Holding

The BDA lacks any statutory authority to re‑convey land acquired for a development scheme; Section 38C only permits allotment, and promissory estoppel cannot be used to compel an act prohibited by law.

Summary

The Bangalore Development Authority (BDA) acquired land for the Koramangala layout under the Mysore/Land Acquisition Acts, paid compensation and took possession. The predecessor Board of Trustees (CITB) passed a 1972 resolution to re‑convey 6 acres 20 guntas to R. Hanumaiah, subject to the withdrawal of compensation, which the respondent complied with. The Karnataka High Court later set aside an earlier decision and ordered BDA to re‑convey the land, relying on a purported shift in judicial thinking and the doctrine of promissory estoppel. On appeal, the Supreme Court held that Section 38C and Section 9 of the Bangalore Development Authority (3rd Amendment) Act, 1993, only empower the Authority to allot sites, not to withdraw an acquisition, and that the 1972 resolution is not saved by the prospective provisions of Section 9. The Court further ruled that promissory estoppel cannot compel a statutory authority to perform an act prohibited by law. Consequently, the High Court judgment was set aside, the writ petition dismissed, and BDA was directed to pay the respondent the determined compensation with interest.

Issues considered

Whether the Bangalore Development Authority has statutory power under Section 38C and Section 9 of the 1993 Amendment Act to re‑convey land acquired for a development scheme.
Whether the 1972 CITB resolution for re‑conveyance is valid and enforceable against the BDA.
Whether the doctrine of promissory estoppel can be invoked to compel the BDA to re‑convey the land.
Whether the State can direct the BDA to re‑convey land under Section 65 of the BDA Act.
Whether the acquisition process is complete and if the land can be released under Sections 48 of the Land Acquisition Act or Section 21 of the General Clauses Act.

Legislation cited

Bangalore Development Authority Act, 1976s. 38, s. 65, s. 76(3)
City of Bangalore Improvement Act, 1945s. 27A, s. 29
General Clauses Acts. 21
Land Acquisition Act, 1894s. 11, s. 16, s. 18, s. 21, s. 31, s. 4, s. 48

Subjects

land acquisitionre‑conveyanceBangalore Development Authoritypromissory estoppelstatutory interpretationSection 38CSection 9compensationgovernment directionsurban development

Judgment

BANGALORE DEVELOPMENT AUTHORITY AND ORS. A
v.
R. HANUMAIAH AND ORS.

OCTOBER 3, 2005

[ASHOK BHAN AND S.B. SINHA, JJ.) B

Mysore land Acquisition Act, 1894, Sections 4, 18-land Acquisition
Act, 1894, Sections 48, l 1, 16, 31-Bangalore Improvement Act, 1945, Sections
29, 27A-Bangalore Development Authority Act, 1976, Sections 38, 65, C
76(3)-Bangalore Development Authority (3rd Amendment) Act 1993, Section
9, 38C.

land Acquisition-Re-conveyance of Acquired land-Whether
permissible Acquisition of respondent's land for development scheme-Cf TB
paying compensation and taking possession-CITE resolution to re-convey D
part of land out of the total land acquired to respondent-later BDA refi1sing
to re-convey in view of High Court decisions that Act and Rules did not
provide for re-conveyance-High Court decreeing respondent "s petition-
Sel/ing aside High Court decree, Held. under the Act and the Rules, BDA has
no power to re-convey the acquired land by withdrawing the acquisition-
Section 38C and 9 having prospective application only would not validate E
a 1972 re-conveyance resolution of CJTB-State cannot direcl BDA to re-
convey the land to owner.

Promissory Estoppel-Re-conveyance ofacquired land--CITB resolution
of re-conveyance-Respondent acting on the resolution altered his position F
to his detriment in not pressing his claim for higher compensation and giving
up his right to withdraw compensation-EDA not acting upon the resolution-
Respondent invoking principle ofpromisso1y estoppel-Held, the Government
cannot be compelled to do an act prohibited by law as there can be no
estoppel against the statute.
G
A Notification for acquisition of respondents land for a development
scheme was published. The amount of compensation paid and the possession
of the land was taken by the authority. Respondent sought a reference for
enhancement of compensation. Therefore his compensation· amount was
deposited in Civil Court. Later CITB passed a resolution to re-convey 6 acres,
WI H
902 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A 20 guntas and 44 square yards of land out of the total land acquired, to
respondent. Respondent withdraw his reference application and gave in writing
that he would not withdraw the compensation. In the layout plan approved by
CITB iii 1974, the said land was shown separately being reserved for re-
conveyance. In 1976, City of Bangalore Improvement Act, 1945 was repealed
and replaced by Bangalore Development Authority Act, 1976 thereby replacing
B CITB by BOA. BOA refused to give effect to re-conveyance resolution in view
of Karnataka High Court decision's that the Act and the rules did not enable
BOA to re-convey the acquired land. Respondent's Writ Petition to High Court
was ultimately decreed holding that , since there was change in judicial
thinking, it was permissible to restore the land to the owners. Hence this
C Appeal

Allowing the Appeal, the Court

HELD : I.I. On a conjoint reading of section 38C with Section 9 of the
Amendment Act it would be seen that Section 38C gives the authority to make
D allotment in certain cases. Section 9 validates the allotment made between
20.12.1973 to 08.05.1986. Section 38C only authorizes BOA to allot a site
in a development scheme to a person whose land has been acquired. It does
not give any power to the BOA to re-convey the land or a part of the land by
withdrawing the acquisition itself. [914-F, G; 915-Al

E 1.2. This apart Section 38C is prospective in its application except to
the extent of the allotment made between 20.12.1973 to 08.05.1986 which are
saved by Section 9. The resolution of CITB of 1972 agreeing to re-convey a
part of the land acquired is not covered by the provisions of Section 9 of the
Amendment Act. [915-B-C[

F 1.3. The present case falls in second part of Section 29 clause 2 of City
of Bangalore Improvement Act, 1945 which provides that the land which have
been acquired by the Board or has been vested in it shall be utilized for. the
purpose of improvement scheme for which the lands have been acquired. It
cannot be used for any purpose other than for which it has been acquired.
G Since the land was acquired for the purpose of forming sites it could only be
used for that. There is no power as per this provision to re-convey the land
which have been acquired under a scheme forming sites. In the Rules framed
there is no provision for re-conveying the land, and therefore, power does not
vest in the Board to re-convey the land for formation of sites in an improvement
scheme. There is no material difference between Section 29of1945 Act and
H Section 38 of Amendment Act. [923-C-E; 923-E-Fl
BANGALORE DEVELOPMENT AlJTHORITY 1·. R.HANUMAIAH 903

1.4. After the vesting of the land and taking possession thereof, the A
Notification for acquiring the land could not be withdrawn or cancelled in
exercise of powers under Section 48 of the Land Acquisition Act. Power under
Section 21 of the General Clauses Act cannot be exercised after vesting of
the land statutorily in the State Government. (925-D-E)

B.N. Sathyanarayana Rao v. State of Karnataka, ILR (1987) Kar 790; B
Lt. Governor of Himachal Pradesh v. Avinash Sharma, [1970) 2 SCC 149;
Pratap v. State of Rajasthan, (1996) 3 SCC l; Mohan Singh v. International
Airport Authority of India, [1997) 9 SCC 132 and Printers Mysore Ltd. v. MA.
Rasheed, (2004) 4 SCC 460, referred to.

Muniyappa v. Bangalore Development Authority, ILR (1992) Kar 125 C
and H.C. Venkataswamy v. BDA, [2001) 9 SCC 204, distinguished.

