Holding

Bulk allotment to a registered housing cooperative society is valid under Section 38B, the Government cannot issue directions contrary to the Act or its Rules, and illegal transfers made before the amendment of Rule 14 may be regularised upon payment of 25% of the site value as provided by the amended Rule 14.

Summary

The Bangalore Development Authority (BDA) had made a bulk allotment of 604 sites to the Legislators' Housing Co-operative Society between 1981 and 1987 under Section 38B of the Bangalore Development Authority Act, 1976. A writ petition challenged the validity of the bulk allotment and the subsequent transfers of those sites by society members, alleging out‑of‑turn allotment and illegal alienation in violation of Rule 14 of the Allotment of Sites Rules, 1984. The Karnataka High Court held the bulk allotment invalid and directed the BDA to set up a committee to examine all its allotments, exceeding the scope of the petition. On appeal, the Supreme Court held that Section 38B validly authorises bulk allotment to a registered housing cooperative society, that the Government cannot issue directions contrary to the Act or its Rules, and that transfers made in contravention of the pre‑amendment Rule 14 are illegal but can be regularised under the 1997 amendment by payment of 25% of the site value. Consequently, the High Court’s directions were set aside and the BDA was ordered to allow regularisation of such transfers upon payment of the stipulated amount.

Issues considered

The validity of bulk allotment of land to a housing cooperative society under Section 38B of the Bangalore Development Authority Act, 1976.
Whether the State Government can issue directions under Section 65 that are inconsistent with the Act or its Rules.
The legality of transfers of allotted sites by society members in violation of Rule 14 of the Allotment of Sites Rules, 1984.
The scope of the writ petition and whether the High Court could direct a comprehensive inquiry into all BDA allotments.
The effect of the 1997 amendment to Rule 14 on regularising earlier illegal alienations.

Legislation cited

Subjects

bulk allotmenthousing cooperative societySection 38BSection 65Rule 14land transferwrit petitionjurisdictionregularisation25 percent site value

Judgment

r

COMMISSIONER, BANGALORE DEVELOPMENT A
AUTHORITY
v.
S. VASUDEVA AND ORS.

JANUARY 18, 2000
B
[B.N. KIRPAL AND M.B. SHAH, JJ.)

Urban Development :

Bangalore Development Authority Act, 1976 : c
Sections 39 and 38-B (inserted in 1993 w.e.f 20-12- 1975)-Allotment
of land-By Development Authority-Bulk allotment of land made to
registered housing cooperative society for further allotment to its mem-
ber.1-Validity of-Held : In the absence of any averment to indicate that
allotment of land was denied to any society, organisation or person registered D
with the Development Authority prior to the registration of the said society,
such allotment valid-Cooperative Societies.

Section 65-Government's power-To give direction to Development
Authority-S.:ope of-Held : Government has no power to issue direction
E
contrary to the provision of the Act or Rules framed under it--R. 14(2) (as it
then stood) did not permit sale of vacant site even with Development
Authority's permission, there/ore Government cannot direct the Authority to
pennit such sales-Hence, such sales invalid-However, with the insertion of
R. 14(2) such alienation can be regularised only under the circumstances
provided by R. 14(3). F

Bangalore Development Authority (Allotment of Sites) Rules, 1984.

Rule 14(3)-Sale of sites-By allottees-Grounds for-Held: Not only
the insolvency of the a/lottee but also his inability to reside in the city and
their impecuniosity are also valid grounds. Allotment of land-Transfer of G
site~y a/lottees-Development Authority permitted transfer of sites by al-
lottees in contravention of Rule:.-Subsequently, Rules were amended permit-
ting such transfer subject to the purchases paying 25% of sital value as
determined by Government:--Held : Development Authority directed to give
an opportunity to the purchasers to get the transfer regularised on payment of H
275
276 SUPREME COURT REPORTS [2000] 1 S.C.R.

A 25% of sital value
Constitution of India, 1950:

A1ticle 226-- ·Wlit petition- !nte1ference undei--Scope of-Writ petition
challenged only out-of-tum allotment of sites to some members of Coopera-
B tive Housing Society and the Transfers made by some allottees-However,
High Court not only held the bulk allotment of land to the society invalid but
also directed the Development Authority to constitute a committee to go into
all the allotments made by it--Co"ectness of-Held : High Court, by issuing
the impugned directions, travelled way beyond the scope of the writ peti-
C tion-Hence, High Court not justified in fasuing such directions.

