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HC cannot issue mandamus contrary to terms of Agreement, Supreme Court

The SC on May 19, 2020 {Bangalore Mysore Infrastructure Corridor  Area Planning Authority & Anr. v. Nandi Infrastructure Corridor Enterprise Limited & Ors.} held that the High Court posed wrong questions to itself and that led to the erroneous   and   untenable   conclusion   deduced   by   it.

It was further observed by the SC Bench, comprising of Justice A.M. Khanwilkar & Justice Dinesh Maheshwari, that  the   Project   Proponents   are   obliged   to construct the five Townships at the demarcated location(s) only and to the extent of land specified therefor. It was held that any other proposal of the Project Proponents would be nothing short of deviation from the Framework   Agreement (in short 'FWA') in particular.

The SC held that the zone specified in the ODP/Master Plan per se is not enough to allow the Project Proponents to unilaterally use the land made over to them after acquisition from private land owners for the Project, for purpose and manner other than specified in the FWA and the Project Technical Report (in short 'PTR').

It was held that the fact remains that Article 7.1 of the FWA obliges the Project Proponents to submit proposal to the State for approval in case of any deviation.   It was also held that no such proposal was submitted to the State. It was further held that  the   Project   Proponents   pursued   the   matter directly   with   the   Planning   Authority.     It was observed that in   that   sense, prior approval of the State for deviating from the FWA and in particular constructing housing complex at location other than demarcated for Townships, is not forthcoming. It was held that, admittedly, no such approval was taken. It was observed that 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 refer the matter to the Empowered Committee constituted for resolving such   issues, as   envisaged in   Article 4 of   the   FWA.

In the present case, the petition was filed by the Project Proponents themselves, who had applied to the Planning Authority   for   grant   of   permission   for   construction   of   group housing scheme. That permission having been rejected on 7.2.2015, subject writ petitions were filed before the High Court, which have been disposed of by the common judgment and order dated 15.10.2019 of the Division Bench, quashing the communication by which the permission had been rejected. That judgment of the HC had been assailed before the SC.

The SC held that  the   proposal/application   of   the   Project Proponents would be a valid proposal/application to the Planning Authority only if it was to be in strict compliance with the land use specified in the FWA read with the PTR. It was held that in case of any deviation   therefrom,   it   ought   to   accompany   a   formal   prior approval of the State or the Empowered Committee, as the case may be, so that it can be processed further by the Planning Authority. Thus, it was held that neither the unilateral assurance given by the Planning Authority nor the fact that such specific reason has not been recorded by the Planning Authority in the impugned communication or that the State was party to the said writ petitions, would denude the State from raising the legal question regarding the scope of the FWA disentitling the Project Proponents for grant of any relief in the subject writ petitions. Further, it was held that the High Court in the guise of issuing   mandamus   to   the   Planning   Authority   for   issuing   the Commencement   Certificate, in   effect, has   prevented the   State from calling upon the Project Proponents to strictly abide by the stipulations in the FWA. That cannot be countenanced.

The SC concluded that prior approval of the State for deviation from the stipulations and specifications in the FWA is the quintessence. The SC allowed the present appeals filed by the Planning Authority and the State of Karnataka and thereby setting aside the impugned judgment of the High Court.

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