2.1. The Doctrine of Promissory Estoppel is not based on principle of
estoppeL It is a doctrine evolved by equity in order to prevent injustice. Where
a party by his word or conduct makes a promise to another person in D
unequivocal and clear terms intending to create legal relations knowing or
intending that it would be acted upon by the other party to whom the promise
is made and it is so acted upon by the other party the promise would be binding
on the party making it. It would not be entitled to go back. (917-A-C)

2.2. There is no provision under Act or Rules framed thereunder E
enabling the BDA to re-convey the land acquired to implement a scheme for
forming the sites and their allotment as per rules. The rules do not provide
for re-conveyance. In the absence of any provision authorizing to re-convey
the land direction cannot be issued to BDA to re-convey a part of the land on
the ground that it had promised to do so. The rule of promissory estoppel
cannot be availed to permit or condone a breach of law. It cannot be invoked to F
compel the Government to do an act prohibited by law. It would be going against
the statute. The principle would under the circumstances be not applicable to
the instant case. [921-A-C[

Mis Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh, G
(1979( 2 SCC 409; A.P. Pollution Control Board !Iv. M. V Nayudu, (200112
SCC 62; Sharma Transport v. Govt. of A.P., (2002) 2 SCC 188; Pune
Municipal Corporation v. Promoters and Builders Association, (20041 10
SCC 796; Amrit Banaspati Co. Ltd. v. State of Punjab, 119921 2 SCC 411;
Tata Iron & Steel Co. Ltd. v. State ofJharkhand, (20051 4 SCC 272; Savitaben
.'
Somabhai Bhatia v. State of Gujarat, (20051 3 SCC 636 and Devasahayam v. H
904 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A P. Savithramma, (2005) 7 SCALE 322, referred to.
State of Punjab v. Nestle India Ltd., [2004[ 6 SCC 465, distinguished.

3.1. Once the amount of compensation was tendered and paid the
acquisition process was complete. After making the award under Section 11
B the Collector can take possession of the land under Section 16. The
acquisition process stood completed. The subsequent development will not alter
the fact that the acquisition was complete. 1925-G-H; 926-A[

3.2. Power of the Government under Section 65 is not unrestricted. The
Government can issue directions which in its opinion are necessary or
C expedient to carry out the purposes of the Act. Directions have to be to carry
out the objective of the Act and not contrary to the provisions of the Act.
Directions issued by the Chief Minister to BDA to re-convey the land, run
counter to and are destructive of the purpose for which the BDA was created.
It is opposed to the object of the Act and therefore bad in law. The BDA has
D rightly refused to comply therewith. [927-B-C-DJ

Hindustan Petroleum Corporation Ltd v. Darius Shapur Chenai, (2005)
7 SCALE 386, referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 97I of2003.
E From the Judgment and Order dated 9/10.7.2001 of the Karnataka High
Court in W.A. No. 727(GM) of 1989.

Altaf Ahmad, S.K. Kulkarni and Vijay Kumar with him for the Appellants.

K. Ramamurthy, V. Anand, B.K. Choudhary, Arul Muruganandham N.K.,
F K. Lingaraja and E.C. Vidya Sagar for the Respondents.

The Judgment of the Court was delivered by

BHAN, J. This appeal is directed against the judgment of the Division"
G Bench of the Karnataka High Court in Writ Petition No.727of1989 wherein
and whereunder the Division Bench while setting aside the judgment of the
learned Single Judge in Writ Petition No.15487of1987 issued a direction to
the Bangalore Development Authority (for short "the BOA"), the appellant
herein, to issue possession certificate to the writ petitioner i.e. the 1st
respondent herein in respect of 6 acres and 20 guntas of land as per its
H Resolution dated 19.4.1972 and to allot alternative plots/sites of equal size to
BANGALORE DEVELOPMENT AUTHORITY"· R.HANUMAIAH [BHAN, J] 905

the persons who had been allotted sites carved out of 6 acres and 20 guntas A
of land

The City of Bangalore Improvement Act, 1945 was enacted by the then
Government of Mysore. Under Section 3 of the said Act a Board of Trustees
was constituted to implement the purposes of the Act. The Board (commonly
known as CITB) was given the power to draw the improvement scheme and B
for undertaking any work for improvement or development of any area in or
around the city of Bangalore. The Board was also given the power to acquire
land by agreement and was deemed to be a local authority for the purposes
of Section 50(2) of the Mysore Land Acquisition Act which was in pari
materia with the Land Acquisition Act of 1894. C
On 28.1.1960 a preliminary notification dated 26.11.1959 was published
in the official Gazette proposing to acquire the land of the I st respondent for
formation of a scheme to set up a layout called the Koramangala Layout. Final
notification was published on 28.9.1965 and the award was made on 29.11.1966.
The amount of compensation was paid and in some cases it was deposited D
in the treasury. !st respondent sought a reference for enhancement of the
compensation. In the cases in which a reference had been sought by the I st
respondent the amount of compensation was deposited in the Civil Court.
Immediately after the passing of the award the possession of the land in
question was taken.
E
On 26.6.1968 a resolution was passed by the CITB Bangalore (wrongly
typed as 26.6.1969 in the impugned judgment) to re-convey an extent of 8
acres and 21 guntas of the land out of the total land acquired to the I st
respondent. On 19.4.1972 another resolution was passed by the CITB modifying
its earlier resolution and agreeing to re-convey 6 acres, 20 guntas and 44 F
square yards in favour of the I st respondent subject to the following
conditions.

"I. He should arrange to withdraw immediately the cases pending in
the civil court.

2. He should withdraw the compensation deposited in the court and G
State Huzur Treasury and re-deposit the same to the CJTB funds
within 30 days.

The details of compensation deposited are noted below. The Additional
---"· Special Land Acquisition Officer (CITB) may be consulted if any H
906 SUPREME COURT REPORTS [2005) SUPP. 3 S.C.R.

A difficulty arises in withdrawing the amounts in courts or State Huzur
Treasury.
I. S. No.32/6 Rs.24,845.17 Civil Judge's Court
2. S. No.32/8 Rs. 2,763.45 Civil Judge's Court
3. S. No.32/9 Rs. 1,265.00 State Huzur Treasury
B
4. S. No.32/11 Rs. 3,004.37 Civil Judge's Court
5. S. No.32/12 Rs. 6,008.75 Civil Judge's Court
6. S. No.32/10 Rs. 1,265.00 State Huzur Treasury

c
Rs. 39,151.74

Compensation paid in respect of Sy. No.32/17 amount to Rs. 3, 162.50
ps. may also be credited to the CITS funds, together with interest at
9% on the compensation amount drawn upto the date of repayment.
D
Possession of S.No.26/1 may be handed over to the Additional Special
Land Acquisition Officer immediately, and informed to take further
action. "

It is suffice to mention that in so far as the refund of compensation
E amount was concerned it was found to be neither feasible nor practicable for
the I st respondent to withdraw the amount and re-deposit it and he, therefore,
gave it in writing to the authority that these amounts would not be withdrawn
by him or claimed by him whereupon the amounts in question were ultimately
re-claimed by the authority. He withdrew his reference applications filed under
Section 18 of the Act.
F
On I 0. 7.1974 layout plan was approved by the CITB in respect of the
land which had been acquired for the development of the area. In the layout
plan the land to the extent of 6 acres and 20 guntas was shown separately ·
being reserved for re-conveyance.

G In the year 1976, The City of Bangalore Improvement Act, 1945 was
repealed and in its place Bangalore Development Authority Act, 1976 was
enacted. Bangalore Development Authority constituted under the 1976 Act
succeeded to the City Improvement Trust Board.

The resolution passed by the CITS to re-convey 6 acres and 20 guntas
H ~-
BANGALORE DEVELOPMENT AUTHORITY v. R.HANUMAIAH [BHAN, J.] 907
of land was not given effect to as the High Court of Kamataka in a series A
of judgment held that the land acquired for the development scheme could
not be returned or re-conveyed to the owner and that it must be applied for
the purpose for which it was acquired and the sites formed therein should be
distributed according to the allotment rules. In view of the declaration of law
made by the High Court the resolution was not given effect to by the BOA
and sites were formed by the appellant in ·the said 6 acres and 20 guntas of B
land and the sites were allotted sometime in the year 1985-86.

After the formation of sites in said 6 acres .and 20 guntas and their
allotment the 1st respondent approached the High Court of Kamataka at
Bangalore seeking a writ of mandamus directing the BOA to re-convey 6 C
acres and 20 guntas of land as per resolution of CITB dated 19.4.1972. A
learned Single Judge of the High Court dismissed the writ petition summarily
at the admission stage as being concluded by the decision of the High Court
in B.N. Sathyanarayana Rao v. State ofKarnataka, !LR (1987) Kamataka 790.
The writ appeal filed by the I st respondent was also dismissed summarily at
the initial stage as being covered by the earlier decisions of the High Court. D
!st respondent thereafter approached this Court in CA.5165of1992 and this
Court by its order dated 31.1.200 I accepted the appeal and set aside the
orders impugned in the appeal and remitted the case back to the Division
Bench to reconsider the appeal on merits in view of the contentions raised
on behalf of the 1st respondent that in a later judgment in Muniyappa v.
Bangalore Development Authority, ILR (1992) Kamataka 125, the High Court E
of Karnataka had taken a view that re-conveyance was permissible.