The Legislator's Housing Cooperative Society 1ms a registered
society under the Karnataka Societies Registration Act, 1%0. Bolk allot·
ment of land was made to the said Society by the appellant-Development
Authority, which in turn, allotted plots of land to its members. Respondent
D No. 1 filed a writ petition before the High Court challengi113 not only the
said allotment but also the transfers of land by allottee in violatio::i of
Bangalore Development Authority (Allotment of Sites) Rules, 1984, it was
also averred in tine writ petition that out-of-turn allotment hnd been given
to certain persons.

E The High Court held that the allotment of land was not validly made
to the Society. It also held that at that belated stage tht violation com-
mitted would not render the allotment invalid. However, tile High Court
allowed the writ petitions and directed that the appellant-Development
Authority to constitute a committee t~ go into all the allotments made by
F it.
On behalf of the appellant it was contended that the allotment was
made to the Society under Section 38-B of the Bangalore Dtvelopment
Authority, 1976 (which was inserted in the Act on 20.12.1975), and that the
appellant had pt:rmitted transfers of land pursuant to a direction issued
G by the State Gonrnment under Section 65 of the Act.
Allowing the appeal, this Court

HELD : 1. Section 38 of the Bangalore Development Authority Act,
1976 gives power to the Authority to lease, sell or transfer property, inter
H alia, for building purposes or for the purposes of any development scheme.
r

COMMR. BANGALORE DEVELUPMENf ALTHURJTY v. S. VASUDEVA 277

The High Court had in an earlier decision interpreted this Act to mean that A
the Bangalore Development Authority (BOA) could not make bulk allot-
ment. This resulted in the passing of the Bangalore Development Authority
(Third Amendment) Act, 1993. By Section 5 of the said Amending Act,
Section 38-B was inserted in the Principal Act with ell'ect from 20.12.1975.
This Section shows that bulk allotment of land by way of sale, lease or
otherwise can be made, mter alia, to any Housing Cooperative Society. This
B
being so, the allotment of land made in favour of the Legislator's Housing
Co-operative Society between 1981 and 1987 would come within the ambit of
Section 38-B. There is no material on record to indicate that there was any
society or organisation or anybody else who had been registered with the
BOA prior to the date of registration of the Society and who had not been c
allotted land. In the absence of any averment in this behalf or any specific
finding in regard thereto, the allotment of land, which consisted of 604 sites
in favour of the Society, cannot be held to be invalid. Admittedly, the
persons whose allotment was challenged were members of the Society and
this being so they would be entitled to allotment of sites from out of the land
had been allotted to said Society. [285-1<'-H; 286-A-B]
D

2.1. Rule 14 (as it then stood) of the Bangalore Development
Authority (Allotment of Sites) Rules, 1984 did not permit transfer of site
on which building had not been erected. According to Rule 14(3) of the
Rules, under certain conditions, an allottee could only surrender the site E
in which case he was entitled to receive the value of the site plus 12 per
cent interest thereon. It is only if building was erected that permission
could be given to sell the vacant site and building be subject to payment
of interest at the rate of 12 percent on the allotted value of site. [288-G-H]
F
2.2. The Government has no power to issue any directions, which are
in conflict with the provisions of the Act and the Rules framed under the
said Act. The directions, which can be given under Section 65 of the Act,
are such which are necessary or expedient for the carrying out of the
purpose of the Act. When Rule 14, as it stood in the year 1994-95, did not
permit sale of vacant sites by an allottee to anybody else, even after getting G
permission from the BOA, the Government could not have permitted or
directed the said land to be sold or transferred. This being the position,
the transfer of land by some members of the Society was clearly illegal and
the permission so granted and the consequent transfer of land would
become liable to be set aside. [289-C-E] H
'

