//
you're reading...
legal issues

just relief to the builders etc., even though the acquisition was quashed and approved by Apex court=In the result, the appeals are dismissed. However, keeping in view the fact that some of the members of the appellant may have built their houses on the sites allotted to them, we give liberty to the appellant to negotiate with the respondents for purchase of their land at the prevailing market price and hope that the landowners will, notwithstanding the judgments of the High Court and this Court, agree to accept the market price so that those who have

1

English: High Court of Karnataka, Bangalore De...

Image via Wikipedia

REPORTABLE
IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 7425-26 OF 2002

Bangalore City Cooperative

Housing Society Ltd. … Appellant
versus

State of Karnataka and others … Respondents
WITH
CIVIL APPEAL NOS. 774-778 OF 2005

J U D G M E N T
G. S. Singhvi, J.
1. These appeals are directed against two sets of

judgments and orders passed by the Division Benches of

the Karnataka High Court whereby the acquisition of

lands by the State Government for the benefit of the
2

appellant was quashed. Civil Appeal Nos. 7425-26/2002

are directed against judgment dated 16.03.1998 passed

by the High Court in Writ Appeal No. 9913/1996 and

order dated 09.07.1999 passed in Civil Petition No.

366/1998. Civil Appeal Nos. 774-78/2005 are directed

against judgment dated 06.02.2004 passed in Writ

Appeal No. 4246/1998, C/W W.A. No. 6039/1998 and

orders dated 11.02.2004 and 15.09.2004 passed in I.A.

No. 1 for rectification in Writ Appeal No. 4246/1998,

C/W W.A. No. 6039/1998 and Review Petition Nos. 166

and 170 of 2004, respectively.
2. Although, the High Court quashed the acquisition

proceedings mainly on the grounds of violation of the

provisions of the Land Acquisition Act, 1894 (for short,

`the 1894 Act’) and the manipulations made by the

appellant through the Estate Agent for acquiring the

land, during the pendency of these appeals the parties

filed voluminous papers and arguments were advanced

by both the sides by relying upon those documents as
3

also the records summoned by the Court from the State

Government.
3. For appreciating the contentions of the parties in a

correct perspective, it will be useful to notice the events

which culminated in the acquisition of the lands

belonging to the private respondents and others.
3.1 Bangalore Development Authority (BDA) was

constituted by the State Government under Section 3 of the

Bangalore Development Authority Act, 1976, (for short, `the

1976 Act’), which was enacted by the State legislature for

ensuring planned development of the City of Bangalore and

areas adjacent thereto. In terms of Section 15 of the 1976 Act,

the BDA is empowered to draw up detailed schemes for the

development of the Bangalore Metropolitan Area and with the

previous approval of the Government, undertake works for the

development of the Bangalore Metropolitan Area and incur

expenditure therefor. Under Section 15(2), the BDA can take

up new or additional development schemes either on its own

or on the recommendations of the Local Authority or as per
4

the directions of the State Government. Section 16 lays down

that every development scheme shall, within the limits of the

area comprised in the scheme, provide among other things for

the acquisition of any land necessary for or affected by the

execution of the scheme. Section 16(3) lays down that the

scheme may provide for construction of houses. Sections 17

and 18 contain the procedure for finalization and sanction of

the scheme. Section 19 provides for the acquisition of land for

the purposes of the Scheme.
3.2 In exercise of the powers vested in it under Section

15 and other relevant provisions of Chapter III of the 1976 Act,

the BDA has been preparing the development schemes and

forming layouts for the purpose of allotment of houses/plots to

various sections of the society.
3.3 Due to unprecedented increase in the population of

Bangalore City (by 1981, the population of the Bangalore City

had swelled to 29.13 lakhs), the State Government realized

that it may not be possible for the BDA to meet the demand of

developed residential sites and, therefore, it was decided to
5

encourage formation of private layouts which is permissible

under Section 32 of the 1976 Act, by the house building

cooperative societies (for short, `the housing societies’). For

this purpose the existing guidelines, which were being followed

by the erstwhile City Improvement Trust Board and the BDA

for the approval of private layouts were revised vide Circular

No. HUD 260 MNX 82 dated 3.3.1983, the relevant portions of

which are extracted below:
“1. The area proposed for a layout should be

within the residential zone of the Outline

Development Plan/Comprehensive Development

Plan approved by Government. In special cases

where lands are reserved for purposes other than

green belt and which are suitable for residential

purpose, layouts may be considered after

obtaining prior approval of Government for the

change in land use.
2. The Co-operation Department shall register the

names of the Housing Societies only after getting

the opinion of the planning Authority (BDA) which

shall verify whether the lands proposed for the

societies are in the residential zone or are suitable

for residential purpose as indicated in para 1, or

whether they are required by Bangalore

Development Authority.
3. If the Housing Society has purchased land, no

objection certificate from the competent authority,

Urban land ceiling should be produced.
6

4. The Housing Societies/Private developers

should produce the title deeds to prove ownership

of the land.
5. The Bangalore City Corporation, the HAL

Sanitary Board, ITI., Notification area, Yelahanka

and Kengeri Municipal authorities and such other

authorities shall not approve any bifurcation of

land into plots or any private layout. Such

approval should be done only by the planning

Authority (BDA) according to the Karnataka Town

& Country Planning Act, 1961.
6. Khatha shall not be issued by the Revenue

Section of the Bangalore City Corporation and the

Bangalore Development Authority HAL Sanitary

Board, I.T.I. Notified area, Yelahanka Town

Municipality, Kengeri Town Municipality/

Panchayaths and such other authorities, unless

the layout is approved by the Bangalore

Development Authority.
7. The following minimum land allocations shall be

insisted in the approval of private layouts by the

Bangalore Development Authority.
Residential Not Exceeding 50%
Parks & Playgrounds 15%
Roads 25% to 30%
Civic amenities 50% to 10%
8. (a) Except in case of layouts for economically

weaker sections standard road width shall be

enforced line 12 metre (40 feet) 18.5 metres (60

feet), 24.5 metres (80 feet) and 30.5 metres (100′).
(b) While working out the road pattern of the

private layouts, major road pattern of the outline
7

Development Plan/Comprehensive Development

Plan should not be affected. Minor roads may be

designed suitable within the framework of roads

approved in the Outline Development

Plan/Comprehensive Development Plan.
The civic amenity sites earmarked should be for

specific purposes determined by Bangalore

Development Authority. In cases where it is found

necessary to allot sites for other purpose, proper

justification will have to be furnished.
10. The purpose for which the sites are proposed

shall not be violated by the housing

societies/private developers.
11. Underground drainage and electricity works in

private layouts shall be carried out only by the

Bangalore Water Supply & Sewerage Board and

Karnataka Electricity Board. Bangalore

Development Authority may permit the Housing

societies to carry out the civil works only in case of

societies getting the work done by Civil Engineers

of the required competence.
12. After the formation of sites, allotment of sites

to individual members of the housing societies

must be in accordance with the eligibility

conditions of allotment of the Bangalore

Development Authority which are in force

including the lease-cum-sale conditions.
13. Conditions shall be enforced in the approval of

layouts in favour of housing societies that the sites

should be allotted only to the members of the

societies and not to other individuals for purposes

of land speculation. A list of members shall be

submitted by the societies along with the

application for approval of private layouts.”
8

3.4 The aforesaid decision of the State Government was

misused by the housing societies which started purchasing

lands directly from the landlords for forming the layouts

resulting in uncontrolled, unplanned and haphazard

development of the city. It also created acute problem of

providing civic amenities, transport facilities etc. Therefore,

by an order dated 18.6.1985, the State Government

abandoned the existing policy of acquiring land through the

Revenue Department and entrusted this task to the BDA for

the Bangalore Metropolitan Area. The State Government also

stopped registration of the housing societies and conversion of

agricultural lands in favour of the existing societies.

Simultaneously, the State Government constituted a Three

Men Committee (TMC) consisting of the Registrar of

Cooperative Societies, Karnataka, T. Thimme Gowda,

Secretary, BDA and the Special Deputy Development

Commissioner to scrutinize the land requirements of the

housing societies which had already been registered and also

fixed 30.6.1984 as the cut off date for consideration of the

applications made by the housing societies for the acquisition
9

of land. The constitution of the committee was made known to

the public vide Order No. HUD 113 MNXA 85 dated 23.6.1986.

It was also made clear that only those persons will be eligible

for allotment of sites who had been enrolled as members of the

housing societies before the cut off date. Subsequently, the cut

off date was extended to 30.6.1987.
3.5 The Executive Director of the appellant submitted

representation dated 7.12.1984 to the Minister for Revenue,

Government of Karnataka for the acquisition of 238 acres 27

guntas land at Vajarahalli and Raghuvanahalli villages for

formation of a layout for its members. The relevant portions

thereof are extracted below:
“We are happy to inform you that our society was

registered under Section 7 of the Mysore

Cooperative Societies Act, 1959 by the Registrar of

Cooperative Societies, Bangalore, during the year

1927 vide No. 1737 C.S. dated 12.9.1927.
2. The object of the society is to provide house

sites to its members who belong to working class

and other backward class people belonging to

weaker sections of the society. The members are

poor people and they are siteless. They are

residents of Bangalore City for several decades.
10

3. Because of the restrictions imposed by Land

Reforms Act and other enactments, the activities of

our society have come to stand still, with the result

the society is not in a position to discharge its

primary obligations entrusted as per the bye-laws.
4. Your Hon’ble authority is fully aware that it is

humbly impossible to secure residential sites in

these days of soaring prices of lands and sites

which have gone up beyond all proportions.
5. The lands which are now requested by the

society for acquisition are not fit for agricultural

purposes and they are laying in the vicinity of

residential layout abutting Bangalore City and

there are no proposals for acquisition of these

survey numbers by the Bangalore Development

Authority for any of its developmental activities, as

per endorsement issued by B.D.A.
6. Due to our sincere efforts we are able to locate

suitable land in the village Vajarahalli and

Raghuvanahalli, Uttarahalli Hobli, Bangalore

south Taluk to an extent of 250 acres. A list

showing the sy. numbers and extent of lands is

enclosed.
7. We request your kindself to acquire these lands

in favour of our society and handover possession

to form layout to distribute sites to the members

who are in great need of sites to construct their

own houses.
8. We have collected sital amounts from the

members. The cost of acquisition will be met by

the society. Necessary amount towards

compensation will be deposited with the

acquisition authorities on receipt of intimation and

after obtaining approval of Government.
11

It is submitted that the society is agreeable to

abide by all terms and conditions to be laid down

by the Government in the matter.”

3.6 The Revenue Department of the State Government

vide its letter dated 29.12.1984 forwarded the aforesaid

representation to Special Deputy Commissioner, Bangalore for

being placed before the TMC constituted vide letter No. RD-

109 AQB 84 dated 26.7.1984.
3.7 Between January, 1985 and 1987 the appellant’s

application made several rounds before the TMC, the State

Level Coordination Committee (SLCC), constituted by the State

Government and the officers of the Cooperative Department.

The Assistant Registrar, Cooperative Societies issued several

notices to the appellant to furnish the details of its members

and supply other particulars along with copy of the agreement

entered with the Estate Agent engaged for formation of the

layout, but the needful was not done. After lapse of long time,

the President of the appellant submitted memorandum dated

17.9.1987 to the Joint Registrar, Cooperative Societies (for

short, `the Joint Registrar’) stating therein that the appellant
12

had engaged M/s. Manasa Enterprises (Estate Agent) for

procuring 250 acres land from the landowners. The copies of

agreements dated 1.6.1984 and 4.12.1984 executed with M/s.

Manasa Enterprises were also submitted along with the

memorandum. Along with letter dated 26.3.1987, the

appellant furnished additional information to the Joint

Registrar.
3.8 The appellant’s application was considered in the

meeting of the TMC held on 5.10.1987 and the Joint Registrar

was asked to conduct verification of the information supplied

by the appellant. After conducting the necessary inquiry, the

Joint Registrar sent report dated 9.10.1987, of which the

salient features were as follows:
i. The appellant had neither collected sital deposit

from the members nor it had paid any advance to the

Estate Agent or the landowners upto 30.6.1984.
ii. During 1984-85, the appellant collected

Rs.20,72,500/- from the members and paid
13

Rs.3,50,000/- to the Estate Agent as an advance for

procurement of the land from the landowners.
iii. During 1985-86, another sum of Rs.5,45,500/- was

collected from the members towards sital deposit and

Rs.10,00,000/- were paid to the Estate Agent.
iv. Upto 30.6.1986, the total amount collected from the

members was Rs.26,18,000/- and the total amount paid

to the Estate Agent was Rs.13,50,000/- for procurement

of 235 acres land in Vajarahally.
v. Letter dated 24.10.1986 of the Estate Agent

revealed that it had made advance payment of

Rs.16,70,000/- to 17 landowners.
3.9 In its meeting on 17.10.1987, the TMC directed the

Joint Registrar to conduct an investigation about the land

available with the appellant before the cut off date. This was

done in the wake of the information supplied by the appellant

about the death of the proprietor of M/s. Manasa Enterprises

in a car accident on 28.2.1987. However, before the Joint
14

Registrar could make the necessary investigation, the

appellant’s application was considered in the meeting of the

SLCC held on 24.10.1987 and the following proceedings were

recorded:
“The Deputy Commissioner, Bangalore raised a

question as to whether the entitlement for acquisition

would depend upon the number of enrolled members

as of the cut off date of 30.4.1984 or the number of

enrolled members who had paid the sital value by

that date. The Revenue Commissioner clarified that

as per the GO, the entitlement depended on the total

number of enrolled members irrespective of whether

they had applied for a site. The Secretary, HUD also

agreed with this and stated that as per the bye-laws

of these societies, all members would be eligible for

grant of sites so long as they had paid the

membership fees prior to the cut off date. The Deputy

Commissioner however pointed out that the previous

and even the present Three Member Committee had

based its recommendations disregarding those

members who had not paid the sital value. The SLCC

decided that as it would not be equitable or fair to

follow two different sets of principles for determining

extent of land entitlement for acquisition, the number

of members who had paid required sital fee would be

the sole guiding factor in determining land to be

cleared for acquisition in the 1st stage. But the

Secretary, Cooperation may keep the Chief Minister

informed of this decision and report back to the

S
LCC before pending cases are taken up for 2 nd
stage

of scrutiny as per GO dt. 30.4.1987.”

