fails to understand as to howthis clause can be construed to mean that the original stipulationsand specifications regarding the five designated Townships inthe FWA stood modified or altered in any manner. This clauseonly deals with the meaning of “Stage 1 of the InfrastructureCCorridor”. Indeed, clause (c) thereof refers to Township–1, butthat reference is in the context of basic development and saleof land, and by no stretch of imagination, can be construed tomean that Township–1 (Corporate Centre) could be set up atany other location much less at intersections demarcated in thePTR. The purpose of intersections is to provide for free flow ofDtraffic across the area. All the five Townships referred to in thePTR are indisputably far away from intersections. Despite that,the Project Proponents have proposed for group housingscheme in Section A of the Project at intersections 5/7 thereaton the peripheral road. This is notwithstanding the fact that even

Ethe Tripartite Agreement does not modify the location(s) andspecifications for the Townships referred to in the PTR, whichforms part of the FWA. The thrust of the argument of the ProjectProponents is that housing is a permitted usage, in terms of theODP/Master Plan. For, the area for which the proposal for grouphousing scheme had been submitted is within yellow zone/Fresidential zone. The question is: whether the ProjectProponents can rely solely on ODP/Master Plan, notified by thePlanning Authority in exercise of statutory function as a PlanningAuthority (for the entire area including the Project area)? TheODP/Master Plan, no doubt, would apply and must be reckonedGif any building proposal/plan is submitted to the PlanningAuthority. However, the Project Proponents are obliged todevelop the Project only in the manner provided for in the FWA.For, the right to develop the Project bestowed on the ProjectProponents flows, primarily, from the FWA and thesupplementary agreements in that regard. Unless the FWAH

enables the Project Proponents to set up Townships atlocation(s) other than location(s) for five Townships demarcatedin the FWA read with PTR and as standalone group housingscheme, the question of Project Proponents unilaterally usingthe allotted land for construction of a group housing schemespread over in 42 acres and 30 guntas, that too at location(s)other than demarcated for five Townships, cannot becountenanced. Only upon grant of prior permission by the Statein that regard, the stipulations in the FWA (about the location(s)of the Townships/group housing scheme), would stand relaxedand modified and the Project Proponents would then be entitledto pursue such proposal with the Planning Authority. The Statecan do so in terms of Article 3.2.3 and the Project Proponentscan request the State in that regard by invoking the enablingprovision in Article 7.1 (both of the FWA). The zone specifiedin the ODP/Master Plan per se is not enough to allow the ProjectProponents to unilaterally use the land made over to them afteracquisition from private land owners for the Project, for purposeand manner other than specified in the FWA and the PTR. [Paras45-47][850-E-G; 851-B-H; 852-A-D]

2.2 The second round of litigation was again a publicinterest litigation to question the land acquisition proceedingsinitiated by the State for implementation of the Project. Thegroup of writ petitions came to be disposed of by the DivisionBench of the High Court, resulting in dismissal of stated writpetitions and issuance of a direction to the State to continue toimplement the Project. That decision was affirmed by this Courtin State of Karnataka & Anr. Vs. All India ManufacturersOrganisation & Ors. Neither the judgment rendered in appealby this Court in All India Manufacturers Organisation nor theobservation found in the order dated 3.11.2009 (passed by thisCourt in Contempt Petition (C) No. 144/2006 and connectedcontempt petitions in Civil Appeal Nos. 3492-3494/2005) will beof any avail to the Project Proponents. For, the Court was notcalled upon to adjudicate the question even indirectly, as towhether the subject proposal for setting up of group housingscheme could be proceeded directly before the PlanningAuthority just because it is in conformity with the ODP/MasterPlan and even though it is proposed at a location different than ABC

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Athe demarcated location(s) for the five Townships in the FWAread with the PTR. No such plea was raised by the ProjectProponents. In other words, none of the Court orders referredto by the Project Proponents had examined the questions/issuesinvolved in these appeals. Admittedly, in the present case, themodified proposal submitted by the Project Proponents onB5.5.2012 for developing 42 acres 30 guntas of land as grouphousing scheme, pertained to Survey Nos. 17(P), 18, 19, 20/1,20/3, 21/1(P), 21/2A2(P), 21/2B(P), 21/2C(P), 21/2D(P) and 21/2E(P) at village Kommagatta, Kengeri Hobli, Bangalore SouthTaluk (at intersection 5/7, Section A of the Project on theCperipheral road). It was not for setting up of Township as such.Neither the PTR nor the FWA envisages construction ofstandalone group housing scheme, that too at a location otherthan demarcated location(s) for five Townships. Thus, it was aclear case of deviation from the stipulations and specificationcontained in the FWA read with the PTR; and to relax or modifyDthe same, prior permission of the State is made mandatory interms of the Article 7.1. For that reason, the Planning Authorityhad informed the Managing Director, NECE vide letter dated28.5.2012 to obtain NOC from the concerned authorities.Notably, even the State had intimated the Planning Authority vide Eletter dated 19.12.2013 sent by the Principal Secretary, PublicWorks, Ports and Inland Water Transport Department, that inrespect of change in land use and approval of residentialdevelopments, prior decision of the Empowered Committeeshould be obtained. [Paras 4, 49-51][797-E-G; 798-A; 854-E-H;855-A-C; 860-D]FState of Karnataka & Anr. v. All India ManufacturersOrganisation & Ors. (2006) 4 SCC 683 : [2006] 1Suppl. SCR 86 – held inapplicable.

2.3 Article 7.1 of the FWA obliges the Project ProponentsGto submit proposal to the State for approval in case of anydeviation. No such proposal was submitted to the State. Instead,the Project Proponents pursued the matter directly with thePlanning Authority. In that sense, prior approval of the State fordeviating from the FWA and in particular constructing housingcomplex at location other than demarcated for Townships, is notHforthcoming. Admittedly, no such approval was taken. If such

proposal was to be submitted to the State, it would be open tothe State to examine the same on its own or refer the matter tothe Empowered Committee constituted for resolving such issues,as envisaged in Article 4 of the FWA. Indeed, the EmpoweredCommittee is not a statutory committee, but it can be soconstituted in terms of Article 4 read with Schedule 6, consistingof high officials of the concerned departments. This is only tofacilitate quick processing of the proposals and implementationof the Infrastructure Corridor Project with mutual understandingand due consultation wherever necessary. It may be assumedthat the Empowered Committee may not agree with theproposal, as it may be of the view that the deviation is quitesubstantial and would disrupt the core objective of the IntegratedInfrastructure Corridor (the Project), which has been designedwith purpose of holistic and orderly development of the regionas a whole. In that eventuality, the Project Proponents would berequired to resort to mechanism of resolution of disputesenvisaged in Article 18 of the FWA. A priori, it must necessarilyfollow that the Project Proponents cannot and ought not to havedirectly approached the Planning Authority for grant of statedpermission in reference to the provisions in the KTCP Act orODP/Master Plan. If the proposal to be submitted by the ProjectProponents was compliant with the stipulations and specificationsgiven in the FWA read with the PTR, only then the ProjectProponents could justifiably approach the Planning Authoritydirectly for grant of permission as per the extant regulationsand municipal laws applicable in that regard, to constructbuildings and structures for establishing a Township. In otherwords, the proposal/application of the Project Proponents wouldbe a valid proposal/application to the Planning Authority only ifit was to be in strict compliance with the land use specified inthe FWA read with the PTR. In case of any deviation therefrom,it ought to accompany a formal prior approval of the State orthe Empowered Committee, as the case may be, so that it canbe processed further by the Planning Authority. [Paras 52,53][863-C-D; 865-F-H; 866-D-F]

3.1 Much emphasis was placed on the fact that theappellants had permitted the Project Proponents to constructhousing complex at a location outside the demarcated area for ABC

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Athe five Townships referred to in the FWA. Similarly, as thestated location was falling in yellow zone being residential, theother neighbouring private land owners were permitted todevelop their property for housing complex. This argument doesnot take the matter any further for the Project Proponents,inasmuch as the land in question has been allotted to the ProjectBProponents by the State after acquiring it from private landowners for implementation of the Project. For that reason, theuse of the land should be strictly in conformity with the FWAand the applicable stipulations in the PTR. It is not open to theProject Proponents to contend that they can unilaterally developCthe land allotted to them by the State in the manner other thanspecified in the FWA, being bound by the contractual obligationsflowing from the FWA. Notably, the State had granted priorpermission to the Project Proponents to construct housing unitsat location(s) other than the five Townships. That was toaccommodate the concerned land losers in connection with theDsame Project as per the policy of the State. Besides, the statedhousing complex is not spread over in 42 acres and 30 guntasof land, so as to disrupt the holistic development envisaged inthe FWA/PTR. In any case, that could be done only afterobtaining prior approval of the State in that regard. As regardsEpermission given to the private land owners, as aforesaid, thatwas given by the Planning Authority as per the applicable townplanning regulations and in particular the use specified in theODP/Master Plan. For, their lands did not form part of theProject and also because they are not bound by the stipulationsin FWA in particular, unlike the Project Proponents. [Paras 54,F55][866-G-H; 867-A-D]

3.2 Reverting to the factum of assurance given by thePlanning Authority in the earlier round of writ petition(s) thatthe modified proposal/application dated 5.5.2012 will beconsidered in accordance with law and also that the State wasGparty to that petition, does not entail in acquiescence or waiverof the jurisdictional issue by the State (regarding necessity ofseeking prior approval of Empowered Committee and NoObjection (Certificate)/approval from the concerned Stateauthorities). In that, the assurance given by the Planning H

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Authority cannot come in the way of the State to urge that inlaw, the Project Proponents had no authority to develop the landsin question except as per the stipulations and specificationsprescribed in the FWA read with the relevant clauses of the PTR.As a matter of fact, the earlier writ petitions were not decidedon merits, but came to be disposed of leaving all contentionsopen, in lieu of the assurance given by the Planning Authoritythat it would consider the modified application as per law. In thepresent writ petitions, therefore, the State in the larger publicinterest is duty-bound to take a legal plea regarding jurisdictionalissue including the extent of right of the writ petitioners (ProjectProponents) being limited to stipulations in the FWA. Thus,neither the unilateral assurance given by the Planning Authoritynor the fact that such specific reason has not been recorded bythe Planning Authority in the impugned communication or thatthe State was party to the said writ petitions, would denude theState from raising the legal question regarding the scope ofthe FWA disentitling the Project Proponents for grant of anyrelief in the subject writ petitions. Further, the High Court inthe guise of issuing mandamus to the Planning Authority forissuing the Commencement Certificate, in effect, has preventedthe State from calling upon the Project Proponents to strictlyabide by the stipulations in the FWA. That cannot becountenanced. It is urged that this Court had held that it wouldbe open to the Project Proponents to carry on construction workof housing on lands which are not falling within the Townshipsarea, if the same were otherwise permissible under the ODP/Master Plan and the town planning regulations. This submissionis founded on complete misreading of the observations in thedecision of this Court in All India Manufacturers Organisation.The lis before this Court including review petition(s) had arisenon account of the challenge to the FWA and also the acquisitionof land for the purpose of the corridor project being excessive.Neither the High Court nor this Court was called upon to answerthe issue now raised by the Project Proponents that it was freeto construct standalone group housing scheme and at location(s)outside the demarcated five Townships (in the FWA/PTR). Theargument of the Project Proponents that the plea taken by theState is hit by res judicata and in any case, by principles of AB

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Aconstructive res judicata, cannot be countenanced. As a matterof fact, the Project Proponents did not pursue the plea of resjudicata or of constructive res judicata before the High Court.Even if it can be considered as a question of law, the same doesnot arise in the fact situation of the present case. [Paras 56-58][867-E-H; 868-A-H]B

Issues

3.3 The Project can be taken forward by the ProjectProponents only in conformity with the stipulations andspecifications in the FWA and the PTR. Additionally, the ProjectProponents are also obliged to ensure compliance of ODP/Master Plan and if so complied, the Planning Authority cannotCcreate any impediment. If the State accords approval to thedeviation in terms of the FWA itself, the Project Proponents maybe competent to carry on such a work. Prior approval of theState for deviation from the stipulations and specifications in theFWA is the quintessence. Further, the dictum in M.DNagabhushana (in third round of litigation which challenged theacquisition proceedings initiated for implementation of theProject. That challenge was rejected by the Division Bench ofthe High Court. The said proceedings culminated with thedecision of this Court in M. Nagabhushana) will also be of noavail to the Project Proponents as it does not militate againstEthe Planning Authority and State, in particular. The directionissued by the High Court in the impugned judgment, in any case,cannot be countenanced in law. But this question has becomeacademic for the view already taken that the Project Proponentscould not have directly approached the Planning Authority forFapproval of modified proposal, which was replete with deviationsfrom the stipulations and specifications in the FWA read with thePTR. This is so because the right in favour of the ProjectProponents to carry on development work on the lands referredto in the FWA and the PTR would enure only in conformity with the stipulations and specifications in the stated documents. ItGis not open to the Project Proponents to develop the land in anyother manner, unless permitted by the State. The impugnedjudgment of the High Court is set aside with liberty to theProject Proponents to first approach the State (under Article 7of the FWA) for its prior permission to allow them to deviateH

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from the stipulations and specifications in the FWA and the PTR.Further directions issued.[Paras 60, 62, 66-68][869-D-E; 870-C; 873-E-G; 874-A-B]

M. Nagabhushana v. State of Karnataka & Ors. (2011)3 SCC 408 : [2011] 2 SCR 435 ; Dakshinamurthy v.

B.K. Das, IAS & Ors. (2010) 1 SCC 64 – heldinapplicable.

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Tata Cellular v. Union of India (1994) 6 SCC 651 :[1994] 2 Suppl. SCR 122 ; Raunaq International Ltd.v. IVR Construction Ltd. & Ors. (1999) 1 SCC 492 :[1998] 3 Suppl. SCR 421 ; Association of RegistrationPlates v. Union of India & Ors. (2005) 1 SCC 679 :[2004] 6 Suppl. SCR 496 ; Michigan Rubber (India)Limited v. State of Karnataka & Ors. (2012) 8 SCC 216: [2012] 8 SCR 128 ; Badrinath vs. Government ofTamil Nadu & Ors. (2000) 8 SCC 395 : [2000] 3Suppl. SCR 573 – referred to.

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S.M. Mohan Rao Nadgir v. State of Karnataka & Ors.Decision dated 28.2.2005 of High Court of Karnatakain Writ Appeal No. 72/2004 – held inapplicable.

H.T. Somashekar Reddy v. Government of Karnataka& Anr. 1998 SCC Online Kar 609 – referred to.

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[2006] 1 Suppl. SCR 86[2011] 2 SCR 435[1994] 2 Suppl. SCR 122[1998] 3 Suppl. SCR 421[2004] 6 Suppl. SCR 496[2012] 8 SCR 128(2010) 1 SCC 64[2000] 3 Suppl. SCR 573

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ACIVIL APPELLATE JURISDICTION : CIVIL APPEAL NO.2116-2128 OF 2020.

From the Judgment and Order dated 15.10.2019 of the HighCourt of Karnataka at Bengaluru in Writ Petition Nos. 16576-77/2015and 18481-91/2015(GM-RES).

BWith

C.A. No. 2129-2141/2020

C.A. Sundaram, Chander Uday Singh, Mr. Mukul Rohatgi,Dr. A.M. Singhvi, Sr.Advs., Ms. Anitha Shenoy, Shailesh Madiyal,Sudhanshu Prakash, Kartik Anand, Rohini Musa, Zafar Inayat, Ms.CSanjana Grace Thomas, Abhishek Gupta, Shubhranshu Padhi, Ms. SrutiChaganti, Ashish Yadav, Rakshit Jain, Vishal Banshal, Mahesh Agarwal,Ankur Saigal, Anirudh Bhatia, Rohan Pratap Talwar, Ms. AashnaAgarwal, Ms. Abha Saigal and E. C. Agrawala, Advs. for the appearingparties.

DThe Judgment of the Court was delivered by

A. M. KHANWILKAR, J.

1. These appeals filed by Bangalore Mysore InfrastructureCorridor Area Planning Authority[1] and the State of Karnataka[2] directedagainst the common judgment and order dated 15.10.2019 passed byEthe High Court of Karnataka at Bengaluru[3] in Writ Petition Nos.16576-16577/2015 and 18481-18491/2015 (GM-RES), whereby theHigh Court quashed the communication bearing No. BMICAPA/339/Praa.Pra.Pa./1541/2011-12 dated 7.2.2015 issued by the PlanningAuthority rejecting the application made by the respondent No. 1 –FNandi Infrastructure Corridor Enterprise Limited[4] and respondent No.2 - Nandi Economic Corridor Enterprises Limited[5][,6], dated 5.5.2012, forpermission to develop a group housing scheme under the FrameworkAgreement dated 3.4.1997[7] in different survey numbers at Kommagattavillage, Kengeri Hobli, Bangalore South Taluk (at interchanges 5/7 ofperipheral road) covering 42 acres 30 guntas of land. The High CourtG

1 For short, “the Planning Authority”

2 For short, “the State”

3 For short, “the High Court”

4 For short, “NICE”

5 For short, “NECE”

6 NICE and NECE are jointly referred to as “the Project Proponents”, for short H

7 For short, “the FWA”

additionally directed the Planning Authority to issue CommencementCertificate to the Project Proponents in terms of application dated5.5.2012, within six weeks from the date of receipt of copy of the HighCourt’s order.

2. This is the fifth round of litigation pertaining to the IntegratedInfrastructure Corridor and Finance Project[8] situated betweenBangalore and Mysore, Karnataka, consisting of residential, industrialand commercial facilities, such as, among other things, self-sustainingTownships, expressways, utilities and amenities including power plants,industrial plants, water treatment plants and other infrastructuraldevelopments, as more specifically described in the InfrastructureCorridor Project Technical Report[9] dated August, 1995, as amended.

3. The first round of litigation was in the form of a public interestlitigation filed by H.T. Somashekar Reddy before the High Court,questioning the requirement of land for the Project as per the FWA fordevelopment of industrial infrastructure facilities (residential, commercial,industrial etc.) and to quash the FWA besides directing an enquiry tobe conducted by Central Bureau of Investigation[10]. That challenge wasrejected by the Division Bench of the High Court vide judgment andorder dated 21.9.1998 in Writ Petition No. 29221/1997[11] and whichdecision came to be affirmed by this Court on 26.3.1999 in SLP(C)No. 4922/1999, dismissing the said special leave petition in limine.

