Karnataka High Court termed KIADB’s act of acquiring land for IMTMA as a ‘fraud’

Stating that “acquisition of land for a profit-making private entity in the guise of a public purpose amounts to a fraud on the law and the Constitution”, the Karnataka High Court struck down the state government’s 2012 notification to acquire private land in favor of the Indian Machine Tool Manufacturers Association (IMTMA) for the construction of multi-level parking facilities for its TuguEC (Bangalore International Exhibition Centre).

A division bench comprising Justice DK Singh and Justice TM Nadaf allowed a series of appeals filed by Mukesh Kumar and other landowners of Madanayakanahalli village while quashing the 2013 order of a single judge partially upholding the 2012 acquisition notification.

The Karnataka Industrial Area Development Board (KIADB) acquired the land under the provisions of the KIAD Act and the land owners challenged the acquisition arguing that it was not for a genuine public purpose.

‘profit making entity’

“Government cannot acquire land for an individual entity of its choice at the expense and cost of the poor landowners,” the Bench observed, noting that IMTMA, the charitable society managing BIEC, is a financially robust entity with substantial profits that is fully capable of purchasing land through private negotiations – as it has already purchased land through a private transaction to expand BIEC’s activities.

“…it is nothing but a fraud perpetrated by the authorities on the basis of law to deprive the land owners of their land ownership for a pittance in favor of a private entity for the purpose of expanding its business and making more and more profit. This kind of exercise of power is a legal and constitutional fraud by the state authorities,” the Bench observed on the KIADB’s action to acquire land in favor of IMTMA.

Noting that despite a final notice issued in 2012, no compensation was ever received and the KIADB did not deposit or pay even a single rupee to the landowners, the court held that this inordinate delay rendered the acquisition proceedings invalid, violating the landowners’ right to an effective and expeditious process as mandated by Article 300A of the Constitution.

Orderly development

The Bench said the objective of the KIAD Act is to set up industrial areas for orderly development and allot land to private companies as per the procedure for setting up their industrial/business unit and not to acquire land for a single private entity, an act which the Bench termed as a “colourful exercise of power”.

Published – 04 Jun 2026 23:58 IST