(underlining is ours)
15

3.10 The appellant’s case was again considered in the

meeting of the TMC held on 27.11.1987 and the following

points were recorded:
“a. Society had 3821 members as on 30.6.1987 and

sital value had been paid by 1362 as per which

the Society’s land requirement is 184 acres 11

guntas. If the SLCC decides that the Society is

eligible for entitlement on this basis the Society

will have to be allowed to select lands to this

extent and furnish survey number-wise details.
b. The question of survey numbers and violation of

various Acts does not arise as the Three Man

Committee considers that the Society is not

eligible for any entitlement as there are no

agreements and also no member had paid the

sital value as on 30.6.1984.
c. The JRCS reported that the Society had, in

pursuance of an agreement, paid Rs. 13.5 lakhs

to the estate agent who died in a car crash. But

even this amount was paid after the cut off

date.”
3.11 In its 14th meeting held on 28.11.1987, the SLCC

considered the cases of various societies and opined that the

appellant was not eligible for acquisition of land in 1st and 2nd

stages of scrutiny because it did not have valid agreements as

on the cut off date i.e., 30.6.1984. However, in the next

meeting of the SLCC held on 22.12.1987 cognizance was taken
16

of the clarification given by the Chief Minister of the State that

eligibility of the housing societies should be considered on the

strength of the members enrolled as on 30.06.1984 in respect

of the 1st stage of scrutiny and as on 30.6.1987 in respect of

the 2nd stage of scrutiny, irrespective of the fact whether the

enrolled members had paid sital fee or not and, accordingly,

decided that the appellant’s case be examined by taking note

of the members enrolled by it.
3.12 On 21.2.1988, the appellant entered into an

agreement with M/s. Rajendra Enterprises whereby the latter

promised to secure the acquisition of land on payment of the

specific amount. Paragraphs 1 to 8 of the agreement, which

have bearing on consideration of one of the issues arising in

these appeals read as under:

“1. THIS AGREEMENT entered into on this the 21st

(Twenty first) day of February 1988 between The

Bangalore City Co-operative Housing Society

Limited, No.2, Seethapathi Agrahara, Bangalore-

560002, a Cooperative Societies Act, represented by

its President and the Executive Director and

hereinafter referred to as the `FIRST PARTY’, which

term shall mean and include its successors, assigns

in office, administrators etc. and M/s. Shri

Rajendra Enterprises, No.4507, 5th Floor, High
17

Point-IV, 4, Palace Road, Bangalore-560 001,

represented by its Managing Partner M.

Krishnappa, Estate Agent and Engineering

Contractor, hereinafter called the Agent of the

`SECOND PARTY’ which term shall mean and

include its successors in interest and successors in

office, assigns, administrators etc., witnesseth:-
2. WHEREAS THE FIRST PARTY has selected

about 228 acres land as detailed in the schedule, in

Vajarahalli village and Raghuvanahalli village,

Uttarahalli Hobli, Bangalore South Taluk, more fully

described in the schedule hereunder and

hereinafter, referred to as the `Schedule Land’ for

making house sites for the benefit of its members

for the construction of dwelling houses with various

amenities including road, water supply, sewerage

facilities, street lighting, etc.
3. WHEREAS the Second Party has offered his

services to the First Party to negotiate and complete

the acquisition and development of schedule land

for the said purpose to form a layout, make sites in

accordance with the rules and regulations in force

and hand over the said sites to the First Party.
4. WHEREAS NOW that the Managing Partner of

M/s. Manasa Enterprises, First Party’s earlier

promoters died of an accident and as such work

could not be continued and subsequently M/s.

Landscape, Layout promoters agreed to take over

the entire project with all its advanced to M/s.

Manasa Enterprises i.e. Rs.13,50,000/- (Rupees

Thirteen Lakhs Fifty Thousand only) for procuring

lands from the agriculturists in favour of the First

Party, at the time of the agreement. The said

Agreement dated 31.12.87 was signed between the

First Party and M/s. Landscape. But this Agreement

was cancelled with effect from 1.2.1988 as M/s.
18

Landscape failed to furnish the agreed Bank

Guarantee of Rs.13,50,000/-.
5. NOW the Second Party, M/s. Rajendra

Enterprises have come forward and agreed to take

over the entire project for the formation of the

proposed layout and start the work `ab initio’ with

all its previous liabilities and have furnished the

required Bank Guarantee No.4/88 dated 8.2.1988

from Syndicate Bank, Vijaynagar Branch,

Bangalore-560 040 of Rs.13,50,000/- (Rupees

Thirteen Lakhs Fifty Thousand only) already

advanced to previous promoters M/s. Manasa

Enterprises (for procuring lands from the

agriculturists).
6. WHEREAS the Second Party has agreed to

provide all the required services towards the

acquisition of scheduled land for the First Party,

obtain all necessary approvals for forming the

layout, roads, water lines, electric lines, drainage,

sewerage connection, etc., and to carry out on the

said land the items of work such as laying of roads

with culverts, drainages, etc., provision of bore-

wells, ground level and overhead tanks, water lines,

etc., for the provision of water laying of electrical

lines, sewerage lines, etc., and in accordance with

the details approved by the respective Statutory and

Government authorities on the schedule lands in

consideration of the amount to be paid by the First

Party as per the B.D.A. rate prevailing at the time of

execution of the above specified works.
7. WHEREAS the Second Party at the behest of the

First Party is taking action to move various

Government and Statutory authorities towards the

publication of Notification in the Official Gazette

under Section 4(1) of the Land Acquisition Act, for

the acquisition of the schedule lands.
19

8. NOW the First Party and the Second Party agree

to undertake the above works as detailed below: –
SECOND PARTY FIRST PARTY

PROCUREMENT OF LANDS
1) To get Notification under 1) At the time of execution of

Section 4(1) of the LAR within the Agreement of Rs. 1.5

four months lakhs and upto issue of 4(1)

Notification Rs. 15/- per Sq.

Yd. against Bank

Guarantee.
2) Issue of Notification under 2) Rs. 25/- per Sq. Yd.

Section 4(1) and subsequent including the award amount

enquiry under Section 5(1) paid to Government.

completed within 4 months
3) Issue of Notification under 3) Rs. 26/- per Sq. Yd.

Section 6(1) within 3 months

of the completion of enquiry

under Section 5(1)
4) Submission of layout plan to 4) Rs. 5/- per Sq. Yd.

BDA within 4 months after

the issue of notification under

Section 6(1)
5) Sanction of layout plan within 5) Rs. 4/- per Sq. Yd.

3 months of its submission.
The Second Party has agreed to complete the

above mentioned works within 18 months from the

day of the agreement subject to any delay caused at

the BDA and other authorities in procuring land

sanctioning or issuing of layout plan.”
(The amount which the appellant had agreed to pay to the

Estate Agent for securing the acquisition of 228 acres land

and submission and sanction of layout plan by the BDA was

Rs.5,42,37,652/-).
20

3.13 Within five days of the execution of the aforesaid

agreement, the SLCC reconsidered the appellant’s case in its

20th meeting held on 26.2.1988 and declared that it is eligible

for the acquisition of 208 acres 18 guntas land. The relevant

portion of the minutes of that meeting are reproduced below:
“7) BANGALORE CITY HBCS:
The Society is eligible for acquisition of 208

acres 18 guntas in stage I/III. As against this they

have given survey number-wise details for 250

acres. They should therefore be given time upto

15th March, 1988 to select the specific lands to be

acquired on their behalf to the extent of 208 acres.”

3.14 In furtherance of the recommendations made by the

SLCC, the State Government sent letter dated 21.5.1988 to

Deputy Commissioner, Bangalore and directed him to initiate

proceedings for the acquisition of 207 acres 29 guntas land in

Vajarahalli and Raghuvanahalli for the appellant by issuing

notification under Section 4(1) of the 1894 Act. The contents of

that letter are reproduced below:
“The Deputy Commissioner,

Bangalore.
21

Sub: Acquisition of land in Vajarahalli and

Raghuvanahalli villages of Uttarahalli hobli,

Bangalore South Taluk in favour of the Bangalore

City Co-operative, Housing Society Ltd., Bangalore.
I am directed to state that the State Level

Coordination Committee has recommended for

acquisition of 208 acres 18 guntas of land in

Ist/IIIrd stage in favour of Bangalore City

Cooperative Housing Soceity. As against this the

society has furnished S.No. wise details for 207

acres 29 guntas (list enclosed) which is within the

extent recommended by State Level Coordination

Committee. Hence you are directed to initiate

acquisition proceedings by issue of notification

under Section 4(1) for an extent of 207 acres 29

guntas of land as recommended by S.L.C.C. in the

village of Vajarahalli and Raghuvanahalli in favour

of Bangalore City House Building Cooperative

Society Ltd., Bangalore subject to the following

conditions:
i) The extent involved (if any) under Section 79(A)

and B may be excluded while issue of 4(1)

notification for the present, which can be notified

after the pending proceedings under the said Act

are finalised.
(ii) Move the Spl. Deputy Commissioner, ULC to

finalise the proceedings pending under ULC Act

before 31.5.1988.
Yours faithfully,
(MAHDI HUSSAINA)

Under Secretary to Government

Revenue Department.”
22

3.15 On 7.8.1988, the Executive Director of the appellant

entered into an agreement with the State Government, the

relevant portions of which are extracted hereunder:
” AGREEMENT
An Agreement made on this Eighth day of

July, One Thousand Nine Hundred Eighty Eight

between the Executive Director, The Bangalore City

Co-operative Housing Society Limited, No.2,

Seethapathi Agrahara, Bangalore-560002

(hereinafter called the Society which expression

shall unless excluded by or repugnant to the

context, be deemed to include its successors and

assigns) of the ONF PART and the GOVERNOR OF

KARNATAKA on the OTHER PART.
AND WHEREAS the Society has applied the

Government of Karnataka (hereinafter referred to as

“THE GOVERNMENT”) that certain land more

particularly described in the schedule hereto

annexed and hereinafter referred to as “THE SAID

LAND” should be acquired under the provisions of

LAND ACQUISITION ACT, 1894 (I of 1894)

hereinafter referred to as “THE SAID ACT”, for the

following purpose namely :-
Formation of Sites and Construction of Houses to

the members of the Bangalore City Co-operative

Housing Society Ltd., No.2, Seethapatha Agrahara,

Bangalore-560002.
AND WHEREAS The Government, having caused an

enquiry be made in conformity with the provisions

of the SAID ACT and being satisfied as a result of

such inquiry that the acquisition of the SAID LAND

is needed for the purpose referred to above, has
23

consented to the provisions of the SAID ACT, being

put in force in order to acquire the SAID LAND for

the benefit of the Society Members, to enter into an

agreement hereinafter contained with the

GOVERNMENT. How, these presents witness and it

is hereby agreed that GOVERNMENT shall put in

force the provisions of the said Act, in order to

acquire the SAID LAND for the benefit of the Society

Members on the following conditions namely:
1. The Society shall pay to the GOVERNMENT

the entire costs as determined by the

GOVERNMENT of the acquisition of the SAID LAND

including all compensation damages, costs, charges

and other expenses whatsoever, which have been

OR may be paid OR incurred in respect of OR on

account of such acquisition OR in connection with

any litigation arising put of such acquisition either

in the original or APPELLATE COURTS, and

including costs on account of any establishment

and salary of any Officer OR officers of the

GOVERNOR who the GOVERNMENT may think it

necessary to employ OR deputation Special duty for

the purpose of such acquisition and also including

the percentage charges on the total amount of

compensation awarded as prescribed by

GOVERNMENT. The monies which shall be payable

by the Society under this clause shall be paid to the

Special Deputy Commissioner of Bangalore

(hereinafter called the “SPECIAL DEPUTY

COMMISSIONER”) within fourteen days after

demand by the SPECIAL DEPUTY COMMISSIONER

in writing of such amount or amounts as the

SPECIAL DEPUTY COMMISSIONER shall from time

to time estimate to be required for the purpose of

paying OR disbursing any compensation, damages,

costs, charges, OR expenses herein before referred

to, for which the COMPANY has made provision in

their finance.
24

2. On payment of the entire cost of the

acquisition of the SAID LAND as hereinabove

referred to the whole of the said land shall as soon

as conveniently may be transferred to the SOCIETY

as to vest in the COMPANY subject to the provision

of the Karnataka Land Revenue Act (hereinafter

called the SAID ACT) and the rules made

thereunder subject also to the provisions of this

agreement as to the terms on which the land shall

be held by the Society.
3. The SAID LAND when so transferred to and

vested in the SOCIETY shall be held by the

SOCIETY if its property to be used only in

furtherance of the and for purpose for which it is

acquired, subject nevertheless to the payment or

agricultural, non-agricultural OR other assessment

if and so far as the said land is OR may from time to

time be liable to such assessment under the

provisions of the SAID ACT and the rules made

thereunder, and the local fund cess, as the case

may be, THE SOCIETY shall :-
(i) not use the SAID LAND for any purpose other

than that for what it is acquired.
(ii) Undertake the work of construction of the

building within three years from the date on

which possession of the land handed to the

Society and complete the same within three years

from the aforesaid date;
(iii) AT ALL TIMES, KEEP AND MAINTAIN the said

land and the building OR buildings effected

thereon in good order and condition, maintain all

records of the SOCIETY properly to the satisfaction

of the DEPUTY COMMISSIONER and supply to the

GOVERNMENT punctually such.
25

(iv) Returns and other information as may from time

to time be required by the GOVERNMENT.
(v) Not use the SAID LAND or any building that may

be erected upon it for any purpose which in the

opinion of GOVERNMENT is objectionable.
5. The Society shall from time to time and at all

times permit the GOVERNMENT or any officer or

officers authorised by the GOVERNMENT in that

behalf to inspect the SAID LAND any works of the

SOCIETY upon the SAID LAND whether in the

course of construction or otherwise and shall

furnish to the Government from time to time on

demand correct statements of the monies spend by

SOCIETY upon its said land.
6. In case the SAID LAND is not used for the

purpose which it is acquired as herein refers recited

or is used for any other purpose 01 in case the

SOCIETY commits a breach of any of conditions

thereof, the SAID LAND together with the buildings,

if any erected thereon shall be liable to resumption

by the Government subject however to the

conditions that the amount spent by the SOCIETY

for the acquisition of the SAID LAND or its value as

undeveloped land at the time of resumption,

whichever is less (but excluding the cost of value of

any improvements made by the SOCIETY to the

SAID LAND or on any structure standing on the

SAID LAND shall be paid as compensation to the

SOCIETY.
Provided that the SAID LAND and the buildings, if

any, erected thereon shall not be so resumed unless

due notice of the breaches complained of the been

given to the Company and the Society has failed to

make good the break or to comply with any

directions issued by the GOVERNMENT in this
26

behalf, within the time specified in the said notice

for compliance therewith.
7. If at any time or times, the whole or any part of

the SAID LAND is required by GOVERNMENT or for

the purpose of making any new public road or for

any purpose connected with public health, safety,

utility or necessary the Company on being required

by the GOVERNMENT in writing shall transfer to

the GOVERNMENT the whole or part of the SAID

LAND as the GOVERNMENT shall specify to the

necessary for any of the aforesaid purposes the

SOCIETY A SUM equal to the amount of the

compensation awarded under the said Act, and paid

by the SOCIETY IN respect of the land to transferred

including the percentages awarded under Section

23(2) of the SAID ACT, together with such amount

as shall be estimated by the SOCIETY whose

decision in the matter shall be final as to the cost of

the development of the land so transferred which

shall include the value at the date of transfer of any

structures standing thereon and when part of a

building is on the land so transferred and part is on

an adjoining land, reasonable compensation for the

injuries effected of the part of the building on the

adjoining land.
8. All the cost and expenses incidental to the

preparation and execution of these presents shall be

paid by the SOCIETY.
9.(a) The Deputy Commissioner/Special Deputy

Commissioner should make a token contribution

towards the compensation framed by Assistant

Commissioner/Special Land Acquisition Officer at

the rate of Rs. 100.00 in respect of each Land

Acquisition Case of the Society.
(b) The Special Deputy Commissioner shall after

taking over possession of the land U/s. 16(1) Land
27

Acquisition to the Society should report to the

Government the fact of having taken physical

possession of the land for clearance of the

Government. The Society should agree

unconditional to pay the compensation as awarded

or if enhanced by the Court decides in favour of

land owners.
(c) The Society shall not from the layouts without

getting the plan duly approved by the Town

Planning Wing of Bangalore Development Authority

keeping in view the zoning regulations. In respect of

places other than Bangalore, the approval of

Planning Authority, Municipality as the case may

shall be obtained.
(d) In case the violation of any of the conditions

Government will be competent to resume the lands

acquired in favour of Societies.
(e) The expenditure incurred in this behalf shall

be debited to the Head of the Account – 253″ +

District Administration-5, Other expenditure-E.