4. The second round of litigation was at the instance of J.C.Madhuswamy and Srirama Reddy, again a public interest litigation toquestion the land acquisition proceedings initiated by the State forimplementation of the Project. The main grouse in this petition was aboutexcess land being acquired for real estate purpose near Bangalore atinterchange areas to pass on the benefit to the Project Proponents andillegal sale of land for construction of Bangalore Exhibition Centre. Thegroup of writ petitions raising aforementioned challenge being WritPetition Nos. 45334/2004 (GM-RES-PIL), 45386/2004(PIL-LA-KIADB) and 48981/2004 (GM-RES-PIL) came to bedisposed of by the Division Bench of the High Court vide judgment 8 For short, “the IICFP” or “the Project”

9 For short, “the PTR”

10 For short, “the CBI”

11 Reported as H.T. Somashekar Reddy vs. Government of Karnataka & Anr., 1998SCC Online Kar 609

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Aand order dated 3.5.2005, resulting in dismissal of stated writ petitionsand issuance of a direction to the State to continue to implement theProject. That decision was affirmed by this Court in State of Karnataka& Anr. Vs. All India MAnufacturers Organisation & Ors.[12].

5. The third round of litigation was at the instance of oneBM. Nagabhushana, challenging the acquisition proceedings initiated forimplementation of the Project. That challenge was rejected by theDivision Bench of the High Court in Writ Appeal No. 1192/2007 videjudgment and order dated 23.7.2010. The said proceedings culminatedwith the decision of this Court in M. Nagabhushana vs. State ofKarnataka & Ors.[13].C

6. The fourth round of litigation was initiated by Abraham T.J.in reference to allegations of illegality and offences committed underthe Prevention of Corruption Act in the course of implementation ofthe Project. That culminated with the dismissal of SLP(Crl.) No. 397/2017 vide order dated 5.9.2018 and R.P.(Crl.) 647/2018 in the dismissedDSLP vide order dated 11.12.2018 by this Court.

7. The present (fifth) round of litigation, however is by theProject Proponents themselves, who had applied to the PlanningAuthority for grant of permission for construction of group housingscheme at the stated location(s). That permission having been rejectedEon 7.2.2015, subject writ petitions were filed before the High Court,which have been disposed of by the common judgment and order dated15.10.2019 of the Division Bench, in the following terms: - “ORDERF(i) Writ petitions are allowed.

(ii) Communication bearing No. BMICAPA/339/Praa. Praa.Pa/1541/20 11-12 dated 07.02.2015 (Annexure-A) issuedby first respondent to the petitioner is hereby quashed.

(iii) A writ of mandamus is issued directing first respondentGto issue commencement certificate as sought for by thepetitioner in its application bearing No. NECE//05/170

12 (2006) 4 SCC 683H13 (2011) 3 SCC 408

dated 05.05.2012 (Annexure-G) expeditiously and at anyrate, within an outer limit of 6 weeks from the date ofreceipt of copy of this order.

(iv) Costs made easy.”

8. Considering the fact that this is the fifth round of litigationbefore this Court and that the importance of the Project has alreadybeen taken note of in the earlier decisions, we deem it apposite toconfine to the factual matrix essential to answer the matters in issue inreference to the relief granted by the High Court vide impugnedjudgment.

9. Shorn of unnecessary details, the State and the NICE hadexecuted the FWA on 3.4.1997, setting out various terms for thepurposes of developing the proposed infrastructure corridor. The FWAwas followed by supplementary agreements dated 6.10.1999 and31.3.2000 between the same parties. Besides the supplementaryagreements, a Tripartite Agreement was executed between the State,NICE and NECE on 9.8.2002.

10. The FWA delineates the location(s)/areas where the five self-sustaining Townships were to be set up. The subsequent agreementsbetween the State and the Project Proponents do not alter the substanceof that dispensation. The FWA makes reference to provisions in thePTR in respect of certain matters.

11. Indeed, the Outline Development Plan[14]/Master Plan wasprepared by the Planning Authority for the new planning area on12.2.2004 and had received approval of the State. However, the ODP/Master Plan was not intended to materially change or alter thelocation(s) for Townships specified in the FWA.

12. The State in exercise of its powers under the KarnatakaTown and Country Planning Act, 1961[15], made amendments to the ZonalRegulations of ODP/Master Plan of various towns and cities permittingthe single plot usage for residential purpose subject to certain conditionsvide notification dated 10.3.2006.

13. In the backdrop of the stated agreements, ODP/Master Planand the amendment to Zonal Regulations of ODP/Master Plan, the 14 For short, “the ODP”

15 For short, “the KTCP Act”

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AProject Proponents submitted an application on 6.1.2012 to the PlanningAuthority for sanction of group housing scheme in 53 acres 5 guntasof land, which included lands transferred to the Project Proponents undersale deeds and notified under Section 28(4) of the Karnataka IndustrialAreas Development Act, 1966[16].B14. Later on, the Project Proponents submitted modifieddevelopment plan on 5.5.2012 for permission to set up group housingscheme in 42 acres 30 guntas of land by excluding the lands in respectof which no sale deed was executed in their favour. The PlanningAuthority vide letter dated 28.5.2012 called upon the Project Proponentsto furnish certain documents, namely, sketches, No ObjectionCCertificates (NOCs), detailed project report etc., since in its view, theapplication submitted by the Project Proponents was defective in thatregard. The Planning Authority also moved a proposal to place thematter for approval before the High-Level/Empowered Committee.

15. The Project Proponents submitted the clarifications andDdocuments in support of the modified development plan videcommunication dated 6.6.2012 and 5.7.2012. The Planning Authority,however, vide letter dated 17.7.2012 called upon the Project Proponentsto furnish more documents i.e. RTCs, clarification pertaining to thepossession over the proposed land and NOC for water supply in supportEof their application. The Project Proponents claimed to have submittedNOC received from the Karnataka Fire and Emergency ServicesDepartment on 10.9.2012.

16. The Planning Authority in its 34[th] General Meeting convenedon 12.9.2012 resolved that the application of the Project ProponentsFbe placed before the High-Level/Empowered Committee for decision.As a consequence of this resolution, the Planning Authority vide letterdated 3.11.2012 directed the Project Proponents to stop work onproposed lands till a decision was taken by the High-Level/EmpoweredCommittee, having noticed that some unauthorised road constructionactivity was being carried out by the Project Proponents. The PlanningGAuthority had thus kept the modified development plan submitted bythe Project Proponents in abeyance till the decision of the High-Level/Empowered Committee.

17. Once again, the Planning Authority vide letter dated 15.1.2013directed the Project Proponents to stop unauthorised work ofconstruction of road, laying of water pipeline and electricity cables inthe concerned area. In response, on 23.3.2013, the Project Proponentsrequested the Planning Authority to issue necessary approvals(Commencement Certificates) against their request letters includingletter dated 5.5.2012. The Planning Authority vide letter dated 30.4.2013,informed the Project Proponents that appropriate decision would betaken on the modified development plan dated 5.5.2012 only after thedecision of the High-Level/Empowered Committee. Accordingly, theProject Proponents were once again asked to stop all constructionactivities until final decision on the proposal was taken.

18. The Project Proponents then filed Writ Petition Nos. 57249-57250/2013 (GM-RES) and 57266-57267/2013 (GM-RES) before theHigh Court for quashing of the decision of the Planning Authority takenin its 34[th] General Meeting held on 12.9.2012 and instead to grantapproval in reference to the modified development plan dated 5.5.2012.The Project Proponents had also sought a declaration that the approvalswere deemed to have been granted in terms of Section 15(2) of theKTCP Act and to direct the Planning Authority to forthwith issueCommencement Certificate in reference to the application dated5.5.2012.

19. When the said writ petitions were pending, the PrincipalSecretary, Public Works, Ports and Inland Water Transport Departmentof the State, vide letter dated 19.12.2013, directed the Planning Authorityto await the decision of the High-Level/Empowered Committeeconstituted under the FWA before considering the request of the ProjectProponents, which would involve change of land use and approval ofresidential developments. On 25.6.2014, the Planning Authority issuednotice under Section 15(4) of the KTCP Act to the Project Proponentsdirecting, inter alia, to refrain from taking up the development worksat the proposed sites and to remove the works already done and restorethe land to its original form.

20. The writ petitions filed by the Project Proponents being WritPetition Nos. 57249-57250/2013 (GM-RES) and 57266-57267/2013(GM-RES) came to be disposed of on 16.12.2014 recording thestatement of the counsel for the Planning Authority that appropriatedecision would be taken on the modified development plan dated AB

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A5.5.2012 submitted by the Project Proponents expeditiously. The HighCourt directed the Planning Authority to send appropriatecommunication to the Project Proponents by 15.3.2015.

21. Before the decision was taken by the Planning Authority, theProject Proponents submitted their response to the notice datedB25.6.2014 issued by the Planning Authority under Section 15(4) of theKTCP Act, on 6.1.2015. The Planning Authority took decision on 7.2.2015 on the application filed by the Project Proponents dated5.5.2012 regarding the modified plan for group housing scheme. ThePlanning Authority rejected that proposal, for the reasons noted in thecommunication dated 7.2.2015, which reads thus: -C

“BANGALORE MYSORE INFRASTRUCTURECORRIDOR AREA PLANNING AUTHORITY

SECOND FLOOR, GATE NO.4, M.S. BUILDING, DR. B.R.AMBEDKAR VEEDHI, DBANGALORE-560001 TEL:080-22353976FAX: 080- 22389519

No BMICAPA/339/CC/1541/201 1-12 Date: 07.02.2015To, Managing Director EM/s. Nandi Economic: Corridor Enterprises Limited.No.1, Midford House,M.G. Road, Bangalore Sir, Sub: Regarding your application for plan approval for groupFhousing in Sy. Nos. 17(P), 18, 19, 20/1, 20/3, 20/4, 21/1 (P), 21/2A1 (P), 21/2A2(P), 21/2B(P), 21/2C(P), 21/2D(P) and 21/2E(P),totally measuring 53 Acres-05 Gunte of Kommaghatta Village,Kengeri Hobli, Bangalore South Taluk.

Ref. 1. Order of the Hon’ble in W.P. No.57249- 50/2013G(GM.-RES) and 57266-67/2013 (GM-2013 dated 16.12.2014)

2. Your application dated 05.05.2012

3. Your re-application dated 06.01.2015

On verification of your application and documents followingHdrawback are observed;

1) In the master plan approved by the Government, theproposed land was earmarked for transporl andcommunication, park and open space, public and semipublic zone. There is no opportunity for residentialbuilding in the said zone. In the plan submitted, landsare not reserved for park and open space.

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2) As per Form-15 (EC) submitted shows thatdevelopment agreement is entered with Umang RealityPvt. Ltd. Copy of the said agreement not submitted.

3) As per sale deed submitted, the proposed lands wereacquired for Stage-1 of Infrastructure Project. (as perFWA phase-1 included 9.8 k.m. link road and 3 k.m. ofperipheral road). Further as per sale deed lands has tobe returned to the Government after 30 years and thereis no clarity in the said document about permitting forbuilding plan in the land. In this regard we have writtenletter to PWD for information and they have not providedany information till now. That apart, the proposed landis not transferred to you for group housing purpose.

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4) As per village map, there is a stream (halla) passingthrough east to west in the land. But in the surveysketch/building plan submitted only portion of the hall isEshown.

5) Construction of Unauthorized road in the lands inquestion has been observed In view of the above, it is hereby informed that, your proposal isrejected.

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Yours sincerely,Additional Director, Town and CountryPlanning and Member Secretary,BMICAPA, Bangalore.”

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The above communication was assailed by the Project Proponentsbefore the High Court and it was prayed that a writ be issued directingthe Planning Authority to grant Commencement Certificate for theproposed group housing scheme. Those writ petitions [Writ Petition Nos.16576-16577/2015 and 18481- 18491/2015 (GM-RES)] have been H

Adisposed of by the Division Bench of the High Court vide impugnedjudgment.

22. The High Court, after considering the stand taken by boththe sides, formulated three points/questions for its consideration, as notedin the impugned judgment, which read thus: - B

“9…..

(1) Whether writ petitions are liable to be dismissed on theground of same not being maintainable as it relates todischarge of contractual obligations between thepetitioner and third respondent?

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Whether writ petitions are liable to be dismissed on theground of FWA providing for redressal of grievances ofpetitioner to be routed through High Level Committee?

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(2) Whether communication dated 07.02.2015-Annexure-Aissued by first respondent rejecting the prayer of thepetitioner for approval of development plan for grouphousing in the Sy.Nos. indicated therein is liable to beupheld or quashed?

E(3) What order?”

At the outset, the High Court, while considering point No. 1, dealtwith the argument regarding maintainability of writ petitions. It referredto the decisions of this Court in Tata Cellular vs. Union of India[17],Raunaq International Ltd. vs. IVR Construction Ltd. & Ors.[18],FAssociation of Registration Plates vs. Union of India & Ors.[19]andMichigan Rubber (India) Limited vs. State of Karnataka & Ors.[20].Thereafter, the High Court proceeded to observe as follows: - ‘‘15. At the outset it requires to be noticed that petitioners areseeking for quashing of the communication dated 07.02.2015G(Annexure-A) addressed to the petitioners whereunder theapproval of the plan for Group Housing which requires to be 17 (1994) 6 SCC 65118 (1999) 1 SCC 49219 (2005) 1 SCC 679H20 (2012) 8 SCC 216

approved by BMIC-first respondent has been rejected. A perusalof the said communication would clearly disclose that nowherefirst respondent has either contended or whispered about nonconsideration of the application submitted by the petitioners onthe ground of petitioners having sought for enforcement of acontractual obligation or on the ground FWA providing formechanism to enable the petitioners to work out their right asper said mechanism. On the other hand, first respondent by virtueof the said authority being the planning authority empowered underthe FWA to grant approval, has examined the prayer of thepetitioners for approval of the plan for group housing and hasrejected the same by assigning five (5) specific reasons. It isnowhere stated said application of petitioner is not beingconsidered on account of petitioner is attempting to enforce acontractual obligation or said application has to be placed beforeHigh Level/Power Committee. Thus, prima facie contentionof third respondent with regard to maintainability of thewrit petitions cannot be accepted.

16. In fact, petitioners herein had approached this Court in W.P.No. 57429-50/2013 and connected matters at the first instancewhen first respondent had resolved to refer said application toHigh Level Committee whereunder this Court had disposed ofthe writ petition by order dated 16.12.2014 based on stand bycounsel appearing for BMIC therein undertaking to consider theapplication on merits. In said proceedings third respondentherein was a party and in fact, no statement of objectionshad been filed by the third respondent raising contentionnow raised and thereby it would clearly indicate that thirdrespondent is attempting to improvise its stand stage bystage and step by step.

17. In the instant case, petitioner has impugned the communicationdated 07.02.2005 (Annexure-A) whereunder application filed bythe petitioner for approval of Group Housing has been rejectedand said right of the petitioner to seek approval stems out of theFWA entered into between the petitioner and GOK and theconsequential agreements. It is agreed between the parties thatunder clause 3.1.1 it is the obligation of the GOK to use its bestefforts to grant and cause its Governmental Instrumentalities, ABC

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AGovernment of India and its instrumentalities to grant, all approvalsrequired in connection with the Infrastructure Corridor projectincluding the approvals indicated in Schedule II of FWA. Theapproval under the Town and Country Planning Act, 1961 hasbeen referred at Sl. No. 15 of Schedule II. Respondents - 1 and2 being the statutory authority conferred with the power underBthe Karnataka Town and Country Planning Act to accord approvalfor the “Proposed Development Plan” submitted by the petitioner,they are required to examine the application filed by petitionerfor Group Housing and approve or reject said plan in accordancewith the statutory provisions. In fact, petitioner by itsCcommunication dated 03.07.2014 (Annexure-H13) addressed tofirst respondent has contended that on account of developmentplan for Group Housing having not been approved, Section 15which is a deeming provision under the Town and CountryPlanning Act, 1961 would be applicable. In other words,petitioner has sought for enforcement of statutory right.DAs such, the contention of respondents that petitioner hasto avail the remedy available under clause 4.1.2 of FWAcannot be accepted. At the cost of repetition, it requires to benoticed that when the application of the petitioner for grant ofapproval of Group Housing was not disposed of by firstErespondent, petitioner had approached this Court in W.P. Nos.57249- 250/2013 and 57266-267/2013 which came to be disposedof by the Division Bench by order dated 16.12.2014 (Annexure-J)in the light of statement made by the Planning Authority namely,first respondent herein. The statement so made which came tobe recorded by the Division Bench in the said writ petitions reads:

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“2. Before the petitions could be heard on merits, a statement isproposed to be made for BMICAPA, which being acceptable tothe petitioners, the petitions are to be disposed of in terms of thestatement as under:

“The applications dated 05.05.2012 and 21.04.2013 (both atAnnexure-F in each set of petitions) shall be considered bythe BMICAPA within a period of three months and thedecisions thereon shall be communicated to the petitioners bythe BMICAPA on or before 15.03.2015”.

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3. Accordingly, making the above statement, the order of theCourt, by consent, the petitions are disposed of in the aforesaidterms, with no order as to costs. Since none of the contentionsof the parties are considered or pressed at this stage, the rightsand contentions of the parties remain open to be agitated, if needbe, in future.”

(emphasis supplied by us)

18. In the said writ petitions, GOK was also represented by theSpecial Government Advocate and the statement made by thefirst respondent in the said proceedings would clearly indicatethat application of the petitioner was required to be consideredunder the provisions of the Karnataka Town and Country PlanningAct, 1961 and as such, it came to be considered on merits andhas been rejected on five (5) grounds as already noticedhereinabove. Hence, these writ petitions being dismissedon the ground of petitioner having remedy under the FWAdoes not arise. Petitioner having sought to enforcestatutory right as well as the impugned communicationstemming out of FWA being challenged on the ground ofmisuse of statutory powers by the respondent - authorities,contention raised with regard to maintainability of writpetitions is to be necessarily held as untenable and saidcontention is liable to be rejected.

19. It would not be out of context to state that the very samepetitioner had sought for issuance of commencement certificatefor residential layout plan relating to land measuring 14 acres 35guntas in Sy. No. 27/2A of Kommaghatta village, Kengeri Hobli,Bangalore South Taluk and 17 acres 39 guntas in Sy. Nos. 164/4(P), 164/5, 165P, 166P, 167/1P, 168(P), 241(P), 242(P), 247(P),248(P), 252(P) of Kengeri village, Kengeri Hobli, BangaloreSouth Taluk enclosing therewith layout plan. Since portions ofland in Sy. No. 27/2A measuring 7.27 acres was reflected inODP as Park, Open space/Traffic and transportation/agricultural,petitioners herein sought for change of land use and as such,petitioners had requested first respondent - authority herein torecommend to the Government for change of land use. Thisrequest was turned down by first respondent by its decision takenat its 33rd General Meeting held on 29.05.2012 and first AB

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SUPREME COURT REPORTS

Arespondent had resolved to place the matter before High Level/Empowered Committee. Being aggrieved by said decision,petitioner herein approached this Court in W.P. Nos. 37298-299/2013 and Division Bench by order dated 22.11.2013 allowed thesaid writ petition on the ground first respondent being the PlanningAuthority is bound to take its decision in accordance with SectionB14A of the Act. Further direction was also issued to firstrespondent to consider the request of petitioner for change ofland use strictly in accordance with the provisions of Section 14Aof the Act. Similar direction had also been issued to firstrespondent by Division Bench of this Court in W.P. Nos.C37300-301/2013 by order dated 22.11.2013. In the said writpetitions, State namely, third respondent herein had been arrayedas second respondent and was represented by learned Advocateand in the said writ petitions, there was no plea raised with regardto maintainability of said writ petitions. As such, thirdrespondent herein cannot be permitted to raise saidDground in these writ petitions by attempting to improveits case step by step. Even otherwise, on merits also, wehave held said contention not being tenable for the reasonsalready recorded.