The Division Bench after remand considered the matter afresh and set
aside the judgment of the Single Judge inter alia holding that there was
change in the judicial thinking and in Maniyappa 's, case (supra) the Division F
Bench taking a wider perspective of the entire case law had held that it was
permissible to restore or re-allot the land to the owners. That in the previous
judgments rendered, the High Court had failed to take into consideration
certain important factors such as that the State being the a~quiring authority
and the BOA being the beneficiary only, the State could withdraw the
acquisition or prune the area of acquisition. Drawing support from Section 21 G
of the General Clauses Act it was held that the authority vested with the
power to do a thing had a corresponding right to undo it as well. Since the
State was the acquiring authority it could withdraw the acquisition or prune
the area of acquisition. That the BOA was barred by doctrine of promissory
estoppel to withdraw/not act upon the resolution dated 19.4.1972 specially H
908 SUPREME COURT REPORTS [2005) SUPP. 3 S.C.R.

A when the !st respondent in pursuance to the resolution passed had acted
prejudicially to his interest. That the decision of the CITS was binding on the
BOA being a successor. It was further held that land which was the subject
matter of the resolution of re-conveyance could not and should not have
allotted at all. That the acquisition proceedings in the process of vesting of
the land had not reached finality in respect of 6 acres and 20 guntas of land
B as !st respondent had re-deposited the amount of compensation as per
resolution dated 19.4.1972 and thus had not received the amount of
compensation. In view of the above findings the Division Bench held that
there was no necessity to· give a direction to re-convey the land but the
proper direction would be to direct the BOA to issue the possession certificate
C to Ist respondent in respect of the land which is the subject matter of the
writ petition. It was further held that since the allottees of the sites out of 6
acres and 20 guntas were likely/bound to be affected by the order a direction
was required to be issued to BDA to allot equivalent sites/plots of land to
such allottees within 4 months of the passing of the order.

D Learned counsels for the parties have been heard at length.

A Division Bench of the High Court ofKarnataka in Writ Appeal No.729
of 1983 (Sri. A. V. Lakshman v. B.D.A. and Ors.,) upheld the order of the Single
Judge by observing that the owners of the land did not have a right in law
to seek re-conveyance of the acquired )and. Another Division Bench in Writ
E Appeal No.581 of 1975. (Rachappa and Ors. v. State andOrs.,) held that the
lands acquired become the property of the Trust Board and it has to be dealt
with in accordance with the law and owners of the land in the absence of a
statutory provision entitling them to get the land re-conveyed would not be
entitled to seek relief from the Court under Article 226 of the Constitution of
India. It was observed as under:-
F
"Assumfrig for the sake of argument that the other lands which have
been acquired by the Trust Board have been re-conveyed that by
itself is not sufficient to hold that the appellants have a legal right in
their favour for getting the lands acquired from them re-conveyed to
G them. When the lands are acquired by the Trust Board they become
the property of the Trust Board and the Trust Board has to deal with
its own sites in accordance with law. In the absence of a statutory
provision entitling the appellants to get re-conveyance they would
not be entitled to seek any relief from this Court under Article 226 of
the Constitution on the ground that the Trust Board has in similar
H
BANGALORE DEVELOPMENT AUTHORITY v."R.HANUMAIAH [BHAN, J.] 909

cases re-conveyed lands in favour of persons from whom they were A
acquired. Hence this prayer cannot be granted."

A single Judge in Writ Petition No. 8321 of 1984 (H.N._Abdul Rehman
v. State and Ors.,) again held that Bangalore Development Authority had no
power.to pass a resolution of re-conveyance. It was observed that it was not
open to the BDA to pass a resolution to re-convey the property and create B
a right in favour of the owner-writ petitioner. In B.N. Satyanarayan Rao v.
State of Karnataka, a learned Single Judge, [which decision was later on
affirmed by the Division Bench] held that there was no provision in the Act
and the Rules framed thereunder enabling the BDA to re-convey the sites.
Re-conveyance was opposed to the scheme itself. The scheme was framed for C
forming of sites and allotting them as per rules. The rules did not provide for
re-conveyance and, therefore, it was not possible to hold that there is any
right to seek re-conveyance. It was also held that it was not possible to apply
the rule of promissory estoppel ori the facts of the case as there was no
provision in the Act, or in the Rules framed thereunder enabling the BDA to
allot or re-convey the sites in the manner proposed to be done by the D
Notification. Therefore, the BDA could not be directed to allot or re-convey
the sites on the ground that it had promised to allot or re-convey the sites.
It was observed in para 4:

"Learned Counsel for the petitioner has not been able to place reliance
on any of the provisions in the Act or on the Rules framed thereunder E
which enable the B.D.A. to re-convey the site. Re-conveyance in a
way is opposed to the scheme itself. Scheme is formed for the purpose
of forming site for allotting them as per the Rules. The rules do not
provide for re-conveyance. Therefore it is not possible to hold that
the petitioners have a right to seek re-conveyance." F
Plea of promissory estoppel noticed in para 5 of the order to the effect:

"However, the learned Coun~el for the petitioners has tried to take
refuge under the equitable doctrine of promissory estoppel on the
basis of the notification issued by the then Chairman of the B.D.A. G
dated 14.7.76 as per Annexure-B. The petitioners claim that as per and
in pursuance of the notification (Annexure-B) they have filed the
·affidavits and have not challenged the acquisition and have altered
their position to their disadvantage, therefore, it is not now open to
the B.D.A. to resile from the notification and deny allotment of sites
to the petitioners by way of re-conveyance." H
910 SUPREME COURT REPORTS [2005) SUPP. 3 S.C.R.

A The said plea was rejected by observing thus:

"In addition to this it is not possible to apply the rule of promissory
estoppel in cases where there is no provision contained in the Act,
or in the Rules framed thereunder enabling the B.D.A. to allot or re-
convey the sites in the manner proposed to be done by the notification.
B (Annexure-B). Therefore I am of the view that the B.D.A. cannot be
directed to allot or re-convey a site to each of the petitioners on the
ground that it had promised to allot or re-convey a site to each one
of the petitioners." ,_
t
In Writ Petition No. 12119 of 1988 (Bangalore District Co-operative
C Central Bank Employees Co-op. Society Ltd. v. Bangalore Development
Authority and Anr.,), Justice Rama Jois expressed his agreement with the view
taken by Bopanna, J. to the following effect:- ...
"If the B.D.A. were to be given the power _to re-convey the land
vested in it by exercising the power under Section I 3 of the Act, that
D would be self-defeating the destructive of the purpose of constituting
a special authority for the development of the City of Bangalore." In
view of the above quoted judgments and some other judgments of the
High Court from 1983 onwards holding that the acquired land cannot
be re-conveyed, the extent of 6 acres and 20 guntas which was
E originally earmarked for re-conveyance was also developed and sites
were carved out and allotted.

In Muniyappa 's case (supra) on which reliance has been placed in the
impugned judgment to come to the conclusion that there was shift in the
judicial thinking regarding the power of the BOA, to re-convey the land
F acquired to the owner, the facts were:-
A Writ Petition No. 2495 of 1979 was filed by the owners of the land ·
seeking issuance of a Writ of Mandamus directing the BOA to deliver
possession certificate in respect of I acre of land in Survey No.5/3 C of
Jadahalli. The Single Judge held that BOA had/has no power to re-convey
. G the land acquired to implement the scheme and negatived the plea of the writ
petitioner. Aggrieved against the order passed by the Single Judge the writ
petitioner filed the appeal which was accepted. It was held that no material
had been placed on record to hold that the land in question had in fact been
acquired for a scheme or that the allotment of site contravened the scheme. ...
H The Division Bench expressed its agreement with the proposition that BOA
BANGALORE DEVELOPMENT AUTHORITY v. R.HANUMAIAH [BHAN, J.] 91 J

which is a statutory body working under the Act had no power under the Act A
or the Rules framed thereunder to re-convey the lands which had been
acquired for implementation of the scheme. The agreement-was expressed in
para 3 of the judgment in the following words:-

"The learned Single Judge has pointed out that the B.D.A. had or has
no power to re-convey the lands acquired to implement a scheme B
relying upon the decisions of this Court in B.N. Sathyanarayan Rao
v. State of Karnataka, ILR 87 Kar. 790, and in B. Venkataswamy
Reddy v. State of Karnataka, ILR (1989) Kar. 75. This proposition is
absolutely unexceptionable having regard to the provisions of the
B.D.A. Act as also the Rules of Allotment of Sites framed under the C
said Act."