Acquisition of land on behalf of other acquiring

bodies (Non-Plan).”
3.16. In furtherance of the direction given by the State

Government, Deputy Commissioner, Bangalore issued

notification dated 23.8.1988, which was published in the

Official Gazette on 1.9.1988, under Section 4(1) of the 1894

Act for the acquisition of 201 acres 17 guntas land including

the land comprised in Survey Nos. 49 and 50/1 belonging to

Smt. Geetha Devi Shah, who shall hereinafter be referred to as
28

respondent No. 3 and Survey Nos. 7/1 and 8/1 belonging to

the predecessor of P. Ramaiah, Munikrishna, Keshava Murthy,

Smt. Nagaveni and Smt. Chikkathayamma (respondent Nos. 3

to 7 in Civil Appeal Nos. 774-778/2005).
3.17 Respondent No. 3 filed detailed objections against

the proposed acquisition of her land and pointed out that the

same were garden lands; that she and her predecessor had

planted 165 fruit bearing mango trees, 75 coconut plants, 15

lime plants, 15 guava trees, 100 papaya trees, 40 eucalyptus

trees, 6 custard apple trees, 100 teakwood trees, 3 neem trees,

one big tamarind tree, 2 gulmohar trees, 10 firewood trees and

10 banana plants. She also pointed out that there was a

residential house and a pump house with electric connection

and the area had been fenced by barbed wires and stone

pillars. Shri P. Ramaiah also filed objections dated 6.9.1988

and claimed that the proposed acquisition was contrary to the

provisions of the 1894 Act and that the lands comprised in

Survey Nos. 7/1 and 8/1 were the only source of livelihood of

his family.
29

3.18 The objections filed by respondent No. 3 were

considered by the Special Land Acquisition Officer along with

the reply of the acquiring body and the following

recommendation was made:
“There are AC Sheet houses and since there are good

number of Malkies: Mango, etc, Government may

take suitable decision”.

3.19 The objections raised by Shri P. Ramaiah were also

considered and the following recommendation was made:
“There are no valid ground in the objections raised,

the lands may be acquired.”

3.20 Thereafter, the Special Land Acquisition Officer

issued declaration under Section 6(1) which was published in

the Official Gazette dated 25.9.1989.
3.21 During the currency of the acquisition proceedings,

Shri G.V.K. Rao, Controller of Weights and Measures and

Recovery Officer was asked to conduct an inquiry into the

membership of the appellant. He submitted report dated

7.11.1988 with the finding that the appellant had admitted 40
30

persons who were not residing within its jurisdiction and

recommended that their names be removed from the rolls of

the appellant and the committee of the management, which is

responsible for admitting such ineligible persons should be

proceeded against.
3.22 It appears that similar reports had been received by

the Government in respect of other societies. After considering

these reports, Joint Secretary to the Government, Housing and

Urban Development Department prepared a note on the basis

of the decision taken by the Executive Council in its meeting

held on 31.5.1989. The name of the appellant was shown in

Annexure 3B of the note which contained the list of housing

societies responsible for admitting ineligible persons as their

members.
3.23 Before publication of the declaration issued under

Section 6(1) of the 1894 Act, the State Government vide its

letter dated 23.6.1989 informed Respondent No. 3 to remain

present for spot inspection of her land. After publication of the

declaration issued under Section 6(1), notices dated 6.1.1990
31

and 7.3.1990 were issued to Respondent No. 3 and others that

the Special Deputy Commissioner would conduct spot

inspection. A memo dated 11.5.1990 was issued to

Respondent No. 3 that Special Deputy Commissioner would

inspect Survey Nos. 49 and 50/2 on 14.5.1990. However, no

one appears to have gone for inspection and to this effect letter

dated 16.5.1990 was sent by Respondent No. 3.
3.24 Special Land Acquisition Officer, Bangalore passed

award dated 23.6.1990 and determined market value of the

acquired land. The award was approved by the State

Government on 11.3.1991. However, before the possession of

the acquired land could be taken, the State Government

issued notification dated 3.8.1991 under Section 48(1) of the

1894 Act and withdrew the acquisition proceedings in respect

of land comprised in Survey No. 50/2. Vide letter dated

9.10.1991, the Revenue Department requested Special Deputy

Commissioner, Bangalore to examine the representation made

by Respondent No. 3 for withdrawal of the acquisition of

Survey No. 49. To the same effect letter dated 29.1.1992 was
32

sent by the Secretary, Revenue Department to the Special

Deputy Commissioner. However, no final decision appears to

have been taken on these communications.
3.25 After one year and over six months of the passing of

the award, the State Government issued Notification dated

7.1.1992 under Section 16(2) in respect of various parcels of

lands including Survey No. 49. The possession of 150 acres

9= guntas of land of Vajarahalli and Raghuvanahalli is said to

have been handed over by the Special Land Acquisition Officer

to the Secretary of the appellant-Society. However, as will be

seen hereinafter, the entire exercise showing taking over of

possession of the respondents’ land and transfer thereof to the

appellant was only on papers and physical possession

continued with them.
THE DETAILS OF THE LITIGATION BEFORE THE HIGH

COURT
A. Smt. Geetha Devi Shah’s case.
4.1 Respondent No. 3 challenged the acquisition of her

land comprised in Survey No. 49 in Writ Petition No.

16419/1992. The appellant also filed Writ Petition No.
33

29603/1994 questioning the legality of notification issued

under Section 48(1). By two separate orders dated 18.11.1996,

the learned Single Judge dismissed both the writ petitions.

The writ petition filed by respondent No. 3 was dismissed only

on the ground of 2= years’ delay between the issue of the

declaration under Section 6(1) of the 1894 Act and filing of the

writ petition. The explanation given by Respondent No. 3 that

on her representations, the Government had withdrawn the

acquisition of land comprised in Survey No. 50/2 and she was

awaiting the Government’s decision in respect of other parcel

of land, was not considered satisfactory by the learned Single

Judge. The writ petition of the appellant was dismissed by the

learned Single Judge by observing that the State Government

has absolute power to withdraw the acquisition before the

possession of the acquired land can be taken.
4.2 Respondent No. 3 challenged the order of the

learned Single Judge in Writ Appeal No. 9913/1996. The

Division Bench of the High Court first considered the question

whether the learned Single Judge was right in dismissing the
34

writ petition only on the ground of delay and answered the

same in negative by making the following observations:
“After hearing the rival contentions of the appellant

and contesting respondent and perusing the

pleadings of both the parties, we are of the opinion

that the learned Single Judge has erred in taking

into consideration the delay of 2 = years from the

date of final notification. The learned Single Judge

has not considered the explanation given by the

petitioner at paragraphs 12 to 15 wherein, he has

explained regarding delay. The State Government

has issued notice dated 6.1.1990 of inspection of

lands proposed to be held at 10.30 a.m. on

16.8.1990 and the Land Acquisition Officer

conducted spot inspection and satisfied that the

lands could be deleted and further another notice

dated 6.2.1990 of fixing the inspection of the spot

on 9.2.1990 was received in pursuance of the same

spot inspection was held and one more notice dated

7.3.1990, 11.5.1990 on those days inspection was

not made. Thereafterwards, he submitted the

petition to the Revenue Secretary. His enquiries

with the Revenue Secretary revealed the

proceedings bearing No. RD 294 AQB 90 dated

5.10.1991 one Mr. N. Lokraj, Under Secretary to the

Government called for reports on the matter vide

Notification dated 29.1.1992. Therefore, the

grievance of the petitioner was pending

consideration before the Government under Section

15A of the Land Acquisition Act as on 29th January,

1992. In this regard, we have perused the record

produced by the Government. These facts with

reference to the denotification of the acquisition in

respect of the land in question along with other

lands are reflected therein. Further the explanation

offered by the appellant at paragraph 15 in the writ
35

petition clearly show the bonafides on the part of

the appellant in the matter of challenging the

acquisition proceedings, as he had submitted the

representation to the Revenue Department seeking

for denotification of the land in question. In our

opinion the delay with regard to the challenge of the

proceedings has been satisfactorily explained by the

appellant. Therefore, non-consideration of the

explanation and rejection of the petition by the

learned Single Judge solely on the ground of delay

and latches cannot be sustained. Moreover relief

cannot be denied to a party merely on the ground of

delay. In fact, in view of the subsequent events after

the final notification, it cannot be said that the

appellant has approached this Court belatedly.”

4.3 The Division Bench then scrutinized records

relating to the acquisition of land, relied upon the judgment in

H.M.T. House Building Cooperative Society v. Syed Khader

and others (1995) 2 SCC 677 (hereinafter described as `Ist

HMT Case’) and held:
“It is a mandatory requirement in law,

since no prior approval of the scheme has

been obtained by the second respondent from the

State Government first respondent herein,

the acquisition by the first respondent can not be

held to be for public purpose as the mandatory

requirement as contemplated under Section 3(f)(VI)

has not been complied with. Hence the acquisition

proceedings have to be held as invalid, and on this

ground the acquisition proceedings are liable to be

quashed. In its counter at paragraph it has not
36

positively stated with regard to the fact of prior

approval of the scheme as required under Section

3(f)(VI) of the Act is granted by the Government.

On the other hand, what is stated by the second

respondent at paragraph 5 of the counter is that the

said society had submitted necessary scheme to

the first respondent for the purpose of initiating

acquisition proceedings under Section 4(1) of the

Act. The acquisition proceedings were to be

initiated after fully satisfying the requirement

under Section 3(f)(VI) of the Act. Therefore, the

contention of the learned Counsel for the

respondent that the acquisition proceedings are in

accordance with law which can not be accepted in

the absence of specific, positive assertion and

proof in this regard. The burden is on the first

and second respondents to show that there is prior

approval of the housing scheme to initiate the

acquisition proceedings in respect of the land in

question. The same is not established. In this view

of the matter and in view of the law declared by the

Apex court in H.M.T. case supra, we have no option

but to hold that there is no housing scheme

approved by the State Government. Hence on this

ground the acquisition proceedings are liable to be

quashed.”

The Division Bench also opined that the Special Land

Acquisition Officer had submitted report without giving

opportunity of hearing to respondent No. 3 and this was

sufficient to nullify the acquisition of her land.
37

4.4 Civil Petition No. 366/1998 filed by the appellant for

review of judgment dated 16.3.1998 was dismissed by the

Division Bench by observing that once the Government had

issued notification under Section 48(1) nothing survives for

consideration.
4.5 Writ Appeal No. 1459/1997 filed by appellant

against the negation of its challenge to notification issued

under Section 48(1) was dismissed by the Division Bench vide

judgment dated 12.3.1998 along with other similar writ

appeals and writ petition.
B. Shri P. Ramaiah and others case.
5.1 Shri P. Ramaiah and others also challenged the

acquisition proceedings in Writ Petition No.10406/1991. The

learned Single Judge allowed the writ petition by relying upon

order dated 15.6.1998 passed by the Division Bench of the

High Court in Writ Petition Nos. 3539-42/1996 wherein it was

held that after the amendment of the 1894 Act by Act No. 68

of 1984, the Deputy Commissioner did not have the authority

to issue notification under Section 4(1) of the 1894 Act.
38

5.2 The appellant challenged the order of the learned

Single Judge in Writ Appeal No. 4246/1998. The State of

Karnataka and the Special Land Acquisition Officer also filed

Writ Appeal No. 6039/1998. The Division Bench of the High

Court dismissed both the appeals by common judgment dated

6.2.2004. The Division Bench referred to the judgment of this

Court in 1st H.M.T. case and held that the acquisition was

vitiated due to adoption of corrupt practice by the appellant,

which had engaged an agent for ensuring the acquisition of

land and large amounts of money changed hands in the

process.
5.3 When the learned counsel for Shri P. Ramaiah and

other respondents pointed out that there were certain errors in

judgment dated 6.2.2004 inasmuch as Smt. Geetha Devi

Shah’s case has been referred to instead of the citation of

H.M.T. House Building Cooperative Society v. Syed Khader

and others (supra), the Division Bench suo motu corrected the

errors vide order dated 11.2.2004.
39

5.4 Review Petition Nos. 166 and 170 of 2004 filed by

the appellant were dismissed by another Division Bench of the

High Court which declined to entertain the appellant’s plea

that the issues raised by Shri P. Ramaiah and others are

covered by the judgment of the High Court in Subramani v.

Union of India ILR 1995 KAR 3139 and that in view of the

dismissal of SLP(C) Nos. 12012-17/1997 filed against the

order passed in Writ Appeal Nos. 7953-62/1996 – Byanna and

others v. State of Karnataka, the order passed by the Division

Bench was liable to be set aside. The Division Bench held that

the judgment in P. Ramaiah’s case does not suffer from any

error apparent requiring its review.
6. Before proceeding further, we consider it

appropriate to mention that in furtherance of the

directions contained in judgments in Writ Appeal No.