20. That apart, contract in question also having elementEof public interest, we are of the considered view that writpetitions are maintainable and as such, contention raisedregarding non-maintainability of writ petitions standsrejected.’’

FThe High Court then considered point No. 2 and by referring toclause 1.1.3 in the Tripartite Agreement dated 9.8.2002, held that it wasa clear admission of the State that stage-1 of the infrastructure corridorwould include 10 (ten) interchanges and Townships. On that basis, theHigh Court held that the Planning Authority ought not to entertain anydoubt regardingthe Townships being established at the interchanges.GFurther, the High Court in the first round of litigation in H.T.SomaShekar Reddy (supra) had held that Townships can be establishedby the Project Proponents under the FWA. It extracted paragraph 66of the said decision in support thereof. The High Court then examinedthe first ground on which the application dated 5.5.2012 was rejectedHby the Planning Authority and observed thus: -

“23. The Outline Development Plan (for short ‘ODP’) came tobe approved by the Government of Karnataka on 12.02.2002 asper Annexures-L and L-1 respectively and same would indicatethat area proposed by the petitioner for putting up residentialbuildings would fall within yellow zone/residential zone andthereby plan submitted by petitioner is in compliance with thezoning regulations and permitted under the ODP. In fact, plansubmitted by petitioner along with application dated 05.05.2012,as rightly pointed out by Sri. D.L.N. Rao, learned Senior Counselappearing for petitioner when juxtapositioned with the ODP, itwould clearly demonstrate that plan submitted by the petitioneris in conformity with the zoning regulations. In fact, Hon’ble ApexCourt by its order dated 03.11.2009 passed in C.P. No. 96/2007has directed that project should be completed as per the ODPdated 12.02.2004.

24. Under FWA Clauses 3.1.1, 3.2.3, 3.2.5 and 3.2.6 it isincumbent upon Government of Karnataka (for short ‘GOK’) tomake best efforts to grant and cause its instrumentalities allapprovals required in connection with project including approvalsspecified under Schedule 2 of the agreement whereunder it isclearly specified that “petitioner would receive the requisitepermissions, approvals, sanctions and/or licences....” under theActs and Rules of GOI and GOK as specified thereunder. Thiswould also include granting approval under Karnataka Town andCountry Planning Act, 1961. In fact, under Clause 3.2.3 it isagreed that GOK would not restrict the use of land in anyway and petitioner would have freedom and discretion todevelop and use the land as generally contemplated by theagreement and it would also be incumbent upon the GOKto zone and re-zone and caused to be done in a mannerconsistent with use in the infrastructure project ascontemplated under the agreement and under Clause 3.2.5it is understood by GOK that development of townshipswould have many components and take many formsincluding the industries, businesses and servicescontemplated in Schedule 4 of FWA.

25. In the light of above findings, contention raised by thelearned Senior Counsel appearing for respondent No. 3

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Awith regard to petitioners could not have approached thefirst respondent directly for plan approval on the groundthat all approvals required in connection with theinfrastructure corridor project had to be granted by theHigh Level Empowered committee consisting of membersfrom each affected ministries of GOK, would not holdBwater and complete answer to such technical plea beingraised has been laid to rest by the Hon’ble Apex Court inits judgment rendered on 20.04.2006 in the matter ofSTATE OF KARNATAKA AND OTHERS vs. ALL INDIAMANUFACTURERS ORGANIZATION reported in (2006)C4 SCC 683 whereunder it has been held to the followingeffect:

“In the future also, we make it clear that while the StateGovernment and its instrumentalities are entitled toexercise their contractual rights under the FWA, theyDmust do so fairly, reasonably and without malafides; inthe event they do not do so, the Court will be entitledto interfere with the same.”

Hence, first ground on which plan approval/permissionhas been refused cannot be sustained and it is liable to beErejected and accordingly it stands rejected.’’

23. The High Court then examined the second ground in theimpugned communication dated 7.2.2015 and observed that thedocument was never demanded by the Planning Authority.

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24. While dealing with the third ground, in the impugnedcommunication, it noted that the entire cost of acquisition of the land inquestion and implementation of the project, was to be borne and carriedout by the Project Proponents. The State, on issuing notification underSection 4A(1) of the KTCP Act on 13.7.1999, had notified the appellantGNo. 1 (in C.A. Nos. 2116- 2128/2020) to be a separate PlanningAuthority for the infrastructure corridor in question. And that Authorityhad prepared ODP/Master Plan for the new planning area. Relying onthe observations in All India Manufacturers Organisation (supra), theHigh Court opined that the lands have been acquired for the Projectwhich is an integrated infrastructure project and not limited only toH

construction of road as indicated in the impugned communication. Itonce again relied on clause 1.1.3 of the Tripartite Agreement and alsothe communication dated 19.12.2013 and noted that it was not open tothe Cabinet to unilaterally cancel the Tripartite Agreement dated9.8.2002. It then noticed the amendment of Section 2(7a) of the KIADAAct, which defines “industrial infrastructural facilities”. It then movedover to consider the issue about return of the subject lands to the StateGovernment after 30 years and for that, referred to the recitals in thesale deeds. The High Court held that it is agreed between the partiesthat what is to be transferred back is “Transferred Toll RoadAssets”, as defined in the FWA on completion of the concession period.As regards the “Transferred Township Assets”, clause 7.2 of the FWAwas adverted to and it concluded as follows: - ‘‘37. A plain reading of expression “Transferred Toll RoadAssets”, “Transferred Township Assets”, along with Clause 6.8of FWA, it would indicate that petitioner has to transfer to GOKat the end of concession period, “Transferred Toll Road Assets”upon terms and conditions mutually agreed by the parties as setforth in Clause 6.8. Thus, there is no ad-idem between theparties with regard to townships being transferred by thepetitioner to GOK. Under Schedule 5 it is more specificallyindicated as to the assets, which are to be transferred in thetownship by the petitioner to the GOK. It reads:

“SCHEDULE 5

Transferred Township Assets

1. Right of way relating to the public roads in the Townshipsother than the Toll Road

2. Buildings solely housing municipal offices

3. Fire Station and related fire fighting equipment

4. Police Station

5. Employment of such employee employed in connectionwith the civil operation of the Township as mutuallyagreed

6. Such other assets as may be mutually agreed betweenGOK and the Company”

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AThus, what is agreed under FWA and supplementalagreements by petitioner with GOK is to transfer theassets of townships as specified in Schedule - 5 of FWAand nothing new can be added or read into it.

38. In fact, contention now raised in the present writ petition wasBalso the plea put forward by State Government before theDivision Bench in the matter of J.C. MADHUSWAMY ANDOTHERS vs. THE STATE OF KARNATAKA AND OTHERSin W.P. No. 45386/2004 (GM-PIL), which came to be consideredand rejected. Same was also affirmed by the Hon’ble Apex Courtin the matter of STATE OF KARNATAKA AND OTHERS vs.CALL INDIA MANUFACTURERS ORGANISATION reportedin (2006) 4 SCC 683 whereunder Hon’ble Apex Court hasnegatived said contention as already observed herein above.

39. Thus, a combined reading of the above clauses in theFWA and the agreements would clearly indicate as to whatDassets would revert back to the Government and thedevelopments that would take place in the subject landsother than what has been mentioned in clause 6.8.3 whichwould revert back to the State Government. As such, pleanow raised by third respondent with regard to townshipEestablished by the petitioner is required to be transferredto GOK cannot be accepted and it stands rejected.”

The High Court thereafter adverted to the ODP/Master Planprepared by the Planning Authority and opined that it defines theFdevelopmental activities to be carried out at the interchanges. Afterextracting the relevant portion thereof and adverting to thecorrespondence between the Public Works Department (PWD) of theState and the Planning Authority and the discussion during the 34[th]General Meeting of the Planning Authority, the High Court concludedGthat interchange areas at link road and peripheral road are permittedfor residential developments as per the FWA. It then went on to considerthe argument of “single plot” and held that the plan submitted by theProject Proponents was in respect of one single plot, wherein they hadproposed to develop group housing block wise. The High Court was H

also impressed by the argument of the Project Proponents that theDepartment of Town and Country Planning in respect of these veryProject Proponents had granted approval for residential layout in SurveyNo. 15/1 (part), 16 & 18 (part) measuring 15 acres 38½ guntas atVarashansandra Village, Kengeri Hobli, Bangalore North Taluk forallotting sites to land losers followed by issuance of CommencementCertificate dated 7.3.2014. Therefore, the High Court went on toobserve that it would not lie in the mouth of the Planning Authority toapprobate and reprobate on the same subject matter. The High Courtalso adverted to the permissions accorded by the Planning Authorityfor setting up housing scheme by private persons nearby interchanges.After referring to those instances, the High Court concluded that thePlanning Authority was adopting policy of pick and choose for grant ofapproval or sanction.

25. As regards the fourth ground in the impugned communication,the same was also overturned on the finding that the Authoritycommitted factual error in that regard. The High Court opined that theplan submitted by the Project Proponents did not violate any condition.

26. Resultantly, the High Court was pleased to set aside theimpugned communication dated 7.2.2015 rejecting the applicationpreferred by the Project Proponents for permission to construct grouphousing scheme at the location(s) referred to in the application dated5.5.2012 and issued a direction to the Planning Authority to grantCommencement Certificate as sought by the Project Proponents.

27. Feeling aggrieved, the Planning Authority and the State havefiled separate appeals by special leave, assailing the impugned judgment.The thrust of assail is that the High Court has completely underminedthe scheme of the FWA, which was binding on the Project Proponentsand the State. The Project Proponents could develop the project onlyas per the specified components of the Project. The FWA was foundedon the extensive exercise of holistic development of the area asrecorded in the PTR. The theme of the PTR was duly deliberated atdifferent levels and eventually an informed decision was taken by theAuthority to implement the report (PTR) subject to certain changes andmodifications. Consistent with such decision, the FWA was executedbetween the Project Proponents and the State. The terms and conditionsset out in the FWA, are self-contained. The parties (Project Proponentsand the State) are bound to comply with the same in its letter and spirit.

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AThe essence of the FWA can be traced to the recitals therein. To wit,the Project was necessitated to achieve an orderly development ofBangalore as a major industrial, commercial and residential city in themanner prescribed. The contours of development work have beendelineated in such a manner so as to ensure amongst other things,self-sustaining townships, expressways, utilities and amenities, includingBpower plants, industrial plants, water treatment plants and otherinfrastructural developments, as referred to in the PTR dated August,1995, as amended. The development work was to promote industrial,commercial and economic activities, so as to generate new jobopportunities for the residents in and around the infrastructure corridor,Cpromote tourism, decongest traffic in Bangalore and Mysore, ensuresmooth and safer traffic between Bangalore and Mysore and providea world class expressway between the two cities. The utility of theland that would be offered by the State for the Project was clearlydefined and prioritised. The Project was to consist of a limited-accesstoll expressway; electric power transmission line; water pipeline; andDfibre optic telecommunications cabling including construction of southernsection of the Bangalore City Outer Peripheral Road connectingNational Highway (NH)-7 and National Highway (NH)-4. As alimited-access expressway with a continuous barrier on either side, theroad would prevent ribbon development, increase efficiency of individual Etravel and cargo movement, and improve vehicle safety. Originally, seven“Township” areas in the entire project were earmarked and clearlyidentified, but after due consideration of all aspects, it was decided toreduce the number of “Townships” to only five, identified as Townships1, 2, 4, 5 and 7 in the PTR. The “possible business and services” ofthe Project have been articulated in Schedule 4 of the FWA to includeFreal estate and housing as one of the activities.

28. According to the appellants, the proposal submitted by theProject Proponents was for development of group housing scheme. Thatwas not in accord with the usage of the land specified in the FWA andthe relevant specifications in the PTR. The PTR as well as FWAGrecognise development of “Townships” and not group housing schemeas such. The two concepts are materially different. Further, the subjectproposal to construct group housing scheme was in area other than theidentified five Townships in the FWA and the PTR, which was notpermissible in terms of the FWA. Besides, the proposal submitted byHthe Project Proponents vide communication dated 5.5.2012 to develop group housing scheme in the stated area also did not include othercomponents required to be constructed and provided for in theTownships. Being a deviation of the FWA, it was essential for theProject Proponents to first take permission of the State, as provided inthe FWA, which could be granted on the basis of the opinion of the“Empowered Committee”. Until grant of such permission, it was notopen to the Project Proponents to maintain any application or submitproposal directly to the Planning Authority merely on the basis of theODP/Master Plan and the municipal laws concerning the town planningscheme under the KTCP Act. It is urged that the High Court posedwrong questions to itself and proceeded to answer the same, that tooin a manner which is untenable and founded on erroneous assumptions.Despite the limited relief claimed by the Project Proponents, the HighCourt went ahead with the issue of validity of the Cabinet decision ofthe State in respect of the tripartite agreement. That was uncalled for.Similarly, it proceeded to answer the issue regarding the “single plot”which ought to have been left for consideration of the competentauthority.

29. In substance, the argument of the appellant is that in absenceof prior permission of the State regarding deviation from the FWA, itwas not open to the Planning Authority to process the application/proposal under consideration. Nor such an application could be treatedas a valid application by the Planning Authority, for the purpose ofSection 15 of the KTCP Act regarding deemed permission. It is urgedthat the proposal submitted by the Project Proponents, if accepted,would result in allowing development on the toll road or at toll roadinterchanges, which cannot be made part of the Townships in view ofthe express provision in that regard in the FWA. In case the ProjectProponents were not in agreement with the stipulations in the FWA orthe conditions specified by the competent authority of the State, theycould resort to remedy of resolution of disputes provided for in the FWAitself, before the Committee or by way of arbitration, as the case maybe. However, the Project Proponents could not have directly approachedthe Planning Authority for grant of permission and the High Court forissue of writ of mandamus against the Planning Authority. In otherwords, no relief could be granted to the Project Proponents unless theState had agreed to the deviation. Significantly, the State had advisedthe Planning Authority vide letter dated 19.12.2013 pointing out that,before taking any decision with respect to change in land use and AB

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Aapproving residential complex, decision of Empowered Committeeconstituted under the FWA be obtained. It is urged that the ProjectProponents were conscious about their obligations. That is manifestfrom the letter sent by NICE to Executive Member of the KarnatakaIndustrial Development Board[21], dated 6.1.1998, including from thestand taken by them before the High Court in different proceedings. ItBis also urged that the PTR and the FWA clearly provide for the sequenceof implementation and execution of the Project and it is open to theState to insist for execution of Project strictly in that order. The ProjectProponents cannot be allowed to disregard these obligations.

30. It is further urged that the logic invoked by the High CourtCis, to say the least, unstatable. Inasmuch as, merely because “Housing”is mentioned in “Real Estate” column in Schedule 4, it would not followthat the other components of the “Townships” specified in the FWAand the PTR are dispensed with. On the other hand, the FWA, if readas a whole alongwith the relevant stipulations in PTR referred to in DFWA, it would be evident that the Project ought to be implemented inthe manner specified therein including the establishment of Townships.Housing scheme would only be one of the components of the“Townships” to be constructed at the designated location of the fiveTownships. That the lands on which development was proposed wereallotted to the Project Proponents for implementation of the Project onlyEas per the FWA with obligation to retransfer the “Transferred Toll RoadAssets” back to the State. This has been completely misinterpreted bythe High Court. Further, the High Court was more impressed by thefact that in the earlier writ petition filed by the Project Proponents, thePlanning Authority had agreed to consider the modified proposal datedF5.5.2012 submitted by the Project Proponents. The assurance so givenby the Planning Authority cannot be the basis to disregard the bindingobligations of the Project Proponents flowing from the FWA regardingthe manner in which the Project should be taken forward.

31. The appellants urge that the fact that permissions were grantedGby the Planning Authority in respect of the neighbouring lands of privatepersons for construction of group housing complex or for that mattergiven to the Project Proponents in respect of some other area, cannotbe the basis to disregard the obligations flowing from the FWA and thePTR. The housing scheme to be constructed by the Project Proponents H21 For short, “the KIADB”

must be in the designated areas/location(s) specified as “Townships”and only in the manner specified in the FWA and the PTR. For, theFWA refers to the PTR in some measure, and by such reference thestipulations and specifications regarding the execution of the Projectgiven in the PTR would get incorporated in the FWA to that extent.The Project Proponents are obliged to adhere to all such stipulations.

32. Concededly, the right of the Project Proponents flows fromthe FWA and is circumscribed by the same. If proposed deviation is tobe ignored, the whole purpose for which the Project has been conceived,will be defeated. It would not be a development, as planned in the PTRand approved in the FWA. It is, therefore, not open to the ProjectProponents to rely on general provisions applicable to other lands inthe neighbourhood not covered by the FWA. It is urged that it is essentialto keep in mind that the private land is made available to the ProjectProponents by the State after acquiring it from land owners forimplementation and execution of the Project. The regional or the zonalplan showing the entire area as yellow zone being residential, would,therefore, be of no avail to the Project Proponents. The ProjectProponents cannot be heard to say that unless they are permitted todevelop group housing scheme, it would not be possible for them tofinance the Project, inasmuch as, the manner of financing the Projectand generation of revenue is already specified in the FWA. It is urgedthat in any case, the High Court exceeded its jurisdiction in issuingmandamus against the Planning Authority, directing to issueCommencement Certificate, as sought by the Project Proponents videmodified proposal dated 5.5.2012.