278 SUPREME COl RT REPORTS (2000] 1 S.C.R.
A 3. However, as a result of the amenilment of Rule 14 by the Bangalore
Development Authority (Allotment of Sites) (Amendment) Rules, 1997
where there has been alienation of site in contravention of Rule 14(2), then
on an application being made by the purchaser the said sale or alienation
in his favour can be regularised on the purchaser paying an amount equal
B to 25 per cent of the sital value determined at the rates specified by the
State Government from time to time. Inasmuch as the permission which
was granted in 1994 and 1995 for transferring the land was illegal, the
effect, would be that the original allottees had transferred the land in
violation of the provisions of Rule 14(2) and now after the amendment of
the said Rule regularisation of the said alienation can take place by the
C purchaser paying the amount referred to in Rule 14(2-A). If this payment
were not made, the result ob"iuusly would be that the alienation will not
be validated and the allotment of land itself would stand cancelled. It is
obvious that under Rule 14 permission to transfer can be granted under
the circumstances provided by Rule 14(3). The High Court erred in inter-
D preting Rule 14(3) to mean that it is only for the reason of insolvency that
permission under Rule 14(3) can be granted. This interpretation is nut
correct because on the ground that the allottee is unable to reside in the
city and also on the ground of impecuniosity, permission can be granted
to sell the land or the land and the building constructed thereon, after that
amendment of the Rule in 1998. [290-D-H; 291-A]
E
4. In the writ petition filed before the High Court respondent No. 1
had prayed for quashing of the out-of-turn allotment of sites tu some
members of the Society and also for quashing of the transfer made by some
of the allottees. There was nu challenge either to the regbtration of the
p Society with the BDA or tu the allotment of land tu the Society as such.
However, the High Court not only came to the conclusion that bulk
allotment of land nut permissible but also directed the constitution of a
Committee to go into all allotments made by BDA. It is not permissible
for the High Court to travel way beyond the scope of writ petition. The writ
petitioner had not chosen to enlarge the scope of the writ petition by
G amending his petition and, therefore, the High Court was not justified in
issuing the type of directions which it did. [284-A-C; EI

6. lt is, therefore, directed that the BDA will give an opportunity to
the purchasers of land who had purchased the same from the members of
H the Society to get the transfer regularised on payment of 25 per cent of the
C'.OMMR BANGALORB DtWLOPMENT AlITHORflY >- S. VASUDEVA (KIRPAL, l J 279

sital value determined at the rates specified by the Government. [291-B-C] A
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 456-458
of 2000 Etc. Etc.

From the Judgment and Order dated 16.10.98 of the Karnataka High
Court in W.P. Nos. 32111/96, 15167/90 and 31227 of 1996. B

Soli J. Sorabjee, Attorney General, M.L. Verma, R.B. Mehrotra,
GL. Sanghi, S.K. Kulkarni, Ms. Sangeeta Kumari, Shantha K. Mahale, S.N.
Bhat, B. Y. Kulkarni, Ranji Thomas, Javed Mahmud Rao, E.C. Vidya Sagar,
A.K. Srivastava, Ms. Sushma Suri, K.R. Nagaraja, Ms. Gargi Khanna, K.K.
Tyagi, A.P. Jain, Ms. Shalini Bhalla, Ms. Abhilasha, B.K. Choudhary and
c
P. Mahale for the appearing parties.

The Judgment of the Court wa~ delivered by

KIRPAL, J. Civil Appeal Nos. 456-458 of 2000 (arising out of Special D
Leave Petitions Nos. 19742-44/ 1999)

Special leave granted.

Aggrieved by allotment of land to 34 persons by the Bangalore
Development Authority (hereinafter referred to as the ''BDA"), respondeiit E
No. 1 filed a writ petition in the Karnataka High Court challenging not only
the said allotment but also some of the tran~fers of land which had been
effected by some of the said allottees. These 34 respondents were stau:d
to be ex-Legislators, ex-Ministers, etc. who were members of the Legis-
lators Housing Co-operative Society Ltd. (for short "the respondent- F
Society"). In the writ petition, it was averred that out of turn allotment had
been given to these 34 persons and in violation of the Rules some of them
had transferred the land and, therefore, that land should ht! resumed by
the Government.

The aforesaid writ petition was filed in the High Court by an Advo- G
cate who stated that he had no personal interest in the matter but was
aggrieved by the breach of the rule of law stated to have been commitkd
by the Government of Karnataka and the BDA. The appellant (BDA)
herein as well as the State of Karnataka represented before the High Court
that the allotments had been made in accordance with the provisions of H
r'
\

280 SUPRr.ME COCRT REPORTS [200011 S.C.R.
A the Bangalore Development Authority Act, 1976 (hereinafter referred to
as "the Act") and the Rules framed thereunder. It was stated that the
respondent-Society had been registered in the year 1981 and bulk allotment
had been made to the Society which, in turn, allottt:d plots of land to its
member:;. Tht: details with n;gard to allotment of land by the BDA to the
B said Society are as under :

·- Authority. Tl, -(io~mem
Resolution /lio. I Order No. &
rNo ~f sit~s
I approwd for
-r .N ---·-f - h -
Jameote
L
& Date date i allotme_nt ____ + ayout
2l5MNX
I: t~ ~:':;;.~ t' __ ~o~ .... t0~l~:::::~~:i _
- -- - - - [ · Hl-D I Further Extn.