[Emphasis supplied]

The Bench after going through the pleadings df the party came to the
conclusion that it was not a case of re-conveyance of the land but allotment D
of the site as contemplated under Rule 5 and the word "re-conveyance"
appears to have been used in a loose sense because the allottee happened
to be the owner of the land prior to its acquisition. It was held:-

" .. Further, the CITB had the power to allot site under Rule 5 without
following the procedure prescribed in Rule 3 provided the other E
requirements of Rule 5 are fulfilled. No serious contention could be
"urged on behalf of the respondent to rebut the contention urged on
behalf of the appellant that the word 'reconveyance' had been used
in the Resolution dated 12.1.1972 and all the subsequent
correspondence in a loose sense and in fact the said word meant F
allotment/grant of site within the meaning of Rule 5. As seen earlier
the earliest Resolution dated 7.8.1963 only spoke of grant and not re-
conveyance. When that is so, and when in fact the Resolution coupled
with the correspondence between the petitioner and the CITB shows
that what was done was an allotment as contemplated under Rule 5,
the contention the word 're-conveyance' appears to have been used G
in a loose sense because the allottee was the previous owner of the
said land prior to the acquisition, but in truth it is t case of allotment
. has to be accepted. If that be so, it has to be held that there was a
valid allotment of I acre of land in Sy. No.5/3C as per Resolution
No.646 dated 12.1.1972 by the CITB in favour of the petitioner-appellant. H
912 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A Further he had also complied with all other requirements impose.ct by
the CITB."

On close scrutiny it has to be held that in Muniyappa 's, case (supra)
the ~ench did not express an opinion contrary to the opinion which had been
expressed in the earlier decisions to the effect that there was no power under
B the Act or the Rules with the BOA to re-convey the acquired land, on the
contrary the Bench expressed its agreement with the view taken in B.N.
Sathyanarayana Rao's, case (supra) and other cases to_.the effect that the
BOA was not vested with the power under the Act or Rules to re-convey the
land which had been acquired for a scheme. On the facts of the case the
C Bench came to the conclusion that it was a case of allotment as contemplated
under Rule 5 and not that of re-conveyance. The Division Bench in the
impugned judgment has misread and misapplied Muniyappa's case (supra)
judgment to come to the conclusion that there was a shift in the judicial
thinking and that the land acquired could be re-conveyed to the owners. The
findings recorded which are based on misreading of the Muniyappa 's case
D (supra) are unsustainable and therefore set aside.

State of Karnataka amended the Bangalore Development Authority Act,
1976 by the Bangalore Development Authorities (3rd Amendment) Act, 1993
(for short "the Amendment Act") which came into force with effect from 3 lst
March, 1994. Section 5 of the Amendment Act introduced Section 38-C in the·
E Act and Section 9 of the Amendment Act validated the allotments made
between 20.12.1973 to 8.5.1986 retrospectively.

Although the Divisi_on Bench in the impugned judgment held that
though the issue regarding applicability of Section 38-C after its incorporation
F in the BDA Act lifting the ban on re-conveyance was irrelevant because the
l st respondent did not contend that he was entitled to any relief under this
provision but indirectly relying upon it the Division Bench held that in a
given case for good reasons it would be i>ermissible for the authority to alter
the terms of the acquisition and restore the lands that had been acquired
under the provisions of the Land Acquisition Act if the facts and circumstances
G so justified.

Section 38-C and Section 9 of the Amendment Act are reproduced
below:-

"38-C. Power of Authority to make allotment in certain cases. •
H Notwithstanding anything contained in this Act or in any other law

I
BANGALORE DEVELOPMENT AUTHORITY». R.HANUMAIAH [BHAN. J.] 9 J3
or any development scheme sanctioned under this Act, or City A
Improvement Trust Board Act, I 985 where the Authority or the
erstwhile City Improvement Trust Board, Bangalore has already passed
a resolution· in favour of any persons any site formed in the land
which belong to them or vested in or acquired by them for the purpose
of any development scheme and on the ground that it is not practicable B
to include such site for the purpose of the development scheme, the
Authority may allot such site by way of sale or lease in favour of
such persons subject to the following conditions, -
(a) the allottee shall be liable to pay any charges as the Authority
may levy from time to time; and
c
(b) the total extent of the site a!Jotted under this section together
with the land already held by the allottee shall not exceed the
ceiling limit specified under Section 4 of the Urban Land (Ceiling
and Regulation) Act, I 976."

"9. Validation of certain allotment. - Notwithstanding anything D
contained in any law or any judgment, decree or order of any court
where in pursuance of any resolution passed by the Authority or the
erstwhile City Improvement Trust Board, Bangalore to re-convey in
favour of any person any site out of the land which belonged to them
or vested in or acquired by them for the purpose of any development
scheme, the Authority has made allotment of such site by way of E
sale, lease or otherwise in favour of such person after the twentieth
day of December, 1973 and before eight day of May, 1986, such
allotment shall be deemed to have been validly made and shall have
effect for all purpose as if, it had been \made under Section 38-C of
the Principle Act as amended by this Act and accordingly - p
(a) all acts, proceedings and things done or allotment made or action
taken by the authority shall for all purpose be deemed to be and
to have always been done or taken in accordance with law;
(b) no suit or other proceedings shall be instituted, maintained or
continued in any court for cancellation of such allotment or for G
questioning the validity of any action or things taken or done
under Section 38-C of the Principle Act as amended by this Act,
and no court shall enforce or recognize any decree or order
declaring such allotment made or any action taken or things
done under the Principle Act as invalid." H
914 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A Section 38-C commences with non obstante clause. ft provides that
irrespective of anything contained in any law or any judgment, decree or
order of any Court where in pursuance of any resolution passed by the authority
or the erstwhile City Improvement Trust Board, Bangalore in favour of any
person re-conveying the site formed in the land which belong to them or
vested in or acquired by them for the purpose of any development scheme
B and on the ground that it is not practicable to include such site for the
purpose of any development scheme, the Authority may allot such site by
way of sale or lease in favour of such persons subject to the allottee paying
such charges which the authority may levy from time to time and the extent
of site allotted under this provision together with the land already held by the
C allottee shall not exceed ceiling limit specified under Section 4 of the Urban
Land (Ceiling & Regulation) Act, 1976.

Section 9 of the Amendment Act speaks of validation of certain
allotment. It also starts with the non obstante clause and provides that if a
resolution has been passed by the Bangalore Development Authority or the
D City Improvement Trust Board to re-convey in favour of any person any site
out of the land which belonged to him or vested or acquired from him for the
purpose of any development scheme, the Authority has already made allotment
of such site by way of sale, lease or otherwise in favour of such person after
20th of December, 1974 and before 8th of May, 1986, then such allotment
E shall be deemed to have been validly made and shall have effect for all'
purpose as if, it is \made under Section 38-C of the Principal Act as amended
by Act 17 of 1984.

On a conjoint reading of Section 38-C read with Section 9 of the
Amendment Act it would be seen that Section 38-C gives the authority to
p make allotment in certain cases. It gives the authority to the BDA to re-
convey/allot in favour of any person any site formed in the land which
belonged to them or vested in or acquired by them for the purpose of any
development scheme and on the ground that it is not practicable to include
such site for the purpose of development scheme by way of sale or lease in
favour of such person whose land was acquired subject to his liability to pay
G any charges that the authority may levy from time to time and that the total
extent of site allotted under this Section together with the land already held
by the allottee would not exceed the ceiling limit under Section 4 of the
Urban Land (Ceiling and Regulation) Act, 1976. Section 9 of the Amendment
Act validates the allotment made between 20th December, 1973 to 8th May,
H 1986. Section 38-C only authorises the BDA to allot a site in a development
BANGALORE DEVELOPMENT AUTHORITY v. R.HANUMAIAH [BHAN, J.l 9 J5
scheme to a person whose land had been acquired. It does not give any power A
to the BDA to re-convey the land or a part of the land by withdrawtng the
·11cquisition itself. Observations made by the Division Bench in the impugned
judgment that Section 38-C enabled the BDA to re-convey the land which
had been acquired for a development scheme for a purpose other than
implementing the scheme are not sustainable.
B
This apart Section 38-C is prospective in its application except to the
extent of the allotment made between 20th December, 1973 to 8th May, 1986
which are saved by Section 9 of the Amendment Act. The resolution of CITB
of 1972 agreeing to re-convey the part of the land acquired is not covered by
the provisions of Section 9 of the Amendment Act. In the present case, the C
resolution of the CITB predecessor-in-interest is dated 19.4.1972 and it would
not be deemed to be validated by the deemed fiction created by Section 9 of
the Amendment Act to bring it within the provisions of Section 38 -C.

