HC upholds verdict on Halcyon Castle


A Division Bench of the Kerala High Court on Monday upheld a single judge’s verdict declaring void and unconstitutional the Kovalam Palace (Take over by Resumption) Act 2005.

The Bench comprising Acting Chief Justice Ashok Bhushan and Justice A.M. Shaffique confirmed the single judge’s verdict while dismissing an appeal filed by the State government against the verdict.

The Bench observed that it was of the considered opinion that the 2005 Act was “arbitrary, discriminatory, and violation of Article 14 of the Constitution of India and has rightly been struck down” by the single judge. The court added that the State had the legislative competence to enact a law. But it did not mean that the legislation was protected from challenge. It was well settled that every Act, may be executive or legislative, could be struck down if it violated Article 14 of the Constitution. The Act denied equal protection to the petitioners.

The single judge verdict came on a petition filed by Venu Krishnan, Director, Kovalam Hotels Limited, and Hotel Leela Venture Limited, against the takeover of the Halcyon Castle (Kovalam Palace) through the Act. The petitioners had contended that the 2005 Act took over the palace on the ground that it was a historic site.

As many as 3,269 properties had been listed as heritage properties by the State government. However, only petitioners’ property had been singled out and taken over. No other property in the list had been taken over, the petitioners argued. They pointed out that the Kovalam Palace was acquired by the State government in 1962 and it was handed over to the Kerala Tourism Development Corporation (KTDC) for running a hotel business,

In 1970, the title and possession of the land and buildings were transferred to the India Tourism Development Corporation. In terms of the disinvestment policy pursued by the then Centre government, the ITDC had transferred the property by a share purchase agreement in favour of the writ petitioners in 2002. In fact, the transfer was affected after floating a global tender, the petitioners contended. The Bench observed that the property which was being used for hotel business by the State government, the ITDC as well as the petitioners could not be “confiscated” by means of an enactment. The sudden decision of the government to take possession of the property without payment of compensation was nothing but an arbitrary exercise of power, the court said.

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Printable version | Jan 26, 2020 12:11:26 PM |

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