Supreme Court of India
BANGALORE CITY COOPERATIVE HOUSING SOCIETY LTD.versusSTATE OF KARNATAKA AND OTHERS
- Citation
- 2012 INSC 69
- Decided
- 2 February 2012
- Disposal
- Dismissed
- Bench
- G S SINGHVI
Holding
Acquisition of land for a cooperative housing society is not a public purpose unless a housing scheme is framed and approved by the Government before the acquisition, and the estate agent’s payment renders the acquisition void.
Summary
The Bangalore City Cooperative Housing Society sought acquisition of 207 acres of land for a housing scheme, entering into an agreement with the State Government and an estate agent who was paid over Rs 5 crores to secure the acquisition. The High Court quashed the acquisition, holding that no housing scheme had been framed or approved by the Government, making the acquisition not a "public purpose" under Section 3(f)(vi) of the Land Acquisition Act, 1894, and that the estate agent’s involvement amounted to manipulation and a violation of Section 23 of the Contract Act. The Society appealed, arguing that the delay in filing its writ petition was justified, that a nominal Rs 100 contribution by the Government implied approval, and that prospective overruling should apply to protect members who had already built houses. The Supreme Court rejected these arguments, emphasizing that prior approval of a housing scheme is a condition precedent for a public purpose acquisition and that the estate agent’s payment was extraneous consideration, while also finding the delay explanation insufficient to overturn the High Court’s findings. Consequently, the Court dismissed the appeals, ordering the Society to return vacant land and allowing it to negotiate market‑price purchases with landowners.
Issues considered
- The acquisition of land for a cooperative housing society qualifies as a "public purpose" under Section 3(f)(vi) of the Land Acquisition Act, 1894.
- Whether the State Government’s nominal contribution of Rs 100 constitutes implicit approval of the housing scheme.
- Whether the delay in filing the writ petition by the landowner can be condoned under Article 226.
- The applicability of the doctrine of prospective overruling to protect members who have constructed houses.
- The validity of the agreement with the estate agent and its impact on the legality of the acquisition.
Legislation cited
- Bangalore Development Authority Act, 1976s. 15, s. 16, s. 3, s. 32
- Constitution of Indias. Article 226
- Indian Contract Act, 1872s. 23
- Karnataka High Court Act, 1961s. 10, s. 4, s. 9
- Land Acquisition Act, 1894s. 3(f)(vi), s. 4(1), s. 41, s. 5A, s. 6(1)
- Mysore High Court Act, 1884s. 17, s. 18, s. 19
Subjects
land acquisitionpublic purposecooperative housing societydelaylachesprospective overrulingestate agentcontract actArticle 226Karnataka
Judgment
[2012) 3 S.C.R. 295
BANGALORE CITY COOPERATIVE HOUSING SOCIETY A
LTD.
v.
STATE OF KARNATAKA AND OTHERS
(Civil Appeal Nos. 7425-7426 of 2002)
FEBRUARY 02, 2012 B
[G.S. SINGHVI AND ASOK KUMAR GANGULY, JJ.]
Land Acquisition Act, 1894:
c
ss. 4, 6 and 3(f)(vi) - Acquisition of land for public purpose
...... for appellant-Co-operative Housing Society - Agreement
entered into between the Housing Society and the State
Government - Issuance of notification u/s. 4(1) and 6 -
Passing of award - Quashing of acquisition of land by the
D
High Court on the ground that it was vitiated due to violation
of the provisions of the Act and the manipulation done by
Housing Society through Estate Agent while acquiring the
land - On appeal, held: Agreement entered into between the
Housing Society and the State Government did not contain
any inkling about the housing scheme framed by the Housing E
Society - It merely mentioned about the proposed formation
of sites and construction of houses for the members of the
Housing Society and payment of cost for the acquired land -
Housing Society did not frame any housing scheme and did
not obtain approval by the State Government before the F
issuance of notification uls. 4(1) - No material produced
before the High Court or Supreme Court to show that a
scheme had been framed and approved by the State
Government - Thus, the High Court rightly held that in the
absence of housing scheme framed by the housing society, G
acquisition of land belonging to the land owner was not for
public purpose as defined in s. 3(f)(vi) - Housing society
executed agreement with the Estate Agent for facilitating the
acquisition of land in lieu of payment of more than rupees five
295 H
296 SUPREME COURT REPORTS [2012] 3 S.C.R.
A crores - Said amount was charged by Estate Agent.for
manipulating the State Apparatus for facilitating the
acquisition of land and sanction of layout etc. without any
obstruction - Thus, such agreement is violative of s. 23 of the
1872 Act - However, the member of the society who had
B already constructed their houses on the land allotted to them
allowed to negotiate with. the State for purchase of their land
at the prevailing market price to the rightful land owners -
Contract Act, 1872.
C ss. 3(f), 3(f)(vi) - Expression 'public purpose' - Meaning
and scope of - Held: Expression 'public purpose' contained
in s. 3(f) is inclusive - Acquisition of land for carrying out any
education, housing, health or slum clearance scheme by a ..
registered society or a Co-operative society can be regarded
as an acquisition for public purpose only if the Scheme has
D been approved by the appropriate Government before
initiation of the acquisition proceedings - In case acquisition
of land is for any purpose other than public purpose as
defined in s. 3(f), then provisions of Part VII would be attracted
and mandate thereof would have to be complied with.
E
ss. 3(f)(vi), 41 - Acquisition of land for public purpose -
Housing scheme of Co-operative housing society -
Agreement signed by the State Government with the co-
operative society - Nominal contribution of Rs. 1001- by the
F Special Deputy Commissioner - Held: The nominal
contribution cannot be construed as State Government's
implicit approval of the housing scheme which had never
been prepared.
s. 5A - Opportunity of hearing under - Finding by
G Division Bench of High Court that land owner not given
opportunity of hearing - Correctness of - Held: Land owner
was given opportunity of hearing as her son appeared before
the Special Land Acquisition Officer along with his· advocate
- Said error not sufficient to nullify the conclusion by the
H Division Bench of the High Court that land acquisition was not
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 297
v. STATE OF KARNATAKA
for a public purpose and the exercise undertaken by the State A
Government was vitiated due to the influence of the
extraneous considerations.
Mysore High Court Act, 1884 - ss. 17, 18 and 19 -
Karnataka High Court Act, 1961 - ss. 4, 9 and 10 - Writ
8
appeal - Jurisdiction of High Court - Division Bench
sustaining the order of Single Judge on a new ground by
relying upon the Supreme Court's decision - Challenge to,
on the ground that the Division Bench did not have the
jurisdiction to decide the appeal relying upon the Supreme C
Court's judgment because that ground was not taken by the
Single Judge and should have remitted the matter - Held:
The ground is not sustainable since parties agreed for that
course - Thus, the Division Bench not acted in violation of
the provisions of the 1884 and 1961 Act.
D
Constitution of India, 1950 - Article 226 - Land
acquisition - Challenge to, by filing writ petition after a Jong
delay - Explanation by land owner that she was hopeful that
after having withdrawn the acquisition in respect of one parcel
of land, the State Government would accept her prayer for E
withdrawal of the acquisition in respect of adjoining land - Writ
petition dismissed by the High Court on the ground of delay
- Division Bench holding that land owner not guilty of /aches
- On appeal, held: Non-consideration of the vital facts and
documents by the Single Judge resulted in miscarriage of F
justice - Division Bench did not commit any error by holding
that the land owner was not guilty of /aches - Delay!Jaches.