We may here notice the judgment of this Court in H.C. Venkataswamy
v. Bangalore Development Authority, [2001] 9 SCC 204, on which reliance D
has been placed by the counsel for the respondent to contend that Section 38-
C would be applicable to the present case. In this case the BDA had acquired
land for the development of the scheme called "Rajamahal Vilas II Stage."
BDA passed a Resolution on 26.6.1984 whereunder it was decided that each
of the owners of the land whose land had been acquired would be given a
site measuring 40' x 60' free of cost. BDA did not implement the decision on E
the ground that the Resolution was not approved by the State Government.
The appellants challenged the decision of the State Government by way of
a writ petition under Article 226 of the Constitution of India before the
Karnataka High Court. ·A Division Bench of the High Court by the judgment
dated 8.2.1991 dismissed the writ petition. Aggrieved again'.st the decision of p
the High Court appeals were filed in this Court which were accepted. Taking
note of Section 38-C read with Section 9 of the Amendment Act it was held
that the provisions of Section 9 were fully applicable to the allotments made
to the appellants during the period 1984-85. It was observed in later part of
para 10 as under:-
G
" ... Even if it is assumed that the basis for the allotment of sites to the
' appellants was not the same as has been provided by the Amendment
Act under Section 38-C, but that would not invalidate the allotments
because the deeming fiction crated by Section 9 of the Amendment
Act would bring the allotments within the purview of Section 38-C.
H
916 SUPREME COURT REPORTS (2005] SUPP. 3 S.C.R.

A The effect of the deeming fiction is that even though these allotments
may not have been made under Section 38-C they would be saved by
Section 9 of the Amendment Act by virtue of the deeming fiction."

It was further observed in para 11 as under:-

B "Even otherwise we are of the view that the resolution of BOA did
substantial justice to the appellants. A situation was created where it
may not have been possible for BOA to implement the scheme. The
BOA entered into a settlement with the farmers and took a conscience
decision to allot plots to them. It was neither fair nor just on the part
ofBDA and the State Government to have gone back on their decision
c which was taken with an open mind and after discussion with the
farmers. BOA by passing the resolution, in a way, accepted the demand
of the farmers for enhanced compensation. The allotment of plots to
them was to further compensate them for acquiring their land for the
development scheme."
D This decision is of no assistance to the !st Respondent as it was a case
of allotment of a site formed under the scheme and not of re-conveyance by
withdrawing from the acquisition itself. Moreover, Section 9 of the Amendment
Act would also be not applicable as the resolution of CITB does not fall
within the prescribed dates i.e. 20.12.1973 to 8.5.1986.

The Division Bench in the impugned judgment has taken the view that
the correspondence exchanged between the parties established that the
respondent acting on the representation or the promise held out to him to his
prejudice and altered his position to his detriment in not pressmg his claim
for higher compensation and withdrawing the legal proceedings. That the
F respondent had also not claimed the compensation that was offered to him,
which was re-deposited by him with the authority. That the appellant could
not be permitted to resile from the representation or promise made by it to
the respondent as the respondent had acted on the representation and altered
his position to its prejudice. Plea taken by the appellant that rule of promissory
G estoppel shall not apply to do or perform an act prohibited by law or not
authorised by law was rejected by observing that Act to re-convey the land
was not prohibited as there was a shift in the judicial thinking in Muniyappa 's
case (supra). It was held that the appellant was bound to re-convey the land
to the petitioner as per its resolution. That the appellant was debarred from
resiting from the promise/representation made especially in view of the fact
H that the respondent acting on the promise made to him had altered his position
BANGALORE DEVELOPMENT AUTHORITY r. R.HANUMAIAH [BHAN, l.l 917
to his prejudice. A
The doctrine of promissory estoppel is not based on the principle of
estoppel. It is a doctrine evolved by equity in order to prevent injustice.
Where a party by his word or conduc.t makes a promise to another person in
unequivocal and clear terms intending to create legal relations knowing or
intending that it would be acted upon by the party to whom the promise is B
made and it is so· acted upon by the other party the promise would be binding
on the party making it. It would not be entitled to go back on the promise
made. This Court in Mis. Motilal Padampat Sugar 'Mills Co. Ltd. v. State of
UttarPradesh, [ 1979] 2 SCC 409, after analyzing the doctrine of promissory
estoppel as applied in the Courts of England and the United States held that C
in India the law may be taken to be settled that principle of promissory
estoppel would be applicable to the Government as well where it makes a
promise knowing or intending that it would be acted upon by the promisee,
and the promisee in fact acting on the promise alters his position, then the
Government will be held bound by the promise and such a promise would be
enforceable against the Government at the instance of the promisee. That the D
Government stood on the same footing as a private individual so far as the
obligation of law is concerned. The Government committed as it is, to the
rule of law, cannot claim immunity from the applicability of Rule of
Promissory Estoppel and repudiate a promise made to it on the ground that
such a promise may fetter its future executive action. It was pointed out that E
since the doctrine of promissory estoppel is equitable doctrine it must yield
when the equity so requires and if it can be shown by Government that,
having regard to the facts as they have transpired, it would be inequitable to
hold the Government to the promise made by it, the Court will not raise an .
equity in favour of the promisee and enforce the promise against the
Government. Another exception carved out was that doctrine of promissory F
estoppel cannot be invoked to compel the Government or even a private
party to do an act prohibited by law. It was observed in para 28 as under:-
" .... It may also be noted that promissory l'.stoppel cannot be invoked
\o compel the Government or even a private party to do an act
prohibited by law. There can also be no promissory estoppel against G
the exercise of legislative power. The Legislature can never be
< precluded from exercising its legislative function by resort to the
doctrine of promissory estoppel. Vide State of Kera/a v. Gwalior
Rayon Silk Manufacturing Co. Ltd., [1973] 2 SCC 713."
In A. P: Pollution Control Board II v. Prof M. V. Nayudu (Retd.), H
918 SUPREME COURT REPORTS [2005) SUPP. 3 S.C.R.

A [200 I] 2 SCC 62, it was held that there can be no estoppel against the statute.
Rejecting the plea for applying the principle of promissory estoppel, it was
observed in para 69 as under:-

"The learned Appellate Authority erred in thinking that because of
the approval of plan by the Panchayat, or conversion of land use by
B the Collector or grant of letter of intent by the Central Government,
a case for applying principle of "promissory estoppel" applied to the
facts of this case. There could be no estoppel against the statute. The
Industry could not therefore seek an NOC after violating the policy
decision of the Government. Point 4 is decided against the 7th
respondent accordingly."
c
[Emphasis supplied]

Similarly, in Sharma Transport represented by D.P. Sharma v.
Government of A.P., [2002] 2 SCC 188, it was held that the Government as
D a public authority cannot be compelled to carry out a representation or promise
which is prohibited by law or which was devoid of authority or power of the
officer of the Government or the public authority to make the promise. It was
observed in para 24 as under:-

"It is equally settled law that the promissory estoppel cannot be used
to compel the Government or a public authority to carry out a
E representation or promise which is prohibited by law or which was
devoid of the authority or power of the officer of the Government or
the pub! ic authority to make. Doctrine of promissory estoppel being
an equitable doctrine, it must yield place to the equity, if larger public
interest so requires, and if it can be shown by the Government or
F public authority for having regard to the facts as they have transpired
that it would be inequitable to hold the Government or public aurhority
to the promise or representation made by it. The Court on satisfaction
would not, in those circumstances raise the equity in favour of the
persons to whom a promise or representation is made and enforce the
promise or representation against the Government or the public
G authority. These aspects were highlighted by this Court in Vasantkumar
Radhakisan Vora v. Board of Trustees of the Port of Bombay, [1991]
1 SCC 761, STO v. Shree Durga Oil Mills, [1998] I SCC 572 and
Ashok Kumar Maheshwari (Dr.) v. State of UP., [1998] (2) SCC
502, Above being the position, the plea relating to promissory estoppel
H
BANGALORE DEVELOPMENT AUTHORITY r. RHANUMAIAH [BHAN, J.] 9 J9
has no substance." A
[Emphasis supplied]