33. The Project Proponents, on the other hand, would reiteratethe stand taken by them before the High Court and which had foundfavour with the High Court. According to the Project Proponents, theHigh Court in the facts of the present case, was justified in not onlyquashing the communication issued by the Planning Authority, dated7.2.2015, but also directing the Planning Authority to issueCommencement Certificate, as prayed in terms of the modified proposaldated 5.5.2012. According to them, the State authorities including thePlanning Authority have been obstructing the implementation of theProject, which has been approved long back and elucidated in the FWAdated 3.4.1997. The group housing scheme is one of the activities clearlypermitted by the FWA. And being a permissible activity, it was A

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Aunnecessary for the Project Proponents to approach the State or theEmpowered Committee, as the case may be. As a matter of fact, theEmpowered Committee is not a statutory Committee. It is only afacilitation Committee under the FWA to ensure smooth implementationof the Project. In any case, the four grounds articulated in the impugnedcommunication dated 7.2.2015 issued by the Planning Authority, makeBno reference to the requirement of obtaining prior approval from theState or the Empowered Committee. The State cannot be heard to raiseany objection in that regard in the present proceedings, as it did notraise the same in the earlier writ petition filed by the Project Proponentsbearing Writ Petition Nos. 57249-57250/2013 (GM-RES) andC57266-57267/2013 (GM-RES), to which it was made party. In fact, anorder was passed on the basis of the assurance given by the PlanningAuthority that it would consider the modified proposal submitted by theProject Proponents on 5.5.2012 within specified time. According to theProject Proponents, the reasons recorded by the High Court are in thecontext of the arguments canvassed before it and invited by the parties.D

34. It is urged that the entire action of the Planning Authorityand the stand taken by the State is replete with mala fides. This Courteven on the earlier occasion, had taken notice of the obstructions createdby the State authorities in the implementation of the Project, as can bediscerned from the observations in All India ManufacturersEOrganisation (supra). It is urged that the Project Proponents were notinvoking the deeming provision, but have pursued grounds to assail thereasons stated by the Planning Authority in the impugned communicationdated 7.2.2015. The High Court dealt with all the four grounds notedby the Planning Authority in the impugned communication and justlyFconcluded that the same were unsustainable. Having said that, the HighCourt was justified in issuing direction to the Planning Authority for grantof Commencement Certificate, as it was satisfied that no fruitful purposewould have been served by relegating the Project Proponents beforethe same (Planning) Authority. For, it was determined to createobstruction in the implementation of the Project. It is urged that theGPlanning Authority having issued ODP/Master Plan, was obliged toprocess the modified proposal submitted by the Project Proponents onthat basis. The land use categorised in ODP/Master Plan refers to outerperipheral road including the land reserved for interchanges. The HighCourt had considered this aspect and accepted the stand of the ProjectH

Proponents that it is clear from perusal of the ODP/Master Plan thatthe land in question can be used for various purposes includingresidential, commercial, industrial developments, which would be inconsonance with clause 3.2.3 of the FWA. It is urged that the ProjectProponents had agreed to undertake and carry on the construction ofgroup housing scheme in strict compliance of the ODP/Master Plan.The Project Proponents are also relying on the argument of theAdvocate General of the State of Karnataka, reproduced in paragraph41 of the judgment of the High Court in Writ Petition No. 3438/2010dated 15.6.2011, wherein it was pleaded on behalf of the State that thePTR was only a proposal and the ODP-2004 was the approvedalignment of the road. It is urged that the State having approved theODP/Master Plan, was bound to give effect thereto and cannot beallowed to approbate and reprobate relying on the PTR/FWA. It iscontended that this Court in All India Manufacturers Organisation(supra) had negatived the submission of the State that 5119.37 acresof land was required for the toll road in the PTR, however, in the FWA,the area was enhanced to 6999 acres. It is urged that the PTR is nota sacrosanct document and the parties accepted various modificationsto the same. It is also urged that the State cannot be permitted to raisethe same plea, which would be otherwise hit by principles of constructiveres judicata. According to the Project Proponents, the issue regardingthe development of land reserved for “Townships” has attained finalityand cannot be raised again in light of the dictum in All IndiaManufacturers OrganisAtion (supra) including dismissal of reviewpetition raising the same ground now urged by the State. Further, thereis no infirmity in the view taken by the High Court, much less regardingthe direction issued vide the impugned judgment.

35. We have heard Mr. C.A. Sundaram, learned senior counselfor the appellant-Planning Authority, Mr. Chandra Uday Singh, learnedsenior counsel for the State and Dr. Abhishek Manu Singhvi and Mr.Mukul Rohatgi, learned senior counsel for the Project Proponents.

36. Considering the rival submissions, we are inclined to acceptthe argument of the appellants that the High Court in paragraph 9 ofthe impugned judgment (reproduced in paragraph 22 of this judgment),posed wrong questions to itself and that led to the erroneous anduntenable conclusion deduced by it. The fundamental issue is: whetherthe subject modified plan submitted by the Project Proponents directly AB

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Ato the Planning Authority for approval is replete with deviations and/orviolation of the stipulations and specifications in the FWA? In that, theFWA had circumscribed the user of the land in terms of the location(s),as well as, the area thereof for implementation of the Project. If so,was it imperative for the Project Proponents under the FWA to obtainprior approval of the State including that of the Empowered Committee?BAnd if that was declined or granted in part, should they take recourseto remedy of resolution of disputes or through arbitration mechanism,as provided in the FWA itself? If all these questions were to be answeredin favour of the Project Proponents, only then the Court could be calledupon to examine the justness of the four reasons recorded by theCPlanning Authority. The High Court, in our opinion, hastened to examinethe justness of the reasons given by the Planning Authority for rejectingthe proposal, vide the impugned communication dated 7.2.2015.

37. For answering the matters in issue in proper perspective, itwould be essential to first understand the purpose of the IntegratedDInfrastructure Corridor and Finance Project (the Project). It wasconceived and formalised to construct a privately financed infrastructurecorridor and seven new Townships between Bangalore city and Mysorecity in Karnataka State. The Project also included construction of thesouthern section of the Bangalore City Outer Peripheral Road. Theinfrastructure corridor was to include a modern, four-lane (extendableEto six- lane) limited access expressway; potable water, sewagetreatment, and electric power transmission facilities; and fibre opticcommunication cables. The southern section of the Outer PeripheralRoad was to link the infrastructure corridor with the region’s entirehighway network. The report (PTR) plainly sets out that the seven newFTownships were to be organic, self- sufficient communities, each withits own unique economic base and directly served by the infrastructurecorridor. All this would fulfil the National and State policy goals forpopulation dispersion, infrastructure modernisation and economicdevelopment, and inevitably, economic and infrastructure privatisation.As a limited-access expressway with a continuous barrier on either side,Gthe road was intended to prevent ribbon development, increaseefficiency of individual travel and cargo movement, and improve vehiclesafety. It also notes that it was intended to provide access to existingand proposed Townships, for which nine (9) interchanges were to be constructed along the length of the expressway. Location(s) of theinterchanges, as well as, the “Townships” area were clearly demarcatedin the PTR. The relevant extract from the PTR reads thus: - “1. The intersection of the expressway with the outerperipheral road

2. The Corporate Counter (Township Site #1)

3. The Commercial Center (Township Site #2) andBidadi

4. The Farming Market Center (Township Site #3), theIndustrial Center (Township Site #4), the HeritageCenter (Township Site #5), Ramanagaram andChannapatna

5. Maddur

6. Mandya

7. The Agricultural Center (Township Site #6) and Arakere

8. The Eco-Tourism Center (Township Site #7) andShrirangapatta

9. The intersection of the Expressway with the MysoreRing Road The expressway will bypass congested village roadways,eliminating conflict between inter-city and local traffic. By limitingaccess to the expressway and charging tolls, local traffic will bediscouraged from using the corridor. As a result, the corridor willsignificantly reduce travel time between Bangalore and Mysoreto about one and one-half hours. The design of the expresswaywill, to the greatest extent possible, maintain the travel patternsof the rural populace. For the most part, local cross roads,although separate from the expressway, will be maintainedthrough the construction of bridges and culverts. Where crossingthe expressway with a local roadway or cattle path is not feasible,local access roads will connect to nearby roadways that do crossthe corridor. Bridges and underpasses for local roads, and mostof the large culverts will serve as cattle crossings during the dryseason.

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AThe expressway and its facilities will be constructed of the bestmaterials and implemented using state-of-the-art highwayengineering and construction techniques. The expressway will beconstructed to high standards of roadway safety with twomarked lanes in each direction and divided by a wide landscapedmedian. The roadway alignment and pavement surface will beBdesigned to ensure safe travel and a smooth ride. To achievethis objective, the expressway will be designed using innovativematerials and construction techniques such as jointless cementconcrete pavement. All bridges will be but of modern materials.The roadway surface will be graded to prevent water poolingCand curves will be banked to enhance driving safety.”

The map of the concerned area clearly specified the location(s)of the interchanges and the Townships, forming part of the PTR. Asregards the Townships development, the relevant portion of the PTRDreads thus: - “TOWNSHIP DEVELOPMENT SUMMARY

The Consortium proposes to design, acquire land for, and constructseven new townships as part of the Bangalore- MysoreEInfrastructure Corridor. The townships will be developedentirely by the Consortium, including the provision ofinfrastructure municipal services, and recreation facilities.The creation of the new townships will provide significantbenefits to Bangalore, Mysore, the investment corridor,and the entire state of Karnataka. The townships are beingFplanned to be compatible with their environments. Theywill strengthen the rural agricultural economies of the areaand maintain the stability of existing rural settlements.

Each of the proposed townships has a unique identitydetermined by its economic base. The urban form,Gtransportation network, and municipal services serve and areguided by the basic purpose and theme of the community. Theproposed townships are as follows:

Corporate Center: A home for corporate headquarters,offices and research and development facilities.

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Industrial Center: A self-sufficient community dedicated toclear manufacturing and industrial research anddevelopment.

Agricultural Center: A town centered on a university and institutededicated to agricultural research and its application.

Eco-tourism Center: An environmental park and culturalarts center which will become a destination for Indians andforeign travellers who wish to learn about the region’senvironmental resources, fine and performing arts, andheritage crafts.

Heritage Center: A pilgrimage site with conference andtraditional healing facilities.

Commercial Center: A residential suburb of Bangalorewith retail, light industry, and municipal support services.

Farming and Market Center: A farming community with a marketcenter for the sale of locally grown produce.

Beyond these themes, the communities share a common planningphilosophy. The towns must be modern, but accommodatetraditional Karnataka lifestyles, customs, and cultural values.Transportation access and utility infrastructure will be providedto a greater ultimate development capacity than will be initiallyneeded for those areas to be created by the Consortium. Thisexcess capacity will permit the new townships toaccommodate future growth with minimal disruption.

Each township has a primary town center with supportingneighbourhood centers. The residential areas are plannedto include a range of housing models and are situated sothat the walking distances to work, school, or shopping arenot greater than ½ mile (0.9 km). Elementary schools arelocated in each neighbourhood. Parks and recreationfacilities are generously allocated to neighborhoods andtown centers. Transportation access to the expressway andinternal vehicle and pedestrian circulation patterns areconsidered carefully. …”

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The other crucial aspect predicated in the PTR is the manner inwhich the Project needs to be implemented and prioritized including theTownships. It reads thus: - PROJECT SCHEDULING AND PHASING:

The current project schedule and phasing plan is responsive tothe financial plan of the Consortium, and it meets thetransportation and township development needs of the region. Amaster schedule illustrating the Bangalore-Mysore InfrastructureCorridor Project elements and their interrelationships is presentedon the following page.

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The project schedule and phasing plan has been developed thatsequentially constructs the expressway elements of the project.Township development is phased to financially support theconstruction of the Expressway and the southern sectionof the Outer Peripheral Road. The project phasing can besummarised as follows:

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Construction of the Southern section of the Outer peripheral Roadaround Bangalore City between years 1-3.

Construction of the Bangalore link Road between years 1-3

Construction of the northern section of the Expressway (0-55km) between years 2-4.

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Construction of the southern section of the Expressway and theMysore Link Road between years 4-6.

Construction of the Bangalore City Elevated Link Road Extensionbetween years 7-10.

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Construction of the townships would begin in year 2 and extendover a period of 12-15 years.

Development in each of the townships would beconcurrent with the construction of the community andmunicipal services. This will enable the financing of theseGtownship elements and allow the consortium to managetheir cash flow.

Once construction of the various expressway elements has beencompleted, tolled traffic operations will commence. For example,it is envisioned that the Southern section of the Outer PeripheralRoad would open for traffic operations at the end of year three.

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Upon completion of each subsequent expressway section, it wouldalso be opened for traffic operation.”

38. Section I of the report (PTR) deals with topics such asSocio-Economic Profile, Highway Planning Issues, RecommendedScheme, Traffic Data and Analysis, Engineering Design, Bridges, InitialEnvironmental Examination, Cost Estimate, Privatisation of HighwayProjects, Appendix-I and Appendix-II. Under topic “RecommendedScheme”, the details of the Expressway, Underpasses/Overpasses,Cattle Underpasses, Utilities Road, Interchanges, Service Areas, TollPlazas, Central Administrative Complex, Express Lighting, City CentreAccess etc. have been duly elaborated including their exact locationand other essential specifications.

39. The topic “Townships Along the Corridor” has beenseparately detailed in Section-II. The relevant portion of the PTR dealingwith “Townships” reads thus: - “1. TOWNSHIPS ALONG THE CORRIDOR

This part of the report deals with the analysis of developingseven urban townships with all infrastructure and civicfacilities along the Bangalore- Mysore expressway.

Historically, the chieftain from Magadi, Kempegowda builtBangalore during 1597 and established a few towers on theboundary limits of Bangalore. The Mughals conquered it in 1687.It is said, it was sold to Chikka Devaraya in 1690 for Rupeesthree lakhs. It was Hyder Ali who got it as a personal jagir in1759. However in 1791, Tippu Sultan was given suzerainty overit after the Treaty of Srirangapatnam. After the fall of Tippu atSrirangapatnam, the same was returned to the Hindu Royalty in1799. A military cantonment of the British was established in1809 and Bangalore later on flourished as an administrative centresince 1830. It grew spectacularly after 1951.

1.3. The population of Bangalore was 12 lakhs during 1961 andit rose to 29 lakhs as per 1981 census. In 1981, it was the fifthmost populated city in the country and accounted for 25% of thepopulation of the state – Hubli-Dharwad, the next urban centreaccounting for a fifth of Bangalore size population.

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1.4. Compared to Karnataka’s growth in population during1981-91 which was 20.09%, the growth of population ofBangalore urban area was 59.08% during 1971-81 and 38.00%in 1981-91 and that of rural Bangalore was 24.30% during1971-81 and 14.70% in 1981-91.

1.5. As against this, Mysore with a population of 6.52 lakhs in1991 recorded a growth of 24.97% in 1971-81 and 21.58% in1981-91 at the district level. Various agencies estimated theexpected population of Bangalore during 2001 as 70 lakhs (TownPlanning Department) and 82 lakhs (anticipated by BangaloreWater supply and sewage Board). The ComprehensiveDevelopment Plan (CDP) 1984 for 2001 of BangaloreDevelopment Authority (BDA) projected a population of 70.00lakhs for Bangalore in 2001. The revised (1995) CDP for 2011AD proposed land uses for 56,465 hac. as against 43,928 hac.During 2001. This is in addition to the green belt, surroundingthe conurbation area.

16. The rapid increase in population necessitated a thinkingprocess to contain Bangalore to a reasonable size, assureit the desired level of civic and social services to keep itspremier status and direct additional growth to alternateplaces in a desirable manner. The acute problems ofBangalore are increasing level of pollution, pressure onland, acute shortage of water, inadequate sewaging systemand lack of proper sewage treatment and disposalarrangements, shortage of power, shortage of residentialaccommodation,inefficient telecommunication system,paucity of land space within green belt etc.

1.7. Bangalore, located at an elevation of +900m is suffering forwant of a good transport system, inter and intracity wise. Areliable power supply system to assure 1000mw was planned asa part of Karnataka power requirement. Tourist and amusementareas like T.G. Halli Reservoir, Hesarghatta Tank, BannerghataNational Park and Ramohalli Banyan Tree and Kanva Reservoirwere considered, but no active steps taken. The region lacks thefacility of good environment parks or amusement places.

The above and many other factors indicate that there is aneed for a policy to establish urban growth centers, withdependable infrastructure and accessibility to themetropolitan area along a fast corridor. Examples of thisnature are many in Switzerland, Norway, Mourville away fromParis in France are just a few instances of polycentredsettlements working as countermagnets, with a strong supportbase. The townships along the proposed Bangalore MysoreExpressway would go a long way in reducing pressure onBangalore. These settlements should, however, take intoaccount the growth pressure likely to be faced by themafter a decade of their completion. Creation of newsettlements is likely to bring in better results comparedto improvements and modification or creating new urbanextensions to metropolitan Bangalore as these actionsneed to necessarily serve under severe constraints on theother facilities like land, transport and power. Usewise forany unit of expenditure, the efficacy of modifications will becomparatively less. The environment and purity will only reduce.But in the case of new settlements, it will be easier to achievebetter results. It is, however, necessary to ensure that the existingstructures and balances in the rural sector are not thoughtlesslydisturbed; the emphasis in the new townships should be forachieving a high degree of green and low rise and lowdensity development.

A very important aspect is to give orientation towards thedirection in which new townships should grow. Referring toBangalore, good transport facilities towards Mysore are in theoffing which is a good boost for industrial and tourism growth.Mysore having an excellent source of shelter, tourism, industry,and raw materials, will serve very well the purpose of animportant supporting city (as the other end of a corridor ofdevelopment with other facilities and settlements dispersedjudiciously in between). Secondly, there are three mediumirrigation projects near about Bangalore viz the ManchanabaleProject, the lggalur project and the Arobele project, which canyield some water for supporting the growth. Rivers ArakavatiShimsa and Cauveri are on the corridor towards Mysore. TheGround Water department ascertained that there is good ground

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water development possibility for making about 33,000 additionalwell structures in Bangalore; 41,600 in Mysore and 42,100 inMandya. At least it indicates good ground water condition atdepths ranging 50m and more. By far the climatic and physicalconditions in this area are very congenial, compared to some otherareas in Karnataka. Therefore, it is most desirable to developthe belt as a corridor with settlements of high order ofinfrastructure well connected to the two metropolitan towns ofBangalore and Mysore.

Selection of Townships

1.10 Estimates indicate that the population of Bangalore will reach85 lakhs by 2011. There is an absolute need to restrict thepopulation to 70 lakhs by 2011. Even for achieving this objective,a number of measures to prepare Bangalore for sustaining aholding capacity of 70 lakhs will be required to be taken. Theproposal now is an effort to absorb almost 7 to 8 lakhs populationin the proposed corridor by developing seven townships (Mandya,Maddur, Ramanagram and Chanpatna shall be geared to absorbabout 2.0 lakhs additional population). The balance of 6 lakhpopulation has to be diverted across towards othercountermagnets and some administrative actions taken.

1.10.2 The selection of the seven townships and the needfor land has been done by physical examination of thepresent ground level conditions and development. Since anexpressway is being considered, a comprehensive view has beentaken about the availability of access to the corridor from theproposed townships each of which will be given an access tothe expressway.

1.10.3 Availability of water is an important consideration. Thereare no water sources of perennial nature, barring Cauveri whichcan be tapped for water supply to these townships. Ground waterconditions do indicate the presence of water at depths 40 to 50mbetween the rocks, but this is not an adequate source to sustainthe nature and level of development. Even the National WaterPolicy hints that drinking water for urban areas shall be met fromsurface flows, and only in rural areas, extensive dependence ontube wells may be considered. Heavy exploitation of subsoil watercan reduce the growth of greens. The idea of bringing water from

Cauveri along the expressway and supplying to the townships isthe only solution. Some water to be tapped trough tube wells andwater ponding by digging lakes can be only auxiliary measures.