C _27212481

--'='1m", -I ~~:,: ~: 1-- 5~- ~~:r~~~~~:~ -

D - 251/23.1086-l 86 Dt. 30.1.87 . - 99 ~ G:;::::·
587/3 7 87
. .
i· HVD
339
MNX
86 Dt. 30.9.87
t 100
Rajmahal Vilas
I(Lottcrgollahalli)
·- -- -- -- f I

---r R.aj~ah~1 vaas -
E HUD 347 MNX LI Stage
379/16.l.87 249 , (Bhoopasandra)
88 Dt. 14.12.88 I d
an Hosur
_ _j_
I, Sarjapur Road
~ ---'--
Total 604

F
It was also contended by the respondt:nts that the writ petition should be
dismissed on the ground of !aches, inasmuch as allotment of land had taken
place between 1981 and 1987 whereas the writ petition itself was filed in
1996. [t was also contended that third party interest had arisen and it would
be unfair and unjust that allotment of land should be cancdled especially
G when some, if not most, of the aHottees had already spent considerable
amount of money and raised construction on the plots so allotted. Defend-
ing the allotment made to the respondent- Society, the BDA rdied upon
the provisions of Section 38-B which was introduced in the Act with effect
from Decembcr 1975 which in terms permitted bulk allotment of land to
H Housing Co-operative Socit:ties for atlotment to its members.
r

COMMR BANUALOREDEVELOPMENT AL11IORITY v. S. VASUDEVA(KIRPALJ.J 281

The High Court came to the conclusion that allotment of land was A
not validly made to the respondent-Society. It abo held that at this belated

- stage the violations which had been committed should not render the
allotment invalid but nevertheless it obst:rvt:d that the said allotment re-
quired reconsideration of tht: cases. The High Court then issued the
following directions :
B

- ··under the circumstances of the case and keeping in view the
position of law as noticed hereinabove, these petitions are allowed
by issuance of the following declarations and directions :

(I) Re~pondent No. 3 is directed to constitute a high power C
Committee for the purpose of examining all the allotments made
so far to the Members of Respondent No. 39- Society keeping in
view the provisions of the Act, the Rules, the Regulations, the
Ordtrs issued in that behalf and the observations and findings
rtcordi;;d in this Judgment. Such Committee should comprise of D
experts in the fields and may be headed by a person of judicial
background pn:ferably a former Judge of this Court. Such a
Committee shall be constituted within a period of one month from
today with direction to submit its Report to the Authority within
a period of four months from the date of its constitution. It is
needless to say that such a Committee shall examine all individual E
cases after notice to the concerned allottees.

(II) Consequent upon the submission of the Report by the
Commitlt:e, Respondent No. 3 shall initiate legal process for can-
cellation of the allotments wherever needed, obviously in accord- F
anee with the provisions of the Act, Rules, Regulations and after
compliance of the principles of natural justice.

(lll) To facilitate an early report, Respondent No. 3 shall notify
the constitution of the Committee, its functions and the place of
sitting by mt:!ans of publication of a notice in three daily newspapers G
published from Bangalore having vide circulation in the State of
Karnataka. ( >ut of these three newspapers one shall be in Kannada
language. Such publication shall be deemed sufficient notice to all
concerned. The Commitlet! shall, however, in its discn:tion be
entitled to issue personal notict! to the concerned. H
'
282 SUPREME COL RT REPORTS [2000J 1 S.C.R.

A (IV) Respondent No. 27, who was allotted a site measuring 50'
x 80' at HSR Layout is proved to have violated the terms of the
lease-cum-sale agreement and the provisions of law, thus incurring
a liability of cancellation of the site. The allotment of a site No.
L-1118 of Hosur Sarjapur L.H. Colony made in favour of Respon-
dent No. 27 is hereby cancelled with direction to Respondent No.
B 3 to resume the site and take its immediate possession. Respondent
No. 27 is held entitled to the payment of such amount as is
permissible to him under Rule 14 of the Allotment Rules only
notwithstanding the amounts 'pent by him on the construction of
--
a Hotel in violation of the provisions of law.
c
(V) All permissions granted to the Respondents for alienation
of land are held to be in vioiation of Ruic 13 of the Allotment
Rules and the conditions of lease-cum-sale agreement executed
between the parties. Such permissions insofar as the concerned
Respondents are concerned arc declared to be nullity, void and
D
inoperative not affecting the rights of the Respondent No. 3-
Authority. Consequent upon the setting aside of the permissions
granted for alienation, Respondent No. 3 is directed to take
immediate consequential action under the provisions of the Act,
Rules i'sued thereunder and the agreement executed between the
E parties. So far as the other allottecs of the sites, who have been
granted permission of alienation, but are not parties before us, a
direction is issued to Respond.:nts I and 3 to immediately initiate
process for cancellation of such permission after notice to the
concerned and compliance of the principles of natural justice.
F Appropriate action shall be initiated within om: month and effec-
tive orders be passed with respect to all concerned within a period
of three months.

