VIJAYAWADA: The Andhra Pradesh High Court on Thursday directed the State government to build and develop Amaravati capital city and capital region within six months as agreed under the AP Capital Region Development Authority Act and Land Pooling Rules. It also ruled that the State Assembly has no “legislative competence” to pass any resolution or law for change of capital or bifurcating or trifurcating the capital city. With this, the court has effectively preempted any move by the State government to revive its ‘three-capital’ proposal.
Hearing a batch of petitions filed by Amaravati farmers, a three-member bench led by Chief Justice Prashant Kumar Mishra, delivered the judgment.In its 307-page verdict, the bench directed the State government and the APCRDA to hand over the developed and reconstituted plots belonging to land owners in Amaravati capital region within three months. Similarly, it ordered that the process of development of infrastructure in the Amaravati Capital City and Region, providing basic amenities like roads, drinking water, drainage and electricity, be completed within one month.
Ruling that the State and APCRDA must discharge their duties enshrined under Schedule II and III and Land Pooling Rules, 2015, the bench instructed them not to alienate/mortgage or create any third party interest in the land pooled except for the construction of capital city or development of the capital region. It also directed the government and APCRDA to complete the Town Planning Schemes as per Section 61 of the APCRDA Act. The bench also imposed a cost of Rs 50,000 on respondents (State government) to be payable to some of the petitioners.
The most debated part of this verdict is likely to be the court’s opinion on the Assembly’s legislative competence, State’s power to choose or change a capital and finally, the very interpretation of the AP Reorganisation Act, 2014, with regard to the capital.Referring to the judgement in Mangal Singh vs Union of India, wherein the apex court dealt with Articles 2, 3 and 4, and analysed the words “supplemental, incidental or consequential provisions,” the bench said Parliament alone is competent to deal with the setting up of legislature, executive and judicial organs of the State, and it is implicit in the language employed in Article 4 of the Constitution of India, i.e. “supplemental, incidental or consequential provisions”.
“Therefore, it is for Parliament to set up three organs of the State, i.e. legislature, executive and judiciary, which are essential to the State administration. Thus, it is made clear that the words “supplemental, incidental or consequential provisions” include establishment of legislature, executive and judiciary. By applying the principles laid down in the above judgment, we safely hold that the power is vested on Parliament to set up legislature, executive and judiciary, but not the State legislature,’’ the bench said. It further noted that the State legislature is incompetent to enact any law for setting up those three wings.
It’s a capital, not three
During the course of hearing, the bench said the government withdrew the Decentralisation Act by which three capitals were sought to be established instead of one capital established by the previous regime under the APRA. The purpose of withdrawal of the Act was for further study and consultation to impart further clarity for the policy of decentralisation and after the study, the government is attempting to bring suitable legislation in the future addressing concerns of all regions.
“As the State is still proceeding to decide on decentralisation and also creation of multiple capitals, this court is of the opinion that the decision is imminent and as the law on the subject is clear this court can or rather it must decide this issue at this stage only,’’ the bench observed.The bench said it found strength in the arguments of petitioners that once Parliament has acted under the provisions of Articles 3 and 4, and passed the Reorganisation Act, which provided for setting up of ‘a’ single capital, the State cannot bypass it.
The bench referred to Sections 5 and 6 of the APRA, which stated that Hyderabad would be the common capital of both Telangana and AP for 10 years, and after the said period, there shall be ‘a’ new capital for AP. It also recalled that the Centre had constituted an expert committee to study various alternatives for ‘the’ new capital.“The APRA, unlike many of the other Reorganisation Acts passed earlier makes a provision for the capital. This is also a distinguishing feature further fortifying the view that Parliament wanted ‘a’ capital only for the State of AP,’’ the bench felt.
Effectively, this means that the State government cannot proceed further on the three-capitals’ proposal.
On the issue of whether the State has the power to choose its capital, the bench, relying on various judgements, said, “It can safely be held that the establishment of three organs of the State, i.e. legislature, executive and judiciary, are part and parcel of the “supplemental, incidental or consequential provisions” employed in Article 4 of the Constitution and Parliament alone is competent to undertake such exercise, but not the State legislature.’’
Declaring that the AP State legislature has no legislative competence to enact any law for shifting the three organs of the State, the bench felt it appropriate to issue ‘continuing mandamus’ by which the court monitors compliance of its orders, seeking periodic reports from authorities on the progress in implementing them.Maintaining that the change of government is not a ground to change the policy, the bench said the present government is under statutory legal obligation to complete the projects undertaken by the earlier regime, unless they are contrary to any statutory or Constitutional provisions.
“The State shall account for the amount spent on the constructions and other activities undertaken by the earlier government to the public, since Rs 15,000 crore was spent on development activities and launched works worth Rs 32,000 crore. Sudden stoppage of the development activities due to an alleged financial crisis or otherwise is impermissible and thereby, the State and APCRDA are held responsible for the total amount spent on the development activities as on date to the public in general under the Doctrine of Public Trust,’’ the bench said.
When the respondents failed to maintain the trust and acted against good governance, and violated the constitutional trust, the court said it can issue appropriate directions to complete the development activities, including infrastructure in the land pooled within the specified time.
After hearing the petitioners and respondents, the bench mainly looked into 10 points. The major among them being whether the development agreement constitutes a statutory agreement, whether the State is liable to implement the terms and also on the State’s competence to make any legislation for shifting or relocating the capital, including the High Court from the location notified under the CRDA Act.
On revoking of the development contract, the bench stated that the contract is a statutory contract and the State and CRDA are bound to develop the land pooled for the capital city.