1.10.4. Efforts are being made to avoid acquisition of lands whichare under good cultivation. Such lands which are good foragriculture and gardens are being almost avoided. Forest land isalso being avoided. Since it is necessary to have one expanse ofland of about 2,000 acres and more for about 1.0 lakh population(or more), search was made for presence of continuous plots ofland, as far as possible, forming a regular geometric figure withoutwedges projecting in or out. However in a few cases, a fewvillages and major district roads exist on ground in the midst ofsuch expansive areas. In such cases, the villages and road areto be integrated suitably with other planning, and some measureswill have to be taken to integrate them with main area. This willbe a right step to encourage the rural settlements adopting newnorms of a system and not distort, or feel disparities.

1.11. The area on the corridor towards Maddur and Mandya arehighly agricultural in character with existing irrigation facilities.It is for this reason that more townships are located in thefirst half of the corridor nearer to Bangalore and only 2out of seven in the other half of corridor nearer Mysore.

Fig. 3.1 (Section-I) shows the location of the townships andthe areas and the location of expressway. Where thetownship area is away from the expressway, a dedicated roadwith good specification is proposed to be constructed up to theexpressway as a part of the township development. They willbe served through the Expressway interchanges.

To avoid speculation, no survey of land has been done. Help ofTopo maps has been taken to know ground conditions. Groundconditions are further examined by limited walking along. Thereare some changes on ground since the last survey work was donefor preparing topo maps. Land use maps of each townshiphave been prepared to indicate the suggested breakup ofareas. After the land is finally selected and ground surveydone to some extent of precision (the existing maps areto a scale of 1:50,000), the land uses firmed up and density AB

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830SUPREME COURT REPORTS

[2020] 8 S.C.R.

Acan be finally decided with zoning and other developmentcomponents like FAR, Height, Set Backs, ArchitecturalControl etc.

1.14. The present comprehensive development plan for Bangaloreshows the following land use pattern. In addition, there is a greenbelt on the periphery B

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1.15. Some townshipsare exclusively designed to promoteindustry and one for Environment and amusement. Theland use pattern at city level in Bangalore cannot beextended for townships outside. The land use pattern in theother township areas will generally be as below.

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Subsequent chapters describe the concept of townshiplayouts infrastructural services and the manner in whichthey will be designed and provided.”

The Conceptual Aspects of Townships are separately discussedas second item in Section-II, which reads thus: - “2. CONCEPTUAL ASPECTS OF TOWNSHIPS

2.1 Problems of the urban community multiply with the increasingcomplexity of our age. The physical expansion of cities is runningout of control, and the economic and social consequencescommand the attention of civic leadership in Government,business and industry. The Practical limitation of the pyramidalform of the city has forced decentralization. When the congestionat the core becomes unbearable, the inner layers slip out. Thepresent exercise is to contain this phenomenon by planning theinfrastructural corridor having seven new townships to cater tothe varying and complex needs of the region, along the proposedexpressway connecting Bangalore and Mysore. These areindicated on the index map.

The new townships would be of relatively small sizes,designed to encourage pedestrians circulation and maintainclose proximity to surrounding open space. The plansindicate an abundance of space flowing throughout the community.The special endeavour has been made to preserve naturalwooded areas or unusual topographical characteristics in all thetowns. The existing villages are assimilated in the overall schemesof development as they are existing on all sites. The human scalepredominates in the total planning of all the new town ships whichare planned as self-contained communities seeking a balancebetween sources of employment, business centres, centre forfashion technology, medical and other research centres etc. aresuitably located in various townships which are essentially organicelements in a broad programme of decentralization of thecongested urban centres of Bangalore and Mysore.

In all townships, the floor-space required to be occupiedby people and ground space for circulation has beencarefully worked out. The emerging pattern is a balancebetween these elements. The high rise ‘Land Mark’buildings, for all towns have been thought of essentiallyin the commercial sectors, to dominate the skyline andalso to be seen from the Expressway.

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The grid pattern is followed for roads with circles and radials insome cases. Three types of principal rights of way have beenfollowed, the respective width being 33.0, 24.5 m and 18.00 m.

Each neighbourhood in the new townships has a small subcentre for shopping, a primary school, and social facilities.The secondary schools serve several neighbourhoods.

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Fig. 3.1 indicates the general locations of the townshipsalong the proposed Expressway and existingBangalore-Mysore State Highway No.17. The existingvillages and towns are also indicated. The distance in km isshown on the drawing along the alignment of proposedExpressway. There are five townships with in the distance of 40kms from Bangalore and two townships in the vicinity of Mysoreon either side of the Kaveri River.

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Township No.1 assumes great significance due to its proximityto Bangalore. It is situated on either side of the Expressway onthe fringes of the Outer Ring Road of Bangalore city. The natureof this township may be roughly identified as a corporatetownship providing facilities for Research and Development,Business Centre, Hotels, Golf Course, Residential, and relatedinfrastructure. Some facilities from the core of the city could beshifted here in a planned and organised manner.

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The entrance and exit to the township is through an interchangeand toll-booths. This is located on the west of the town. The townis provided with a Green Belt on its periphery. Due considerationhas been given to the ecological and environmental factors. TheFtotal area of the township is 2792 acres.

The ‘Land Mark’ buildings are proposed at appropriate locations.

The city is designed as a self-contained entity with all facilities,including a hospital and a college with appropriate number ofprimary schools, high schools and other town requirements.

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2.8 Township No. 2 is located about 10 kms from the Bangaloreconurbation boundary. The site is proposed to be developed as acommercial township, contributing to relieve the pressures ofurbanization.

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Covering an area of 1868 acres, the township is situated about7-8 kms off the Bangalore-Mysore Expressway and 4 kms fromthe existing railway line and state highway No.17 to the southof the township.

The existing site features are more or less suitably modifiedaccording to the layout with an exception of a few rirulets, naturalwater bodies and hillocks and rocky outcrops scattered withinthe site boundary. The proposed township site is bounded by tworoads leading to Bangalore from Nejjala and Bidadi towns. Anumber of existing settlements are present all around the siteboundary especially towards the south while two settlements fallwithin the site boundary.

The basic design of this township revolves around the centralcore. This central core is the major commercial, business, servicesand institutional hub of the town. The residential area is distributedall around this central core.

The multifunctional central core offers varied services, right froma commercial complex to hotel, bus terminal municipal offices,institutional and office use, hospital, and college, all located within2 kms from the farthest point in the township and hence confirmsto the standards of human scale, facilitating use of non motorisedform of transport.

The road layout is more or less a grid pattern. Each residentialpocket is to be developed as a self-contained neighbourhood withfacilities like school, playground, park, dispensary, convenientshopping etc.

The environmentally friendly nature of the township is emphasizedby developing the township for non- motorised transport system,encompassing the existing settlements within the overall structureof the township and provision of a green buffer all along the siteboundary besides the provision of community parks and trees liningthe major roads of the township.

Last but not the least is the link to the proposed Expresswaywhich will be provided through an interchange on the expressway.

2.9 Township No. 3xxxxxxxxx

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A2.10. Town ship No. 4 is about 36-37 kms. west of Bangalorealong the proposed Expressway. The site has an area of about1660 acres and is meant for the industrial land use. It is intendedto accommodate different types of plots for the various industries.A green buffer is maintained all round the township and theenvironmental considerations shall be well looked after. The siteBhas an approach from the Expressway. The necessary provisionhas also been maintained for the public and semi-public and thegreen areas. The town shall be designed on the lines of a modernIndustrial township will all necessary trapping.

2.11. Township No. 5 is north of township no.4. This townshipCis located near the existing Bangalore-Mysore State HighwayNo.17 and also near the existing Railway line.

The site of this township in on the north of the existing village ofArchahakra Halli, which is along the State Highway No.17 fromwhere an existing roadway leads to the hinterlands. This roadDpasses through the entire length of the proposed township. Thisproposed township has a mix of cultural and residential land useand it occupies an area of about 2700 acres. The town shall havea medical centre with a full-fledged hospital with centres for thestudy of various types of medical systems like Allopathy,EAyurveda etc. it will also have a centre for religious studies withsubcentres for all world religion and will accommodate specialcentre for the Vedic studies. Housing also forms the majorcomponent of this township.

Township No. 6 xxxxxxxxx

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Township No. 7 is in the near vicinity of Mysore City, about 3km on its outskirts and about 1 km on the north of Kaveri River.It occupies an area of 4010 acres. The township is designed forEcotourism and all facilities have been provided to meet thistarget.

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This is the township of contrasts. It will have an AmusementPark, Golf Course and hotels with some residentialneighbourhoods. A town centre with commercial, public buildingsand other necessary infrastructure facilities is provided.

All these townships together provide for necessary infrastructureHsupport required in this region for perspective requirements.

The townships will be developed in line with modern town planningpractices. Special consideration should be shown while detailingopen spaces parks and greens. Special attention is to be givento Agricultural Zone and the Agriculture University where useslike agriculture, horticulture farming, chilling centers, farm housesand accessory buildings will be planned.

Since the detailed layout and architectural control & draftingzoning applicable norms is not within the scope of this report,this is not attempted; also it is an exclusive work, which has tobe handled separately. However there are certain points whichhave links with land use planning and which need to be consideredin development planning. They are listed below.

1. Road hierarchy has to be planned to avoid main trafficin a subcity going through residential areas.

2. Wind Rose is to be kept in view while treating high risebuildings vs. low rise buildings.

3. Continuous green may be attempted to allow minimumpublic use of motorised transport – encourage cycle orpedestrian movement.

4. All high rise buildings to be on wide roads only.

5. Drainage and greens to be integrated

6. Low rise buildings to be attempted to harmonize withenvironment

7. Energy savings should be an important criterion whiledetailing architectural plans.

8. Local zoning to ensure a low noise environment forschools, hospitals, and residences.”

40. The project report (PTR) was deliberated and eventuallytranslated into a formal decision of the State with some modificationsand changes to the recommendations made therein. Finally, theFramework Agreement (FWA) was executed between the State andNICE. Even this agreement at the outset - in the recitals, unambiguouslyrefers to the PTR and the necessity to implement the Project as finally A

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Aapproved by the Government in larger public interest. The relevantrecitals read thus: - “W I T N E S S E T H

WHEREAS, Bangalore and Mysore are the fastest developingcities in the State of Karnataka and are leading centres forindustry, trade and commerce, simultaneously attracting touristsfrom all over the world; B

WHEREAS, the traffic intensity between Bangalore and Mysorehas been very high and will continue to increase with furthergrowth of industry, trade, commerce and tourism in such citiesand in the State of Karnataka; C

WHEREAS, in order to ensure smooth and accident- free trafficbetween Bangalore and Mysore, an expressway between thetwo cities is proposed; DWHEREAS, in light of the ever-increasing urbanisationproblems and in an effort to achieve the orderlydevelopment of Bangalore as a major industrialcommercial and residential city. GOK has proposed topromote an integrated infrastructure corridor situatedbetween Bangalore and Mysore, Karnataka, consisting ofEresidential, industrial and commercial facilities such as amongother things, self- sustaining townships, expressways, utilities andamenities, including power plants, industrial plants, watertreatment plants and other infrastructural developments, as morespecifically described in the Infrastructure CorridorFProject Technical Report, dated August 1995, as amended(collectively, the “Infrastructure Corridor”); D

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WHEREAS, GOK has been consistently attempting to attract onagreeable terms a consortium to industrially and commerciallydevelop the Infrastructure Corridor in accordance with the visionof GOK; G

WHEREAS, the Kalyani Group, SAB Engineering andConstruction Inc., and Vanasse Hangen Brustlin Inc. (collectively,the “Consortium”) and GOK entered into a Memorandum ofUnderstanding dated 20 February, 1995 relating to the furtherconsideration of the industrial and commercial development of H

the Infrastructure Corridor by the Consortium (the “Memorandumof Understanding”); WHEREAS, GOK, upon review, assessment and considerationof the Infrastructure Corridor Project Technical Report datedAugust – 1995 prepared by the Consortium, as amended by theGovernment Order (defined below) and the Annexure thereto(the “Infrastructure Corridor Project Technical Report”) issatisfied that the interests of the State of Karnataka would bebest served if the Infrastructure Corridor is industrially andcommercially developed as contemplated by the InfrastructureCorridor Project Technical Report inasmuch as such developmentwould promote industrial, commercial and economic growth inthe State of Karnataka generally and in Bangalore and Mysoreand the Infrastructure Corridor specifically create new jobopportunities for the residents in and around the InfrastructureCorridor, promote tourism, decongest traffic in Bangalore andMysore, ensure smooth and safer traffic between Bangalore andMysore and provide a world-class expressway between the twocities; WHEREAS, GOK issued Order No. PWD 32 CSR 95 dated20 November 1995 (the “Government Order”) authorizing thedevelopment of the Infrastructure Corridor by the Consortiumas contemplated by the Infrastructure Corridor Project TechnicalReport; WHEREAS, GOK has consented to and acknowledged theexercise by the Company of the Consortium’s rights under theMemorandum of Understanding and the Government Orderpursuant to a Consent and Acknowledgement Agreement dated9[th] September, 1996 among the GOK and the members of theConsortium; WHEREAS, the Company has agreed to industrially andcommercially develop the Infrastructure Corridor andfinance, own and/or operate such developments in themanner contemplated by this Agreement; WHEREAS, under the above recited premises, GOK hasundertaken to extend to and provide the Company with thenecessary governmental actions, cooperation and assistance and AB

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Agrant the Company rights required for the industrial andcommercial development of the Infrastructure Corridor, includingthe services and businesses contemplated in Schedule 4, whichGOK believes is in the best interests of the State of Karnatakaand its citizens because, among other things, it will (i) promoteindustrial, commercial and economic growth in the InfrastructureBCorridor, the cities of Bangalore and Mysore and the State ofKarnataka generally, (ii) create new jobs, (iii) provide the Stateof Karnataka a much needed world-class expressway betweenBangalore and Mysore, (iv) create a counter-magnet to Bangalorecity and (v) help in promotion and development of world-classCtourism; and WHEREAS, the Company will assign its rights under thisAgreement to the various Project Companies, each of which willdevelop, construct and finance part of the Infrastructure CorridorProject in a manner to be determined by the Company inDaccordance with this Agreement; NOW, THEREFORE, in consideration of the mutual premises,covenants and promises herein contained, the Company andGOK do hereby agree as follows:”

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Suffice it to observe that the underlying concern of the State wasabout the increasing urbanisation problems and to assuage the hardshipcaused on that account to the general public. The Project, as envisagedand finalised was intended to achieve the objective of orderlydevelopment of Bangalore as a major industrial, commercial andFresidential city. The Integrated Infrastructure Corridor (the Project) wasto consist of residential, industrial and commercial facilities, amongstother things, self- sustaining townships, expressways, utilities andamenities including power plants, industrial plants, water treatment plantsand other infrastructural developments, as envisaged in the PTR, asGamended. The objective of the Project was also to ensure smooth andaccident-free traffic between Bangalore and Mysore; to create newjob opportunities for the residents in and around the InfrastructureCorridor; promote tourism; decongest traffic etc.

41. Notably, the PTR had suggested creation of seven Townships,but in the final decision, as noted in the FWA, only five Townships haveH

been approved as part of the Project being Townships 1, 2, 4, 5 and 7.It was a conscious decision taken by the State to have limited numberof self-sustaining Townships in the entire belt, so as to fulfil the Nationaland State policy goals of population dispersion and to ensure properfunctionality in the region. In other words, the FWA predicates that theProject Proponents will be allowed to develop only five Townships atthe demarcated locations and which are self-sustaining with sufficientinfrastructure for ensuring smooth and accident-free traffic onBangalore-Mysore Expressway stretched to about 140 kilometres.Keeping that objective in mind, the stipulations and specifications in theFWA read with the relevant portion of the PTR will have to beexamined. There is no room for giving liberal meaning to the stipulationsand specifications which would inevitably defeat and frustrate theunderlying objective of the Project - of orderly development of BangaloreCity and to address the ever-increasing urbanisation problems.

42. Be it noted that the FWA executed between the State andthe Project Proponents delineates the nature of contract and the scopeof work to be carried out by the Project Proponents, as per the termsand conditions specified therein. It is an integrated project not only forconstruction and management of Expressway, but also creation ofTownships at the demarcated location(s) as per the specifications andarea earmarked therefor. The “Infrastructure Corridor” has been definedas having the same meaning as set forth in the recital (4[th] WHEREASclause) of the FWA. It means, collectively, the Land, the Toll Road,the Townships, the Power Plants, the Telecommunication Facilities,Water Supply Facilities and the Waste Water Treatment Facilities andother developments, and the acquisition, design, construction,engineering, financing and implementation thereof, as referred to in thePTR. “Townships” is, therefore, an identified and well-definedcomponent of the “Infrastructure Corridor Project”. It has been definedas follows: - “”Townships” means the townships described as Townships 1,2, 4, 5 and 7 in the Infrastructure Corridor Project TechnicalReport which will be developed by the Company and/or theProject Companies for the industrial and commercial growth andother development of the Infrastructure Corridor, and theprovision of roads, supply of water and electricity, street lighting,sewage, conservancy and such other conveniences and socio- ABC

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Aeconomic infrastructure, inter alia comprising of housing schools,hospitals, shopping complexes, parks and open spaces as set forthin Schedule 4 attached hereto.”

From this definition, it is amply clear that only five Townships(each having different purpose – such as Corporate Centre, IndustrialBCentre, Ecotourism Centre, Heritage Centre and Commercial Centre)have been envisaged in the Infrastructure Corridor Project. Thelocation(s) of these five Townships have been identified in the PTR.Besides the location(s), the extent of area to be utilised for creation ofeach Township has also been specified in the PTR, which appliesproprio vigore to the expression “Townships” in the FWA. The termC“Townships”, no doubt, includes housing, but a standalone group housingscheme cannot be regarded as a Township as such. The Townshipswould, however, comprise of not only housing, but also schools, hospitals,shopping complexes, parks and open spaces, as noted in Schedule 4,which reads thus: - D“SCHEDULE 4

-BangaloreMysore Infrastructure Corridor Possible Business and Services

1. Power

EGeneration & TransmissionDistribution & Metering

2. WaterPurification & TransmissionDistributionFReservoirs

3. SewageCollection & TreatmentRecycling & Selling the waterSelling by product G

4. Tele-communicationTransmission & SwitchingDistribution in township

5. Expressway toll facilities

H6. Restaurants and Gas Pumps

7. Interchange Plazas

8. Hospitals

9. Schools

Primary and High Schools Colleges

10. Hotels & Motels (Townships)

11. Real Estate

- Commercial

- Industrial

- Housing

- Municipal

- Rental

12. Garbage

13. Cable TV

14. Parking Authority

15. Entertainment

- Golf Course

- Movie Theatres

- Bars

- Amusement Park

16. Marriage Mandaps

17. Temples and religious activities

18. Convention and Exhibition Centres

19. Land Management

20. Industrial Plants

21. Any other such business area which may emerge fromtime to time as permitted by law.”

Besides Schedule 4, it may be appropriate to advert to Schedule1, which deals with the total Land to be used for the InfrastructureCorridor Project. The bifurcation of the extent of land to be used for A

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Adifferent activities, such as Toll Road and Township areas township-wise,is also specified. Schedule 1 reads thus: - “SCHEDULE 1

Land

TOTALTOTALPVT(Acres)TOTAL

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The figures noted above are approximates.”