In Pune Municipal Corporation and Anr., v. Promoters and Builders
Association and Anr., (2004] JO SCC 796. It was held that it is a settled
preposition of law that there could be no "promissory estoppel" against the B
statute. Relying upon the earlier decisions of this Court and overturning the
view taken by the High Court in invoking the principle of promissory estoppel
it was held in para 6 as under:-

"DCR are framed under Section 158 of the Act. Rules framed under
the provisions of a statute form part of the statute. (See General C
Officer Commanding-in-Chief v. Dr. Subhash Chandra Yadav, (1988]
2 SCC 35, para I4). In other words, DCR have statutory force. It is
also a settled position of law that there could be no "promissory
estoppeI" against a statute. (A.P. Pollution Control Board JI v. Prof
MV. Nayudu, (2001] 2 SCC 62, para 69, STO v. Shree Durga Oil
Mills, [I 998] I SCC 572, paras 21 and 22 and Sharma Transport v. D
Govt. ofA.P., [2002] 2 SCC 188, paras 13 to 24.) Therefore, the High
Court again went wrong by invoking the principle of "promissory
estoppel" to allow the petition filed by the respondents herein."

[Emphasis supplied]
E
Reliance placed by the counsel for the respondent on the decision in
State of Punjab v. Nestle India Ltd., [2004] 6 SCC 465, to contend that the
principle of promissory estoppel would be applicable to the present case
cannot be accepted. In the aforesaid case, the State of Punjab had come up
in appeal against the order passed by the High Court quashing the demand p
raised by the State of Punjab for purchase tax on milk for the period 1996-
97. The High Court quashed the demand raised by the State of Punjab on the
principle of promissory estoppel as the State of Punjab had promised to
abolish the purchase tax on milk for the period in question and was estopped
from contending to the contrary. The respondent writ petitioners were the
factories producing various milk products. As registered dealers under the G
Punjab General Sales Tax Act, 1958 the respondent writ petitioners had been
paying purchase tax on milk in terms of Section 4-B of the Act however for
one year i.e. from the period 1.4.1996 to 4.6.1997 none of the respondents
paid the purchase tax on the plea that the Government had decided to abolish
purchase tax on milk for the period in question and was estopped from H
920 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A contending to the contrary.
It was averred in the writ petition that the Chief Minister of Punjab on
26.2.1996 while addressing dairy farmers at the State level function had
announced that the State Government had abolished purchase tax on milk
and milk products in the State. Similarly, the Finance Minister in his Budget
B Speech echoing the view of the Chief Minister had stated that the State
Government had abolished the purchase tax on milk. The Financial
Commissioner in its memo dated 26.4.1996 addressed to the Excise and
Taxation Commissioners had written that it has been decided in principle to
abolish purchase tax on milk with effect from 1.4.1996. In a meeting held
C under the Chairmanship of Chief Minister a decision was taken to abolish the
purchase tax on milk and it was decided to issue a formal notification in a
day or two. Later on, the Government resiled from its promise and issued
demand notices raising the demand of purchase tax for the year 1996-97.
Upholding the decision of the High Court and noticing and analyzing the
entire case law on promissory estoppel it was held that the State Government
D in view of the provisions of the Punjab General Sales Tax Act, 1948 had the
power to exempt the purchase tax on milk. Since there was nothing in law
which prohibited it from doing so, the State Government was held bound to
act upon its representation and exempt the milk from purchase tax for the
relevant period. It was held that no representation could be enforced which
E is prohibited by law but this principle would not be applicable to the cases
where there is power under the statute to grant exemption. Grant of exemption
could not be said to be contrary to the statute. Statute did not debar the grant
of exemption rather it envisaged it. Distinguishing the judgment in Amrit
Banaspati Co. Ltd. v. State of Punjab, [1992] 2 SCC 411, it was observed as
under:-
F
"Amrit Banaspati Co. Ltd. v. State of Punjab, [1992] 2 SCC 411, is
an example of where despite the petitioner having established the
ingredients of promissory estoppel, the representation could not be
enforced against the Government because the Court found that the
Government's assurance was incompetent and illegal and "a fraud on
G the Constitution and a breach of faith of the people". This principle
would also not be applicable in these appeals. No one is being asked
to act contrary to the statute. What is being sought is a direction on
the Government to grant the necessary exemption. The grant of
exemption cannot be said to be contrary to the statute. The statute
does not debar the grant. It envisages it."
H
BANGALORE DEVELOPMENT AUTHORITY 1·. R.HANUMAIAH [BHAN, J.] 92 J
There is no provision in the Act and the Rules framed thereunder A
enabling the BOA to re-convey the land acquired to implement a scheme for
forming of sites and their allotment as pe'r rules. The rules do not provide for
re-conveyane. In the absence of any provision in the Act or the Rules framed
thereunder authorizing the BOA to re-convey the land direction cannot be
issued to the BOA to re-convey a part of the land on the ground that it had
promised to do so. The rule of promissory estoppel cannot be availed to B
permit or condone a breach of law. It cannot be invoked to compel the
Government to do an act prohibited by law. It would be going against the
statute. The principle of promissory estoppel would under the circumstances
be not applicable to the case in hand.

It is well-settled that there cannot be any estoppel against a statute. In
c
Tata Iron & Steel Co. Ltd. v. State of Jharkhand and Ors., [2005] 4 SCC
272, this Court observed:

"53. This is also not a case where the appellant altered its position
pursuant to or in furtherance of a promise made to it by the State. The D
doctrine of promissory estoppel, therefore, is not applicable. It is not
even a case where the doctrine of legitimate expectation could be
invoked. (See Hira Tikkoo v. Union Territory, Chandigarh)

54. We, however, are not oblivious that the doctrine of promissory
estoppel would be applicable where a representation has been made E
by the State in exercise of its power to exempt or abolish a commodity
as taxable commodity. Such promise, however, must be made by the
persons who have the power to implement the representation."

In Savitaben Somabhai Bhatiya v. State of Gujarat and.Ors., [2005] 3
sec 636, this Court observed: F
"17. In Yamunabai case plea similar to the one advanced in the present
case that the appellant was not informed about the respondent's earlier
marriage when she married him was held to be of no avail. The
principle of estoppel cannot be pressed into service to defeat the
provision of Section 125 of the Code." G
Recently in Devasahayam (D) BY LRS. v. P. Savithramma and Ors.,
(2005) 7 SCALE 322], this Court observed:

"The doctrine of approbate and reprobate is a species of estoppel.
However, there cannot be any estoppel against a statute. [See MD, H
922 SUPREME COURT REPORTS (2005] SUPP. 3 S.C.R.

A Army Welfare Housing Organisation v. Sumangal Services (P) Ltd. v.
Sumanga/ Services (P) Ltd., (2004] 9 SCC 619"

Learned counsel for the respondent vehemently contended that Section
29 of the City of Bangalore Improvement Act, 1945 was different in content
and scope than Section 38 of the Bangalore Development Act. Since the
B resolution was passed under the City of Bangalore Improvement Act, 1945,
the resolution has to be seen and interpreted in the light of Section 29 of the
City of Bangalore Improvement Act, 1945. That Section 76(3) of the BDA
Act provides that any right, privilege, obligation or liability acquired, accrued
or incurred arising under the old Act shall remain intact. We do not find any
C force in the submission.

