Bengaluru: In a major setback to a real estate-linked project, the Karnataka high court has quashed the Karnataka Industrial Areas Development Board’s (KIADB) acquisition of over 63 acres of land near Hebbal, ruling that the move was aimed at benefiting a private venture linked to businessman Dayanand Pai. The court also imposed a fine of ₹10 lakh and ordered a CBI probe into the alleged irregularities.
A division bench comprising Justice D K Singh and Justice Tara Vitasta Ganju, which heard the arguments advanced by senior counsel SN Aswathanarayana Senior advocate for advocate S.A.Sudindra and L.Narasimhamurthy (Sadali Associates), delivered the verdict on Friday (April 10).
Coming down strongly on the state and KIADB, the bench observed that land acquisition powers cannot be invoked under the guise of “public purpose” to facilitate private commercial interests.
The dispute dates back to 2002, when KIADB issued a notification to acquire 63.33 acres for industrial development despite objections from local residents. In 2004, the Bangalore Development Authority (BDA) also notified the same land for the Arkavathi Layout. However, KIADB proceeded with acquisition under Section 28(A) of the KIAD Act.
Landowners challenged the move, alleging that the acquisition was intended to support a project by Lake View Tourism Corporation, linked to Pai, for setting up a tourism hub including resorts, five-star hotels and entertainment facilities.
While the petition was initially dismissed, the division bench, hearing the appeal, accepted the contention that the acquisition lacked genuine public purpose. The petitioners argued that KIADB acted under pressure from influential individuals and deviated from its statutory mandate.
The court noted that the private entity had already entered into agreements to purchase part of the land and sought additional land through state intervention. It also raised concerns over the legal status of Lake View Tourism Corporation, observing that it was not a registered company.
Holding that the state had wrongly invoked its power of “eminent domain” to aid a private party, the bench said such actions undermine public interest and violate legal principles governing land acquisition.
Quashing the acquisition notification, the court imposed costs of ₹10 lakh and directed the Central Bureau of Investigation (CBI) to probe the alleged land scam.
The verdict as strengthening judicial authority:
Legal experts said the Karnataka high court’s ruling in the Hebbal land case sends a strong message to KIADB, which has faced repeated allegations of irregularities, with the division bench of Justice D K Singh and Justice Tara Vitasta Ganju not only quashing the acquisition notification but also ordering a CBI probe, thereby reinforcing that the judiciary will step in against misuse of statutory powers; senior lawyers described the verdict as strengthening judicial authority and underlining that public institutions must act strictly in accordance with law and public interest.