To put it differently, the Project Proponents are obliged toconstruct the five Townships at the demarcated location(s) only and toDthe extent of land specified therefor. Any other proposal of the ProjectProponents would be nothing short of deviation from the FWA inparticular. It is not necessary for us to dilate on the essentialspecifications and components to constitute a Township. Suffice it toobserve that the Project Proponents are obliged to construct housingin the area demarcated for Townships and ensure that the otherEsocio-economic infrastructure components such as schools, hospitals,shopping complexes, parks and open spaces etc. are also provided forwithin the Townships. The construction of the essential componentsincluding housing, as expressly provided in the FWA, must also complywith the municipal laws governing such constructions. For, Schedule 2of the FWA reads as follows:-F

“SCHEDULE 2

Approvals

The Company shall have received the required permissions,approval, sanctions and/or licences under the following acts andGrules of GOI and GOK:

1. Environment (Protection) Act, 1986 – Section 3(1) andSection 3(2)(v).

2. Environment (Protection) Rules, 1986 – Rule 5(3)(a); H

3. Water (Prevention and Control of Pollution) Act, 1974– Section 25.

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4. Air (Prevention and Control of Pollution) Act, 1981-Section 21.

5. Clearance and confirmation from GOK that the Landdoes not contain reserve forest under the Forest(Conservation) Act, 1980 – Section 44 and Section 28.

B

6. Exemption under Section 20 of the Urban Land (Ceilingand Regulation) Act, 1976 for holding land in the sitefalling within the Urban Agglomerations.

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7. Declaration by GOK under the appropriate Act andformation of Greenbelt.

8. Karnataka Stamp Act, 1957 – Section 9 in respect ofstamp duty payable on the amounts secured any bymortgage deeds executed in connection with theInfrastructure Corridor Project.

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9. Electricity (Supply) Act, 1948.

10. Consent of the Telegraph Authority under Section 4 ofthe Indian Telegraph Act, 1985 and Part V of the IndianTelegraph Rules for the provision of telecommunicationEfacilities.

11. Permissions approvals under the Foreign ExchangeRegulation Act, 1973 for, Offshore borrowings and debt servicing.

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Appointment of and payment to the foreigncontractors.

Purchase or lease of equipment supplies fromabroad.

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Appointment of and payment to non- resident/foreignconsultants, advisors and experts.

Consent to remit dividends to non-residentshareholders.

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Consent for remittance to non-resident directors.

Permission for creation of securities in favour ofnon-resident lenders.

12. Exemption under Section 9 of Karnataka Stamp Act forpurchase of the Land.

B

13. Rural Development and Panchayat Raj.

14. Applicable rules of the Irrigation Department of GOK.

15. Town & Country Planning Act, 1961.

16. Karnataka Land Revenue Act and Rules, 1964 and1965.”

C

43. Indeed, while planning for the development of Townships, itis open to the Project Proponents to deviate from the PTR within thedefined norms to the extent such deviation is required to enable theparties to realise the full benefits intended from development of theDProject. But, that is required to be done only with prior written approvalof the State. This is made amply clear by Article 7.1 of the FWA itself.Article 7 reads thus: - “ARTICLE 7. TOWNSHIPS.

E7.1 Development. Each of GOK and the Company acknowledgesand agrees that the industrial and commercial development ofthe Townships by the Company is an integral part of theInfrastructure Corridor Project and its goal of increasing andpromoting industry, trade, commerce and tourism in Bangalore,Mysore and the Infrastructure Corridor. Accordingly, GOK willFassist the Company in the manner contemplated herein so thatthe Company may develop the Townships in the mannerdescribed in the Infrastructure Corridor Project Technical Reportand as authorised in the Government Order. The Company maydeviate from the Infrastructure Corridor Project TechnicalGReport in the development of the Townships within theapplicable law to the extent such deviation is required toenable the Parties to realize the full benefits intended fromdevelopment of the Infrastructure Corridor Project andwith prior written approval of GOK which approval shallnot be unreasonably withheld by GOK.

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7.2 Operation and Maintenance. GOK and the Company agreethat the Company shall have the right to operate the Townships.The Company and GOK shall enter into an agreement negotiatedin good faith by each for the operation and maintenance and inaccordance with applicable laws. Notwithstanding theprevious sentence on the first anniversary of the TownshipCompletion Date, the Company shall transfer to GOK theassets relating to the Townships set forth in Schedule 5and the right of way over the Land that may be requiredwith respect to such assets, but not including anyownership interest in any part of the Land (the“Transferred Township Assets”) and shall assign theadministration of such Townships to GOK or a GOKGovernmental Instrumentality designated by GOK, GOKshall pay to the Company the sum of Rs.1 for suchTransferred Township Assets and shall assume allobligations relating thereto and to the administration of theTownships. GOK shall contract with the Company to provideto the Townships after such assumption the utilities and amenitiestheretofore provided by the Company or its Affiliates or to bethereafter provided for which the Company shall receivereasonable compensation agreed to by the Parties in good faithnegotiation. GOK will indemnify and hold harmless the Companyand its Affiliates and each of its and their respective directors,managers, officers, employees and agents from any and allexpense, loss or claim relating to the Townships (or any assetsor part thereof) and the administration, management andoperation thereof arising in respect of any date on or after thedate of such possession and assumption.

7.2.1 Deliveries Upon Transfer. Each Party shall deliver tothe other Party all documents and things necessary to effectthe transfer set forth above, including (i) the delivery by theCompany of an agreement assigning and transferringthe Transferred Township Assets, (ii) the delivery byGOK of an agreement in which GOK assumes allobligations of the Company relating to the TransferredTownship Assets and the administration, management,operation and maintenance of the Townships after thedate of such assumption and releases in full the ABC

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Company and its Affiliates from all liability relatingto the Transferred Township Assets andsuch administration, management, operation andmaintenance after such date and (iii) the delivery byGOK to the Company of Rs.1.

7.2.2 Maintenance. In connection with the transfercontemplated by this Paragraph 7.2, GOK will offer to theCompany the right to provide all utilities and amenities to theTownships on terms mutually agreed upon by the Parties. Thefailure of the Parties to mutually agree to the provision ofany such utilities or amenities will entitle GOK to contract theprovision of such utilities or amenities with a third party, GOKor a GOK Governmental Instrumentality on terms no morefavourable then those offered by GOK to the Company.

7.3 Construction Responsibilities. The Company shall assure thatits construction, development and maintenance obligations inrelation to each Township shall be performed in accordance withthe provisions of this Agreement.

7.4. Completion of the Townships. Within 30 days of thecompletion of the full industrial, commercial and otherdevelopment, including the services and businessescontemplated in Schedule 4, of the Townships (includingsale by the Company of those parts of the Townshipsintended to be sold as part of the development of theTownships), the Company shall deliver a notice in writingto GOK with regard to such completion (The “TownshipCompletion Notice”). The Company shall specify in suchTownship Completion Notice the date on which full developmentof the Townships was completed (the “Township CompletionDate”). The parties understand that the Company will developthe Infrastructure Corridor Project in a coordinated manner inaccordance with the terms of this Agreement and that work atanytime may be conducted on all or any part of the Land withrespect to the Toll Road, the Townships, the Water SupplyFacilities, the Telecommunication Facilities, the Power Plants andthe utilities and other supports ancillary thereto in furtherance ofthe Infrastructure Corridor Project. The basic infrastructurefor the Townships will be substantially completed (i.e.

minimal reasonable facilities that enable some people tobe able to live in the Townships shall have beencompleted) within twelve (12) years from the date of theToll Road Completion Notice. The Township CompletionDate in no event shall be later than the date which is thirty(30) years from the date the Toll Road Completion Noticeas or should or would have been delivered pursuant to theprovisions of Paragraph 6.6.2 and clause (iii) of Paragraph6.6.3.

7.5 Warranties. The Company warrants to GOK that:

7.5.1 The Company will industrially and commercially developthe townships so as to promote the industry, trade, commerceand tourism in such Townships as intended by theInfrastructure Corridor Project Technical Report; 7.5.2 all the skill and care to be expected of a professionallyqualified and competent designer experienced in work ofsimilar nature and scope as that required in connection withthe development of the Townships will be exercised in thedesign of the Townships; 7.5.3 the developments in the Townships will, when completed,comply in all material respects with all applicable Laws ofIndia; 7.5.4 the Townships will be developed using proven up-to-dategood practices which are consistent with applicable Laws ofIndia; 7.5.5 no goods or materials generally known to be deleteriousor otherwise not in accordance with good engineering practicewill be specified or selected by the Company or any oneacting on its behalf and no goods or materials which, aftertheir specification or selection by or on behalf of the Companybut before being incorporated into the developments of theTownships, become generally known to be deleterious orotherwise not in accordance with good engineering practice,will be incorporated into the development of the Townships;and

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7.5.6 it will obtain all necessary approvals from an appropriateGOKGovernmental Instrumentality with regard to theTechnical Requirements for the Townships.

7.6 Execution of Documentation. GOK and the Company shallexecute such agreements, Certificates, instruments and otherBdocumentation in order to give effect to the purposes of thisArticle 7.”

(emphasis supplied)

44. Article 3 deals with the obligations of the State forimplementation of the Project referred to in the FWA. Much emphasishas been placed on Article 3.2.3, which postulates that the State willnot restrict the use of the land in any way and the Project Proponentsshall have full freedom and discretion to industrially and commerciallydevelop and use the land. Article 3 reads thus: - C

“ARTICLE 3. OBLIGATIONS OF GOKD

GOK covenants, agrees and undertakes that it shall perform, andshall cause its Governmental Instrumentalities to perform, eachof the following obligations:

3.1. Approvals.

3.1.1 GOK shall use its best efforts to grant, and cause itsGovernmental Instrumentalities, GOI and GOI governmentalInstrumentalities to grant, all Approvals required in connectionwith the Infrastructure Corridor Project, including all Approvalslisted on Schedule 2.

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3.1.2 GOK shall use its best efforts to dispose of, resist andresolve any obstacles or impediments created or placed by anyPerson to thwart or challenge any part of the InfrastructureCorridor Project.

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3.2 LandG

3.2.1 GOK shall use its best efforts to, and cause itsGovernmental Instrumentalities to, promulgate, facilitate, initiate,advocate and/or amend to the full extent possible under the Lawsof India any and all enactments, acts and legislation necessaryor desirable to enable GOK or any GOK Governmental H

Instrumentality to obtain, procure and/or transfer the Land to theCompany for the purposes set forth in this Agreement.

3.2.2. GOK shall authorise and take whatever other action thatmay be necessary for the use of any part of the Land and/orany other tract of land reasonably requested by the Companyas a waste dump/disposal site for the waste generated by anyof the Components of the Infrastructure Corridor Project duringconstruction and development of the Infrastructure CorridorProject, all in accordance with applicable law.

3.2.3 GOK covenants that it will not restrict the use of theLand in any way and that the Company shall have fullfreedom and discretion to industrially and commerciallydevelop and use the Land, as generally contemplated bythis Agreement except that GOK shall zone and rezone,and shall cause to be zoned and rezoned, all Land in amanner consistent with its intended use in theInfrastructure Corridor Project as contemplated by thisAgreement or as reasonably requested by the Company,all in accordance with applicable law.

3.2.4 GOK covenants that upon transfer of the Land ascontemplated hereby, the Company will have good, valid, clearand marketable title to the Land and all buildings, structures andother improvements thereon, free of any Encumbrances, GOKwill indemnify and hold harmless and the Company and itsAffiliates and their respective directors, managers, officers,employees and agents from any and all expenses, loses or claimsrelating to the use or ownership of such Land by the Companyor any project Company in the manner contemplated herein.

3.2.5 Company shall request and GOK shall use its best effortsto cause GOK Instrumentalities to, remove in the most expeditiousmanner possible any person that trespasses or encroaches on anypart of the Land or any right of the Company hereunder and shalltake all other action reasonably requested by the Company topermit the Company to fully enjoy its rights thereon or theretoand to develop the Land in the manner contemplated in thisAgreement.

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A3.2.6 GOK covenants that it shall provide all assistancereasonably requested by the Company with respect to clearanceand preparation of the Land for development in the mannercontemplated herein.

.....”

B

Considering the fact that the State is obliged to facilitate theProject Proponents to deviate from the PTR specifications adopted inthe FWA for the development of Townships, that does not mean thatthe Project Proponents will set up housing complex at location(s) otherCthan those demarcated for five Townships including not providing forother components of Townships in the proposal or limit the proposalonly to one component, such as housing and excluding the othermandatory components - schools, hospitals, shopping complexes, parksand open spaces etc. Such interpretation cannot be countenanced andDif accepted, it would inevitably defeat the very purpose of the well-defined project intended to address the increasing urbanisation problemsand for orderly development of Bangalore City including smooth andaccident-free traffic between Bangalore and Mysore Expressway.

45. The next question is: whether the stipulations andEspecifications in the FWA regarding the scope of work and theapplication of both parties stood modified or altered due tosupplementary agreements dated 6.10.1999 and 31.3.2000? Even on afair reading of these agreements, we find that there is no express clausetherein which would alter the scope of work and the obligations of bothparties regarding the setting up of five self-sustaining Townships onlyFat the demarcated location(s). The supplementary agreements, however,deal with other aspects with which we are not concerned nor are thesame relevant to decide the matters in issue. Similarly, the TripartiteAgreement dated 9.8.2002 between the State, NICE and NECE alsodoes not alter or modify the stipulations and specifications for settingGup of five self-sustaining Townships only at the demarcated locations.The High Court has placed emphasis on clause 1.1.3 of the TripartiteAgreement, which reads thus: - “1.1.3 Stage 1 of the Infrastructure Corridor shall mean (a) Toll road (Section -A)

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(b) Acquisition of the land and such rights, title and intereststherein as may be necessary for the above-mentionedroads and development and sale of land.

(c) Basic development and sale of land, including that at ten(10) interchanges and Township-1"

We fail to understand as to how this clause can be construed tomean that the original stipulations and specifications regarding the fivedesignated Townships in the FWA stood modified or altered in anymanner. This clause only deals with the meaning of “Stage 1 of theInfrastructure Corridor”. Indeed, clause (c) thereof refers to Township–1, but that reference is in the context of basic development and sale ofland, and by no stretch of imagination, can be construed to mean thatTownship–1 (Corporate Centre) could be set up at any other locationmuch less at intersections demarcated in the PTR. The purpose ofintersections is to provide for free flow of traffic across the area. Allthe five Townships referred to in the PTR are indisputably far awayfrom intersections. Despite that, the Project Proponents have proposedfor group housing scheme in Section A of the Project at intersections5/7 thereat on the peripheral road. This is notwithstanding the fact thateven the Tripartite Agreement does not modify the location(s) andspecifications for the Townships referred to in the PTR, which formspart of the FWA.

46. The thrust of the argument of the Project Proponents is thathousing is a permitted usage, in terms of the ODP/Master Plan. For,the area for which the proposal for group housing scheme had beensubmitted is within yellow zone/residential zone. The question is: whetherthe Project Proponents can rely solely on ODP/Master Plan, notifiedby the Planning Authority in exercise of statutory function as a PlanningAuthority (for the entire area including the Project area)? The ODP/Master Plan, no doubt, would apply and must be reckoned if any buildingproposal/plan is submitted to the Planning Authority. However, theProject Proponents are obliged to develop the Project only in the mannerprovided for in the FWA. For, the right to develop the Project bestowedon the Project Proponents flows, primarily, from the FWA and thesupplementary agreements in that regard. Unless the FWA enables theProject Proponents to set up Townships at location(s) other thanlocation(s) for five Townships demarcated in the FWA read with PTRand as standalone group housing scheme, the question of Project A

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AProponents unilaterally using the allotted land for construction of a grouphousing scheme spread over in 42 acres and 30 guntas, that too atlocation(s) other than demarcated for five Townships, cannot becountenanced. Only upon grant of prior permission by the State in thatregard, the stipulations in the FWA (about the location(s) of theTownships/group housing scheme), would stand relaxed and modifiedBand the Project Proponents would then be entitled to pursue suchproposal with the Planning Authority. The State can do so in terms ofArticle 3.2.3 and the Project Proponents can request the State in thatregard by invoking the enabling provision in Article 7.1 (both of theFWA).C

47. To put it differently, the zone specified in the ODP/MasterPlan per se is not enough to allow the Project Proponents to unilaterallyuse the land made over to them after acquisition from private landowners for the Project, for purpose and manner other than specified inthe FWA and the PTR.

D48. Much emphasis was placed on the order dated 3.11.2009passed by this Court in Contempt Petition (C) No. 144/2006 andconnected contempt petitions in Civil Appeal Nos. 3492- 3494/2005 andconnected appeals to contend that the Planning Authority and the Statewere obliged to allow the Project Proponents to complete the ProjectEand also permit them to use the land allotted to them, as per thealignment specified in the ODP/Master Plan dated 12.2.2004. The saidorder dated 3.11.2009 reads thus:- “We have heard the learned counsel for the parties on theContempt Application.FAfter hearing the learned counsel for the parties and after goingthrough the materials on record and the application for Contempt,we are of the view that pending final disposal of the Contemptproceeding, the following order may be passed: - By a final Judgment, this Court directed the State/respondentsGto implement the Bangalore-Mysore 1 Infrastructure CorridorProject. Unfortunately, the said project has not yet beenimplemented by the State/respondents. On 4th of February, 2009,when this Contempt proceeding was taken up for hearing by thisCourt, Mr. G. E. Vahanvati, learned Solicitor General of India (ashe then was) appearing for the State, stated before the CourtH

that the State Government has decided to implement theJudgment of the High Court of Karnataka, as upheld by this Court,and needs time for implementation of the decision. Unfortunately,in spite of such submission made by the learned Solicitor Generalof India (as he then was), we are informed that the project hasnot yet been implemented. While some argument was advancedby the learned counsel for the parties and the Advocate Generalof the State, who is present today in Court, who submitted beforeus that the State has already taken all steps to implement theproject and in fact, some lands have already been allotted to theapplicants. Since the learned Advocate General of the Statesubmitted that all possible steps have been taken to implementthe project and to act in compliance with the Judgment of thisCourt, we direct that the 2 State Government shall constitute aCommittee to be headed by the Chief Minister of Karnataka forthe purpose of implementation of the project in question, whichwill submit a report by 22[nd] of November, 2009 as to allotmentand possession of lands for completion of the project andsuch steps can be taken within the time that may bementioned in the report and the project shall be allowedto be completed as per the alignment specified in theOutline Development Plan dated 12th of February, 2004issued by the Bangalore Mysore Infrastructure CorridorArea Planning Authority as per the Town and CountryPlanning Act.