Doctrines - Doctrine of prospective overruling -
Invocation of - Acquisition of land by State Government for
the benefit of appellant-Cooperative Housing Society G
quashed by the High Court on the ground of violaUon of the
provisions of the Land Acquisition Act and the manipulations
made for the acquisition of land - Plea of the appellant that
the doctrine of prospective overruling be invoked since crores
of rupees spent for formation of layouts, 17191 plots allotted H
298 SUPREME COURT REPORTS [2012] 3 S.C.R.
A to members and 200 already constructed, 50% land given to
Development Authority and some land given to Power
Transmission Corporation, such that people who have
already constructed houses would not suffer incalculable
harm - Held: Doctrine of prospective overruling cannot be
B invoked since it would result in conferring legitimacy to the
influence of money power over the rule of law, which is edifice
of the Constitution.
There was unprecedented increase in the population
of Bangalore City. Since it was not possible for the
C Bangalore Development Authority to meet the demand of
developed residential sites, the State Government
decided to encourage formation of private layouts by the
house building co-operative societies. The guidelines for
the approval of private layouts were revised. The
D appellant-Co-operative Housing Societies filed
representation to the State Government for the
acquisition of land for formation of a layout for its
members. The appellant entered into an agreement with
the Estate Agent 'RE' who promised to secure the
E acquisition of land on payment of the specific amount.
The State Level Co-ordination Committee (SLCC)
considered the case of the appellant and declared that it
was eligible for the acquisition of 208 acres 18 guntas
land.- The State Government directed the Deputy
F Commissioner, Bangalore to initiate acquisition
proceedings of 207 acres 29 guntas land at place 'V' and
'R' for the appellant by issuing notification under Section
4(1) of the 1894 Act. Thereafter, the appellant entered into
an agreement with the State Government. The Deputy
G Commissioner, Bangalore issued notification under
Section· 4(1) of the Land Acquisition Act, 1894 for the
acquisition of the land including the land comprised in
Survey Nos. 49 and 50/1 belonging to respondent No. 3
and Survey Nos. 7/1 and 8/1 belonging to the
H prede.cessor of 'PR' and others. The land owners-
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 299
v. STATE OF KARNATAKA
respondent No. 3 and 'PR' and others filed objections A
against the proposed acquisition of their land. Thereafter,
the Special Land Acquisition Officer issued declaration
under Section 6(1) and the same was published. During
the currency of the acquisition proceedings, an inquiry
was conducted into the membership of the appellant and s
other societies and it was found that they had admitted
ineligible persons as their members. Subsequently, the
Special Land Acquisition Officer, Bangalore passed an
award and determined market value of the acquired land.
The award was approved by the State Government. c
However, before the possession of the acquired land
could be taken, the State Government withdrew the
acquisition proceedings in respect of land comprised in
Survey No. 50/2. Respondent No. 3 made a representation
for withdrawal of the acquisition of Survey No. 49 but no
0
final decision was taken. After eighteen months of the
passing of the award, the State Government issued
Notification under Section 16(2) in respect of various
parcels of lands including Survey No. 49. The Special
Land Acquisition Officer handed over the possession of
150 acres 9% guntas of land at place 'V' and 'R' to the E
appellant-Society. However, 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. Respondent
No. 3 challenged the acquisition of her land comprised F
in Survey No. 49 by filing a writ petition. Appellant also
filed a writ petition questioning the legality of notification
issued under Section 48(1 ). The Single Judge of the High
Court dismissed the writ petition filed by respondent No.
3 on the ground of 2% years' delay between the issue of G
the declaration under Section 6(1) of the 1894 Act and
filing of the writ petition. The writ petition of the appellant
was dismissed holding that the State Government has
absolute power to withdraw the acquisition before the
possession of the acquired land can be taken. 'PR" and H
300 SUPREME COURT REPORTS (2012] 3 S.C.R.
A others also filed challenged the acquisition proceedings
but the same was allowed. Respondent No. 3 challenged
the order of the Single Judge in Writ Appeal. The
appellant, the State Government and the Special Land
Acquisition Officer also filed writ appeal. The Division
8 Benches of the High Court quashed the acquisition of
lands by the State Government for the benefit of the
appellant on the grounds of violation of the provisions of
the Land Acquisition Act, 1894 and the manipulations
made by the appellant through the Estate Agent for
C acquiring the land. Therefore, the appellants filed the
instant appeals.
Dis~issing the appeals, the Court·
HElD: 1.1 The framers of the Constitution have not
D 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
E an equity 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.
[Para 8) [346-E-F]
:2
1 In the writ petition respondent no. 3 spell out the
F reasons for her seeking interventi.on of the High Court.
The said averments were not controverted by respondent
Nos. 1 and 2. Notwithstanding this, the Single Judge
refused to accept the explanation given by respondent
No. 3 that she was hopeful that after having withdrawn
G the acquisition in respect of one parcel of land, i.e., Survey
No. 50/2, the State Government would accept her prayer
for withdrawal of the acquisition in respect of Survey No.
49 as well. Unfortunately, the Single Judge altogether
ignored the fact that soon after the issue of the
H
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 301
v. STATE OF KARNATAKA
declaration under Section 6(1) of the 1894 Act and A
notices under Sections 9 and 10 of the said Act, the writ
petitioner received letter that she should make herself
available for inspection of the land and the then Land
Acquisition Officer in_spected the site and felt satisfied
that the same could be deleted because it was an orchard B
and was at the end of the area proposed to be acquired.
The Single Judge also omitted to consider that the
notices were issued to respondent No.3 informing her
about the proposed inspection of the site; that she made
a complaint to the Revenue Secretary that no one had C
come for inspection; that yet another notice was received
by respondent No.3 for inspection would be held on
14.5.1990 but the concerned officer did not turn up; that
letters were sent by the Revenue Department to Special
Deputy Commissioner, Ban'galore requiring him to
submit report in the matter of withdrawal of acquisition; D
and in writ petition, she had disclosed the cause for her
filing the writ petition after the long delay. Non-
consideration of these vital tac.ts and documents by the
Single Judge resulted in miscarriage of justice. The
Division Bench did not commit any error by holding that E
respondent No.3 was not guilty of laches. [Para 12] [347-
H; 348-A-H]
Tilokchand Motichand v. H.B. Munshi (1969) 1 SCC 110
- relied on. F
Ajodhya Bhagat v. State of Bihar (1974) 2 SCC 501;
State of Mysore v. V.K. Kangan (1976) 2 SCC 895: 1976 (1)
SCR 369; Pt. Girdharan Prasad Missir v. State of Bihar (1980)
2 sec 83; Hari Singh v. state of U.P. (1984) 2 sec 624: G
1984 (3) SCR 417; Municipal Corpn. of Greater Bombay v.
Industrial Development Investment Co. (P) Ltd. (1996) 11
SCC 501 1996 (5) Suppl. SCR 551; Urban Improvement
Trust, Udaipur v. Bheru Lal (2002) 7 SCC 712: 2002 (2)
Suppl. SCR 512; Swaika Properties (P) Ltd. v. State of
H
302 SUPREME COURT REPORTS [2012] 3 S.C.R.
A Rajasthan (2008) 4 SCC 695: 2008 (2 ) SCR 521;
Sheikhupura Transport Co. Ltd. v. Northern India Transport
Insurance Company (1971) 1 SCC 785; C.K. Prahalada v.
State of Karnataka (2008) 15 SCC 577: 2008 (7) SCR 852 - .
referred to.