(VI) The alienations made by the allottees in favour of the third
parties would not come in tho:: way of Respondents 1 to 3 to
G implemtmt the directions of this Court. lt is, however, directed that
in all such cases where the name of the transferees are notified,
the Respondents l to 3 shall pass effective orders after notice to
the concerned transferees also.

H (VII) That pending amendment of the Rules, no further per-
I

lUMMR ~ANGALURF DEVH OPMr ~ r AL 1HORITY v. S. VASl'DEV A [KIRPAL. L) 283

mission shall be granted to any allottee for transfer of the site to A
any person undt:r any circumstances.

(VIII) Even after the Rules arc amended as recommended by
Respondent No. 3-Authority, the allottees of the sites from the
B.D.A. an: hdd not eligible to transfer the vacant site to any person
for any reason. Allottees of such sit;;s shall howt:ver upon proof of B
the conditions specifa:d under Ruic 14(3) of the Allotment Rules
be eligible to surrender the sites in favour of the.: Authority on
receipt of the amount as provided under the aforesaid Rule.

(lX) The alluttees of the sites who haw put up buildings shall
be permitted to sell the sites only upon declaration of their status
c
regarding insolvency or impecuniosity by a competent Court of
jurisdiction and in the light of the findings returned by us in this
judgment.

(X) Such of the allottees of the sites who are unable to reside D
in the city of Bangalore shall be required to sum;nder the site
whether any construction is raised or not in favour of Respondent
No. 3-Authority on receipt of the amounts calculated as per tt:rms
of Ruh: 14(3) of the Allotment Rules.

(XI) Ri.:spondent No. 3 is further directed to immediately E
appoint an officer to ascertain within one wecok regarding the
position of the sites so far as the construction of the building in
terms of least:-cum-sale agreements is concerned. Such officer shall
submit his Report positively within a period of two weeks.

(XII) P<ending Report of the Committee appointed in terms of F
direction No. 1, nu allottee of any site, which is in dispute and
allotted at the instance of Respondent No. 39 shall be permitted
to commenc.: or carry on any construction on the site.

(XIII) The directions issued and law laid down in this case shall G
mutatis mutandis apply to B.D.A. Act and Rules whether directly
or through Housing Societit:s."

The aforesaid judgment of the High Court and the directions issued
by it haw been chalknged in this appeal and the connected petitions which
have been filed. H
284 SUPREME COURT REPORTS (2UOO] l S.C.R.
A At the outset, we are of the opinion that the High Court travelled
way beyond the scope of the writ petitJon which was before it. The prayer
-
in the writ petition was for quashing the out of turn allotments in favour
of MLAs, MPs and others who wen: impleaded as respondents Nos. 4 to
38 before the High Court. The further prayer was that permission which
B had been granted to some of these MLAs, MPs and others to transfer plots
of land which had been allotted to them should also be quashed. It is
pertinent to note that in this writ petition there was no challenge either to
the registration of the respondent-Society with the BOA or to the allotment
of land to the Society as such. As already noted, the chalkngc was to the
allotment to the 34 persons who were statt:d to be mt:mbcrs of the said
C Society. The High Court, on the otht:r hand, not only came to the con-
clusion that bulk allotment of land was nut permissible but also directed
the constitution of a Committt:e to go into all allotment> made by the BOA.
The effect of this would be that the Committee which was sought to be
constituted was empuwc:rcd tu carry out a roving and fishing inquiry with
D regard to allotments of land made by the BOA since the time it was
constituted in the year 1'176. There Will> neither any prayer in the writ
petition to this effect nor do we find any affidavit having been tiled by the
respondents before the High Court in relation to such allotments of land
to the Society and other>. The writ petitioner had not chosen to enlarge
the scope of the writ petition by amending his petition and, then:fore, the •
E High Court, in our opinion, was not justified in issuing the type of direc-
tions which it did.