Section 27-A of the City of Bangalore Improvement Act, 1945 provided
that notwithstanding .anything contained in the Act during a period of fifteen
years from the date of commencement of the Act, the Government may
acquire the land under the Mysore Land Acquisition Act, 1894 for the purpose
D of improvement, expansion or development of the City of Bangalore or any
area to which this Act extends, and any land so acquired after it has vested
in the Government, stand transferred to the Board and such land may be dealt
with under the provisions of Sections 28 and 29, or in such manner as the
Government may direct. Section 29 of the said Act reads as under:-

E "Section 29. Power of Board to acquire, hold and dispose of property.
- (I) The Board shall for the purposes of this Act, have power to
acquire and hold movable and immovable property, whether within
or outside City.
(2) Subject to such restrictions, conditions and limitations as may be
F prescribed by rules made by the Government, the Board shall have
power to lease, sell or otherwise transfer any movable or immovable
property which belongs to it, and to appropriate or apply any land
vested in or acquired by it for the formation of open spaces or for
building purposes or in any other manner for the purpose of any
improvement scheme.
G
(3) The restrictions, conditions and limitations contained in any grant
or other transfer of any immovable property or any interest therein
made by the Board shall, notwithstanding anything contained in the
Transfer of Property Act, 1882 (Central Act 4 of 1882) or any other
law, have effect according to their tenor."
H
BANGALORE DEVELOPMENT AUTHORITY 1•. R.HANUMAIAH [BHAN, J] 923
First part of Clause (I) of Section 29 provides that the Board shall have A
the power for the purpose of the Act to acquire and hold movable and
immovable property, whether within or outside the city. Clause (2) provides
that subject to such restrictions, conditions and limitations as may be prescribed
by rules made by the Government, (i) the Board shall have power to lease,
sell or otherwise transfer any movable or immovable property which belongs
to it, and, (ii) to appropriate or apply any land vested in or acquired by it for B
the formation of open spaces or for building purposes or in any other manner
for the purpose of any improvement scheme. The first part deals with the
power of the Board to lease, sell or otherwise transfer any movable or
immovable property which belongs to it and, second, to appropriate or apply
any land vested in or acquired by it for the formation of open spaces or for C
the building purposes or in any other manner for the purpose of any
improvement scheme. The present case falls in the second part which provides
that the lands which have been acquired by it or have been vested in it for
formation of open spaces or for building purposes shall be utilized for the
purpose of the in\provement scheme for which the lands have been acquired.
It cannot be used for any purpose other than for which it was acquired which D
in the present case was for formation of open spaces or for building purposes
and since the land was acquired for the purpose of forming sites it could only
be used for the purpose of forming sites and their allotment. There is no
power as per th is provision to re-convey the lands which have been acquired
under a scheme for forming sites. The power of the Board to lease or sell or E
transfer the sites was made subject to the restrictions, conditions and limitations
which may be prescribed by the Rules. In the Rules framed there is no
provision for re-conveying the land and, therefore, power does not vest in the
Board to re-convey the lands which were acquired for formation of sites in
an improvement scheme.
F
On comparison and reading of Section 29 of the City of Bangalore
Improvement Act, 1945 and Section 38 of the Amendment Act we do not
find any material difference between these two sections. In fact both these
sections are pari materia with each other. The arguments raised, based on
Section 76(3) of the BDA Act, therefore, has no force and hence rejected.
G
Notification under Section 4 was issued under the Mysore Land
Acquisition Act, 1894 which is pari muteria with the Central Act i.e. Land
Acquisition Act. By the Land Acquisition (Karnataka Extension &
Amendment) Act, 1961 (Karnataka Act No.17 of 1961) the earlier Act of
Mysore State was repealed and the Land Acquisition Act of 1894 (Central H
924 SUPREME COURT REPORTS [2005) SUPP. 3 S.C.R.

A Act I of 1894) was extended to the whole of the State of Karnataka in its
application to the State of Karnataka. It was specifically provided that all
amendments made by the Act repealed shall cease to continue and shall be
omitted from the Land Acquisition Act of 1894 and such of the provisions
thereof as were affected by the repealed Act shall stand revived to the extent
to which they would have otherwise continued in operation but for the passing
B of the repealed Act.

Preliminary notification under Section 4 dated 26.11.1959 was published
under the Karnataka Land Acquisition Act, 1894 (The Mysore Land
Acquisition Act). But all proceedings thereafter including the final notification
C and the subsequent proceedings were under the Land Acquisition Act, 1894.
The Division Bench in the impugned order has taken the view applying the
principle laid down in Section 21 of the General Clauses Act which provides
that power to issue the notification, order or rules or bye-laws would include
the power to add, amend, vary or rescind any notification, order, rule or bye-
law held that where the authority is vested with the power to do something
D then it is entrusted with the power to undo it as well. Since the State
Government had the power to acquire the land it has the power to release the
land from acquisition as well.

In our considered view, the Division Bench has erred in holding that
the State Government could release the lands in exercise of its power under
E Section 48 of the Land Acquisition Act, 1894 from the acquisition.

This Court in Lt. Governor of Himachal Pradesh v. Sri Avinash Sharma,
[1970) 2 sec 149, has held in para 6 as under:-

"Power to cancel a notification for compulsory acquisition is, it is
F true, not affected by Section 48 of the Act; by a notification under
Section 21 of the General Clauses Act, the Government may cancel
or rescind the notification iS>ued under Sections 4 and 6 of the Land
Acquisition Act. But the power under Section 21 of the General
Clauses Act cannot be exercised after the land statutorily vests in the
State Government."
G
It was concluded in para 8 that:-"

.... It is clearly implicit in the observations that after possession has
been taken pursuant to a notification under Section 17(1) the land is
vested in the Government, and the notification cannot be cancelled
H
BANGALORE DEVELOPMENT AUTHORITY"· RJIANUMAIAH [BHAN, J.] 925
under Section 21 of the General Clauses Act, nor can the notification A
be withdrawn in exercise of the powers under Section 48 of the Land
Acquisition Act. Any other view would enable the State Government
to circumvent the specific provision by relying upon a ganeral power.
When possession of the land is taken under Section 17( I), the land
vests in the Government. There is no provision by which land
statutorily vested in the Government reverts to the original owner by B
mere cancellation of the notification."

Again in Pratap v. State of Rajasthan, [ 1996] 3 SCC 1, it was reiterated
that once the possession is taken and the land vests in the Government then
the Government cannot withdraw from acquisition under Section 48 of the C
Land Acquisition Act. Same view was reiterated by this Court in Mohan
Singh v. International Airport Authority of India, (1997] 9 SCC 132, and in
Printers (Mysore) Ltd. v. MA. Rasheed, (2004] 4 SCC 460.

The possession of the land in question was taken in the year 1966 after
the passing of the award by the Land Acquisition Officer. Thereafter, the D
land vested in the Government which was then transferred to CITB,
predecessor-in-interest of the appellant. After the vesting of the land and
taking possession thereof, the notification for acquiring the land could not be
withdrawn or cancelled in exercise of powers under Section 48 of the Land
Acquisition Act. Power under Section 21 of the General Clauses Act cannot
be exercised after vesting of the land statutorily in the State Government. E
The High Court also erred in holding that land acquisition process and
the vesting process became incomplete since the land owners were asked to
re-deposit the amount of compensation. High Court failed to take notice of
Section 31 of the Land Acquisition Act. Section 31 contemplates that on F
making of an award under Section 11 the Collector shall tender amount of
compensation awarded by him to the person interested and entitled thereto
according to the award and shall pay to them unless prevented by any one
or more of the contingencies mentioned in the subsequent clauses. None of
those contingencies arose in the present case. Thus, once the amount was
tendered and paid the acquisition process was complete. After making the G
award under Section 11 the Collector can take possession of the land under
Section 16 which shall thereupon vest absolut'!ly in the Government free
from all encumbrances. In the instant case, after making the payment in terms
of the award, possession was taken. The acquisition process stood completed.
The subsequent development will not alter the fact that the acquisition was H
926 SUPREME COURT REPORTS [2005) SUPP. 3 S.C.R.

A complete.
This brings us to the last contention raised by the counsel for the
respondent.· Respondent placed on record copy of the letter No.UDD/260/
2005 dated 12.7.2005 addressed by the Principal Secretary to the Government,
Urban Development Department, Bangalore to the Commissioner, Bangalore
B Development Authority, Bangalore. This letter was addressed by the Urban
Development Department with reference to Chief Minister's note No.CM/
SCM-2/49/BDA/05 dated 5.7.2005. The letter reads as under:-

"With reference to the above subject the copy of the note under
reference is enclosed along with this Letter and the subject is self
c explanatory.