“Failure to adhere to the statutory contract is a matter of serious concern and the court can interfere with such breach of statutory contract, more particularly, when the farmers are not entitled to approach civil court or authority for redressal of their grievances as per the terms incorporated in the development agreement,’’ the bench said.
Stating that the development agreement cannot be revoked in view of Section 202 of the Indian Contract Act, which deals with the termination of agency, where the agent has an interest in subject matter, the bench said in the present case, the agency is between farmers who surrendered the land and the CRDA, who agreed to develop the land pooled and allot developed plots to the farmers. By laying seed access roads and other internal roads and completing construction of buildings, an interest is created by the agency and the same cannot be terminated in the absence of any express contract.
“We find no such express clause for termination of the agreement between the farmers and CRDA. Therefore, either of the parties to the agreement are entitled to terminate the agreement in the absence of any express contract between the parties,’’ it ruled. The court said it is an obligation on the part of the State to complete the development activities in the land pooled and any deviation from the terms and conditions amounts to violation of the CRDA Act and Land Pooling Rules.
Making mention of one of the clause in the development agreement that the farmers are not entitled to claim any amount in addition to the amount agreed and have to accept it without any protest and they cannot claim for payment of higher compensation in any court, the bench observed that the CRDA prepared the terms which have totally taken away the rights of the farmers to approach any court. Referring to the Supreme Court judgement in Indian Oil Corporation vs M/s Raja Transport Private Limited, the bench observed that the petitioners are denuded from ventilating their grievance before any court of law or authority.
“When the petitioners voluntarily agreed to surrender their land, the State and CRDA being the State and its instrumentality are bound by the terms and conditions of the development agreement,’’ the bench said. It noted that the agreement contains a condition that the farmers cannot approach any court for redressal of grievance but that does not take away the jurisdiction of the court under Article 226 of the Constitution, in view of the law declared by the apex court in L Chandra Kumar vs the Union of India.
‘Development works stopped, abandoned’
All works towards development have been stopped, abandoned and left to decay on account of the acts of the State and CRDA due to lame excuses of lack of funds. The bench said when the State and CRDA infringed or invaded fundamental rights of the farmers, the court can issue writ of mandamus.
‘Works stopped citing lame excuse’
The bench noted that there was no development of infrastructure and amenities and all works towards development have been stopped, abandoned and left to decay on account of the acts of the State and CRDA due to lame excuse of lack of funds. “Due to failure to develop Amaravati, each farmer has suffered loss on account of the CRDA and State’s failure to keep up its promise and obligation, both under the CRDA Act and Land Pooling Rules, as such, their Right to Livelihood guaranteed under Article 21 of the Constitution and Right to Property are infringed,’’ the bench observed.
Amaravati story so far
A look at the major incidents and decisions related to Amaravati capital city from the beginning
June 2, 2014 - Andhra Pradesh Reorganization
Act comes into force
September 1, 2014 Location of new capital
city finalised
December 30, 2014 APCRDA Act comes into effect and APCRDA was established
January 2015 Voluntary land pooling
scheme announced
March 2015 - Consent for 33,000 acres
obtained from farmers
May 25, 2015 - Submission of Capita City Plan
by the Singapore government
July 20, 2015 - Submission of Seed Area
Plan by Singapore government
October 2015 -Capital City project gets environmental clearance
October 22, 2015 - Prime Minister Narendra Modi lays stone for the capital city project
October 12, 2016 - Interim Secretariat Construction completed and inaugurated by
Chief Minister N Chandrababu Naidu
February 3, 2019 - Chief Justice of India lays foundation stone for Andhra Pradesh High Court
May 30, 2019 Chandrababu Naidu lost the elections; Jagan Mohan Reddy’s YSR
Congress forms new government
July 23, 2019 World Bank, Asian Infrastructure Investment Bank announce their decision to
pull out of Amaravati project
September 13, 2019 Government appoints an expert committee headed by GN Rao to take a review of the developmental plans initiated in Amaravati and suggest comprehensive strategy for all-round development of the State
November 11, 2019 The Singapore government -backed consortium pulls out of Amaravati
start-up area development project
December 17, 2019 CM Jagan Mohan Reddy announces the three capital proposal in the Assembly by taking South Africa’s capital
model into consideration
December 20, 2019 The six-member expert panel submits its report to the Chief Minister.
G N Rao panel suggested moving ‘some of the capital functions’ to other areas
December 29, 2019 The Govt constitutes High power committee to discuss GN Rao Panel and BCG reports after protests
January 3, 2020 The Boston Consulting Group submits report to the govt and supported the
idea of three capitals
January 20, 2020 Cabinet approves the
report of the high power committee on three capitals and draft bills
January 21, 2020 Assembly passes CRDA Repeal Bill and Decentralization Bill
January 22, 2020 Council refers CRDA
Repeal Bill and Decentralized Capital bill to a
select committee
January 22, 2020 Amaravati farmers move
AP High Court challenging the twin legislations
June 16, 2020 AP Assembly passes the bills
for the second time
July 23, 2020 The High Court issued notices to the state and centre to file affidavits
July 31, 2020 Governor Biswabhusan Harichandan approved the repeal of APCRDA and AP Decentralization bills
August 4, 2020 High Court stays capital bill
and adjourns case hearing to August 14
August 26, 2020 Supreme court refuses to interfere with the orders issued by the High
Court on three capitals
November 15, 2021 Hearing resumed by
three-member bench headed by Chief Justice Prashant Kumar Mishra
November 22, 2021 State Government informs the High court that the cabinet has resolved to repeal the CRDA repeal bill and Decentralized Development bill
February 4, 2022 The High Court reserves verdict on maintainability of petition
challenging three-capital act
March 3, 2022 The Andhra Pradesh High
Court directs the government to construct and develop Amaravati capital city and capital region
within six months