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Bangalore Mysore Infrastructure Corridor Area Planning Authority v. Nandi Infrastructure Corridor Enterprise Limited

Civil Appeal · 2020 INSC 399Decided 19 May 2020
Civil Appeal Nos. 2116-2128 of 2020
Justice A.M. Khanwilkar · Justice Dinesh Maheshwari

Background

This was the fifth round of litigation over the long-running Bangalore-Mysore Infrastructure Corridor Project, a large expressway-and-townships development built under a 1997 Framework Agreement between the State of Karnataka and private developers (NICE/NECE). The developers applied directly to the local Planning Authority for permission to build a group-housing scheme on land that deviated from what had been approved in the project's original Technical Report. The Planning Authority rejected the application, but the Karnataka High Court quashed that rejection and ordered the Authority to issue a construction ("commencement") certificate. The State and the Planning Authority appealed to the Supreme Court.

Decision Breakdown

The Supreme Court held that the Framework Agreement itself (Article 7.1) required the developers to first obtain the State Government's prior written approval for any deviation from the originally sanctioned project plan: they could not go straight to the Planning Authority and bypass the State. Since no such approval had ever been sought from the State, the Planning Authority's rejection was not improper, and the High Court's direction to issue a commencement certificate could not stand. The Court set aside the High Court's judgment and dismissed the developers' writ petitions, but gave them liberty to first approach the State for permission to deviate (to be decided within six months), with recourse to the agreement's dispute-resolution mechanism if the State refused.

Lesson Learnt

When a project is governed by a formal agreement that lays out a specific approval sequence (here, government approval before local planning approval), a party cannot skip a step in that sequence and go directly to a lower authority: courts will enforce the agreed order of approvals even years into a project.

Official source (sci.gov.in)View Judgment (PDF)

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