Let this matter be placed for further orders on 26[th] of November,2009 at 3.30 PM.”

Indisputably, these contempt petitions were in reference to theorder passed by this Court on 20.4.2006 in Civil Appeal Nos. 3492-3494/2005 and connected appeals. Those appeals were against the decisionof the High Court, which had considered two questions posed beforeit, as noted in paragraph 21 of the reported judgment in All IndiaManufacturers Organisation (supra). The same reads thus: - “21. The High Court in the impugned judgment (vide para 18)raised the following two questions for consideration in the threewrit petitions:

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“(1) Whether the FWA entered into between the Governmentof Karnataka and Nandi was a result of any fraud ormisrepresentation as alleged by J.C. Madhuswamy andothers and the State Government?

(2) Whether any excess land than what is required for theProject had been acquired by the State Government andwhether it is open to it to raise such a plea?””

B

The High Court allowed the writ petitions and directed the Stateand all its instrumentalities, including the KIADB to execute the Projectas conceived originally and to implement the FWA in its letter and spirit.CThat direction was the subject matter of assail by the State on theground that the direction amounted to mandamus to specifically performthe FWA, which is extremely complex contract. At the same time, theState had contended that the Project was vitiated by fraud,misrepresentation and mala fide. However, the latter plea was givenup before this Court as noted in paragraph 24 of the reported judgment.

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49. The fact remains that the original proceedings in the form ofwrit petitions were filed as public interest litigation before the High Court,challenging the Project in question, the stipulations in the FWA andbecause in the garb of the Project, acquisition of excess land wasresorted to by the State, which would eventually result in undueEprofiteering by Project Proponents. In our opinion, neither the judgmentrendered in appeal by this Court in All India ManufacturersOrganisation (supra) nor the observation found in the order dated3.11.2009 will be of any avail to the Project Proponents. For, the Courtwas not called upon to adjudicate the question even indirectly, as toFwhether the subject proposal for setting up of group housing schemecould be proceeded directly before the Planning Authority just becauseit is in conformity with the ODP/Master Plan and even though it isproposed at a location different than the demarcated location(s) for thefive Townships in the FWA read with the PTR. No such plea wasraised by the Project Proponents. In other words, none of the CourtGorders referred to by the Project Proponents had examined thequestions/issues involved in these appeals.

50. Admittedly, in the present case, the modified proposalsubmitted by the Project Proponents on 5.5.2012 for developing 42acres 30 guntas of land as group housing scheme, pertained to SurveyHNos. 17(P), 18, 19, 20/1, 20/3, 21/1(P), 21/2A2(P), 21/2B(P), 21/2C(P), 21/2D(P) and 21/2E(P) at village Kommagatta, Kengeri Hobli,Bangalore South Taluk (at intersection 5/7, Section A of the Project onthe peripheral road). It was not for setting up of Township as such.Neither the PTR nor the FWA envisages construction of standalonegroup housing scheme, that too at a location other than demarcatedlocation(s) for five Townships. Thus, it was a clear case of deviationfrom the stipulations and specification contained in the FWA read withthe PTR; and to relax or modify the same, prior permission of the Stateis made mandatory in terms of the Article 7.1. For that reason, thePlanning Authority had informed the Managing Director, NECE videletter dated 28.5.2012 to obtain NOC from the concerned authorities.The same reads thus: - “BANGALORE MYSORE INFRASTRUCTURECORRIDOR LOCAL AREA PLANNING AUTHORITY

OFFICE OF THE DIECTOR FOR TOWN PLANNING, P.B.NO.5257 M.S. BUILDING, GATE NO.4, DR. B.R. AMBEDKAR VEEDHI, BANGALORE 560001

No. BMICAPA/339/ProaPraPa/541/2011-12 Dated: 28.05.2012

The Managing DirectorM/s Nandi Economic Corridor Enterprises LimitedMidford House. Midford Garden,M.G. Road, Bangalore-540001.

Sir,

Sub: Regarding approval for construction of Group housing in theland measuring 53 acres 05 guntas in Sy. No.17 Part, 18, 19, 20/1, 20/3, 20/4, 21/1 part, 21/2A1 part, 21/2A2 Part, 21/2B part,21/2C Part, 21/2D part and 21/2E Part of Kommaghatta Village,Kengeri Hobli, Bangalore South Taluk.

Ref.: Your request date: NECE/05/170 dated 05.05.2012 withreference to the above subject, on verification of the proposalsubmitted in the letter at reference above, the following defectsare noticed.

1. Submit Survey sketch Prepared by the taluk Surveyorand certified by the Tahsildar showing the proposed land,existing road connection, adjacent survey numbers,Karab land.

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2. Submit No Objection Certificate from the ProjectCo-Ordinal or – BMICP, KIADB (BMICP), P.W.D.with regard to Provision for this proposal as per theFWA’ entered into between Government and NICEL.

3. Submit No Objection Certificate from KSPCB, BWSSB,BEnvironment Pollution Department and BESCOMrelating to the proposed lands.

4. Submit Detailed Project Report relating to the proposedlands.

5. Submit No objection Certificates from Fire Department,CAirport Department and BSNL relating to the proposedlands.

6. Submit on affidavit stating therein that no disputes orcases relating to the proposed lands are pending in thecourts.

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The above documents have to be submitted within 7 days ofreceipt of the above letter, failing which your representation willbe rejected and will be kept in abeyance.

Yours faithfully,Sd/-

E

Additional Director for TownAnd Country Planning andMember Secretary BMICAPABangalore.”

F

In response to the above noted communication, the NECE videletter dated 6.6.2012, wrote to the Member Secretary of the PlanningAuthority. The said letter reads thus: - “NANDI ECONOMIC CORRIDOR ENTERPRISESLIMITEDGRegistered Office: 1, Midford House, Midford Garden, Off.M.G. Road, Bangalore – 560001, INDIA

Telephone: (80) 2555 9819, 2559 5252 Fax: (80) 2555 9998Email : [REDACTED]

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Ref: NECE/06/211ADated: June 6, 2012Without Prejudice The Member Secretary,Bangalore Mysore InfrastructureCorridor Area Fanning Authority,Office of the Director of Town and Country Planning,P.B. No. 5257, Gate No.4, M.S. Building,Dr. B.R. Ambedkar Veedhi,Bangalore-560 001

B

Sir,

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Sub: Approval for Group Housing Scheme in 42-08G in Sy. Nos.17(P), 18, 19, 20/1, 20/3, 21/1(P), 21/2A1(P), 21/2A2(P), 21/2B(P), 21/2C(P), 21/2D(P) and 21/2E(P) of KommaghattaVillage, Kengeri Hobli, Bangalore South Taluk.

D

Ref.: 1) Your Letter No. BMICAPA/339/Pra.Pra/1541/2011-12dt. 28[th] May 2012

2) Our Letter No. NECE/05/170, dated 5[th] May 2012.

With reference to your above letter, we furnish the followingclarifications/documents to the queries raised by you therein:

EF

1. We are submitting an original survey sketch prepared by theTaluk Surveyor and duly attested an authenticated by theTahsildar, Bangalore South Taluk. The survey sketch clearlyshows the existing bridge, road, kharab land and the relevantsurvey numbers surrounds, the land for which your approval isnow sought.

2. Your second query requesting us to provide “No ObjectionCertificate” from the Authorities referred above would be onceagainst breach of terms of understanding of the FrameworkAgreement since it can be clearly seen from the sale deedsexecuted by the KIADB transferring title of the above surveynumbers, photocopy of which have already been submitted to you,we are, the absolute owners of the land in question without anyrestrictions/limitations on the use of the land. This is in conformitywith the FWA where under the State Government has agreed G

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that it will not restrict use of land in any manner and we shall befully entitled at our discretion to industrial and commerciallydevelop the land. We reproduce below for you ready referenceclauses 3.2.3 and 3.8.3 of the FWA which read as follows:

3.2.3 GOK, covenants that will not restrict the use of the Landin any way and that the Company shall have full freedom anddiscretion to industrially and commercially develop and use theland as generally contemplated by this Agreement except thatGOK shall come and rezone, and shall cause to be zoned andrezoned, all Land in a manner consistent with its intended usein the Infrastructure Corridor Project as contemplated by thisAgreement or as reasonably requested by the Company, allin accordance with applicable law.

3.8.3 GOK understands that each of the components of theInfrastructure Corridor Project is an integral part of theIndustrial and commercial development of the InfrastructureCorridor ma manner designed and calculated to maximize thefull industrial and commercial growth, potential and quality oflife in such corridor. Accordingly, GOK shall use its bestefforts to cause land of appropriate width from the outerboundaries of the entry and exist points (rampwaysinterchanges) of the Toll Road the outer boundaries of eachof the Townships, each as identified by the Company, not tobe rezoned for use other than for farming (such area beingcalled herein the “Greenbelt”). The appropriate width referredto in the immediately preceding sentence shall be determinedby the appropriate Local Planning Authority. In the event anarea to be included in the Greenbelt is on the date hereofalready developed, GOK shall not be required to rezone suchland for the Greenbelt, GOK acknowledges and agrees thatthe Greenbelt will protect and buffer the Toll Road and theTownships from unfettered and uncontrolled developmentwhich would cause irreparable harm to the Toll Road and theTownships and undermine the goals and purposes of theinfrastructure Corridor Project contemplated hereby and thatin the event of breach of this Paragraph 3.8.3 no adequatenamely, would exist and damages would be difficult to measureand accordingly, the Company shall be entitled to Injunctive relief for specific performance pending resolution of anyDispute involving the provisions of this Paragraph 3.8.3. Inthe event any Person attempts to use the land designated forthe Greenbelt for purposes other than farming, the Companymay in its sole discretion take any and all steps it deemsnecessary or required, including the initiation of legal actionagainst such Person, to step or prevent such unauthorized use.GOK shall support to the full extent possible under applicablelaw such efforts of the Company to stop and prevent suchunauthorized use. However, violation of the Greenbelt by thirdparties shall not constitute a GOK Event of Default.

As you are aware, FWA has been upheld by the Hon’ble HighCourt of Karnataka in its judgments dated 21.09.1998 and03.05.2005 and the Hon’ble Supreme Court in its judgment dated20.04.2006 has affirmed the judgment dated 03.05.2005 passedby the Hon’ble High Court of Karnataka.

The legal position emerging from the reading of FWA and therulings of the Hon’ble High Court of Karnataka and the Hon’bleSupreme Court of India clearly shows that our Company hasabsolute and full power and authority to develop the land,commercially and industrially, subject, however, to the ODP andthe zoning regulations. As such, the question of obtaining NoObjection Certificate (NOC) or any other form of consent fromthe State Government would not arise.

3. The NOC’s obtained from BSNL, Airport and BWSSBand the acknowledgments for having applied to KSPCB,BESCOM and Fire Force and enclosed herewith.

4. The NOC’s from KSPCB, BESCOM and Fire Forcewill be submitted immediately after their receipt.

5. The detailed Project Report is enclosed.

6. You have requested to submit an Affidavit Stating that“no law suits” are pending in any of the courts withregard to the subject lands. We would like to state thatwe have already submitted the original copy of theAffidavit along with the letter cited at reference (ii) copyof which is enclosed.

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AIn addition to this, a true copy of the learned Advocate General’sopinion dated 24.12.2011 furnished by in to the Planning Authorityin response to the reference in this behalf obtained by us underthe provisions of the Right to Information Act is enclosed for yourready reference.

BThis is for your kind information and further needful action inthe matter.

Thanking you

Your faithfully,For Nandi Economic Corridor Enterprises Limited,Sd/- C

Authorised Signatory”

51. Notably, even the State had intimated the Planning Authorityvide letter dated 19.12.2013 sent by the Principal Secretary, PublicWorks, Ports and Inland Water Transport Department, that in respectDof change in land use and approval of residential developments, priordecision of the Empowered Committee should be obtained. The saidcommunication reads thus: - “LoE 114 CRM 2013

Secretariat, Government of KarnatakaVikasa SoudhaBangalore, Dated 19[th] December, 2013

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From

Principal Secretary Government of KarnatakaPublic Works, Ports and Inland Water Transport DepartmentFBangalore.

To

Member SecretaryBangalore-Mysore Infrastructure Corridor Area PlanningAuthority, Multi-storeyed Building,GBangalore-1

Sir,

Sub: Re: Furnishing of documents and opinion as sought for bythe authority with respect to the BMICP project.

H

Ref:1.YourletterNo.BMICAPA: 339:PraPraAP:1541:2011-12 dated 17.07.2012

2. Your letter No.BMICAPA:145:Bhu.U.B:519:2011-12dated 18.08.2011 and 12.04.2012

3. Your letter No.BMICAPA:371:Design:1629:2010-11Bdated 12.08.2011 and 12.04.2012

4. Your letter No.BMICAPA:81:Bhu.U.B:422:2011-12dated 12.08.2011, 07.09.2011 and 09.04.2012

5. YourletterNo.BMICAPA:80:Resid entialPlan:421:2011-12 dated 12.08.2011, 04.11.2011 andC14.12.2011

6. YourletterNo.BMICAPA:79:Resid entialDesign:420:2011-12 dated 12.08.2011

7. Letter No.BMICAPA:Yo Sa:29:Information:2013-14dated 23.09.2013 of Shri B. Mahendra, MemberDSecretary, BMICAPA, Bangalore.

The Cabinet in its meeting on 30.08.2007 with respect to thesubject matter as mentioned above while referring to Article 1.1.3of the Tripartite Agreement entered into between M/s. NICE,M/s. NECEL and the Government of Karnataka on 09.08.2002while referring to clauses in the said agreement namely (c) basicdevelopment and sale of land including that at ten (10)interchanges and Township 1 as follows- E

(iii) NICEL or anyone who is implementing the BMICP shall notbe entitled to sell/alienate any portion of the land in theinterchanges/road portion of the BMICP. Necessary steps betaken by the concerned department to cancel the agreementdated 09.08.2002 between NICE and the Government ofKarnataka insofar as it introduces clause for sale of land in Para1.1.3 or elsewhere in the agreement.

F

G

Apart from that, the judgments rendered in the context ofimplementation of the project by the High Court of Karnatakaand Supreme Court mandate execute the project as conceivedoriginally and upheld in Somashekar Reddy’s case and toimplement the FWA in letter and spirit. The clauses in the H

A

Tripartite Agreement dated 09.08.2002 which are in contradictionwith the FWA are to be ignored. Further, the agreement dated09.08.2002 is to be limited to assignment only.

The PTR submitted by M/s NICE is a prominent part of theFWA and the project will have to be implemented in accordancewith the Technical Report. As per the definition of Toll Road andTownship in the FWA which is reproduced below, the Toll Roadis to be specifically restricted to Toll Road as defined. Further,for the residential and commercial development, Township hasbeen separately provided for and in such Township, differentcommercial and residential plans being provided, the same areto be implemented in accordance with the rules.

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“Toll Road” means the portion of the infrastructure corridorproject consisting of Phase I Road, Phase II Road, Phase IIIRoad, Phase IV Road, Phase V Road, Phase VI Road, theBangalore Feeder, the Mysore Feeder, Link Road and the OuterPeripheral Road collectively; D

“Townships” means the townships described as Township 1, 2,4, 5 and 7 in the Infrastructure Corridor Project Technical Reportwhich will be developed by the company and/or project companiesfor the industrial and commercial growth and other developmentEof the infrastructure corridor and the provision of roads, supplyof water, and electricity, street lighting, sewage, conservancy, andsuch other conveniences and socio- economic infrastructure, interalia, comprising of housing, schools, hospitals, shopping complexes,parks and open spaces as set forth in Schedule 4 attached hereto.

F

M/s. NICE has completed the Peripheral Road and Link Road.However, with respect to the facilities that are necessary fordrivers of vehicles being plied on such road, such as petrol bunks,service stations, and truck terminals, it is noticed that till datenone of these facilities have been provided for.

G

In the light of the above points, before any decision istaken with respect to change in land use and approval ofresidential developments, the pros and cons will have tobe placed before the Empowered Committee constitutedunder the FWA and decision be obtained from it. I havebeen directed to inform you accordingly.

H

Approved by the Principal Secretary PWD

Yours sincerely,

Sd/-

N. MahalakshammaProject Coordinator (BMICP), Public Works,Ports and Inland Water Transport Department”

52. The fact remains that Article 7.1 of the FWA obliges theProject Proponents to submit proposal to the State for approval in caseof any deviation. No such proposal was submitted to the State. Instead,the Project Proponents pursued the matter directly with the PlanningAuthority. In that sense, prior approval of the State for deviating fromthe FWA and in particular constructing housing complex at location otherthan demarcated for Townships, is not forthcoming. Admittedly, no suchapproval was taken. If such proposal was to be submitted to the State,it would be open to the State to examine the same on its own or referthe matter to the Empowered Committee constituted for resolving suchissues, as envisaged in Article 4 of the FWA. Article 4 reads thus: - “ARTICLE 4 EMPOWERED COMMITTEE

4.1 Empowered Committee.

4.1.1 Composition and Actions of Empowered CommitteeGOK represents and warrants that it has established acommittee (the “Empowered Committee”) which consists ofChief Secretary and other members whose postings and titlesare as set forth in Schedule 6 attached hereto. In the eventof a vacancy on the Empowered Committee, GOK shall fillsuch vacancy with a similarly titled person from the sameGOK governmental Instrumentality. The EmpoweredCommittee shall meet only after convening a duly calledmeeting and providing seven (7) Days prior written notice tothe Company so that the Company may make available to suchCommittee a Company representative to answer any questionsthat the Empowered Committee may have and to update theCompany on actions taken by such Committee.

4.1.2 Committee Determinations Do Not Modify Rights orObligations. The Parties acknowledge and agree that the A

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rights and obligations of the Parties to this Agreement and theparties to any Project Contract shall be as set forth in thisAgreement and such Project Contract and the EmpoweredCommittee shall not have the authority to modify or alter suchrights and obligations other than through a written agreementbetween the Parties hereto or the parties thereto. Subject tothe foregoing, the Empowered Committee shall be themechanism by which GOK will coordinate (with anynecessary assistance from the Company) performance of itsobligations under this Agreement, including to:

4.1.2.1 facilitate and expedite all Approvals requiredin connection with the Infrastructure CorridorProject at the state and local level; specifically, as theEmpowered Committee consists of high level membersfrom each of the affected ministries of GOK, it will actas the “single window co-ordination centre” withrespect to the required clearance and permits; suchcommittee shall also assist the Company in all meanspossible with regard to obtaining any and all Approvalsrequired from GOK or any GOI GovernmentalInstrumentality; 4.1.2.2 oversee GOK Governmental Instrumentalitiescompliance with the provisions of this Agreement.