Coming to the merits of the cast: and without going into the question
of !aches, we find that during the pt:ndency of the hearing of the writ
F petition, two of the respondents, namely, Jagannatha Rao Chandraki and
K.G. Ramaswamy had expired. The High Court ordered tht:ir deletion
from the array of respondents. In addition thereto, it was found that some
of the persons who were originally impkaded as respondents wen: not
Legislators and on a memo being filed by the writ petitioner 13 such
respondents wen; deleted from the array of respondents vide Court's order
G dated 27th Augu.~t, 1998. We are thus concerm:d with the remaining ex-
Legislators and Ministers to whom allotment had l11::en made by virtue of
their being members of the respondent-Society.
.-
In justification of allotment of land, the appellant BOA has placed
H strong reliance on Section 38B of the Act which reads as under :
C'OMMR. BA,'ICJALOREDEVELOPMENT AL'THORITY v. S. VASL'DbVA[KlRPAL,J.) 285

38B. Power ofAuthority to make bulk allotment. - Notwithstand- A
ing anything contained in this Act or Development Scheme sanc-
tioned under this Act, the Authority may, subject to any rnstriction,
condition and limitation as may be prescribed, make bulk allotment
by way of sale, lease or otherwise of any land which belongs to it
or is vested in it or acquired by it for the purpose of any develop-
ment scheme, - B

(i) to the State Government; or

(ii) to the Central Government; or

/ (iii) to any Corporation, Body or Organisation owned or con- C
'
/
trolled by the Central Government or the State Government; or

(iv) to any Housing Co-operative Society registered under the
Karnataka Co-operative Societies Act, 1959 (Karnataka Act 11 of
1959)'
D
(v) to any society registered under the Karnataka Societies
Registration Act, 1960 (Karnataka Act 17 of 1960); or

(vi) to a Trust created wholly for charitable, educational or
religious purpose:
E
Provided that prior approval of the Govi;;rnment shall be ob-
tained for allotment of land to any category listed above.

It may here be noticed that Section 38 of the Act gives power to the
Authority to lease, sdl or transfer property, inter alia, for building pur-
poses or for the purposes of any devdopment scheme. It appears that the F
Karnataka High Court had in an earlier decision interpreted this Act to
mean that the BOA could not make bulk allotment. This resulted in the
pass;ng of the Bangalon: Development Authority (Third Amt:ndment) Act,
1993. By Sei.:tiun 5 of the said Amending Act, Section 38B was inserted in
the principal Act with effect from 20th December, 1975. A plain reading
of this Section shows that bulk allotmt:nt of land by way of sale, lease or G
otherwise can be made, inter alia, to any Housing Co-operative Society.
This being so, the allotment of land made in favour of the respondent-
Society between 1981 and 1987 would come within the ambit of Section
38B. There is no material on record to indicate that there ·.vas any society
or organisation or anybody else who had been registered with the BOA H
286 SUPREME COURT REPORTS [2000] 1 S.C.R.
A prior to the date of registrati0n of the respondent-Society and who had not
been allotted land. In the absence of any averment in this behalf or any
specific finding in regard thereto, the allotment of land which consisted of
604 sites in favour of the respondent-Society cannot be held to be invalid.
It is not in dispute that the respondents whose allotment was challenged
B were members of the respondent-Society and if this being so they would
be entitled to allotment of sites from out of the land which had been
allotted to the said Society.

We now come to the question of transfer of sites by the allottt:es.
There were 11 persons who were not members of the rt:spondt:nt-Society,
C who had applied to the BOA for permission to sell the land allotted to
them. The BDA had recommended to the Government that approval be '
I
accorded to them to transfer the land. This approval was granted and there
is no challenge to the same in the present proceedings. The challenge,
however, is to the approval which was granted to 13 other members of the
Society, who were impleaded as respondents in tht: writ petition, and who
0 were permitted to sell tht: sites which had bet:n allotted to tht:m.

Rule 14 of the Bangalori.; Devdopment Authority (Allotment of
Sites) Rules, 1984 provides for restrictions and conditions on saks of sites.
The said Rule which was in existence in 1994-95, when permission was
granted to the ex-Legislators to transfer the land, rt:ads as follows:
E
14. Restrictiom, conditions on sales of sites -

(!) Notwithstanding anything contained in these rules, the
Commissiom:r may at the request of the allottee of a site execute
a deed of conveyance subject to the restrictions, conditions and
F
limitations specified in sub-rule (2).