9913/1996 filed by respondent No.3 and Writ Petition

No. 10406/1991 filed by Shri P. Ramaiah and others, the

State Government issued notification under Section 48(1)

dated 25.6.1999 for release of the lands comprised in
40

Survey Nos. 49, 7/1 and 8/1. However, when the

appellant filed Contempt Petition No. 946/1999, the

Government vide its order dated 15.11.1999 withdrew

Notification dated 25.6.1999.
The grounds of challenge and the arguments.
7.1 The appellant has challenged the impugned

judgments on several grounds most of which relate to the case

of respondent No. 3. Therefore, we shall first deal with those

grounds. Shri Dushyant Dave and Shri P. Vishwanatha

Shetty, learned senior counsel for the appellant argued that

the writ petition filed by respondent No. 3 was highly belated

and the Division Bench of the High Court committed serious

error by interfering with the discretion exercised by the

learned Single Judge not to entertain her challenge to the

acquisition of land on the ground of delay of more than 2-1/2

years. In support of this argument, learned senior counsel

relied upon the judgments of this Court in Ajodhya Bhagat v.

State of Bihar (1974) 2 SCC 501, State of Mysore v. V.K.

Kangan (1976) 2 SCC 895, Pt. Girdharan Prasad Missir v.
41

State of Bihar (1980) 2 SCC 83, Hari Singh v. State of U.P.

(1984) 2 SCC 624, Municipal Corpn. of Greater Bombay v.

Industrial Development Investment Co. (P) Ltd. (1996) 11 SCC

501, Urban Improvement Trust, Udaipur v. Bheru Lal (2002) 7

SCC 712 and Swaika Properties (P) Ltd. v. State of Rajasthan

(2008) 4 SCC 695.
7.2 Shri P.P. Rao, learned senior counsel appearing for

the private respondents argued that respondent No. 3 was not

guilty of delay and laches and the Division Bench rightly

accepted the explanation given by her. Shri Rao submitted

that respondent No. 3 had represented to the State

Government and its functionaries to withdraw the acquisition

of her land and as the State Government accepted her plea in

respect of Survey No. 50/2 and issued Notification dated

3.8.1991, she was very hopeful that the acquisition in respect

of the remaining land will also be withdrawn and this was the

reason why she did not approach the Court soon after the

issue of declaration under Section 6(1) of the 1894 Act.

Learned senior counsel pointed out that vide letters dated
42

5.10.1991 and 29.1.1992, the Revenue Department had asked

Special Deputy Commissioner, Bangalore to submit report

regarding Survey No. 49 and this gave rise to a legitimate hope

that the State Government would withdraw the acquisition in

respect of that parcel of land. Learned senior counsel relied

upon the judgments in Sheikhupura Transport Co. Ltd. v.

Northern India Transport Insurance Company (1971) 1 SCC

785 and C.K. Prahalada v. State of Karnataka (2008) 15 SCC

577 and argued that in exercise of power under Article 136 of

the Constitution, this Court will not interfere with the

discretion exercised by the High Court in the matter of

condonation of delay.
8. We have considered the respective arguments. The

framers of the Constitution have not prescribed any

period of limitation for filing a petition under Article 226

of the Constitution and it is only one of the several rules

of self-imposed restraint evolved by the superior Courts

that the jurisdiction of the High Court under Article 226

of the Constitution, which is essentially an equity
43

jurisdiction, should not be exercised in favour of a person

who approaches the Court after long lapse of time and no

cogent explanation is given for the delay. In Tilokchand

Motichand v. H.B. Munshi (1969) 1 SCC 110, the

Constitution Bench considered the question whether the

writ petition filed under Article 32 of the Constitution for

refund of the amount forfeited by the Sales Tax Officer

under Section 21(4) of the Bombay Sales Tax Act, which,

according to the petitioner, was ultra vires the powers of

the State legislature should be entertained ignoring the

delay of almost nine years. Sikri and Hedge, JJ. were of

the view that even though the petitioner had approached

the Court with considerable delay, the writ petition filed

by it should be allowed because Section 12(a)(4) of the

Bombay Sales Tax Act was declared unconstitutional by

the Division Bench of the High Court. Bachawat and

Mitter, JJ. opined that the writ petition should be

dismissed on the ground of delay. Chief Justice

Hidayatullah who agreed with Bachawat and Mitter, JJ.

noted that no period of limitation has been prescribed for
44

filing a petition under Article 32 of the Constitution and

proceeded to observe:

“Therefore, the question is one of discretion for this

Court to follow from case to case. There is no lower

limit and there is no upper limit. A case may be

brought within Limitation Act by reason of some

article but this Court need not necessarily give the

total time to the litigant to move this Court under

Article 32. Similarly in a suitable case this Court

may entertain such a petition even after a lapse of

time. It will all depend on what the breach of the

Fundamental Right and the remedy claimed are

when and how the delay arose.”
9. The ratio of the aforesaid decision is that even

though there is no period of limitation for filing petitions

under Articles 32 and 226 of the Constitution, the

petitioner should approach the Court without loss of time

and if there is delay, then cogent explanation should be

offered for the same. However, no hard and fast rule can

be laid down or a straight-jacket formula can be adopted

for deciding whether or not this Court or the High Court

should entertain a belated petition under filed under

Article 32 or Article 226 of the Constitution and each

case must be decided on its own facts.
45

10. In the light of the above, we shall now consider

whether respondent No.3 had satisfactorily explained the

delay. In paragraphs 12, 13 and 14 of the writ petition

filed by her, respondent No. 3 made the following

averments.
“12. ENQUIRY REGARDING DELETION
Annexure “L” dated 6.1.1990 is a notice of

inspection of lands proposed to be held at

10.30a.m. on 16.8.1990. On 16.1.1990, Shri Harish

Gowda, the then Land Acquisition Officer was

pleased to hold an inspection and was also satisfied

that the lands could be deleted since the same

comprised a well-maintained orchard, though on a

very uneven land also for reasons that they were

situated on one extreme end of the area proposed to

be acquired. Strange to say, the said officer was

transferred, the petitioner is at Serial No. 5 among

the addressee of the said notice.
13. ANNEXURE `M’ dated 6.2.1990 is yet another

notice of inspection fixed for 10.00 AM on 2.2.1990.

No inspection have been held on that day, the

petitioner received ANNEXURE `N’ dated 7.5.1990

intimating that an inspection will be held at

11.30AM on 14.3.1990. The petitioner submits that

nobody turned up on that day also. The petitioner

once again complained to the Revenue Secretary.

Thereupon the petitioner received ANNEXURE `O’

dated 11.5.1990 intimating that the inspection will

be held at 11.00 AM on 14.5.1990. However, the

Land Acquisition Officer did not visit the lands on

14.5.1990 or on the following day as orally stated.

On the very next day, i.e., 16th May, 1990, the
46

petitioner submitted ANNEXURE `P’ to the Special

Land Acquisition Officer with a copy to the Revenue

Secretary, requesting for an inspection on a fixed

time and date. The petitioner submits that to this

day no inspection has been held by any of the

officers who had succeeded Shri Harish Gowda in

pursuance of notices mentioned above at Annexures

`L’, `M’, `N’, `O’ respectively. The petitioner was given

to understand that she will be informed in due

course. However, the petitioner has not received any

such notice.
14. The plaintiff submits that recent enquiries

show that the Secretariat (Revenue Department)

had addressed two communications to the Special

Deputy Commissioner, Krishi Bhavan, Bangalore,

bearing No. RD 294 AQB 90 dated 5.10.1991 and

22.1.1992 under the signature of Sri. M. Lokraj,

Under Secretary to Government, Revenue

Department calling for reports on the matter

immediately. ANNEXURE `Q’ and `R’ are Xerox

copies of the said communications dated 5.10.1991

and 29.1.1992. These clearly go to show that the

petitioner’s grievances regarding the legality and

propriety of the proceedings and the question of

deletion had been taken up for consideration under

Section 15(A) of the Land Acquisition Act and that

the enquiry was still pending even as late as 29th

January, 1992, which is the date of Annexure `R’.”

11. Paragraph 15 of the writ petition in which

respondent No. 3 spelt out the reasons for her seeking

intervention of the High Court reads as under:
47

“15. However, a couple of days ago, the petitioner’s

son received an anonymous telephone call

informing that the office of the Special Land

Acquisition Officer at the instance of the 2nd

respondent is about to create documents for having

taken possession of the petitioner’s lands on the

basis of an ante-dated “Award”. The petitioner

submits that she immediately took legal advice and

was advised that no award having been passed

within 2 years of Section 6(1) declaration, the

proceedings had lapsed. She was also advised that

in the light of the latest decision of this Hon’ble

Court reported in ILR 1991 KAR 2248, the

notifications are vitiated in law and a writ petition

may be filed seeking appropriate reliefs including

stay of all further proceedings and injunction

against unlawful dispossession. Hence this writ on

the following among other grounds.”

12. The aforesaid averments were not controverted

by respondent Nos. 1 and 2 herein. Notwithstanding this,

the learned Single Judge refused to accept the

explanation given by respondent No. 3 that she was

hopeful that after having withdrawn the acquisition in

respect of one parcel of land, i.e., Survey No. 50/2, the

State Government will accept her prayer for withdrawal of

the acquisition in respect of Survey No. 49 as well.

Unfortunately, the learned Single Judge altogether
48

ignored the fact that soon after the issue of the

declaration under Section 6(1) of the 1894 Act and

notices under Sections 9 and 10 of the said Act, the writ

petitioner received letter dated 6.1.1990 that she should

make herself available for inspection of the land and on

16.1.1990 Shri Harish Gowda, the then Land Acquisition

Officer inspected the site and felt satisfied that the same

could be deleted because it was an orchard and was at

the end of the area proposed to be acquired. The learned

Single Judge also omitted to consider the following:
(i) notices dated 6.2.1990 and 7.5.1990 were issued

to respondent No.3 informing her about the

proposed inspection of the site;
(ii) she made a complaint to the Revenue Secretary

that no one had come for inspection;
(iii) yet another notice dated 11.5.1990 was received

by respondent No.3 for inspection will be held on

14.5.1990 but the concerned officer did not turn

up;
49

(iv) letters dated 5.10.1991 and 22.1.1992 were sent

by the Revenue Department to Special Deputy

Commissioner, Bangalore requiring him to

submit report in the matter of withdrawal of

acquisition; and
(v) in paragraph 15 of the writ petition, she had

disclosed the cause for her filing the writ petition

in May 1992.
In our view, non-consideration of these vital facts and

documents by the learned Single Judge resulted in

miscarriage of justice. The Division Bench did not commit any

error by holding that respondent No.3 was not guilty of laches.
13. The judgments relied upon by learned counsel

for the parties turned on their own facts and the same do

not contain any binding proposition of law. However, we

may briefly notice the reasons which influenced the

Court in declining relief to the petitioner(s) in those cases

on the ground of delay. In Ajodhya Bhagat’s case, this

Court noted that the writ petition had been filed after 6
50

years of finalization of the acquisition proceedings and

held that the High Court was justified in declining relief

to the petitioner on the ground that he was guilty of

laches. In V.K. Kangan’s case, the Court held the delay

of 2 years in challenging the acquisition proceedings was

unreasonable because it came to the conclusion that the

respondents’ primary challenge to the acquisition

proceedings was legally untenable. In Pt. Girdharan

Prasad Missir’s case, this Court approved the view taken

by the High Court that unexplained delay of 17 months

in challenging the award was sufficient to non-suit the

writ petitioner. In Hari Singh’s case, the Court held that

even though the High Court had summarily dismissed

the writ petition without assigning reasons, the

appellants’ challenge to the acquisition proceedings

cannot be entertained because co-owners had not

challenged the acquisition proceedings, disputed

questions of fact were involved and there was delay of 2=

years. In Municipal Corporation of Greater Bombay’s

case, this Court reversed the order of the Bombay High
51

Court which had quashed the acquisition proceedings

ignoring the fact that the respondent had approached the

Court after substantial delay calculated with reference to

the date of award and, in the meanwhile, several steps

had been taken by the Corporation for implementing the

scheme. In Bheru Lal’s case, this Court set aside the

order of the High Court which had quashed the

acquisition proceedings and observed that the writ

petition should have been dismissed because the

respondent had not offered any explanation for the delay

of two years. In Swaika Properties’ case, the Court noted

that the appellant had first challenged the acquisition of

land situated in Rajasthan by filing a petition in the

Calcutta High Court and after three years, it filed writ

petition in the Rajasthan High Court and concluded that

the delay in challenging the acquisition was sufficient to

deny relief to the petitioner.
14. The second ground on which judgment dated

16.3.1998 has been questioned is that the Division
52

Bench of the High Court committed an error by nullifying

the acquisition on the ground of non-compliance of

Section 3(f)(vi) of the 1894 Act. Shri Dushyant Dave and

Shri Vishwanatha Shetty, learned counsel for the

appellant and Shri S.R. Hegde, learned counsel for the

State pointed out that in the writ petition filed by her,

respondent No.3 had not taken a specific plea that the

acquisition was contrary to Section 3(f)(vi) of the 1894 Act

and that the factual foundation having not been laid by

respondent No.3, the Division Bench of the High Court

did not have the jurisdiction to declare that the

acquisition was not for a public purpose. Learned senior

counsel relied upon the judgments in M/s. Tulasidas

Khimji v. Their Workmen (1963) 1 SCR 675, Third

Income-tax Officer, Mangalore v. M. Damodar Bhat

(1969) 2 SCR 29, Ram Sarup v. Land Acquisition Officer

(1973) 2 SCC 56, Sockieting Tea Co. (P) Ltd. v. Under

Secy. to the Govt. of Assam (1973) 3 SCC 729, Bharat

Singh v. State of Haryana, (1988) 4 SCC 534,

Umashanker Pandey v. B.K. Uppal, (1991) 2 SCC 408,
53

M/s. Jindal Industries Ltd. v. State of Haryana 1991

Supp (2) SCC 587, D.S. Parvathamma v. A. Srinivasan

(2003) 4 SCC 705, Shipping Corpn. of India Ltd. v.

Machado Bros. (2004) 11 SCC 168, J.P. Srivastava &

Sons (P) Ltd. v. Gwalior Sugar Co. Ltd., (2005) 1 SCC 172

and Shakti Tubes Ltd. v. State of Bihar (2009) 7 SCC 673

and submitted that the Division Bench of the High Court

should not have entertained an altogether new plea

raised for the first time.
15. Shri Dushyant Dave also relied upon order dated

12.4.1996 passed by the High Court in Writ Petition Nos.

28577-586/1995 – Byanna and others v. State of

Karnataka, order dated 3.12.1996 passed by the Division

Bench in Writ Appeal No. 7953/1996 and connected

matters, order dated 23.7.1997 passed by this Court in

SLP(C) Nos. 12012-17/1997, order dated 22.11.1995

passed by the learned Single Judge in Writ Petition No.

17603/1989 – Smt. Sumitramma and another v. State of

Karnataka and others, order dated 1.1.1996 passed by
54

the Division Bench of the High Court in Writ Appeal No.