4.1.2.3 serve as the information centre and clearinghousefor assembling and disseminating information with respectto the Infrastructure Corridor Project to GOK and theGOK Governmental Instrumentalities and the public atlarge; and 4.1.2.4 serve as the primary intermediary onbehalf of GOK and GOI and any GovernmentalInstrumentality thereof in connection with dealings betweenGOK and the Company.

4.1.3 Committee Pronouncements and Decisions. GOK, on behalfof itself and the GOK Governmental Instrumentalities, covenantsthat the Company may rely on the pronouncements and decisionsof the Empowered Committee as pronouncements and decisionsof GOK or the relevant GOK Governmental Instrumentality inconnection with the Infrastructure Corridor Project and that suchpronouncements and decisions shall be made by GOK or such

GOK Governmental Instrumentalities in an expeditions and timelymanner. GOK understands and agrees that this is one of theprimary purposes of setting up such Empowered Committee andthat it will facilitate and expedite the realisation of the goals ofthe Infrastructure Corridor Project.

4.1.4 Committee Rights of Observation. GOK shall have theright, upon reasonable prior notice to the Company, through theEmpowered Committee, to observe the progress of InfrastructureCorridor Project. The company shall assist GOK in arrangingsuch visits. All persons visiting the Infrastructure Corridor Projectsite on behalf of GOK shall comply with all reasonableinstructions, directions and safety requirements as prescribed bythe Company or its contractors from time to time. GOK shallcause all such persons to comply with the Company Rules andRegulations regarding site safety and access, and in the eventany such GOK employee or representative fails to comply withany reasonable requirements of the Company, GOK shall beexclusively liable for and shall indemnify, defend and holdharmless the Company against any and all damages, costs, claims,expenses and consequences arising out of such failure. Unlessotherwise provided herein, such rights of GOK to visit theInfrastructure Corridor Project shall not be construed directly orindirectly as a contractual right of GOK to review, advise,recommend, approve or require changes.”

Indeed, the Empowered Committee is not a statutory committee,but it can be so constituted in terms of Article 4 read with Schedule 6,consisting of high officials of the concerned departments. This is onlyto facilitate quick processing of the proposals and implementation ofthe Infrastructure Corridor Project with mutual understanding and dueconsultation wherever necessary. We may assume that the EmpoweredCommittee may not agree with the proposal, as it may be of the viewthat the deviation is quite substantial and would disrupt the core objectiveof the Integrated Infrastructure Corridor (the Project), which has beendesigned with purpose of holistic and orderly development of the regionas a whole. In that eventuality, the Project Proponents would be requiredto resort to mechanism of resolution of disputes envisaged in Article18 of the FWA, which reads thus: - A

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A“ARTICLE 18. RESOLUTION OF DISPUTES

18.1 Mutual Discussions. In the event of a Dispute, the Partiesshall endeavour to resolve such Dispute by discussion in goodfaith in the first instance within thirty (30) days of Notice of suchDispute.B

18.2 Referral to the Expert. If any Dispute cannot be settled withinsuch thirty (30) Day period and the Parties mutually agree inwriting, such Dispute shall be referred to the Expert. If the Expertdoes not arrive at a decision within sixty (60) days or if eitherParty does not accept the decision of the Expert, then eitherCParty may, upon giving Notice to the other Party, refer theDispute immediately for arbitration in accordance with Paragraph18.3.

…..”53. A priori, it must necessarily follow that the Project ProponentsDcannot and ought not to have directly approached the Planning Authorityfor grant of stated permission in reference to the provisions in the KTCPAct or ODP/Master Plan. As aforesaid, if the proposal to be submittedby the Project Proponents was compliant with the stipulations andspecifications given in the FWA read with the PTR, only then the ProjectEProponents could justifiably approach the Planning Authority directlyfor grant of permission as per the extant regulations and municipal lawsapplicable in that regard, to construct buildings and structures forestablishing a Township. In other words, the proposal/application of theProject Proponents would be a valid proposal/application to the PlanningAuthority only if it was to be in strict compliance with the land useFspecified in the FWA read with the PTR. In case of any deviationtherefrom, it ought to accompany a formal prior approval of the Stateor the Empowered Committee, as the case may be, so that it can beprocessed further by the Planning Authority.

54. Much emphasis was placed on the fact that the appellantsGhad permitted the Project Proponents to construct housing complex ata location outside the demarcated area for the five Townships referredto in the FWA. Similarly, as the stated location was falling in yellowzone being residential, the other neighbouring private land owners werepermitted to develop their property for housing complex. This argumentdoes not take the matter any further for the Project Proponents,H

inasmuch as the land in question has been allotted to the ProjectProponents by the State after acquiring it from private land owners forimplementation of the Project. For that reason, the use of the landshould be strictly in conformity with the FWA and the applicablestipulations in the PTR. It is not open to the Project Proponents tocontend that they can unilaterally develop the land allotted to them bythe State in the manner other than specified in the FWA, being boundby the contractual obligations flowing from the FWA.

55. Notably, the State had granted prior permission to the ProjectProponents to construct housing units at location(s) other than the fiveTownships. That was to accommodate the concerned land losers inconnection with the same Project as per the policy of the State. Besides,the stated housing complex is not spread over in 42 acres and 30 guntasof land, so as to disrupt the holistic development envisaged in the FWA/PTR. In any case, that could be done only after obtaining prior approvalof the State in that regard. As regards permission given to the privateland owners, as aforesaid, that was given by the Planning Authority asper the applicable town planning regulations and in particular the usespecified in the ODP/Master Plan. For, their lands did not form part ofthe Project and also because they are not bound by the stipulations inFWA in particular, unlike the Project Proponents.

56. Reverting to the factum of assurance given by the PlanningAuthority in the earlier round of writ petition(s) that the modifiedproposal/application dated 5.5.2012 will be considered in accordancewith law and also that the State was party to that petition, in our view,it does not entail in acquiescence or waiver of the jurisdictional issueby the State (regarding necessity of seeking prior approval ofEmpowered Committee and No Objection (Certificate)/approval fromthe concerned State authorities). In that, the assurance given by thePlanning Authority cannot come in the way of the State to urge that inlaw, the Project Proponents had no authority to develop the lands inquestion except as per the stipulations and specifications prescribed inthe FWA read with the relevant clauses of the PTR. As a matter offact, the earlier writ petitions were not decided on merits, but came tobe disposed of leaving all contentions open, in lieu of the assurancegiven by the Planning Authority that it would consider the modifiedapplication as per law. In the present writ petitions, therefore, the Statein the larger public interest is duty-bound to take a legal plea regarding AB

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D

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Ajurisdictional issue including the extent of right of the writ petitioners(Project Proponents) being limited to stipulations in the FWA. Thus,neither the unilateral assurance given by the Planning Authority nor thefact that such specific reason has not been recorded by the PlanningAuthority in the impugned communication or that the State was partyto the said writ petitions, would denude the State from raising the legalBquestion regarding the scope of the FWA disentitling the ProjectProponents for grant of any relief in the subject writ petitions. Further,the High Court in the guise of issuing mandamus to the PlanningAuthority for issuing the Commencement Certificate, in effect, hasprevented the State from calling upon the Project Proponents to strictlyCabide by the stipulations in the FWA. That cannot be countenanced.

57. It is urged that this Court had held that it would be open tothe Project Proponents to carry on construction work of housing onlands which are not falling within the Townships area, if the same wereotherwise permissible under the ODP/Master Plan and the townDplanning regulations. This submission is founded on complete misreadingof the observations in the decision of this Court in All IndiaManufacturers Organisation (supra). As noticed earlier, the lis beforethis Court including review petition(s) had arisen on account of thechallenge to the FWA and also the acquisition of land for the purposeof the corridor project being excessive. Neither the High Court nor this ECourt was called upon to answer the issue now raised by the ProjectProponents that it was free to construct standalone group housingscheme and at location(s) outside the demarcated five Townships (inthe FWA/PTR).

58. Thus understood, the argument of the Project Proponents thatFthe plea taken by the State is hit by res judicata and in any case, byprinciples of constructive res judicata, cannot be countenanced. As amatter of fact, the Project Proponents did not pursue the plea of resjudicata or of constructive res judicata before the High Court, as isevident from the points for consideration formulated by the High CourtGin paragraph 9 reproduced in the earlier part of this judgment (inparagraph 22). Even if it can be considered as a question of law, inour opinion, the same does not arise in the fact situation of the presentcase.

59. The Project Proponents had also placed reliance on the dictumof the High Court in S.M. Mohan Rao Nadgir vs. State of Karnataka& Ors.[22], which, in our opinion has no bearing on the question thatarises for our consideration. Paragraph 10 of the said decision asreproduced in the written submission filed by the Project Proponents,in fact merely sets out the factual matrix of that case and is certainlynot an opinion of the Court answering the plea required to be adjudicatedin the present appeals. Even the observation in Dakshinamurthy vs.B.K. Das, IAS & Ors.[23], being an order passed in Contempt Petitionsfiled in Civil Appeal Nos. 3492-3494/2005 and connected appeals[decided on 20.4.2006, as reported in All India ManufacturersOrganisation (supra)] will be of no avail to the Project Proponents.The fact recorded that the Project shall be allowed to be completed asper the alignment specified in the ODP/Master Plan, as noted therein,has no bearing on the questions dealt with in the present appeals.

60. Be it noted that the Project can be taken forward by theProject Proponents only in conformity with the stipulations andspecifications in the FWA and the PTR. Additionally, the ProjectProponents are also obliged to ensure compliance of ODP/Master Planand if so complied, the Planning Authority cannot create anyimpediment. If the State accords approval to the deviation in terms ofthe FWA itself, the Project Proponents may be competent to carry onsuch a work. To put it differently, prior approval of the State fordeviation from the stipulations and specifications in the FWA is thequintessence. We do not wish to burden this judgment with the argumentabout attitude of the concerned authorities in creating obstructions incompletion of the Project because no official has been named in thewrit petitions filed by the Project Proponents being responsible for thatsituation.

61. The argument of the Project Proponents that the housingcomplexes can be constructed even at intersections by placing relianceon the observations in All India Manufacturers Organisation (supra),is begging the question. The issue is: whether it is open to the ProjectProponents to deviate from the stipulations and specifications of theFWA, in particular, in respect of Townships without prior approval of 22 Decided by the High Court on 28.2.2005 in Writ Appeal No. 72/2004 and connectedwrit appeals23 (2010) 1 SCC 64

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Athe State? The issue considered in the earlier rounds of litigation bythis Court was on the basis of stand taken by the State to defend theProject, the FWA and the acquisition of land for the purpose of theproject. In the present appeals, the matter is required to be examinedin the context of the stand of the Project Proponents that they are freeto carry on construction of housing scheme at any location of theirBchoice even outside the demarcated location(s) for five Townships,stretched over about 140 kilometres of the expressway, in the FWAand the PTR.

62. Reverting to the dictum in M. Nagabhushana (supra), thesame will also be of no avail to the Project Proponents as it does notCmilitate against the Planning Authority and State, in particular. As alreadynoted, the State is competent to maintain its stand that the legal rightof Project Proponents flows only from the terms and conditionsspecified in the FWA read with the PTR. That is a just plea availableto the State and must be taken by it in the larger public interest to ensureDthat the objective of the Integrated Corridor Project (the Project) is notmarginalised, undermined or frustrated in any manner. If developmentas desired by the Project Proponents on the stretch of 140 kilometresof the expressway is allowed, it would result in development in mannerother than the one planned and conceived in the FWA and the PTR,the objective of which is to provide for holistic and orderly developmentEof the self-sustaining Townships with all basic infrastructure and civicfacilities and to ensure smooth and accident-free traffic betweenBangalore and Mysore; population dispersal as per the National/Statepolicy; to create new job opportunities for the residents in and aroundthe Infrastructure Corridor; promote tourism; and decongest traffic etc.F

63. It is not necessary for us to dilate on other aspects regardingthe efficacy of the FWA and the PTR or the other agreements executedbetween the parties, having held that it is for the State to consider theproposal for allowing the Project Proponents to deviate from thestipulations and specifications of the FWA and the PTR and until thatGdecision is taken by the State or its instrumentalities including theEmpowered Committee constituted in terms of the FWA, the PlanningAuthority cannot process the proposal/application directly submitted toit by the Project Proponents. Further, such non-compliant proposal/application submitted by the Project Proponents directly to the PlanningAuthority must be regarded as infirm, invalid and non-est in law.

H

64. The next question is: whether the findings recorded by theHigh Court for setting aside the reasons given by the Planning Authorityin the impugned communication dated 7.2.2015, can be said to be thejust approach of the High Court? In view of the conclusion reached byus hitherto, it is not necessary for us to dilate on the correctness of theview taken by the High Court in that regard.

65. Suffice it to observe that assuming the High Court was rightin taking the view as it did to set aside the communication dated7.2.2015, it was certainly not right in issuing mandamus to the PlanningAuthority to straightaway grant Commencement Certificate in respectof the modified proposal. The appropriate order that could have beenpassed by the High Court in such a situation after setting aside thecommunication dated 7.2.2015, would have been to relegate the ProjectProponents before the Planning Authority for proceeding with thisproposal in accordance with law and applicable regulations expeditiouslyafter considering the other issues/points raised by the State. The ProjectProponents would, however, rely on the exposition in paragraph 27 ofthe decision of this Court in Badrinath vs. Government of TamilNadu & Ors.[24], which reads thus: -

“27. This flows from the general principle applicable to“consequential orders”. Once the basis of a proceeding is gone,may be at a later point of time by order of a superior authority,any intermediate action taken in the meantime – like therecommendation of the State and by the UPSC and the actiontaken thereon – would fall to the ground. This principle ofconsequential orders which is applicable to judicial andquasi-judicial proceedings equally applicable to administrativeorders. In other words, where an order is passed by an authorityand its validity is being reconsidered by a superior authority (likethe Governor in this case) and if before the superior authorityhas given its decision, some further action has been taken on thebasis of the initial order of the primary authority, then such furtheraction will fall to the ground the moment the superior authorityhas set aside the primary order.”

Reliance is also placed on Section 15 of the KTCP Act, inparticular, proviso thereto, which reads thus: - AB

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A“15 - Permission for development of building or land.-

(1) On receipt of the application for permission under section 14,the Planning Authority shall furnish to the applicant a writtenacknowledgment of its receipt and after such inquiry as may benecessary either grant or refuse a commencement certificate:

B

Provided that such certificate may be granted subject to suchgeneral or special conditions as the State Government may, byorder made in this behalf, direct.

(2) If the Planning Authority does not communicate itsdecision to the applicant within three months from the dateof such acknowledgment, such certificate shall be deemedto have been granted to the applicant.

C

Provided that the land use, change in land use or the developmentfor which permission was sought for is in conformity with theoutline development plan and the regulation finally approved undersub-section (3) of section 13.

D

(3) Subject to the provisions of section 16, no compensation shallbe payable for the refusal of or the insertion or imposition ofconditions in the commencement certificate.

(4) If any person does any work on, or makes any use of, anyproperty in contravention of section 14 or of sub- section (1) ofthis section, the Planning Authority may direct such person bynotice in writing, to stop any such work in progress or discontinueany such use; and may, after making an inquiry in the prescribedmanner, remove or pull down any such work and restore the landto its original condition or, as the case may be, take any measureto stop such use.

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(5) Any expenses incurred by the Planning Authority undersub-section (4) shall be a sum due to such Authority under thisAct from the person in default or from the owner of the land.

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Explanation. -The power to grant necessary permission under thissection for a change of user of land shall include the power togrant permission for the retention on land of any building or workconstructed or carried out thereon before the date of thepublication of the declaration of intention to prepare an outline H

development plan under sub-section (1) of section 10 or for thecontinuance of any use of land instituted before the said date.

(6) Any person aggrieved by the decision of the PlanningAuthority under sub-section (1) or sub-section

(4) may, within thirty days from the date of such decision, appealto such authority as may be prescribed.

(7) The prescribed authority may, after giving a reasonableopportunity of being heard to the appellant and the PlanningAuthority, pass such orders as it deems fit, as far as may be,within four months from the date of receipt of the appeal.”

We are not impressed by this submission. The reported decisionpressed into service does not go to the extent of justifying the directionissued by the High Court vide impugned judgment to issueCommencement Certificate. Indisputably, the question of issuingCommencement Certificate would arise only if the Planning Authoritywas fully satisfied that the proposal/plan submitted by the ProjectProponents is compliant in all respects in reference to the extant townplanning rules and regulations. Moreso, because it is not a case wherethe Project Proponents were invoking the provision regarding deemedapproval of the modified plan submitted on 5.5.2012.

66. As a result, we have no hesitation in taking view that thedirection issued by the High Court in the impugned judgment, in anycase, cannot be countenanced in law. But this question, if we maysay so, has become academic for the view that we have already takenthat the Project Proponents could not have directly approached thePlanning Authority for approval of modified proposal, which was repletewith deviations from the stipulations and specifications in the FWA readwith the PTR. This is so because the right in favour of the ProjectProponents to carry on development work on the lands referred to inthe FWA and the PTR would enure only in conformity with thestipulations and specifications in the stated documents. It is not opento the Project Proponents to develop the land in any other manner, unlesspermitted by the State.

67. Taking overall view of the matter, we have no hesitation inallowing the present appeals filed by the Planning Authority and the A

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AState of Karnataka and thereby setting aside the impugned judgmentof the High Court with liberty to the Project Proponents to firstapproach the State (under Article 7 of the FWA) for its prior permissionto allow them to deviate from the stipulations and specifications in theFWA and the PTR. Upon consideration of such proposal, the competentauthority of the State may take appropriate decision in the matter andBif need be, obtain prior opinion of the Empowered Committee. However,this process must be completed in right earnest and no later than sixmonths from the date of submission of the proposal to the competentauthority of the State. If the decision is adverse to the ProjectProponents, it would be open to them to take recourse to the disputesCresolution mechanism in terms of Article 18 of the FWA, if so advised.Only after prior permission is granted by the State regarding theproposed deviations, the Project Proponents may then apply to thePlanning Authority for permission to construct buildings/structures asper the applicable town planning regulations, which be considered onits own merits in accordance with law uninfluenced by its earlierDcommunication dated 7.2.2015.

68. We leave all other contentions available to concerned partiesopen to be considered by the concerned forum/Court on their own meritsin accordance with law.

E69. Accordingly, the impugned judgment and order is quashed andset aside and the stated writ petitions filed by the Project Proponentsstand dismissed with liberty to the Project Proponents, as aforesaid. Theappeals are allowed in the above terms. There shall be no order as tocosts. Pending interlocutory applications, if any, shall stand disposed of.

F

Divya Pandey

Appeals allowed.

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