(2) The conveyance of site by the Commissioner in fayour of
an allottee (hereinafter referred to as the purchaser) shall be
subject to the foi'lowing restrictions, conditions and limitations
G namely:

(a) in the case of a site on which a building has not been
constructed :

(i) the purchaser shall construct a building on the site within
H such period as may be specified by the Authority as per plans,
I

CUMMR. BANGALORE DEWLOPME:CT AlTHORTIY v. S. VASUDEVA (KIRPAL J.( 'JB7

designs, and conditions to be approved by the Authority or in A
conformity with the provisions of the Karnataka Municipal Cor-
porations Act, 1976 and the Bye-laws made thereunder.

(ii) the purchaser shall not without the approval of the
Authority construct on the sitt: any building other than a build-
ing for the construction of which the site was allotted, granted B
or sold.

(iii) the purchaser shall not alienate the site within a period of
ten years from the date of the conveyance except by mortgage in
favour of the Government of India or the Government of Kar-
nataka, the Life Insurance Corporation of India or the Karnataka
c
Housing Board or any Company or Co-operative Society approved
by the Authority .:ir any Corporation set up owned or controlled
by the State Government or the Central Government to secure
money advanced by such Government, Corporation, Company,
Board, Society or Corporation, as the case may be for the con- D
struction of the building on the site.

(b) in the case of a site on which a building has been con-
structed, the purchaser shall not alienate the sik and the building
constructed thereon within a period of ten years from the date of
agreement except by mortgage in favour of the Government of
E
India, the Government of Karnataka, the Life Insurance Corpora-
tion of India, or the Karnataka Housing Board or any Company
or Co-operative Society approved by the Authority to secure
moneys advanced by such Government, Corporation, Board or
Society or Company for the construction of the building on the F
site.

(c) in the event of the purchaser committing breach of any of
the conditions in clause (a) or clause (b) the Authority may at any
time, after giving the purchaser reasonable notice, resume the site G
free from all encumbrances. The purchaser may remove all things
which he has attached to the earth.

Provided that if he has left the site in the state in which he
received it, all transactions entered into in contravention of the
conditions specified in clauses (a) and (b) shall be null and void H
\

288 SUPREME CO CRT REPORTS [2000] 1 S.C.R.
A ab-initio.

Explanation - In this rule, reforences to the authority shall be
deemed to include the references to the commission.:r when
authorised by the general resolut10n to exercise any power vested
in the authority.
B
(3) Notwithstanding anything contained in sub- rule (2) but
without prejudice to the provisions of rule 13 where the lessee
applies that for reasons beyond hi:, control he is unable to reside
in the City of Bangalore or by reasons of his insolvency or im-
pecuniosity it is necessary for him to sdl the site and the building,
c if any, he may have put up thereon the Bangalore Development
Authority may, with the previous approval of the State Govern-
ment, either :

(a) require him to surrender th.: site, where there is no building
D in its favour; or

{b) where there is a building put up permit him to sell the
vacant site and building :

Provided that -
E
(i) in case covered by clause (a) the Authority shall pay to the
lessee the allotted value of the site and an additional sum equal to
the amount of interest at twelw p..:r cent per annum thereon; and

(ii) in case covered by clause (b) the lessee shall pay to the
F authority a sum equal to the amount of interest at twelve per cent
per annum on the allotted value of the site."

The said Rule did not permit transfer of site on which building had not
been erected. According to sub-rule {3), under certain conditions an
allottee could only surrender the site in which case he was entitled to
G receive the value of the site plus 12 per cwt inter.:st thereon. It is ouly if
a building was erected that permission could be given to sell the vacant site
and building subject to payment of interest at the rate of 12 per cent on
the allotted value of the site. lt is represtnted before us that the BDA
permitted that allottces to sell the sites, inasmuch as under Section 65 of
H the Act the Government of KMnataka had issued a direction requiring the
COMMR. BANGALORElJi'.VELOP\1E!'IT AL"fHORITY v. S. VASLDEVA(KIRPALJ.] 289

BDA to permit the said transfers. Section 65 of the Act gives power to the A
• Government to issue directions to the Authority and reads thus :

65. Government's power to give directions to the Authority. - The
Govemment may give such directions to the Auth01ity as in its
opinion are necessary or expedient for carrying out the purposes of
this Act, and it shall be the duty of the Auth01ity to comply with such B
directions .
...
As wt: read the above Section, the Government has no power to issue
any directions which are in conflict with the provisions of the Act and, by
necessary implication, in contlict with the Rules framed under the said Act. C
The directions which can be given under Section 65 are such which are
necessary or expedient for the carrying out of the purposes of the Act.
When Rule 14, as it stood in the year 1994-95, did not permit sale of vacant
sites by an allottee to anybody else, even after getting permission from the
BOA, the Government could not have permitted or directed the said land
to be sold or transft:rred. This being the position, the transfer of land by D
l3 such ex-Legislators and ex·ministers who were members of the respon-
dent·Society, and whose names are included in the BDA's letter dated
27th/28th October, 1995 written to the Principal Secretary to Government,
Housing & Urban Development Department, Bangalore, was clearly illegal
and the permission so granted and the consequent transfer of land would E
become liable to be 'et aside.