5081/1995 with the same title and order dated

4.10.1996 passed in SLP (C) No. 10270/1996, Kanaka

Gruha Nirmana Sahakara Sangha v. Narayanamma

(2003) 1 SCC 228, referred to the recommendations made

by SLCC in its 20th meeting held on 26.2.1988 and letter

dated 21.5.1988 sent by State Government to Deputy

Commissioner, Bangalore and argued that the direction

given by the State Government to Deputy Commissioner,

Bangalore for initiating the acquisition proceedings

should be treated as approval of the housing scheme

framed by the appellant.
16. Shri Vishwanatha Shetty argued that even if there

was no express approval by the State Government to the

acquisition of land of the appellant, the required approval

will be deemed to have been granted because the State

Government had contributed Rs.100 towards the

acquisition of land. In support of this argument, Shri

Shetty relied upon the judgments of this Court in Smt.
55

Somavanti and others v. The State of Punjab and others

(1963) 2 SCR 774: AIR 1963 SC 151 and Pratibha Nema

v. State of M.P. (2003) 10 SCC 626 and agreement dated

8.7.1988 executed between the appellant and the State

Government.
17. Shri P.P. Rao pointed out that in paragraph 2 of the

writ petition, respondent No. 3 had specifically pleaded

that the acquisition of land for carrying out any

educational, housing, health or slum clearance scheme

by the appellant had to be with the prior approval of the

appropriate Government in terms of Section 3(f)(vi) and

argued that the averments contained in that paragraph

were sufficient to enable the High Court to make an

inquiry whether the acquisition of the land in question

was preceded by the State Government’s approval to the

housing scheme framed by the appellant. Learned senior

counsel submitted that the Division Bench of the High

Court did not commit any error by recording a finding

that the acquisition of the land belonging to respondent
56

No. 3 cannot be treated as one made for public purpose

because the appellant had not prepared any housing

scheme.
18. The question whether the acquisition of the land in

question can be treated as one made for public purpose

as defined in Section 3(f) needs to be prefaced by making

a reference to the following provisions of the 1894 Act:

“Section 3(cc) as amended by Act No.68 of 1984
3.(cc) the expression “corporation owned or

controlled by the State” means any body corporate

established by or under a Central, Provincial or

State Act, and includes a Government company as

defined in section 617 of the Companies Act, 1956

(1 of 1956), a society registered under the Societies

Registration Act, 1860 (21 of 1860), or under any

corresponding law for the time being in force in a

State, being a society established or administered

by Government and a co-operative society within

the meaning of any law relating to co-operative

societies for the time being in force in any State,

being a co-operative society in which not less than

fifty-one per centum of the paid-up share capital is

held by the Central Government, or by any State

Government or Governments or partly by the

Central Government and partly by one or more

State Governments;

Section 3(e) as amended by Act No.68 of 1984

“3.(e) the expression “Company” means-
57

(i) a company as defined in section 3 of the

Companies Act, 1956 (1 of 1956), other than a

Government company referred to in clause (cc);

(ii) a society registered under the Societies

Registration Act, 1860 (21 of 1860), or under any

corresponding law for the time being in force in a

State, other than a society referred to in clause (cc);

(iii) a co-operative society within the meaning of

any law relating to co-operative societies for the

time being in force in any State, other than a co-

operative society referred to in clause (cc);

Section 3(f) as amended by Act No.68 of 1984

(f) the expression “public purpose” includes-

(i) the provision of village-sites, or the extension,

planned development or improvement of existing

village-sites;

(ii) the provision of land for town or rural

planning;

(iii) the provision of land for planned development

of land from public funds in pursuance of any

scheme or policy of Government and subsequent

disposal thereof in whole or in part by lease,

assignment or outright sale with the object of

securing further development as planned;

(iv) the provision of land for a corporation owned

or controlled by the State;

(v) the provision of land for residential purposes

to the poor or landless or to persons residing in

areas affected by natural calamities, or to persons
58

displaced or affected by reason of the

implementation of any scheme undertaken by

Government, any local authority or a corporation

owned or controlled by the State;

(vi) the provision of land for carrying out any

educational, housing, health or slum clearance

scheme sponsored by Government or by any

authority established by Government for carrying

out any such scheme, or with the prior approval of

the appropriate Government, by a local authority,

or a society registered under the Societies

Registration Act, 1860 (21 of 1860), or under any

corresponding law for the time being in force in a

state, or a co-operative society within the meaning

of any law relating to co-operative societies for the

time being in force in any State;

(vii) the provision of land for any other scheme of

development sponsored by Government or with the

prior approval of the appropriate Government, by a

local authority;

(viii) the provision of any premises or building for

locating a public office,

but does not include acquisition of land for

Companies;

Section 39 as amended by Act No.68 of 1984
39. Previous consent of appropriate Government

and execution of agreement necessary. – The

provisions of sections 6 to 16 (both inclusive) and

sections 18 to 37 (both inclusive) shall not be put in

force in order to acquire land for any company

under this Part, unless with the previous consent of
59

the appropriate Government, not unless the

Company shall have executed the agreement

hereinafter mentioned.
40. Previous enquiry. – (1) Such consent shall not

be given unless the appropriate Government be

satisfied, either on the report of the Collector under

section 5A, sub-section (2), or by an enquiry held as

hereinafter provided, –

(a) that the purpose of the acquisition is to obtain

land for the erection of dwelling houses for

workmen employed by the Company or for the

provision of amenities directly connected therewith,

or

(aa) that such acquisition is needed for the

construction of some building or work for a

Company which is engaged or is taking steps for

engaging itself in any industry or work which is for

a public purpose, or

(b) that such acquisition is needed for the

construction of some work, and that such work is

likely to prove useful to the public.

(2) Such enquiry shall be held by such officer and at

such time and place as the appropriate Government

shall appoint.

(3) Such officer may summon and enforce the

attendance of witnesses and compel the production

of documents by the same means and, as far as

possible, in the same manner as is provided by the

Code of Civil Procedure, 1908 (5 of 1908) in the

case of Civil Court.
41. Agreement with appropriate Government. – If

the appropriate Government is satisfied after
60

considering the report, if any, of the Collector under

section 5A, sub-section (2), or on the report of the

officer making an inquiry under section 40 that the

proposed acquisition is for any of the purposes

referred to in clause (a) or clause (aa) or clause (b)

of sub-section (1) of section 40, it shall require the

Company to enter into an agreement with the

appropriate Government, providing to the

satisfaction of the appropriate Government for the

following matters, namely:-

(1) the payment to the appropriate Government of

the cost of the acquisition;

(2) the transfer, on such payment, of the land to the

Company;

(3) the terms on which the land shall be held by the

Company;

(4) where the acquisition is for the purpose of

erecting dwelling houses or the provision of

amenities connected therewith, the time within

which, the conditions on which and the manner in

which the dwelling houses or amenities shall be

erected or provided;

(4A) where the acquisition is for the construction of

any building or work for a Company which is

engaged or is taking steps for engaging itself in any

industry or work which is for a public purpose, the

time within which, and the conditions on which, the

building or work shall be constructed or executed;

and

(5) where the acquisition is for the construction of

any other work, the time within which and the

conditions on which the work shall be executed and
61

maintained and the terms on which the public shall

be entitled to use the work.
42. Publication of agreement. – Every such

agreement shall, as soon as may be after its

execution, be published in the Official Gazette, and

shall thereupon (so far as regards the terms on

which the public shall be entitled to use the work)

have the same effect as if it had formed part of this

Act.”

(3) the terms on which the land shall be held by the

Company;

(4) where the acquisition is for the purpose of

erecting dwelling houses or the provision of

amenities connected therewith, the time within

which, the conditions on which and the manner in

which the dwelling houses or amenities shall be

erected or provided;

(4A) where the acquisition is for the construction of

any building or work for a Company which is

engaged or is taking steps for engaging itself in any

industry or work which is for a public purpose, the

time within which, and the conditions on which, the

building or work shall be constructed or executed;

and

(5) where the acquisition is for the construction of

any other work, the time within which and the

conditions on which the work shall be executed and

maintained and the terms on which the public shall

be entitled to use the work.
42. Publication of agreement. – Every such

agreement shall, as soon as may be after its

execution, be published in the Official Gazette, and

shall thereupon (so far as regards the terms on
62

which the public shall be entitled to use the work)

have the same effect as if it had formed part of this

Act.”
19. An analysis of the definitions noted

hereinabove shows that all the cooperative societies have

been classified into two categories. The first category

consists of the cooperative societies in which not less

than 51% of the paid-up share capital is held by the

Central Government or any State Government or partly

by the Central Government and partly by one or more

State Governments. The second category consists of the

cooperative societies other than those falling within the

definition of the expression `corporation owned or

controlled by the State’ [Section 3(cc)]. The definition of

the term `company’ contained in Section 3(e) takes within

its fold a company as defined in Section 3 of the

Companies Act, 1956 other than a government company

referred to in clause (cc), a society registered under the

Societies Registration Act or under any corresponding

law framed by the State legislature, other than a society
63

referred to in clause (cc) and a cooperative society defined

as such in any law relating to cooperative societies for the

time being in force in any State, other than a cooperative

society referred to in clause (cc). The definition of the

expression `public purpose’ contained in Section 3(f) is

inclusive. As per clause (vi) of the definition, the

expression `public purpose’ includes the provision of land

for carrying out any educational, housing health or slum

clearance scheme sponsored by Government or by any

authority established by Government for carrying out any

such scheme, or, with the prior approval of the

appropriate Government, by a Local Authority, or a

society registered under the Societies Registration Act,

1860 or any corresponding law in force in a State or a

cooperative society as defined in any law relating to

cooperative societies for the time being in force in any

State. To put it differently, the acquisition of land for

carrying out any education, housing, health or slum

clearance scheme by a registered society or a cooperative

society can be regarded as an acquisition for public
64

purpose only if the scheme has been approved by the

appropriate Government before initiation of the

acquisition proceedings. If the acquisition of land for a

cooperative society, which is covered by the definition of

the term `company’ is for any purpose other than public

purpose as defined in Section 3(f), then the provisions of

Part VII would be attracted and mandate thereof will have

to be complied with.
20. In our view, there is no merit in the argument of

learned senior counsel for the appellant and learned

counsel for the State that the Division Bench of the High

Court committed an error by recording a finding on the

issue of violation of Section 3(f)(vi) of the 1894 Act

because respondent No. 3 had not raised any such plea

in the writ petition. In paragraph 2 of the writ petition,

respondent No. 3 made the following averments:
“The acquisition of any land under the Act for the

benefit of the 2nd respondent will not be for a public

purpose and will have to be in accordance with the

provisions contained in Part VII of the Act. In any

case, even if the acquisition is for carrying out any
65

educational, housing, health or slum clearance

scheme of the 2nd respondent, the same shall be

with the prior approval of the appropriate

Government (Vide Sec. 3(f)(vi) of the Act).”
The appellant neither controverted the above-extracted

averments nor produced any document before the High Court

to show that it had prepared a housing scheme and the same

had been approved by the State Government before the issue

of notification under Section 4(1) of the 1894 Act. Therefore,

the Division Bench of the High Court rightly held that the

acquisition in question was not for a public purpose as defined

in Section 3(f)(vi) of the 1894 Act.
21. We shall now examine whether the appellant

had, in fact, framed a housing scheme and the same had

been approved by the State Government. The first of

these documents is representation dated 7.12.1984 made

by the Executive Director of the appellant to the Minister

of Revenue, Government of Karnataka. The other two

documents are letter dated 21.5.1988 sent by the State

Government to Deputy Commissioner, Bangalore to issue
66

notification under Section 4(1) of the 1894 Act and

agreement dated 7.8.1988 entered into between the

Executive Director of the appellant and the State

Government. A close and careful reading of these

documents reveals that although, in the representation

made by him to the Revenue Minister, the Executive

Director of the appellant did make a mention that the

object of the society is to provide house sites to its

members who belong to working class and other

backward class people belonging to weaker class of

society and the members are poor and siteless people,

there was not even a whisper about any housing scheme.

The direction issued by the State Government to Deputy

Commissioner, Bangalore to issue the preliminary

notification for an extent of 207 acres 29 guntas land

also does not speak of any housing scheme. The

agreement entered into between the appellant through its

Executive Director and the State Government does not

contain any inkling about the housing scheme framed by

the appellant. It merely mentions about the proposed
67

formation of sites and construction of houses for the

members of the appellant and payment of cost for the

acquired land. The agreement also speaks of an inquiry

having been got made by the State Government in

conformity with the provisions of the 1894 Act and the

grant of consent for the acquisition of land for the benefit

of society’s members. The agreement then goes on to say

that the appellant shall pay to the Government the entire

costs of the acquisition of land and expenses. Paragraph

2 of the conditions incorporated in the agreement speaks

of transfer of land to the society as to vest in the

company. Clause 9(a) of the agreement did provide for

token contribution of Rs.100 by the Deputy

Commissioner / Special Deputy Commissioner towards

the compensation to be determined by the Assistant

Commissioner/Special Land Acquisition Officer, but that

is not relatable to any housing scheme framed by the

appellant. It is, thus, evident that the appellant had not

framed any housing scheme and obtained its approval
68

before the issue of notification under Section 4(1) of the

1894 Act.
22. The 1976 Act does provide for framing of

various schemes including housing scheme. Section 15

of that Act empowers the BDA to undertake works and

incur expenditure for development. In terms of Section

15(1)(a), the BDA is entitled to draw up detailed schemes

for the development of the Bangalore Metropolitan Area

and in terms of clause (b), the BDA can with the previous

approval of the Government undertake any work for the

development of the Bangalore Metropolitan Area and

incur expenditure therefor and also for the framing and

execution of development schemes. Sub-sections (2) and

(3) empower the BDA to make and take up any new or

additional development scheme either on its own or on

the recommendations of the Local Authority or as per the

direction of the State Government. Section 16 of the

1976 Act lays down that every development scheme shall

provide for the acquisition of any land which is
69

considered necessary for or affected by the execution of

the scheme; laying and re-laying out all or any land

including the construction and reconstruction of

buildings and formation and alternation of scheme,

drainage, water supply and electricity. Sub-section (3) of

Section 16 envisages construction of houses by the BDA

as part of the development scheme. Section 32 which

contains a non obstante clause postulates forming of new

extensions or layouts by private persons. Though, sub-

section (1) thereof is couched in negative form, it clearly

provides for formation of any extension or layout by a

private person with the written sanction of the BDA and

subject to the terms and conditions which it may specify.

Sub-section (2) of Section 32 provides for making of

written application along with plans and sections

showing various matters enumerated in clauses (a) to (d).