B
2.1 All the co-operative societies have been classified
into two categories. The first category consists of the co-
operative 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
C Government and partly by one or more _State
Governments. The second category consists of the co-
operative societies other than those falling within the
definiti.on of the expression 'corporation owned or
controlled by the State' [Section 3(cc)]. The definition of
D 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
E law framed by the State legislature, other than a society
referred to in clause (cc) and a co-operative society
defined as such in 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). The
F 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
G 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
H law in force in a State or a co-operative society as defined
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 303
v. STATE OF KARNATAKA
in any law. relating to co-operative societies for the time A
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 co-operative society can be regarded as an
acquisition for public purpose only if the scheme has B
been approved by the appropriate Government before
initiation of the acquisition proceedings. If the acquisition .
of land for a co-operative society, which is covered by the
definition of the term 'company' is for any purppse other
than public purpose as defined in· Section 3(f), then the c
provisions of Part VII would be attracted and mandate
thereof would have to be complied with. [Para 19] [357-
C-H; 358-A-C]
2.2 In the writ petition, respondent no. 3 averred that
"the acquisition of any land under the Act for the benefit D
of the 2nd respondent would not be for a public purpose
and would 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 educational, housing,
health or slum clearance scheme of the 2nd respondent, E
the same shall be with the prior approval of the
appropriate Government. The appellant neither
controverted the said averments nor produced any
document before the High Court to show that it had
prepared a housing scheme and the same had been F
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 was not for a public purpose as defined in
Section 3(f)(vi) of the 1894 Act. The submission that the G
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 pl.ea in the writ petition, cannot be
accepted. [Para 20] [358-C-G] H
304 SUPREME COURT REPORTS [2012] 3 S.C.R.
A 2.3 A close and careful reading of the documents-
representation dated 7.12.1984 made by the Executive
Director of the appellant to the Minister of Revenue,
Government of Karnataka, letter dated 21.5.1988 sent by
the State Government to Deputy Commissioner,
B Bangalore to issue 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, reveals that altho.ugh, in the
representation made by him to the Revenue Minister, the
c 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.
0
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··
E 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
formation of sites and construction of houses for the
members of the appellant and payment of cost for the
F 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
G 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
H provide for token contribution of Rs.100 by the Deputy
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 305
v. STATE OF KARNATAKA
Commissioner/Special Deputy Commissioner towards A
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 B
before the issue of notification under Section 4(1) of the·
Act. [Para 21] [359-A-H; 360-A]
2.4 Although, the appellant may not have been
required to frame a scheme in strict conformity with the
provisions of the 1976 Act and the Karnataka Housing C
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 D
apply mind whether or not the housing scheme framed
by the appellant should be approved. However, 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 E
the issue of notification under Section 4(1) of the 1894
Act. Even before this Court, no material was 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 F
Section 3(f)(vi) and held that in the absence of a housing
scheme having been 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).
[Para 23] [361-8-E] G
2.5 In the instant case, no housing scheme was
framed by the appellant which is sine qua non for treating
the acquisition of land for a co-operative society as an
acquisition for public purpose within the meaning of
H
306 SUPREME COURT REPORTS [2012] 3 S.C.R.
A 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. The Estate Agent engaged by the appellant had
promised that it would get the notifications issued under
B 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
C manipulating the State apparatus and 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. [Para 29] [371-G-H; 371-
·B]
D 2.6 None of the orders and judgments referred to,
could 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)
E 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 would be used
for providing sites to poor and people belonging to
backward class and on receipt of the recommendations
F of SLCC the State Ciovernment 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 Benches in *1st and **2nd
H.M. T. cases and the judgment of two Judge Bench in
G *** Vyalikawa/ House Building Cooperative Society's case.
In the instant 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
H Government was in the nature of an agreement
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 307
v. STATE OF KARNATAKA
contemplated by Part VII. While in *1st H:M. T. 's case, the A
amount paid to 'SR' Constructions was rupees one crore,
in the instant 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 BOA within a period of B
less than one year. The High Court did not commit any
error by relying upon the judgment in *1st H.M. T case for
declaring that the acquisition was not for a public
purpose. [Para 32] [378-F-H; 379-G-H; 380-A]
*H. M. T. House Building Cooperative Society v. Syed C
Khader and Ors. (1995) 2 SCC 677: 1995 (2) SCR 200;
**H.M. T.House Building Co-operative Society v. M.
Venkataswamappa (1995) 3 SCC 128; ***Vyalikawal House
Building. Co-operative Society v. V. Chandrappa (2007) 9
sec 304 - relied on. D
Mis. 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. E
to the Govt. of Assam (1973) 3 SCC 729; Bharat Singh v.
State of Haryana (1988) 4 SCC 534: 1988 (2) Suppl. SCR
10; Umashanker Pandey v. B.K. Uppal (1991) 2 SCC 408;
Mis. Jindal Industries Ltd. v. State of Haryana 1991 Supp (2)
SCC 587; D.S. Parvathamma v. A. Srinivasan (2003) 4 SCC
F
. 705: 2003 (3) SCR 197; Shipping Corpn. of India Ltd. v.
Machado Bros. (2004) 11 SCC 168: 2004 (3) SCR 584; J.P.
Srivastava & Sons (P) Ltd. v. Gwalior Sugar Co. Ltd.;
(2005) 1 SCC 172: 2004 (5) Suppl. SCR 648; Shakti Tubes
Ltd. v. State of Bihar (2009) 7 SCC 673: 2009 (10) SCR 739; G
Kanaka Gruha Nirmana Sahakara Sangha v. Narayanamma
(2003) 1 SCC 228: 2002 (3) Suppl. SCR 97; The State of
Punjab and Ors. (1963) 2 SCR 774; Pratibha Nema v. State
of M.P. (2003) 10 SCC 626; Narayana Reddy v. State of
Karnataka ILR 1991 (3) KAR 2248; Narayana Raju v. State
of Karnataka ILR 1989 KAR 376; Narayana Raju v. State of H
308 SUPREME COURT REPORTS [2012] 3 S.C.R.
A Karnataka ILR 1989 KAR 406; State of Gujarat v. Chaturbhai
Narsibhai AIR 1975 SC 629: 1975 (3) SCR 284; General
Government Servants Co-operative Housing Society Limited
v. Kedar Nath (1981) 2 SCC 352 :1981 (3) SCR 46; Mis.
Fomento Resorts and Hotels Limited v. Gustavo Ranato Da
B . Cruz Pinto AIR 1985 SC 736: 1985 (2) SCR 937; Rattan
Chand Hira Chand v. Askar Nawaz Jung JT 1991 (1) SC 433:
1991 (1) SCR 327; Kanaka Gruha Nirmana Sahakara
Sangha v. Narayanamma (2003) 1 SCC 228: 2002 (3)
Suppl. SCR 97; Subramani v Union of India ILR 1995 Kar
C 3139 - referred to.
3. The appellant's challenge to the judgment in the
case of respondent No. 3 that even if there was no
express approval by the State Government to the
acquisition of land, the approval would be deemed to
D have been granted because the State Government had
contributed Rs.100 towards the acquisition of land; and
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,
E lacks merit. The agreement was signed by the Executive
Director of the appellant and the State Government in
compliance of Section 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
F construed as the State Government's implicit approval of
the housing scheme which had never been prepared.
[Para 33] [381-8-E]
Smt. Somavanti and Ors. v. The State of Punjab and Ors.