I have been directed to inform you that in the light of the order
of the Hon 'ble Chief Minister, an extent of 6 acres 20 guntas of Land
should be re-conveyed to Sri. R. Hanumaiah in accordance with the
decision rendered by the High Court of Karnataka in Writ Appeal
D No.727/1989, dated 9/10.7.2001, you should take necessary action
immediately and send a report to the Government regarding the action
taken."

The Bangalore Development Authority sent their reply contending inter
E a/ia that the directions issued by the Chief Minister were contrary to law and
the third party rights had set in and therefore, not capable of being
implemented. Thereafter, there has been no communication from the office
of the Chief Minister to the BOA.

The letter was written on behalf of the Government in purported exercise
p of its power under Section 65 of the Act which reads:

"Section 65 : Government's power to give directions to the Authority.
- The Government may give such directions to the authority as in its
opinion are necessary or expedient for carrying out the purposes of
this Act, and it shall be the duty of the authority to comply with such
G directions."

We do not agree with the contention raised by the counsel for the
respondent that the directions issued by the Chief Minister through his note
were binding on the BOA or that the BOA was bound in law to re-convey
the land in terms of the directions issued in the impugned judgment. It has
H not been shown that the Chief Minister was authorised to issue the directions
BANGALORE DEVELOPMENT AUTHORITY 1'. R.HANUMAIAH [BHAN, J.] 927

-to the BDA to re-convey the land. Under Section 65 the Government can A
give such directions to the authority which in its opinion are necessary or
expedient for carrying out the purpose of the Act. It is the duty of the BDA
to comply with such directions. Contention that BDA is bound by all directions
of the Government irrespective of the nature and purpose of the directions
cannot be accepted. Power of the Government under Section 65 is not
unrestricted. Directions have to be to carry out the objective of the Act and B
not contrary to the provisions of the Act. The Government can issue directions
which in its opinion are necessary or expedient for "carrying out the purposes
of the Act".

Directions issued by the Chief Minister in the present case would not C
be to carry out the purpose of the Act rather it would be to destroy the same.
Such a direction would not have the sanctity of law. Directions to release the
lands would be opposed to the . statute as the purpose of the Act and object
of constituting the BDA is for the development of the city and improve the
lives of the persons living therein. The authority vested with the power has
to act reasonably and rationally and in accordance with law to carry out the D
legislative intent and not to destroy it. Direction issued by the Chief Minister
run counter to and are destructive of the purpose for which the BDA was
created. It is opposed to the object of the Act and therefore, bad in law.
Directions of the Chief Minister is to re-convey the land in terms of the
decision rendered by the High Court in the impugned judgment i.e. Writ E
Appeal No.727 of 1989. Since we are setting aside the impugned judgment,
the BDA as per directions issued by the Chief Minister cannot re-convey the
land to the respondent in terms of the decision rendered by the High Court
in the impugned judgment i.e. Writ Appeal No.727 of 1989.

The Land Acquisition Act, 1894 is a code by itself. It not only deals p
with acquisition of land but also deals with payment of compensation as also
release of the acquired lands.

Bangalore Development Authority is a creature of statute. Its functions
and duties are delineated by Bangalore Development Authority Act, 1976.
does not confer any power on the said authority to re-convey the l~nd vested G
in it. Upon acquisition of the land, the same vests in the State. The State only
in terms of Section 13 of the said Act can re-convey the said acquired land
of the said authority.

It is not in dispute that Section 48 of the Land Acquisition Act would
apply to the acquisitions made under the 1976 Act and in that view of the H
928 SUPREME COURT REPORTS (2005) SUPP. 3 S.C.R.

A matter the State could exercise its jurisdiction for re-conveyance of the property
in favour of the owner thereof only in the event possession thereof had not
been taken. Once such possession is taken even the State cannot direct re-
convey the property. It has been accepted before us that Section 21 of the
General Clauses Act has no application but reliance has been sought to be
placed on Section 65 of the 1976 Act which empowers the Government to
B issue such directions to the authority as in its opinion are necessary or expedient
for carrying out the purpose of the Act. The power of the State Government
being circumscribed by the conditions precedent laid down therein and, thus,
the directions can be issued only when the same are necessary or expedient
for carrying out the purpose of the Act. In a case of this nature, the State
C Government did not have any such jurisdiction and, thus, the Bangalore
Development Authority has rightly refused to comply therewith.

Recently in Hindustan Petroleum Corpn. ltd. v. Darius Shapur Chenai
and Ors., (2005) 7 SCALE 386, this Court noticed:

D "In Commissioner of Police, Bombay v. Gordhandas Bhanji, AIR
(1952) SC 16, it is stated :

" ... We are clear that public orders, publicly made, in exercise of a
statutory authority cannot be construed in the light of explanations
subsequently given by the officer making the order of what he meant,
E or of what was in his mind; or what he intended to do. Public orders
made by public authorities are meant to have public effect and are
intended to affect the actings and conduct of those to whom they are
addressed and must be construed objectively with reference to the
language used in the order itself."

F Yet again in Mohinder Singh Gill, (supra), this Court observed :

"The second equally relevant matter is that when a statutory
functionary makes an order based on certain grounds, its validity
must be judged by the reasons so mentioned and cannot be
supplemented by fresh reasons in the shape of affidavit or otherwise.
G Otherwise, an order bad in the beginning may, by the time it comes
to court on account of a challenge, get validated by additional grounds
later brought out. We may here draw attention to the observations of
Bose, J. in Gordhandas Bhanji."

Referring to Gordhandas Bhanji (supra), it was further observed :
H "Orders are not like old wine becoming better as they grow older."
BANGALORE DEVELOPMENT AUTHORITY,.. R.HANUMAIAH [BHAN, J.) 929

[The said decisions have been followed by this Court in Bahadursinh A
Lakhubhai Gohi/ v. Jagdishbhai M. Kama/ia and Ors., [2004] 2 SCC
65]."

Equally untenable is the plea of the Respondents that promise of the
CITB to re-convey is enforceable in law.
B
Bangalore Development Authority has been constituted for specific
purposes. It cannot take any action which would defeat such purpose. The
State also ordinarily cannot interfere in the day to day functioning of a
statutory authority. It can ordinarily exercise its power under Section 65 of
the 1976 Act where a policy matter is involved. It has not been established
that the Chief Minister had the requisite jurisdiction to issue such a direction. C
Section 65 of the 1976 Act contemplates an order by the State. Such an order
must conform to the provisions of Article 166 of the Constitution of India.

Since the !st respondent has re-deposited the amount of compensation
received and also withdrew his reference applications seeking enhancement D
of the compensation, the equities have to be balanced. As per the averments
made in para 5.2 of the writ petition the question of compensation for lands
acquired were finally decided by the High Court in MFA No. 217 of 1974
and MFA No. 219 of 1974 decided on I Ith September, 1975 and MFA No.
545 of 1974 decided on 29th September, 1975. The High Court enhanced the
compensation to Rs. 10,000/- per acre excluding interest and statutory E
allowances. On adding of interest and statutory allowances the amount would
come approximately to Rs. 19,000/- per acre. But for the promise made by
the appellant, the !st respondent would have been entitled to compensation
at the said rate for the extent of 6 acres 21 guntas 42 square yards as well.

In equity we deem it appropriate to direct the appellant to pay the F
amount of compensation which was determined by the Land Acquisition
Officer along with enhanced compensation which may have been granted by
the High Court in any of the reference filed either by the I st respondent or
any other land owner inclusive of statutory benefits with interest @ 9% per
annum with effect from the date on which it became due till its payment. As G
the I st respondent has been deprived of the amount due for quite some time
we direct the appellant to re-deposit the entire amount within three months
from today. Jn case the amount is not deposited within three months then the
1st respondent would be entitled to interest@ 12% per annum. On deposit
of the amount the first respondent would be entitled to withdraw the same.
H
930 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R.

A We accept this appeal and set aside the judgment of the High Court as
well as the directions issued by the State Government on the asking of the
Chief Minister vide letter dated 12th July, 2005 to the BOA to re-convey the
land measuring 6 acres, 20 guntas and 42 Sq. Yds. to the Ist Respondent.
The judgment under appeal is set aside and that of the Single Judge is restored.
The writ petition is dismissed except to the extent that the 1st respondent
B would be entitled to re-claim the amount of compensation along with interest
as indicated in the earlier paragraphs. Parties shall bear their own costs.

K.G. Appeal allowed.