Similar provisions are contained in Section 18 of the

Karnataka Housing Board Act.
70

23. Although, the appellant may not have been

required to frame a scheme in strict conformity with the

provisions of the 1976 Act and the Housing Board Act,

but it was bound to frame scheme disclosing the total

number of members eligible for allotment of sites, the

requirement of land including the size of the plots and

broad indication of the mode and manner of development

of the land as a layout. The State Government could

then apply mind whether or not the housing scheme

framed by the appellant should be approved. However, as

mentioned above, the appellant did not produce any

evidence before the High Court to show that it had

framed a housing scheme and the same was approved by

the State Government before the issue of notification

under Section 4(1) of the 1894 Act. Even before this

Court, no material has been produced to show that, in

fact, such a scheme had been framed and approved by

the State Government. Therefore, the Division Bench of

the High Court rightly referred to Section 3(f)(vi) and held

that in the absence of a housing scheme having been
71

framed by the appellant, the acquisition of land belonging

to respondent No. 3 was not for a public purpose as

defined in Section 3(f)(vi).
24. In Narayana Reddy v. State of Karnataka ILR

1991 (3) KAR 2248, the Division Bench of the High Court

considered whether the acquisition of land made on

behalf of 7 house building cooperative societies including

H.M.T. Employees’ Cooperative Society and Vyalikaval

House Building Cooperative Society was for a public

purpose as defined in Section 3(f)(vi) or the same was

colourable exercise of power by the State Government. A

reading of the judgment shows that when the writ

petitions questioning the acquisition of land were placed

before the learned Single Judge, he felt that the points

which were raised by the petitioners had not been

considered in the earlier judgment of the Division Bench

in Narayana Raju v. State of Karnataka ILR 1989 KAR

376, which was confirmed by this Court in Narayana

Raju v. State of Karnataka ILR 1989 KAR 406 and
72

referred the matter to the Division Bench under Section 9

of the Karnataka High Court Act. The Division Bench first

considered whether the acquisition of land on behalf of

house building cooperative societies was for a public

purpose. After noticing the relevant statutory provisions,

the Division Bench referred to the judgments of this

Court in State of Gujarat v. Chaturbhai Narsibhai AIR

1975 SC 629, General Government Servants Cooperative

Housing Society Limited v. Kedar Nath (1981) 2 SCC 352

and M/s. Fomento Resorts and Hotels Limited v. Gustavo

Ranato Da Cruz Pinto AIR 1985 SC 736 and held that the

earlier decisions support the writ petitioners’ plea that

they were entitled to be heard before the Government

could grant approval for the acquisition of land on behalf

of cooperative societies, but their plea cannot be accepted

in view of the latter judgment. The Division Bench

further held that the aggrieved person can raise all points

during the course of an inquiry held under Section 5A of

the 1894 Act. The Division Bench then referred to the

averments contained in Writ Petition Nos.7683-
73

7699/1988 in which the acquisition of land for various

House Building Cooperative Societies was challenged, the

advertisement issued by the society, agreement entered

into between HMT Cooperative Society and the Estate

Agent who assured that he will get the acquisition

approved at an early date subject to payment of the

specified amount, various reports including the one

prepared by G.V.K.Rao, order dated 14.1.1991 passed by

the State Government and quashed the acquisition.
25. The Division Bench of the High Court held that the

whole acquisition was vitiated due to malafides and

manipulations done by the House Building Cooperative

Societies through the Estate Agent. The Division Bench

also referred to Section 23 of the Contract Act, judgment

of this Court in Rattan Chand Hira Chand v. Askar

Nawaz Jung JT 1991 (1) SC 433 and held as under:

“Applying the ratio of the above judgment,

there can be no doubt that the Agreements

entered into between the six respondent-

Societies and their respective agents in which

one of the condition was payment of huge

sums of money by the Society to the agent in
74

consideration of which the agent had to get the

Preliminary and Final Notifications issued by

the Government, was for the purpose of

influencing the Government and to secure

approval for acquisition of the lands and

therefore opposed to public policy.

The question however, for our consideration is,

whether the impugned Notifications are liable

to be quashed. In our opinion, once it is clear

that the Agreement entered into between the

Societies and the agents concerned, under

which the purport of one of the clauses was

that the agent should influence the

Government and to procure Preliminary and

Final Notifications under Sections 4 and 6 of

the Act respectively are opposed to public

policy, the impugned Notifications being the

product or fruits of such an agreement are

injurious to public interest and detrimental to

purity of administration and therefore cannot

be allowed to stand. As seen from the findings

of G.V.K. Rao Inquiry Report, in respect of five

respondent-Societies and the report of the

Joint Registrar in respect of Vyalikaval House

Building Cooperative Society, these Societies

had indulged in enrolling large number of

members illegally inclusive of ineligible

members and had also indulged in enrolling

large number of bogus members. The only

inference that is possible from this is that the

office bearers of the Societies had entered into

unholy alliance with the respective agents for

the purpose of making money, as submitted

for the petitioners. Otherwise, there is no

reason as to why such an Agreement should

have been brought about by the office bearers

of the Society and the agents. Unless these

persons had the intention of making huge
75

profits as alleged by the petitioners, they would

not have indulged in entering into such

Agreements and would not have indulged in

enrolment of ineligible and bogus members.

The circumstance that without considering all

these relevant materials the Government had

accorded its approval, is sufficient to hold that

the agents had prevailed upon the Government

to take a decision to acquire the lands without

going into all those relevant facts. The

irresistible inference flowing from the facts and

circumstances of these cases is, whereas the

power conferred under the Land Acquisition

Act is for acquiring lands for carrying out

housing scheme by a housing society, in each

of the cases the acquisition of lands is not for a

bona fide Housing Scheme but is substantially

for the purpose of enabling the concerned

office bearers of respondent-Societies and their

agents to indulge in sale of sites in the guise of

allotment of sites to the Members/Associate

Members of the Society and to make money as

alleged by the petitioners and therefore it is a

clear case of colourable exercise of power.

Thus the decision of the Government to

acquire the lands suffers from legal mala fides

and therefore the impugned Notifications are

liable to be struck down.”
26. In the 1st H.M.T. Case, this Court approved the

judgment of the Division Bench of the High Court. The

three-Judge Bench considered questions similar to those

raised in these appeals, referred to the agreement entered

into between the appellant and the State Government
76

whereby the former agreed to abide by the conditions

specified in Sections 39 and 40 of Part VII of the 1894 Act

and held:
“12. There is no dispute that the society with which

we are concerned shall not be covered by the

expression “corporation owned or controlled by the

State”, because the said expression shall include a

cooperative society, being a cooperative society in

which not less than 51 per centum of the paid-up

share capital is held by the Central Government, or

by any State Government or Governments, or partly

by the Central Government and partly by one or

more State Governments.
13. The substituted definition of the expression

`company’ in Section 3(e)(iii) will certainly include

the appellant-Society. The substituted definition of

the expression `company’ shall include cooperative

society, within the meaning of any law relating to

cooperative societies other than those referred to in

clause (cc) of Section 3 of the Act. Such cooperative

society shall be deemed to be a company, to which

provisions of Chapter VII relating to acquisition of

land for company shall be applicable.
14. In view of the substituted definition of the

expression “public purpose”, in Section 3(f)(vi), the

provision for carrying out any housing scheme

sponsored by the Government or by any authority

established by Government for carrying out any

such scheme shall be deemed to be a “public

purpose”. It further says that the provision of land

for carrying out any housing scheme with prior

approval of the State Government by a cooperative

society within the meaning of any law relating to

cooperative societies for the time being in force in
77

any State, shall be deemed to be a “public purpose”.

As such for any housing cooperative society lands

can be acquired by the appropriate Government,

treating the same as acquisition for the public

purpose. But, in that event, there has to be a prior

approval of such scheme by the appropriate

Government. When the lands are acquired for any

cooperative society with prior approval of the

scheme by the State Government, there is no

question of application of the provisions of Part VII

of the Act. Such acquisition shall be on the mode of

acquisition by the appropriate Government for any

public purpose.
18. Now the question which is to be answered is as

to whether in view of the definition of “public

purpose” introduced by the aforesaid Amending Act

68 of 1984 in Section 3(f)(vi), is it open to the

appropriate Government to acquire land for

cooperative society for housing scheme without

making proper enquiry about the members of the

society and without putting such housing

cooperative society to term in respect of nature of

construction, the area to be allotted to the members

and restrictions on transfer thereof?
19. According to us, in Section 3(f)(vi) the

expression `housing’ has been used along with

educational and health schemes. As such the

housing scheme contemplated by Section 3(f)(vi)

shall be such housing scheme which shall serve the

maximum number of members of the society. Such

housing scheme should prove to be useful to the

public. That is why Parliament while introducing a

new definition of “public purpose”, said that any

scheme submitted by any cooperative society

relating to housing, must receive prior approval of

the appropriate Government and then only the

acquisition of the land for such scheme can be held
78

to be for public purpose. If requirement of Section

3(f)(vi) is not strictly enforced, every housing

cooperative society shall approach the appropriate

Government for acquisition by applying Section 3(f)

(vi) instead of pursuing the acquisition under Part

VII of the Act which has become more rigorous and

restrictive. In this background, it has to be held

that the prior approval, required by Section 3(f)(vi),

of the appropriate Government is not just a

formality; it is a condition precedent to the exercise

of the power of acquisition by the appropriate

Government for a housing scheme of a cooperative

society.
20. In the present case, a hybrid procedure appears

to have been followed. Initially, the appellant-

Society through M/s S.R. Constructions purported

to acquire the lands by negotiation and sale by the

landholders. Then from terms of the agreement

dated 17-3-1988, it appears that the procedure

prescribed in Part VII was to be followed and the

lands were to be acquired at the cost of the

appellant-Society treating it to be a `company’. The

allegation made on behalf of the appellant-Society

that the housing scheme had been approved by the

appropriate Government on 7-11-1984 shall not be

deemed to be a prior approval within the meaning of

Section 3(f)(vi) but an order giving previous consent

as required by Section 39 of Part VII of the Act. In

the agreement dated 17-3-1988 it has been

specifically stated:
“And whereas the Government having caused

inquiry to be made in conformity with the

provisions of the said Act and being satisfied

as a result of such inquiry that the acquisition

of the said land is needed for the purpose

referred to above has consented to the

provisions of the said Act being in force in
79

order to acquire the said land for the benefit of

the society members to enter in the agreement

hereinafter contained with the Government.”
But, ultimately, the lands have been acquired on

behalf of the appropriate Government treating the

requirement of the appellant-Society as for a public

purpose within the meaning of Section 3(f)(vi). It is

surprising as to how respondent M/s S.R.

Constructions entered into agreement with the

appellant-Society assuring it that the lands, details

of which were given in the agreement itself, shall be

acquired by the State Government by following the

procedure of Sections 4(1) and 6(1) and for this,

more than one crore of rupees was paid to M/s S.R.

Constructions (Respondent 11).”
27. The three Judge Bench also approved the view

taken by the High Court that the acquisition of land was

vitiated because the decision of the State Government

was influenced by the Estate Agent with whom the

appellant had entered into an agreement. Paragraphs 21

and 22 of the judgment, which contain discussion on this

issue are extracted hereunder:

“21. Mr G. Ramaswamy, learned Senior

Counsel appearing on behalf of the appellant,

submitted that merely because the appellant-

Society had entered into an agreement with

Respondent 11, M/s S.R. Constructions, in

which the latter for the consideration paid to it

had assured that the lands in question shall
80

be acquired by the State Government, no

adverse inference should be drawn because

that may amount to a tall claim made on

behalf of M/s S.R. Constructions in the

agreement. He pointed out that the

notifications under Sections 4(1) and 6(1) have

been issued beyond the time stipulated in the

agreement and as such, it should be held that

the State Government has exercised its

statutory power for acquisition of the lands in

normal course, only after taking all facts and

circumstances into consideration. There is no

dispute that in terms of agreement dated 1-2-

1985 payments have been made by the

appellant-Society to M/s S.R. Constructions.

This circumstance alone goes a long way to

support the contention of the writ petitioners

that their lands have not been acquired in the

normal course or for any public purpose. In

spite of the repeated query, the learned

counsel appearing for the appellant-Society

could not point out or produce any order of the

State Government under Section 3(f)(vi) of the

Act granting prior approval and prescribing

conditions and restrictions in respect of the

use of the lands which were to be acquired for

a public purpose. There is no restriction or bar

on the part of the appellant-Society on carving

out the size of the plots or the manner of

allotment or in respect of construction over the

same. That is why the framers of the Act have

required the appropriate Government to grant

prior approval of any housing scheme

presented by any cooperative society before the

lands are acquired treating such requirement

and acquisition for public purpose. It is

incumbent on the part of the appropriate

Government while granting approval to

examine different aspects of the matter so that
81

it may serve the public interest and not the

interest of few who can as well afford to

acquire such lands by negotiation in open

market. According to us, the State Government

has not granted the prior approval in terms of

Section 3(f)(vi) of the Act to the housing

scheme in question. The power under Sections

4(1) and 6(1) of the Act has been exercised for

extraneous consideration and at the instance

of the persons who had no role in the decision-

making process — whether the acquisition of

the lands in question shall be for a public

purpose. This itself is enough to vitiate the

whole acquisition proceeding and render the

same invalid.

22. In the present case there has been

contravention of Section 3(f)(vi) of the Act

inasmuch as there was no prior approval of

the State Government as required by the said

section before steps for acquisition of the lands

were taken. The report of Shri G.K.V. Rao

points out as to how the appellant-Society

admitted large number of persons as members

who cannot be held to be genuine members,

the sole object being to transfer the lands

acquired for “public purpose”, to outsiders as

part of commercial venture, undertaken by the

office-bearer of the appellant-Society. We are

in agreement with the finding of the High

Court that the statutory notifications issued

under Sections 4(1) and 6(1) of the Act have

been issued due to the role played by M/s S.R.

Constructions, Respondent 11. On the

materials on record, the High Court was

justified in coming to the conclusion that the

proceedings for acquisition of the lands had

not been initiated because the State

Government was satisfied about the existence
82

of the public purpose but at the instance of

agent who had collected more than a crore of

rupees for getting the lands acquired by the

State Government.”
28. The view taken by this Court in 1st H.M.T. case

was reiterated by another three Judge Bench in the case

titled as H.M.T. House Building Cooperative Society v. M.