G (1963) 2 SCR 774; Pratibha Nema v. State of M.P. (2003)
10 SCC 626: 2003 (1) Suppl. SCR 890 - Distinguished.
4. The ground of challenge that in view of the
provisions contained in Sections 17, 18 and 19 of the
Mysore High Court Act, 1884 and Sections 4, 9 and 10 of
H the Karnataka High Court Act, 1961, the Division Bench
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 309
v. STATE OF KARNATAKA
did not have the jurisdiction to decide the appeal by A
relying upon the judgment in *1st H.M. T. case because
that was not the ground on which the Single Judge had
quashed the acquisition proceedings; that if the Division
Bench was of the view that the order of the Single Judge
should be sustained on a new ground by relying upon B
the judgment of this Court in *1st H.M. T. case, then it
should have remitted the matter to the Single Judge for
fresh disposal of the writ petition, is rejected since the
Division Bench had decided the writ appeal preferred by
the appellant by relying upon the judgment in *1st H.M. T. c
case because the counsel appearing for the parties had
agreed for that course. 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 0
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. [Paras 35, 36, 37) [382-F-H; 383-C- E
G-H]
5.1 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. From the proceedings of the Special Land F
Acquisition Officer it is found that 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 G
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 H
I ~
310 SUPREME COURT REPORTS [2012] 3 S.C.R.
A in 'PR'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 is rejected in view of
the conclusion recorded in relation to the case of
respondent No.3. [Para 38) [384-A-D]
8
5.2 The appellant criticized the decision of the State
Government to entertain the representation made by
respondent No. 3 for withdrawal of the notification, and
submitted that notification under Section 48 could not
C have been issued without hearing t'1e beneficiary, i.e., the
appellant. This argument appears to have substance, but
it is not 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 Single
D 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. [Para 39] [384-E-H]
E
Larsen & Toubro Ltd. v. State of Gujarat (1998) 4 SCC
387; State Government House/ess Harijan Employees'
Association v. State of Karnataka (2001) 1 SCC 610 -
referred to.
F
6.1 The submission of the appellant that they have
already spent Rs. 18. 73 crores for formation of the
layouts and 1791 plots were allotted to the members, out
of which, 200 have already constructed their houses;
they pointed out that 50% of the land was given to the
G BOA for providing civil amenities and 16154 sq. ft. was
given to Karnataka Power Transmission Corporation, and
as such it is a fit case for invoking the doctrine of
prospective overruling so that those who have already
constructed houses may not suffer incalculable harm,
H can·not be accepted. [Paras 40 and 41] [385-A-C]
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 311
v. STATE OF KARNATAKA
6.2 The instant case is not a fit case for invoking the A
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 Estate Agent, namely, 'RE' with whom
the appellant had entered into an agreement dated B
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) a1_1d 6(1) of the 1894 Act and c
sanction of layout plan by the BOA. 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 D
had parted with crores of rupees knowing fully well that
a substantial portion thereof would be used by the Estate
Agent for manipuJating the State apparatus. Therefore,
there is no any justification to invoke the doctrine of
prospective overruling and legitimize what was found by E
the Division Bench of the High Court to be ex-facie illegal.
[Paras 40, 41] [385-G-H; 386-B-E]
ECIL v. B. Karunakar (1993) 4 SCC 727: 1993 (2)
Suppl. SCR 576; Abhey Ram v. Union of India (1997) 5 SCC
421: 1997 (3) SCR 931; Baburam v. C.C. Jacob (1999) 3 F
SCC 362; Somaiya Organics (India) Ltd. v. State of U.P.
(2001) 5 SCC 519: 2001 (3) SCR 33; Padma Sundara Rao
v. State of T.N. (2002) 3 SCC 533: 2002 (2) SCR 383; Sarwan
Kumar v. Madan Lal Aggarwal (~003) 4 SCC 147: 2003 (1)
SCR 918; Girias Investment Private Limited v. State of G
Karnataka (2008) 7 SCC 53; G. Mal/ikarjunappa v. Shamanur
Shivashankarappa; (2001) 4 SCC 428; Uday Shankar Triyar
v. Ram Kalewar Prasad Singh (2006) 1 SCC 75: 2005 (5)
Suppl. SCR 157; /. C. Golak Nath v. State of Punjab AIR 1967
SC 1643: (1967) 2 SCR 762 - referred to. H
312 SUPREME COURT REPORTS [2012] 3 S.C.R.
A 7. Keeping in view the fact that some of the members
of the appellant may have built their houses on the sites
allotted to them, liberty is given to the appellant to
negotiate with the respondents for purchase of their land
at the. prevailing market price and hope that the
B landowners would, notwithstanding the judgments of the
High Court and this Court, agree to accept the market
price so that those who have built the houses may not
suffer. At the same time, it is made clear that the appellant
must return the vacant land to the respondents
c irrespective of the fact that it may have carved out the
sites and allotted the same to its members. This must be
done within the stipulated period 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
D present status/character of the land. [Para 43] [387-B-D]
Case Law Reference:
ILR 1995 KAR 3139 Referred to Para 5.4
E (1971) 1 sec 785 Referred to Para 7.2
2008 (7) SCR 852 Referred to Para 7.2
(1969) 1 sec 110 Relied on Paras
F (1974) 2 sec 501 Referred to Para 13
1976 (1) SCR 369 Referred to Para 13
(1980) 2 sec 83 Referred to Para 13
1984 (3) SCR 417 Referred to Para 13
G
1996 (5) Suppl. SCR 551 Referred to Para 13
2002 (2) Suppl. SCR 512 Referred to Para 13
2008 (2) SCR 521 Referred to Para13
H
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 313
v. STATE OF KARNATAKA
(1963) 1 SCR 675 Referred to Para 14 A
(1969) 2 SCR 29 Referred to Para 14
(1973) 2 sec 56 Referred to Para 14
(1973) 3 sec 129 Referred to Para 14
B
1988 (2) Suppl. SCR 10 Referred to Para 14
(1991) 2 sec 408 · Referred to Para 14
1991 Supp (2) sec 587 Referred to Para 14
2003 (3) SCR 197 Referred to Para 14
c
2004 (3) SCR 584 Referred to Para 14
2004 (5) Suppl. SCR 648 Referred to Para 14
2009 (10) SCR 739 Referred to Para 14 D
2002 (3) Suppl. SCR 97 Referred to Para 15
ILR 1991 (3) KAR 2248 Referred to Para 24
ILR 1989 KAR 376 Referred to Para 24 E
ILR 1989 KAR 406 Referred to Para 21
1975 (3) SCR 284 Referred to Para 24
1981 (3) SCR 46 Referred to Para 24
F
1985 (2) SCR 937 Referred to Para 24
1991 (1) SCR 327 Referred to Para 25
2002 (3) Suppl. SCR 97 Referred to Para 30
1995 (2) SCR 200 Para 32 G
Relied on
(1995) 3 sec 128 Relied o·n Para 32
(2001) 9 sec 304 Referred to Para32
(1963) 2 SCR 774 Distinguished Para 33 H
314 SUPREME COURT REPORTS [2012] 3 S.C.R.
A 2003 (1) Suppl. SCR 890 Distinguished Para 33
1993 (2) Suppl. SCR 576 Referred to Para 40
1997 (3) SCR 931 Referred to Para 40
(1999) 3 sec 362 Referred to Para 40
B
2001 (3) SCR 33 Referred to Para 40
2002 (2) SCR 383 Referred to Para 40
2003 (1) SCR 918 Referred to Para 40
c
(2008) 1 sec 53 Referred to Para 40
(2001) 4 sec 428 Referred to Para 40
2005 (5) Suppl. SCR 157 Referred to Para 40
D (1967) 2 SCR 762 Referred to Para 41
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.
7245-7426 of 2002.
From the Judgment & Order dated 16.3.1998 & 9. 7.1999
E of the High Court of Karnataka at Bangalore in Writ Appeal No.
9913 of 1996 & Civil Petition No. 366 of 1998.
WITH
F C.A. No. 774-778 of 2005
Dushyant Dave, P. Vishwanatha Shetty, Shashi Kiran
Shetty, M. Sreenivasa, Bramjeet Mishra, Yatish Mohan,
Haripriya Padmanabhan, E.G. Vidya Sagar, V. Mohana for the
Appellant.
G
P.P. Rao; R.S. Hegde, Chandra Prakash, Amit Wadhwa,
AS. Bhasme, P.P .. Singh, Sanjay R. Hegde, A. Rohen Singh,
Ramesh K. Mishra, Ramesh S. Jadhav, Vikrant Yadav for the
Respondent.
H
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 315
v. STATE OF KARNATAKA
The Judgment of the Court was delivered by A
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 appellant B
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 C
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, Cl
WW.A. No. 6039/1998 and Review Petition Nos. 166 and 170
of 2004, respectively.
D
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 E
appeals the parties filed voluminous papers and arguments
were advanced by both the sides by relying upon those
documents as also the records summoned by the Court from
the State Government.
3. For appreciating the contentions of the parties in a F
correct perspective, it will be useful to notice the events which
culminated in the acquisition of the lands belor1ging to the
private respondents and others.
3.1 Bangalore Development Authority (BOA) was G
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
H
316 SUPREME COURT REPORTS [2012] 3 S.C.R.
A areas adjacent thereto. In terms of Section 15 of the 1976 Act,
the BOA 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
B expenditure therefor. Under Section 15(2), the BOA can take
up new or additional development schemes either on its own
or on the recommendations of the Local Authority or as per the
directions of the State Government. Section 16 lays down that
e'lery development scheme shall, within the limits of the area
c 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 prov.ides for the acquisition of land for
0
the purposes of the Scheme.
3.2 In exercise of the powers vested in it under Section
15 and other relevant provisions of Chapter Ill of the 1976 Act,
the BOA has been preparing the development schemes and
E 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
F had swelled to 29.13 lakhs), the State Government realized that
it may not be possible for the BOA to meet the demand of
developed residential sites and, therefore, it was decided to
encourage formation of private layouts which is permissible
under Section 32 of the 1976 Act, by the house building
G 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 BOA 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:
H
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 317
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
"1. The area proposed for a layout should be within the A
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 B
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 (BOA) which shall verify whether the c
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.
D
3. If the Housing Society has purchased land, no objection
certificate from the competent authority, Urban land ceiling
should be produced.
4. The Housing Societies/Private developers should
E
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 F
layout. Such approval should be done only by the planning
Authority (BDA) ~ccording to the Karnataka Town &
Country Planning Act, 1961.
6. Khatha shall not be issued by the Revenue Section of G
the Bangalore City Corporation and the Bangalore
Development Authority HAL Sanitary Board, LT.I. Notified
area, Yelahank? Town Municipality, Kengeri Town
Municipality/ Panchayaths and such other authorities,
unless the layout is approved by the Bangalore
H
•
318 SUPREME COURT REPORTS [2012] 3 S.C.R.
A Development Authority.
7. The following minimum land allocations shall be insisted
in the approval of private layouts by the Bangalore
Development Authority.
B Residential Not Exceeding 50%
Parks & Playgrounds 15%
Roads 25% to 30%
c 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)
D and 30.5 metres (100').
(b) While working out the road pattern of the private layouts,
major road pattern of the outline Development Plan/
Comprehensive Development Plan should not be affected.
Minor. roads may be designed suitable within the
E framework of roads approved in the Outline Development
Plan/Co,mprehensive Development Plan.
The civic amenity sites earmarked should be for specific
purposes determined by Bangalore Development
F 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.
G
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
H Housing societies to carry out the civil works only in case
•
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 319
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
of societies getting the work done by Civil Engineers of A
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 B
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 C
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."
3.4 The aforesaid decision of the State Government was 0
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, E
the State Government abandoned the existing policy of
acquiring land through the Revenue Department and entrusted
this task to the BOA for the Bangalore Metropolitan Area. The
State Government also stopped registration of the housing
societies and conversion of agricultural lands in favour of the F
existing societies. Simultaneously, the State Government
constituted a Three Men Committee (TMC) consisting of the
Registrar of Cooperative Societies, Karnataka, T. Thimme
Gowda, Secretary, BOA and the Special Deputy Development
Commissioner to scrutinize the land requirements of the
housing societies which had already been registered and also G
fixed 30.6.1984 as the cut off date for consideration of the
applications made by the housing societies for the acquisition
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 H
320 SUPREME COURT REPORTS [2012] 3 S.C.R.
A 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,
B
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:
c "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.
D
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
E
decades.
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
F 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
G soaring prices of lands and sites which have gone up
beyond ~II 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
H City and there are no proposals for acquisition of these
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 321
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
survey numbers by the Bangalore Development Authority A
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, B
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 C
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 D
amount towards compensation will be deposited with the
acquisition authorities on receipt of intimation and after
obtaining approval of Government.
It is submitted that the society is agreeable to abide by all
terms and conditions to be laid down by the Government E
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 F
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 G
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
H
322 SUPREME COURT REPORTS [2012] 3 S.C.R.
A 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 had
B engaged Mis. 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 Mis. Manasa
Enterprises were also submitted along with the memorandum.
Along with letter dated 26.3.1987, the appellant furnished
C 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
0
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
E Agent or the landowners upto 30.6.1984.
ii. During 1984-85, the appellant collected
Rs.20,72,5001- from the members and paid Rs.3,50,0001
- to the Estate Agent as an advance for procurement of
the land from the landowners.
F
iii. During 1985-86, another sum of Rs.5,45,5001- was
collected from the members towards sital deposit and
Rs:10,00,000l-were paid to the Estate Agent.
G iv. Upto 30.6.1986, the total amount collected from the
members was Rs.26,18,0001- and the total amount paid
to the Estate Agent was Rs.13,50,0001- for procurement
of 235 acres land in Vajarahally.
v. Letter dated 24.10.1986 of the Estate Agent revealed
H
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 323
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
that it had made advance payment of Rs.16,70,000/- to 17 A
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 B
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
Registrar could make the necessary investigation, the
appellant's application was considered in the meeting of the C
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 D
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 E
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 F
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 G
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 H
I
324 SUPREME COURT REPORTS [2012] 3 S.C.R.
A SLCC before pending cases are taken up for 2nd stage
of scrutiny as per GO dt. 30. 4. 1987."
(underlining is ours)
3.10 The appellant's case was again considered in the
B 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
c 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.
D 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
E 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
F 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
G stages of scrutiny because it did not have valid agreements as
on the cut off date i.e., 30.6.1984. However, in the r:iext meeting
of the SLCC held on 22.12.1987 cognizance was taken 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 ehrolled as on 30.06.1984 in respect
H of the 1st stage of scrutiny and as on 30.6.1987 in respect of
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 325
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
the 2nd stage of scrutiny, irrespective of the fact whether the A
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 B
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:
c
"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 Co-
operative Societies Act, represented by its President and D
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
Point-IV, 4, Palace Road, Bangalore-560 001, E
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., F
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 G
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. H
326 SUPREME COURT REPORTS [2012] 3 S.C.R.
A 3. WHEREAS the Second Party has offered his seNices
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
B 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 Mis. Landscape, Layout promoters
c agreed to take over the entire project with all its advanced
to Mis. 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
D was signed between the First Party and M/s. Landscape.
But this Agreement was cancelled with effect from 1.2.1988
as M/s. Landscape failed to furnish the agreed Bank
Guarantee of Rs.13,50,000/-.
E 5. NOW the Second Party, Mis. 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
F 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).
G 6. WHEREAS the Second Party has agreed to provide all
the required seNices towards the acquisition of scheduled
land for the First Party, obtain all necessary approvals for
forming the layout, roads, water lines, el~ctric lines,
drainage, sewerage connection, etc., and to carry out on
H the said land the items of work such as laying of roads with
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 327
v. STATE OF KARNATAKA [G.S. SINGHVI, J.)
culverts, drainages, etc., provision of bore-wells, ground A
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 B
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 C
in the Official Gazette under Section 4(1) of the Land
Acquisition Act, for the acquisition of the schedule lands.
a: NOW the First Party and the Second Party agree to
undertake the above works as detailed below: - D
SECOND PARTY FIRST PARTY
PROCUREMENT OF LANDS
1) To get Notification under 1) At the time of execution of
E
Section 4(1) of the LAR the Agreement of Rs. 1.5
within four months lakhs and upto issue of
4(1) Notification Rs. 15/-
per Sq. Yd. against Bank
Guarantee.
F
2) Issue of Notification under 2) Rs. 25/- per Sq. Yd.
Section 4(1) and subse- including the award
quent enquiry under amount paid to
Section 5(1) completed Government.
within 4 months G
3) Issue of Notification under 3) Rs. 26/- per Sq. Yd.
Section 6(1) within 3
months of the completion
H
328 SUPREME COURT REPORTS · [2012] 3 S.C.R.
A of enquiry under Section
5(1)
4) Submission of layout plan to 4) Rs. 5/- per Sq. Yd.
BDA within 4 months after
B l:he issue of notification
under Section 6(1)
5) Sanction of layout plan within 5) Rs. 4/- per Sq. Yd.
3 months of its submission.
c 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."
D
(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/-).
E 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:
F
"?) BANGALORE CITY HBCS:
The Society is eligible for acquisition of 208 acres
18 guntas in stage 1/111. As against this they have given
survey number-wise details for 250 acres. The·y should
G 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
H
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 329
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
SLCC, the State Government sent letter dated 21.5.1988 to A
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: B
"The Deputy Commissioner,
Bangalore.
Sub: Acquisition of land in Vajarahalli and Raghuvanahalli C
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 D
Committee has recommended for acquisition of 208 acres
18 guntas of land in lst/lllrd 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 E
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 F
Ltd., Bangalore subject to the following conditions:
i) The extent involved (if any) under Section 79(A) and 8
may be excluded while issue of 4(1) notification for the
present, which can be notified after the pending G
proceedings under the said Act are finalised.
(ii) Move the Spl. Deputy Commissioner, ULC to finalise
H
330 SUPREME COURT REPORTS [2012] 3 S.C.R.
A the proceedings pending under ULC Act before 31.5.1988.
Yours faithfully,
(MAHDI HUSSAINA)
Under Secretary to Government
Revenue Department."
B
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
c
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,
D 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.
E 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
F 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
G 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
H SAID ACT and being satisfied as a result of such inquiry
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 331
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
that the acquisition of the SAID LAND is needed for the A
purpose referred to above, has 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 B
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 C
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 D
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 E·
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 F
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 G
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.
H
332 · SUPREME COURT REPORTS [2012] 3 S.C.R.
A 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 te vest in the COMPANY subject to the
provision of the Karnataka Land Revenue Act (hereinafter
B 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
c 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
D 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.
E '
(ii) Undertake the work of construction of the building \)'ithin
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;
F (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
G punctually such.
(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
H
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 333
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
erected upon it for any purpose which in the opinion of A
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
8
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.
c
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 D
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 E
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, F
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 behalf, within the time specified in
the said notice for compliance therewith. G
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 H
334 ' SUPREME COURT REPORTS [2012] 3 S.C.R.
A 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
B 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
c 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.
D
8. All the cost and expenses incidental to the preparation
and execution of these presents shall be paid by the
SOCIETY.
E 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.
F (b) The Special Deputy Commissioner shall after taking
over possession of the land U/s. 16(1) Land 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
G 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
H Bangalore Development Authority keeping in view the
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 335
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
zoning regulations. In respect of places other than A
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 B
of Societies.
(e) The expenditure incurred in this behalf shall be debited
to the Head of the Account - 253" + District Administration-
s, Other expenditure-E. Acquisition of land on behalf of
other acquiring bodies (Non-Plan)." C
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 D
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
respondent No. 3 and Survey Nos. 7/1 and 8/1 belonging to the
predecessor of P. Ramaiah, Munikrishna, Keshava Murthy, E
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 F
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 G
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
provision~ of the 1894 Act and that the lands comprised in H
336 SUPREME COURT REPORTS [2012] 3 S.C.R.
A Survey Nos. 7/1 and 8/1 were the only source of livelihood of
his family.
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
8
recommendation was made:
"There are AC Sheet houses and since there are good
number of Malkies: Mango, etc, Government may take
suitable decision".
c
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."
D
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.
E 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
7.1.1.1988 with the finding that the appellant had admitted 40
F p~rsons 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.
G ' 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
H
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 337
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
held on 31.5.1989. The name of the appellant was shown in A
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 B
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
and 7 .3.1990 were issued to Respondent No. 3 and others that C
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. D
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 E
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 F
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 sent by
the Secretary, Revenue Department to the Special Deputy
Commissioner. However, no final decision appears to have G
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
H
338 SUPREME COURT REPORTS [2012] 3 S.C.R.
A lands including Survey No. 49. The possession of 150 acres
91h 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
B 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
C 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/
0 1992. The appellant also filed Writ Petition No. 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
E 21h 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,
F 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.
G
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 writ petition
H
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 339
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
only on the ground of delay and answered the same in negative A
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
8
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 C
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 D
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 E
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 F
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 G
appellant at paragraph 15 in the writ 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 H
340 SUPREME COURT REPORTS [2012] 3 S.C.R.
A 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
B 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."
c 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 '1st HMT
Case') and held:
D
"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
E 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
F 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
G 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
H
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 341
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
accepted in the absence of specific, positive assertion and A
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 B
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 C
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.
4.4. Civil Petition No. 366/1998 filed by the appellant for D
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.
E
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.
F
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 G
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.
H
342 SUPREME COURT REPORTS [2012] 3 S.C.R.
A 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
B 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.
c 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
D and others (supra), the Division Bench suo motu corrected the
errors vide order dated 11.2.2004.
5.4 Review Petition Nos. 166 and 170 of 2004 filed by the
appellant were dismissed by another Division Bench of the
E 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
F WritAppeal 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.
G 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
H
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 343
v. STATE OF KARNATAKA [GS. SINGHVI, J.]
under Section 48(1) dated 25.6.1999 for release of the lands A
comprised in 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.