Rule 14 has now been amended by Notification dated 6th February,
1998. Rule 5 of the Bangalore Development Authority (Allotment of Sites)
(Amendment) Rules, 1997 which makes the amendment in Rule 14 reads
ilifil: F
5. Amendment of Rule-14: - In rule-14 of the said Rules. -

(i) after sub·rule (2), the foUowing shall be inserted namely :-

''2A. Notwithstanding anything contained in sub- rule (2), where G
a lessee has alienated the site in contravention of sub-clause (iii)
of clause (a) sub-rule (2), the authority may on application of the
purchaser of such site and subject to payment by the purchaser an
amount equal to twenty-five per cent of the sital value determined
at the rates specified by the State Government from time to time H
290 SUPREME COURT REPORTS (2000] 1 S.C.R.

A for the purpose of registration, order for n:g•.1larisation of such
alienation and may also convey title to such purchaser.''

(2) in sub-rule (3),

(i) after clause (a), the following clause shall be inserted
B namely:

"(aa) permit tht allottee to sell the site during the lease period "
of tt:n years."

(ii) in the proviso, afkr clausc (i), the following clausc shall be
c inserted namely :

"(ia) in case cuvcred by clause (aa), m<:ntiuned above, the lessee
shall pay tu the Authority an amount equivalent to fifteen per cent
of the sital value determincd at the rates specified by the State
D Government from time to time tor the purpose of registration.

As a result of the Rules as they now stand were there has been
alienation of site m contravention of sub·rule (2), then on an application
being made by the purchaser the said sale or alienation in his favour can
be regularised on the purchaser paying an amoun.t equal to 25 per cent of
E the sital value determined at the rates specified by the State Government
from time to time. Inasmucn as the permission which was granted in 1994
and 1995 for transferring the land was ilkgal, the effect would be that the
original allottees had transforred the land in violation of the provisions of
sub-rule (2) of Rule 14 and now after the amendment of the said Rule
F regularisation of the said alienation can take place by the purchaser paying
the amount referred to in sub-rule (2A). If this payment is not made, the
result obviously would be that the alienation will not be validated and the
allotment of land itself would stand cancelled. It is obvious that under Rule
14 permission to transfer can be granted under the circumstances provided
by sub-rule (3). The said sub-rule provides that an application fur transfer
G can be made by an allottt:e on the ground that (a) for reasons beyond his
control he is unable tu reside in the city uf Bangalore; or (b) by n::asuns of
his insolvency or impecuniusity, it is nect-ssary for him tu sell the site and
the building. The High Court has interpreted this Rule to mean that it is
only for reason of insolvency that permission under sub-rule (3) can be
H granted. This dues nut appear to be com:ct because on the ground that
CUMMR. BANUALOREDhVLLUPMENTAL'THORITY v. S. VASUDEVA(KIRPAL.J.J 291

the allottee i~ unable to reside in the city of Bangalore and also on the A
ground of impecuniosity, permission can be granted to sell the land or the
land and the building constructed thereon, after the amendment of the
Rule of 1998.

For the aforesaid reasons, these appeals are allowed and the judg-
ment of the High Court is set aside. We, however, direct that the BOA will B
give an opportunity to the purchasers of land referred to in its !ettcr dated
27/28th October, 1995 who had purchased the same from the members of
the respondent-Society to get the transfer regularised on payment of 25 per
cent of the sital value determined at the rates specified by the Government.
Notice to this effect should be issued within eight weeks from today and C
the notice would indicate that if the amount so determined is not deposited,
the land in qm:stion will stand resumed by the BDA. No other directions
are called for.

Nu costs.
D
Civil Appeal Nos. 459-461, 462-463, 464 and 465 of 2000 (arising out of
Special Leave Petition (Civil) Nos. 1419-1421, 3418-3419, 3444 and 7820 of
1999)

Special leave granted.

For the reasons stated above, these appeals an: disposed of in terms
E
of the directions givc;n above.

No costs.

v.s.s. Appeals allowed.