Venkataswamappa (1995) 3 SCC 128 and by a two Judge

Bench in Vyalikawal House Building Cooperative Society

v. V. Chandrappa (2007) 9 SCC 304. In the last

mentioned judgment, this Court declined to accept the

argument of the appellant’s counsel that the respondents

have accepted the amount and observed:

“Learned counsel for the appellant tried to persuade

us that as the amount in question has been

accepted by the respondents, it is not open for them

now to wriggle out from that agreement. It may be

that the appellant might have tried to settle out the

acquisition but when the whole acquisition

emanates from the aforesaid tainted notification any

settlement on the basis of that notification cannot

be validated. The fact remains that when the basic

notification under which the present land is sought

to be acquired stood vitiated then whatever money

that the appellant has paid, is at its own risk. Once

the notification goes no benefit could be derived by

the appellant. We are satisfied that issue of

notification was mala fide and it was not for public
83

purpose, as has been observed by this Court,

nothing turns on the question of delay and

acquiescence.”
29. As noticed earlier, in this case also no housing

scheme was framed by the appellant which is sine qua

non for treating the acquisition of land for a cooperative

society as an acquisition for public purpose within the

meaning of Section 3(f). Not only this, the appellant

executed agreement dated 21.2.1988 for facilitating the

acquisition of land in lieu of payment of a sum of rupees

more than 5 crores. This agreement was similar to the

agreement executed by H.M.T. Employees’ House

Building Society with M/s. S.R. Constructions. The

Estate Agent engaged by the appellant had promised that

it will get the notifications issued under Sections 4(1) and

6(1) within four months and three months respectively.

The huge amount which the appellant had agreed to pay

to the Estate Agent had no co-relation with the services

provided by it. Rather, the amount was charged by the

Estate Agent for manipulating the State apparatus and
84

facilitating the acquisition of land and sanction of layout

etc. without any obstruction. Such an agreement is

clearly violative of Section 23 of the Contract Act.
30. The stage has now reached for taking note of

the orders passed by the High Court and this Court in

other cases as also the judgment in Kanaka Gruha

Nirmana Sahakara Sangha v. Narayanamma (2003) 1

SCC 228, which have been relied upon by the learned

senior counsel for the appellant in support of their

argument that the H.M.T.’s case has not been followed in

other similar cases. We have also taken note of some

other orders, copies of which have been produced by the

appellant.
(i) Writ Petition Nos. 28577-86/1995 – Byanna and

others v. State of Karnataka and others were dismissed by the

learned Single Judge vide order dated 12.4.1996. The only

contention raised in that case was that the acquisition was

tainted by fraud. The learned Single Judge briefly adverted to

the averments contained in writ petitions and the counter
85

affidavits and negatived challenge to the acquisition

proceeding. Paragraphs 3 to 6 of that order are extracted

below:
“3. The contention of the learned counsel for the

petitioner is that the acquisition was made

fraudulently and there were some mediators, which

clearly shows that the entire acquisition

proceedings are fraudulent. He, therefore, relies on

the Judgment of the Supreme Court in H.M.T.

House Building Cooperative Society Vs. Syed

Khader (ILR 1995 Kar. 1962). He further submits

that the petitioners being villagers, were not aware

of their rights, and they did not approach this Court

earlier.
4. On being issued notice, the respondents 1 and 2

have filed their statement of objections. The

various dates mentioned above are furnished to the

Court, stating the various steps taken during the

acquisition proceedings. It was further stated,

there was no middle man and that the General

Power of Attorney was given only after the issuance

of Notification under Section 6(1) Notification. It

was, therefore, contended that there was no fraud

played at any stage.
5. Based on the decision mentioned above and the

facts stated in the objections, it is clear that there

was no fraud in the acquisition proceedings. The

purpose of acquisition being for a society has to be

held to be for a public purpose.
6. The petitioners have not explained the long delay

in approaching this Court. The dates mentioned

above clearly show that the petitioners have

approached this Court after nearly six years. The
86

contention of the learned Counsel for the petitioners

that the petitioners being villagers were unaware of

their rights, cannot be accepted. No other reason is

given explaining the laches. Apart from there being

no merits in the case, the writ petitions are to be

dismissed on the ground of long laches, which is

not explained. The writ petitions are dismissed.”

Writ Appeal No. 7953/1996 – Byanna and others v. State of

Karnataka and others and batch was dismissed by the

Division Bench by relying upon the observations made by the

learned Single Judge that no middlemen was involved in the

transaction; that the acquisition was for a public purpose

within the meaning of the 1894 Act and the appellants had

failed to explain inordinate delay. SLP (C) Nos. 12012-

12017/1997 titled Byanna and others v. State of Karnataka

and others were dismissed by this Court by recording the

following order:
“The SLPs are dismissed.”
(ii) Writ Petition No. 35837/1994 – Subramani and

others v. the Union of India and others and batch, in which

large number of Judges of (sitting and retired) were impleaded
87

as party respondents was disposed of by the Division Bench of

the High Court – Subramani v. Union of India ILR 1995 KAR

3139. The Division Bench rejected the plea that the

acquisition of land for Karnataka State Judicial Department

Employees’ House Building Cooperative Society was vitiated

because the middlemen were responsible for the acquisition of

land as had happened in H.M.T.’s case. The Division Bench

noted that the terms of the agreement entered into between

the Society and M/s. Devatha Builders was not for the

acquisition of land but only for development of the acquired

land. The Division Bench also noted that the agreement was

entered into between the Society and the owners in 1985,

whereas the Government gave approval for acquisition in 1985

and the agreement with the developer was of 1986. The

Division Bench also noted that no stranger had been inducted

as a member of the society. However, the acquisition which

was under challenge in Writ Petition No.28707 of 1995 was

declared illegal because the concerned House Building

Cooperative Society has not framed any housing scheme and

obtained approval thereof from the State Government. The
88

Division Bench also expressed the view that remedy under

Article 226 was discretionary and it was not inclined to nullify

the acquisition made for the society because the petitioners

had approached the Court after long lapse of time and there

was no explanation for the delay.
(iii) Writ Appeal No. 2074/1994 – Sh. Ramchandrappa

v. State of Karnataka and connected cases were dismissed by

the Division Bench of the High Court mainly on the ground

that award had already been passed and the appellants had

participated in the award proceedings and further that the

appellants had approached the Court at the instance of some

rival developers. The Division Bench further held that the

disputed acquisition cannot be termed as colourable exercise

of power. SLP (C) Nos.9088-9097/1997 with the same title

were summarily dismissed by this Court on 1.5.1997
(iv) Writ Petition No. 15508/1998 – Bachappa v. State of

Karnataka was dismissed by the learned Single Judge vide

order dated 9.7.1998 by observing that the acquisition cannot

be nullified by entertaining writ petitions filed after three years
89

simply because in H.M.T.’s case the acquisition proceedings

were quashed. Writ Appeal Nos. 3810-12/1998 filed against

the order of the learned Single Judge were dismissed by the

Division Bench vide order dated 24.8.1998 albeit without

assigning reasons. SLP (C) …. CC Nos. 1764-69/1999 were

dismissed by this Court on 14.5.1999 by recording the

following order:
“Special Leave Petitions are dismissed.’
(v) Writ Petition Nos. 7287-7300/1993 were dismissed by

the learned Single Judge on 3.1.1996 on the ground of

delay of four years. Writ Appeal Nos. 920-925/1996

and batch filed against the aforesaid order was

dismissed by the Division Bench vide order dated

7.7.1997 on the ground that the appellants had failed

to explain the delay. SLP(C) Nos. 15337-38/1997 were

dismissed by this Court by the usual one line order.
(vi) Writ Petition Nos. 30868-70/1996 were dismissed by

the learned Single Judge vide order dated 29.11.1996

on the ground that in the earlier round they had failed
90

to convince the Court on the issue of invalidity of

acquisition. Writ Appeal No.146/1997 and connected

matters were dismissed by the Division Bench on

2.6.1997 by recording its agreement with the learned

Single Judge. SLP(C) …….CC Nos. 189-191/1998 were

dismissed by this Court on 20.1.1998.
(vii) Writ Petition No. 586/1991 Muniyappa v. State of

Karnataka, in which the petitioner had challenged the

acquisition on the ground that no scheme had been

framed under Section 3(f)(vi) of the 1894 Act, was

dismissed by the learned Single Judge on 24.11.1994

by relying upon the judgments in Narayana Raju v.

State of Karnataka ILR 1989 KAR 376 and Narayana

Reddy v. State of Karnataka ILR 1991 KAR 2248. Writ

Appeal No. 281/1995 filed against the order of the

learned Single Judge was dismissed by the Division

Bench vide judgment dated 14.2.1995. The Division

Bench held that framing of Rules is not a condition

precedent for the acquisition of land for the purpose of
91

a cooperative society. SLP(C)…CC No. 14581/1995

Muniyappa v. State of Karnataka was dismissed by

this Court on 4.10.1996 by recording the following

order:
“We have heard the learned counsel for the parties.

The contention that has been raised by the learned

co
unsel for the petitioner o
n
the basis of the

decision of this Court of HMT House Building Co-

operative Society vs. Syed Khader & Ors. (1995) 2

SCC 677, cannot be accepted in view of the fact

that a scheme had been prepared in the present

case and it had been approved by the State

Government and there is nothing to show that the

said approval is vitiated. The special leave petition

is, therefore dismissed.

(viii) Writ Petition No. 41397/1995 and batch were

dismissed by the learned Single Judge on 21.6.1996

by relying upon the judgment in Subramani v. Union

of India ILR 1995 KAR 3139. The learned Single Judge

held that the petitioners had approached the Court

after almost seven years of finalization of the

acquisition proceedings and there was no cogent

explanation for the delay. Writ Appeal Nos. 7057-

72/1996 Smt. Akkayamma v. State of Karnataka were
92

dismissed by the Division Bench vide order dated

12.8.1996 on the ground that the appellants had

already received compensation more than four years

ago and they had entered into an agreement for sale of

the property. SLP(C) Nos. 18239-18254/1996 were

summarily dismissed by this Court on 20.9.1996.
(ix) Writ Petition No. 17603/1989 Smt. Sumitramma v.

State of Karnataka was dismissed by the learned

Single Judge on 22.11.1995 by relying upon the

averment contained in the counter affidavit of

respondent No. 4 that it had submitted a scheme to

the State Government and the acquisition was made

after approval of the scheme. The learned Single Judge

also relied upon the judgment in Narayana Raju’s case

in support of his conclusion that if the Government

decides to acquire the land for a cooperative society on

its being satisfied that the land was to put up houses

after forming layout, etc., the approval to such a

scheme can be inferred from the very fact that the
93

Government was a party to an agreement which

ensured that the lands will be utililised for

implementing the purpose of the acquisition. Writ

Appeal No. 5081/1995 filed against the order of the

learned Single Judge was dismissed by the Division

Bench on 1.1.1996 by one word order “Dismissed.”.

SLP(C) No. 10270/1996 was dismissed by this Court

on 4.10.1996 by recording the following order:
“Strong reliance is placed by the learned counsel for

the petitioner on this Court’s decision H.M.T. House

Building Cooperative Society v. Syed Khader and

others (1995) 2 SCC 677. The submission is that in

the case cited above the Enquiry committee had

submitted a report on the basis whereof a provision

was made in the agreement dated 17.3.88 which

recited that the Government having caused enquiry

to be made in conformity with the provisions of the

Act and being satisfied with the result of such

enquiry that the acquisition of such land is needed

for the purpose referred to above and the

Government having consented to acquire the said

land for the benefit of the society members they

have entered into an agreement with the

Government. While this recital indeed is found in

the agreement dated 17.3.88 no separate order was

made by the Government granting approval as in

the present case. In the present case a separate

order dated 14.10.1985 was passed by the

Government and under the signatures of the Under

Secretary to the Government, Revenue Department,
94

conveying the approval of the Government in the

issuance of the Notification dated 21.1.86 under

Section 4 of the Land Acquisition Act to acquire

certain parcels of land in favour of L.R.D.E.

Employees Housing Co-operative Society,

Bangalore. Therefore, there is a separate specific

order made by the Government on the basis of the

recommendation of the Committee unlike in the

H.M.T. case. We, therefore, do not see any merit in

this petition and dismiss the same. No orders in I.A.

No. 2.”
(x) Writ Petition No. 38745/1995 – A.K. Erappa v. State of

Karnataka was dismissed by the learned Single Judge

mainly on the ground that the writ petitioners had

participated in the award proceedings and agreed that

the compensation be disbursed to his power of

attorney and also approached the society for allotment

of a site. Writ Appeal No. 6914/1996 filed by the

appellant was dismissed by the Division Bench on

7.10.1996. SLP (C) No. 1528/1997 was summarily

dismissed by this Court on 3.2.1997.
(xi) Writ Appeal Nos. 7122-34/1996 – Smt. Hanumakka v.

State of Karnataka were dismissed by the Division

Bench of the High Court vide order dated 12.9.1996 on
95

the ground of delay and also on the ground that the

appellant had not approached the Court with clean

hands. SLP (C) Nos. 23256-68/1996 were summarily

dismissed by this Court on 9.12.1996.
31. In Kanaka Gruha Nirmana Sahakara Sangha’s case,

two questions were considered by this Court. The first

question was whether there was any inconsistency between

the Land Acquisition (Mysore Extension and Amendment) Act,

1961 and the 1894 Act. After examining the relevant

constitutional provisions and the two enactments, this Court

answered the question in negative. The second question

considered by the Court was whether the Government had

approved the housing scheme framed by the appellant. The

Court noted that Assistant Registrar of Cooperative Societies,

Three Men Committee and the State Level Committee had

recommended the acquisition of land on behalf of the

appellant and the Government had directed Special Deputy

Commissioner, Bangalore to initiate acquisition proceedings

by issuing Section 4(1) Notification and proceeded to observe:
96

“Considering the fact that the State Government

directed the Assistant Registrar of Cooperative

Societies of Bangalore to verify the requirement of

the members of the Society and also the fact that

the matter was placed before the Committee of three

members for scrutiny and thereafter the State

Government has conveyed its approval for initiating

the proceedings for acquisition of the land in

question by letter dated 14-11-1985, it cannot be

said that there is lapse in observing the procedure

prescribed under Section 3(f)(vi). Prior approval is

granted after due verification and scrutiny.”
32. In our view, none of the orders and judgments

referred to hereinabove can be relied upon for holding that

even though the appellant had not framed any housing

scheme, the acquisition in question should be deemed to have

been made for a public purpose as defined in Section 3(f)(vi)

simply because in the representation made by him to the

Revenue Minister of the State, the Executive Director of the

appellant had indicated that the land will be used for

providing sites to poor and people belonging to backward class

and on receipt of the recommendations of SLCC the State

Government had directed Special Deputy Commissioner to

issue notification under Section 4(1) of the 1894 Act and that

too by ignoring the ratio of the judgments of three Judge
97

Benches in 1st and 2nd H.M.T. cases and the judgment of two

Judge Bench in Vyalikawal House Building Cooperative

Society’s case. In majority of the cases decided by the High

Court to which reference has been made hereinabove, the

petitioners were non-suited on the ground of delay and laches

or participation in the award proceedings. In Muniyappa’s

case, the judgment in 1st H.M.T. case was distinguished on the

premise that a scheme had been framed and the same had

been approved by the State Government and further that the

petitioner had failed to show that the approval was vitiated

due to intervention of the extraneous consideration. In

Sumitramma’s case, this Court noted that in 1st H.M.T. case,

no separate order was made by the Government for grant of

approval whereas in Sumitramma’s case an order has been

passed on 14.10.1985 conveying the Government’s approval

for the issuance of Notification dated 21.1.86 under Section 4

of the 1894 Act. In Kanaka Gruha’s case also, this Court

treated the direction contained in letter dated 14.11.1985 of

the Revenue Commissioner and Secretary to Government to

Special Deputy Commissioner, Bangalore to initiate the
98

acquisition proceedings by issuing Notification under Section

4(1) as an approval within the meaning of Section 3(f)(vi). In

none of the three cases, this Court was called upon to consider

whether the decision taken by the Government to sanction the

acquisition of land in the backdrop of an agreement executed

by the society with a third party, as had happened in the

H.M.T. cases and the present case whereby the Estate Agent

agreed to ensure the acquisition of land within a specified time

frame subject to payment of huge money and the fact that

agreement entered into between the society and the

Government was in the nature of an agreement contemplated

by Part VII. While in 1st H.M.T.’s case, the amount paid to

M/s. S. R. Constructions was rupees one crore, in the present

case, the appellant had agreed to pay more than rupees five

crores for facilitating issue of Notifications under Sections 4(1)

and 6(1) and sanction of the layouts and plans by the BDA

within a period of less than one year. Therefore, we have no

hesitation to hold that the appellant’s case is squarely covered

by the ratio of the H.M.T. cases and the High Court did not

commit any error by relying upon the judgment in 1st H.M.T
99

case for declaring that the acquisition was not for a public

purpose.
33. Another facet of the appellant’s challenge to the

judgment in the case of respondent No. 3 is that even if there

was no express approval by the State Government to the

acquisition of land, the approval will be deemed to have been

granted because the State Government had contributed

Rs.100 towards the acquisition of land. Shri Vishwanatha

Shetty relied upon the judgments of this Court in Smt.