8
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, C
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 D
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. State of Bihar (1980) 2 SCC 83, E
Hari Singh v. State of UP. (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 F
sec 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 G
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
H
344 SUPREME COURT REPORTS [2012) 3 S.C.R.
A 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 5.10.1991 and 29.1.1992,
B 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
C 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
D 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
E 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 jurisdiction, should
not be exercised in favour of a person who approaches the
F 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
G 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
H considerable delay, the writ petition filed by it should be allowed
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 345
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
because Section 12(a)(4) of the Bombay Sales Tax Act was A
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 filing a B
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 C
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 0
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 E
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 F
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.
10. In the light of the above, we shall now consider whether
respondent No.3 had satisfactorily explained the delay. In G
paragraphs 12, 13 and 14 of the writ petition filed by her,
respondent No. 3 made the following averments.
H
346 SUPREME COURT REPORTS [2012] 3 S.C.R.
A "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
B
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
c 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
D 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
E '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 petitioner submitted ANNEXURE
F '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.
G
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
H Secretariat (Revenue Department) had addressed two
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 347
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
communications to the Special Deputy Commissioner, A
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 B
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 c
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: D
"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 E
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. F
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. G
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 H
348 SUPREME COURT REPORTS [2012] 3 S.C.R.
A 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 ignored
the fact that soon after the issue of the declaration under Section
B 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
c 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
D 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
E
by respondent No.3 for inspection will be held on
14.5.1990 but the concerned officer did not turn up;
(iv) letters dated 5.10.1991 and 22.1.1992 were sent
by the Revenue Department to Special Deputy
F 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
G 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 !aches.
H
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 349
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
13. The judgments relied upon by learned counsel for the A
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 B
filed after 6 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 c
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 D
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, E
disputed questions of fact were involved and there was delay
of 2Yz years. In Municipal Corporation of Greater Bombay's
case, this Court reversed the order of the Bombay High 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 F
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 G
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 H
350 SUPREME COURT REPORTS [2012] 3 S.C.R.
A 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 Bench of
B 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
C 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
D Mis. 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.
E State of Haryana, (1988) 4 SCC 534, Umashanker Pandey
v. B.K. Uppal, (1991) 2 SCC 408, Mis. 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,
F 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.
G
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
H
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 351
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
23.7.1997 passed by this Court in SLP(C) Nos. 12012-17/ A
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 the Division Bench of the High Court in
Writ Appeal No. 5081/1995 with the same title and order dated B
4.10.1996 passed in SLP (C) No. 10270/1996, Kanaka Gruha
Nirmana Sahakara Sangha v. Narayanamma (2003) 1 SCC
228, referred to the recqmmendations 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 c
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 D
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 E
Court in Smt. 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. · F
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 G
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 H
scheme framed by the appellant. Learned senior counsel
352 SUPREME COURT REPORTS [2012] 3 S.C.R.
A 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 No. 3 cannot be treated as
one made for public purpose because the appellant had not
prepared any housing scheme.
B
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:
c "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
D 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
E
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
F 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-
G (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
H Act, 1860 (21 of 1860), or under any corresponding law
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 353
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
for the time being in force in a State, other than a society A
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 8
in clause (cc);
Section 3(f) as amended by Act No.68 of 1984
(f) the expression "public purpose" includes-
c
(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 D
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;
E
(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 displaced or affected by F
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, G
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, H
354 SUPREME COURT REPORTS [2012] 3 S.C.R.
A 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
8 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
c 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
D 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 the appropriate Government, not
E 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
F the report of the Collector under section SA, 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
G 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 tal<ing steps for engaging itself in any industry or work
H which is for a public purpose, or
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 355
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
(b) that such acquisition is needed for the construction of A
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
8
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, C
1908 (5 of 1908) in the case of Civil Court.
41. Agreement with appropriate Government. - If the
appropriate Government is satisfied after considering the
report, if any, of the Collector under section SA, sub-section 0
(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 E
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;
F
(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;
G
(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; H
356 SUPREME COURT REPORTS [2012] 3 S.C.R.
A (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
B 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.
c
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
D 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;
E (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;
F
(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
G 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
H which the public shall be entitled to use the work.
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 357
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
42. Publication of agreement. - Every such agreement A
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." B
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 C
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' D
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 Soci~ties Registration Act or under any
corresponding law framed by the State legislature, other than E
a society 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 F
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 G
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. H
358 SUPREME COURT REPORTS [2012] 3 S.C.R.
A 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 purpose only if the scheme has
been approved by the appropriate Government before initiation
B 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.
c 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
D 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
E 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 educational, housing, health or slum
clearance scheme of the 2nd respondent, the same shall
be with the prior approval of the appropriate Government
F (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
G 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.
H 21. We shall now examine whether the appellant had, in
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 359
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
fact, framed a housing scheme and the same had been A
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 B
Commissioner, Bangalore to issue 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 c
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, D
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 E
Government does not contain any inkling about the housing
scheme framed by the appellant. It merely mentions about the
proposed 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 F
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 G
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 I
H
360 SUPREME COURT REPORTS [2012] 3 S.C.R.
A 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
B its approval 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 BOA to undertake works and incur expenditure
C for development. In terms of Section 15(1)(a), the BOA is
entitled to draw up detailed schemes for the development of
the Bangalore Metropolitan Area and in terms of clause (b), the
BOA can with the previous approval of the Government
undertake any work for the development of the Bangalore
D Metropolitan Area and incur expenditure therefor and also for
the framing and execution of development schemes. Sub-
sections (2) and (3) empower the BOA 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
E 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 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
F 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 BOA as part of the
development scheme. Section 32 which contains a non
obstante clause postulates forming of new extensions or layouts
G 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 BOA and subject to the terms and conditions which it may
specify. Sub-section (2) of Section 32 provides for making of
H written application along with plans and sections showing
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 361
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
various matters enumerated in clauses (a) to (d). Similar A
provisions are contained in Section 18 of the Karnataka
Housing Board Act.
23. Although, the appellant may not have been required to
frame a scheme in strict conformity with the provisions of the B
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 C
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 D
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 E
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 Kamataka ILR 1991 F
(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 G
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
H
362 SUPREME COURT REPORTS [2012] 3 S.C.R.
A 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 Kamataka ILR 1989
KAR 406 and referred the matter to the Division Bench under
Section 9 of the Karnataka High Court Act. The Division Bench
B 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 Al R 1975 SC 629, General
c Government Servants Cooperative Housing Society Limited
v. Kedar Nath (1981) 2 SCC 352 and Mis. 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
D 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
E in Writ Petition Nos.7683-7699/1988 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
F 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.
G 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
H Court in Rattan Chand Hira Chand v. Askar Nawaz Jung JT
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 363
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
1991 (1) SC 433 and held as under: A
"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 B
by the Society to the agent in 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 . C
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 D
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 E
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 F
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 G
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
H
364 SUPREME COURT REPORTS [2012] 3 S.C.R.
A and the agents. Unless these persons had the intention of
making huge 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
B 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
c 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
D
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
E 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
F 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 whereby the former
agreed to abide by the conditions specified in Sections 39 and
G 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,
H
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 365
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
being a cooperative society in which not less than 51 per A
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.
B
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 C
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 D
"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 E
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 any State, shall be deemed to
be a "public purpose''. As such for any housing F
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 G
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.
H
366 SUPREME COURT REPORTS [2012] 3 S.C.R.
A 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
B 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?
c 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.
D 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
E and then only the acquisition of the land for such scheme
can be held 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)
F instead of pursuing the acquisition under Part VII of the Act
whic:h 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
G 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
H
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 367
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
S.R. Constructions purported to acquire the lands by A
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 B
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. c
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 D
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 order to acquire the said land for the
benefit of the society members to enter in the E
agreement hereinafter contained with the
Government."
But, ultimately, the lands have been acquired on behalf of
the appropriate Government treating the requirement of the F
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 G
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 Mis S.R. Constructions
(Respondent 11 )."
H
368 SUPREME COURT REPORTS [2012] 3 S.C.R.
A 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
B 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,
c in which the latter for the consideration paid to it had
assured that the lands in question shall be acquired by the
State Government, no adverse inference should be drawn
because that may amount to a tall claim made on behalf
of Mis S.R. Constructions in the agreement. He pointed
D 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
E 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 Mis S.R.
Constructions. This circumstance alone goes ~ long way
to support the contention of the writ petitioners that their
F 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)(v1) of the Act granting prior approval and
G 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
H same. That is why the framers of the Act have required the
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 369
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
appropriate Government to grant prior approval of any A
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 111atter so that it may B
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)(v1)
of the Act to the housing scheme in question. The power c
under Sections 4(1) and 6(1) of the Act has been exercised
for extraneous consideration and at the insta"nce 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
0
whole acquisition proceeding and render the same invalid.
22. In the present case there has been contravention of
Section 3(f)(v1) 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 E
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, F
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 G
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 of the public
purpose but at the instance of agent who had collected H
370 SUPREME COURT REPORTS [2012] 3 S.C.R.
A 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
B 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
C 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
D 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
E 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
F not for public 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
G 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.
H Employees' House Building Society with Mis. S.R.
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 371
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
Constructions. The Estate Agent engaged by the appellant had A
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 B
manipulating the State apparatus and 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 C
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 D
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 E
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 F
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 G
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 H
372 SUPREME COURT REPORTS [2012] 3 S.C.R.
A 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
B
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
c 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
D 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
E
nearly six years. The 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
F 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
Kamataka and others and batch was dismissed by the Division
G Bench by relying upon the observations made by the learned
1
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
H Byanna and others v. State of Karnataka and others were
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 373
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
dismissed by this Court by recording the following order: A
"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 as B
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 C
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 D
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. E
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 Division Bench also expressed the view F
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. G
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 H
374 SUPREME COURT REPORTS (2012] 3 S.C.R.
A 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
B (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 obseNing that the acquisition cannot
be nullified by entertaining writ petitions filed after three years
simply because in H.M;T.'s case the acquisition proceedings
C 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: .
D
"?pecial 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
E 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.
F
(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 to convince the
Court on the issue of invalidity of acquisition. Writ Appeal
G 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
H
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 375
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
Karnataka, in which the petitioner had challenged the acquisition A
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. B
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 a cooperative society. SLP(C) ... CC c
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 counsel for D
the petitioner on the basis of the decision of this Court of
HMT House Building Co-operative Society vs. Syed
Khader & Ors. (1995) 2 sec 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 E
Government and there is nothing to show that the said
approval is vitiated. The special leave petition is, therefore
dismissed.
(viii) Writ Petition No. 4139711995 and batch were F
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 G
cogent explanation for the delay. Writ Appeal Nos. 7057-72/
1996 Smt. Akkayamma v. State of Karnataka were 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
H
376 SUPREME COURT REPORTS [2012] 3 S.C.R.
A 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
8
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
C 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
Government was a party to an agreement which ensured that
the lands will be utililised for implementing the purpose of the
D 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. 102'70/1996 was dismissed by this Court on 4.10.1996 by
recording the following order:
E
"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 sec 677. The submission is that in the case cited above
F 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
G
referred to above ,1:1nd 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
H
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 377
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
the Government granting approval as in the present case. A
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, conveying the approval of the Government in
the issuance of the Notification dated 21.1.86 under B
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 C
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 D
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 E
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 the ground of F
delay and also on the ground that the appellant had not
approached the Court with clean hands. SLP (C) Nos. 23256-
6811996 were summarily dismissed by this Court on
9.12.1996.
31. In Kanaka Gruha Nirmana Sahakara Sangha's case, G
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
H
378 SUPREME COURT REPORTS [2012] 3 S.C.R.
A 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
B 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:
C "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
D 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
E 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
F 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
G 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 Benches in 1st and 2nd H.M.T.
cases and the judgment of two Judge Bench in Vyalikawal
H
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 379
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
House Building Cooperative Society's case. In majority of the A
cases decided by the High Court to which reference has been
made hereinabove, the petitioners were non-suited on the
ground of delay and !aches 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 B
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 c
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 0
dated 14.11.1985 of the Revenue Commissioner and Secretary
to Government to Special Deputy Commissioner, Bangalore to
initiate the 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 E
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 F
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 G
rupees five crores for facilitating issue of Notifications under
Sections 4(1) and 6(1) and sanction of the layouts and plans
by the BOA 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 H
380 SUPREME COURT REPORTS (2012] 3 S.C.R.
A Court did not commit any error by relying upon the judgment in
1st H.M.T 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
8
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
C 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
D 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 41, which finds place in
E 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
F 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
G 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
H that the contribution of Rs.100 was insignificant was rejected
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 381
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
and it was held that a small quantum of contribution by the State A
Government cannot lead to an inference that the acquisition was
made in colourable exercise of power. In Pratibha Nema's
case, the 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 B
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 C
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 D
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 E
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 F
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, G
obviously, it becomes the fund of the Nigam: Such 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 H
382 SUPREME COURT REPORTS [2012] 3 S.C.R.
A 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
B 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:
c 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.
D Ramamurthy, Advocate and he was given opportunity of
personal hearing.
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
E 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
F 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
1O of the Karnataka High Court Act, 1961, the Division Bench
G 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 vie~ that the order of the
learned Single Judge should be sustained on a new ground by
H relying upon the judgment of this Court in 1st H M.T. case, then
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 383
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
it should have remitted the matter to the learned Single Judge A
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 B
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 C
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:
D
"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 E
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 F
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 G
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. H
384 SUPREME COURT REPORTS {2012] 3 S.C.R.
A 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 SA is well-founded. We
have carefully gone through the proceedings of the Special
Land Acquisition Officer and find that Shri Sandip Shah (son
B 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
c 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
0
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
E by respondent No. 3 for withdrawal of the notification and
argued that notification under Section 48 could not have been
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
F 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
G 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
H 25.6.1999 is concerned, the State Government had withdrawn
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 385
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
the same on 15.11.1999. A
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 plots B
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 BOA 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 C
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, D
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 E
Shivashankarappa, (2001) 4 SCC 428, Uday Shankar Triyar
v. Ram Kalewar Prasad Singh, (2006) 1 SCC 75.
41. We have given serious thought to the submission of
the learned counsel but have not felt convinced that this is a fit F
case for invoking the doctrine of prospective overruling, which
was first invoked by the larger Bench in /. 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 Amenclment) Act, 1964. That doctrine has been G
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 H
386 SUPREME COURT REPORTS [2012] 3 S.C.R.
A 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
B money and other extraneous factors for influencing the decision
making process by the Executive. In this case also the Estate
Agent, namely, M/s. 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
c 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 BOA. The
respondents could not have produced any direct evidence that
D 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
E 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
F that in view of the law laid down in the 1st H.M .T. case
(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
G 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
H
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 387
v. STATE OF KARNATAKA [G.S. SINGHVI, J.]
interpreted as this Court's approval of the view expressed by A
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 B
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 built the houses may C
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 D
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.
N.J. Appeals dismissed. E
Search Indian case law
Ask in plain English, not just keywords. 25,000 AI words free, no card.
Try "land acquisition"Sign in to search