Somavanti and others v. The State of Punjab and others (1963)

2 SCR 774, Pratibha Nema v. State of M.P. (2003) 10 SCC 626

and agreement dated 8.7.1988 and argued that the decision of

the State Government to execute an agreement with the

appellant should be construed as its approval of the proposal

made for the acquisition of land. In our view, this argument of

the learned senior counsel lacks merit. At the cost of

repetition, we consider it appropriate to mention that the

agreement was signed by the Executive Director of the

appellant and the State Government in compliance of Section
100

41, which finds place in Part VII of the 1894 Act. Therefore, a

nominal contribution of Rs.100 by the Special Deputy

Commissioner cannot be construed as the State Government’s

implicit approval of the housing scheme which had never been

prepared. In Smt. Somavanti’s case, the appellants had

challenged the acquisition of their land by the State

Government on the ground that the provisions of the 1894 Act

could not be invoked for the benefit of respondent No. 6, who

was interested in setting up an industry over the acquired

land. The majority of the Constitution Bench held that the

declaration made by the State Government that the land is

required for a public purpose is conclusive and the same was

not open to be challenged. The argument made on behalf of

the petitioners that there could be no acquisition for a public

purpose unless the Government had made a contribution for

the acquisition at public expense and that the contribution of

Rs.100 was insignificant was rejected and it was held that a

small quantum of contribution by the State Government

cannot lead to an inference that the acquisition was made in

colourable exercise of power. In Pratibha Nema’s case, the
101

challenge was to the acquisition of 73.3 hectares dry land

situated at Rangwasa village of Indore district for

establishment of a diamond park by Madhya Pradesh

Audyogik Kendra Vikas Nigam Ltd. It was argued that the

Nigam did not have sufficient amount for payment of

compensation. While dealing with the argument, this Court

observed:

“It seems to be fairly clear, as contended by the

learned counsel for the appellants, that the amount

paid by the Company was utilized towards payment

of a part of interim compensation amount

determined by the Land Acquisition Officer on 7-6-

1996 and in the absence of this amount, the Nigam

was not having sufficient cash balance to make

such payment. We may even go to the extent of

inferring that in all probability, the Nigam would

have advised or persuaded the Company to make

advance payment towards lease amount as per the

terms of the MOU on a rough-and-ready basis, so

that the said amount could be utilized by the Nigam

for making payment on account of interim

compensation. Therefore, it could have been within

the contemplation of both the parties that the

amount paid by the Company will go towards the

discharge of the obligation of the Nigam to make

payment towards interim compensation. Even then,

it does not in any way support the appellants’ stand

that the compensation amount had not come out of

public revenues. Once the amount paid towards

advance lease premium, maybe on a rough-and-

ready basis, is credited to the account of the Nigam,

obviously, it becomes the fund of the Nigam. Such
102

fund, when utilized for the purpose of payment of

compensation, wholly or in part, satisfies the

requirements of the second proviso to Section 6(1)

read with Explanation 2. The genesis of the fund is

not the determinative factor, but its ownership in

praesenti that matters.”

34. Neither of the aforesaid decisions has any bearing

on the issues arising in these appeals, i.e., whether the

acquisition of land was for a public purpose within the

meaning of Section 3(f)(vi) and whether the acquisition was

vitiated due to manipulations, malafides and extraneous

considerations.
35. The following are the three ancillary grounds of

challenge:

i. The finding recorded by the Division Bench that
respondent No. 3 had not been given opportunity of

hearing under Section 5A is ex facie incorrect and is

liable to be set aside because her son Sandip Shah

had appeared before the Special Land Acquisition

Officer along with Shri S.V. Ramamurthy, Advocate

and he was given opportunity of personal hearing.
103

ii. The judgment in P. Ramaiah’s case is vitiated by an
error apparent because the Division Bench relied upon

the judgment of this Court in 1st H.M.T. case without

taking note of the fact that no evidence was produced

to show that the Estate Agent had indulged in

malpractices for facilitating the acquisition of land on

behalf of the appellant and, in any case, such a finding

could not have been recorded without impleading the

Estate Agent as a party respondent and giving him

opportunity to controvert the allegation.
iii. In view of the provisions contained in Sections 17, 18
and 19 of the Mysore High Court, 1884 and Sections

4, 9 and 10 of the Karnataka High Court Act, 1961,

the Division Bench did not have the jurisdiction to

decide the appeal by relying upon the judgment in 1st

H.M.T. case because that was not the ground on which

the learned Single Judge had quashed the acquisition

proceedings. Shri Vishwanatha Shetty argued that if

the Division Bench was of the view that the order of
104

the learned Single Judge should be sustained on a

new ground by relying upon the judgment of this

Court in 1st H.M.T. case, then it should have remitted

the matter to the learned Single Judge for fresh

disposal of the writ petition. Shri Shetty relied upon

the judgment of the larger Bench of the Karnataka

High Court in State of Karnataka v. B. Krishna Bhat

2001 (2) [Karnataka Law Journal 1] to show that the

approach adopted by the learned Presiding Officer of

the Division Bench in taking up the cases, which are

required to be heard by the Single Bench was not

approved by the larger Bench.
36. We shall first take up the last ground, which, in our

considered view, deserves outright rejection because the

Division Bench had decided the writ appeal preferred by the

appellant by relying upon the judgment in 1st H.M.T. case

because learned counsel appearing for the parties had agreed

for that course. This is evident from the following extracts of

the opening paragraph of the judgment:
105

“When the appeal came up for hearing before

us, all the learned counsel submitted that by

virtue of the subsequent decision of the

Supreme court, that the order of the learned

Single Judge would no longer survive and that

consequently, the writ petition itself would

have to be heard on merits. A request was

conveyed to the Court that instead of

remanding the case to the learned Single

Judge at this late stage for a haring on merits,

and depending on the view taken the matter

once again coming up to the appeal court that

it was far from desirable that the appeal court

itself should hear the parties on merits and

dispose of the writ petition.”
37. It is nobody’s case that the advocate who appeared

on behalf of the appellant had not made a request that instead

of remanding the case to the Single Bench, the Division Bench

should hear the parties on merits and dispose of the matter.

Therefore, it is not open for the appellant to make a grievance

that the Division Bench had acted in violation of the

provisions of the Mysore High Court Act, 1884 and the

Karnataka High Court Act, 1961.
38. The appellant’s challenge to the finding recorded by

the Division Bench that respondent No. 3 had not been given

opportunity of hearing under Section 5A is well-founded. We
106

have carefully gone through the proceedings of the Special

Land Acquisition Officer and find that Shri Sandip Shah (son

of respondent No. 3), had appeared along with his Advocate

and after hearing him along with other objectors, the

concerned officers submitted report to the State Government.

However, this error in the impugned judgment of the Division

Bench is not sufficient for nullifying the conclusion that the

acquisition of land was not for a public purpose and that the

exercise undertaken by the State Government was vitiated due

to the influence of the extraneous considerations. The

appellant’s challenge to the judgment in P. Ramaiah’s case on

the ground that no evidence had been produced by the writ

petitioner to show that the Estate Agent had indulged in

malpractices deserves to be rejected in view of the conclusion

recorded by us in relation to the case of respondent No.3.
39. Shri Vishwanatha Shetty also criticized the decision

of the State Government to entertain the representation made

by respondent No. 3 for withdrawal of the notification and

argued that notification under Section 48 could not have been
107

issued without hearing the beneficiary, i.e., the appellant. He

supported this argument by relying upon the judgments in

Larsen & Toubro Ltd. v. State of Gujarat (1998) 4 SCC 387

and State Government Houseless Harijan Employees’

Association v. State of Karnataka, (2001) 1 SCC 610. This

argument of the learned senior counsel appears to have

substance, but we do not consider it necessary to examine the

same in detail because the appellant’s challenge to notification

dated 3.9.1991, vide which the acquisition of land comprised

in Survey No. 50/2 was withdrawn, was negatived by the

learned Single Judge and the Division Bench of the High Court

and the appellant is not shown to have challenged the

judgment of the Division Bench and insofar as notification

dated 25.6.1999 is concerned, the State Government had

withdrawn the same on 15.11.1999.
40. In the end, Shri Dave and Shri Shetty referred to

the additional affidavit of Shri A.C. Dharanendraiah, filed on

behalf of the appellant, to show that the appellant has already

spent Rs. 18.73 crores for formation of the layouts and 1791
108

plots were allotted to the members, out of which, 200 have

already constructed their houses. They pointed out that 50%

of the land has been given to the BDA for providing civil

amenities and 16154 sq. ft. has been given to Karnataka

Power Transmission Corporation. Learned counsel submitted

that this is a fit case for invoking the doctrine of prospective

overruling so that those who have already constructed houses

may not suffer incalculable harm. In support of this

submission, the learned counsel relied upon the judgments in

ECIL v. B. Karunakar, (1993) 4 SCC 727, Abhey Ram v. Union

of India, (1997) 5 SCC 421, Baburam v. C.C. Jacob, (1999) 3

SCC 362, Somaiya Organics (India) Ltd. v. State of U.P., (2001)

5 SCC 519, Padma Sundara Rao v. State of T.N., (2002) 3 SCC

533, Sarwan Kumar v. Madan Lal Aggarwal, (2003) 4 SCC

147, Girias Investment Private Limited v. State of Karnataka,

(2008) 7 SCC 53, G. Mallikarjunappa v. Shamanur

Shivashankarappa, (2001) 4 SCC 428, Uday Shankar Triyar v.

Ram Kalewar Prasad Singh, (2006) 1 SCC 75.
109

41. We have given serious thought to the submission of

the learned counsel but have not felt convinced that this is a

fit case for invoking the doctrine of prospective overruling,

which was first invoked by the larger Bench in I.C. Golak Nath

v. State of Punjab AIR 1967 SC 1643 : (1967) 2 SCR 762 while

examining the challenge to the constitutionality of

Constitution (Seventeenth Amendment) Act, 1964. That

doctrine has been applied in the cases relied upon by learned

counsel for the appellant but, in our opinion, the present one

is not a fit case for invoking the doctrine of prospective

overruling because that would result in conferring legitimacy

to the influence of money power over the rule of law, which is

the edifice of our Constitution. The finding recorded by the

Division Bench of the High Court in Narayana Reddy’s case

that money had played an important role in facilitating the

acquisition of land, which was substantially approved by this

Court in three cases, is an illustration of how unscrupulous

elements in the society use money and other extraneous

factors for influencing the decision making process by the

Executive. In this case also the Estate Agent, namely, M/s.
110

Rejendra Enterprises with whom the appellant had entered

into an agreement dated 21.2.1988 had played crucial role in

the acquisition of land. The tenor of that agreement does not

leave any manner of doubt that the Estate Agent has charged

huge money from the appellant for getting the notifications

issued under Sections 4(1) and 6(1) of the 1894 Act and

sanction of layout plan by the BDA. The respondents could

not have produced any direct evidence that the Estate Agent

had paid money for facilitating the acquisition of land but it is

not too difficult for any person of reasonable prudence to

presume that the appellant had parted with crores of rupees

knowing fully well that a substantial portion thereof will be

used by the Estate Agent for manipulating the State

apparatus. Therefore, we do not find any justification to

invoke the doctrine of prospective overruling and legitimize

what has been found by the Division Bench of the High Court

to be ex-facie illegal.
42. Before concluding we consider it necessary to

observe that in view of the law laid down in the 1st H.M.T. case
111

(paragraphs 19, 21 and 22), which was followed in 2nd H.M.T.

case and Vyalikawal House Building Cooperative Society’s

case, the view taken by the Division Bench of the High Court

in Narayana Raju’s case that the framing of scheme and

approval thereof can be presumed from the direction given by

the State Government to the Special Deputy Commissioner to

take steps for issue of notification under Section 4(1) cannot

be treated as good law and the mere fact that this Court had

revoked the certificate granted by the High Court cannot be

interpreted as this Court’s approval of the view expressed by

the High Court on the validity of the acquisition.
43. In the result, the appeals are dismissed. However,

keeping in view the fact that some of the members of the

appellant may have built their houses on the sites allotted to

them, we give liberty to the appellant to negotiate with the

respondents for purchase of their land at the prevailing

market price and hope that the landowners will,

notwithstanding the judgments of the High Court and this

Court, agree to accept the market price so that those who have
112

built the houses may not suffer. At the same time, we make it

clear that the appellant must return the vacant land to the

respondents irrespective of the fact that it may have carved

out the sites and allotted the same to its members. This must

be done within a period of three months from today and

during that period the appellant shall not change the present

status of the vacant area/sites. The members of the appellant

who may have been allotted the sites shall also not change the

present status/character of the land. The parties are left to

bear their own costs.
……………………………………J.

[G.S. Singhvi]

…………………………………….J.

[Asok Kumar Ganguly]

New Delhi,

February 02, 2012.

About advocatemmmohan

ADVOCATE

Discussion

Comments are closed.

Blog Stats

  • 2,881,399 hits

ADVOCATE MMMOHAN

archieves

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 1,905 other followers

Follow advocatemmmohan on WordPress.com
%d bloggers like this: