REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 7425-26 OF 2002

Bangalore City Cooperative Housing Society Ltd. … Appellant

versus

State of Karnataka and others      … Respondents

WITH

CIVIL APPEAL NOS. 774-778 OF 2005

J U D G M E N T

G. S. Singhvi, J.

1. These  appeals  are  directed  against  two  sets  of  

judgments and orders passed by the Division Benches of  

the  Karnataka  High  Court  whereby  the  acquisition  of  

lands  by  the  State  Government  for  the  benefit  of  the  

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

are directed against judgment dated 16.03.1998 passed  

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

order  dated  09.07.1999  passed  in  Civil  Petition  No.  

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

against  judgment  dated  06.02.2004  passed  in  Writ  

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

orders dated 11.02.2004 and 15.09.2004 passed in I.A.  

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

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

and 170 of 2004, respectively.

2. Although, the High Court quashed the acquisition  

proceedings  mainly  on  the  grounds  of  violation  of  the  

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

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

appellant  through  the  Estate  Agent  for  acquiring  the  

land, during the pendency of these appeals the parties  

filed voluminous papers and arguments were advanced  

by both the sides by relying upon those documents as  

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also the records summoned by the Court from the State  

Government.

3. For appreciating the contentions of the parties in a  

correct perspective, it will be useful to notice the events  

which  culminated  in  the  acquisition  of  the  lands  

belonging to the private respondents and others.

3.1 Bangalore  Development  Authority  (BDA)  was  

constituted by the State Government under Section 3 of the  

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

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

ensuring planned development of  the City of  Bangalore and  

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

the BDA is empowered to draw up detailed schemes for the  

development of the Bangalore Metropolitan Area and with the  

previous approval of the Government, undertake works for the  

development  of  the  Bangalore  Metropolitan  Area  and  incur  

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

up new or additional development schemes either on its own  

or on the recommendations of the Local Authority or as per  

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the directions of the State Government. Section 16 lays down  

that every development scheme shall, within the limits of the  

area comprised in the scheme, provide among other things for  

the acquisition of any land necessary for  or affected by the  

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

scheme may provide for construction of houses.  Sections 17  

and 18 contain the procedure for finalization and sanction of  

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

the purposes of the Scheme.

3.2 In exercise of the powers vested in it under Section  

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

the BDA has been preparing the development schemes and  

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

various sections of the society.

3.3 Due to unprecedented increase in the population of  

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

had swelled  to  29.13 lakhs),  the  State  Government  realized  

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

developed residential  sites  and,  therefore,  it  was decided to  

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encourage formation of  private  layouts  which is  permissible  

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

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

this purpose the existing guidelines, which were being followed  

by the erstwhile City Improvement Trust Board and the BDA  

for the approval of private layouts were revised vide Circular  

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

which are extracted below:  

“1.  The  area  proposed  for  a  layout  should  be  within  the  residential  zone  of  the  Outline  Development  Plan/Comprehensive  Development  Plan  approved  by  Government.  In  special  cases  where lands are reserved for purposes other than  green belt  and which are suitable  for  residential  purpose,  layouts  may  be  considered  after  obtaining  prior  approval  of  Government  for  the  change in land use.

2. The Co-operation Department shall register the  names of the Housing Societies only after getting  the opinion of the planning Authority (BDA) which  shall  verify  whether  the  lands  proposed  for  the  societies are in the residential zone or are suitable  for residential purpose as indicated in para 1, or  whether  they  are  required  by  Bangalore  Development Authority.

3. If the Housing Society has purchased land, no  objection certificate from the competent authority,  Urban land ceiling should be produced.

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4.  The  Housing  Societies/Private  developers  should produce the title deeds to prove ownership  of the land.

5.  The  Bangalore  City  Corporation,  the  HAL  Sanitary Board, ITI., Notification area, Yelahanka  and Kengeri Municipal authorities and such other  authorities  shall  not  approve  any  bifurcation  of  land  into  plots  or  any  private  layout.  Such  approval  should  be  done  only  by  the  planning  Authority (BDA) according to the Karnataka Town  & Country Planning Act, 1961.

6.  Khatha  shall  not  be  issued  by  the  Revenue  Section of the Bangalore City Corporation and the  Bangalore  Development  Authority  HAL  Sanitary  Board,  I.T.I.  Notified  area,  Yelahanka  Town  Municipality,  Kengeri  Town  Municipality/  Panchayaths  and  such  other  authorities,  unless  the  layout  is  approved  by  the  Bangalore  Development Authority.

7. The following minimum land allocations shall be  insisted in the approval of private layouts by the  Bangalore Development Authority.

Residential Not Exceeding 50%

Parks & Playgrounds 15%

Roads 25% to 30%

Civic amenities 50% to 10%

8. (a)  Except in case of  layouts for  economically  weaker  sections  standard  road  width  shall  be  enforced line 12 metre  (40 feet)  18.5 metres (60  feet), 24.5 metres (80 feet) and 30.5 metres (100’).

(b)  While  working  out  the  road  pattern  of  the  private layouts, major road pattern of the outline  

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Development  Plan/Comprehensive  Development  Plan should not be affected. Minor roads may be  designed suitable  within  the  framework of  roads  approved  in  the  Outline  Development  Plan/Comprehensive Development Plan.

The civic amenity  sites earmarked should be for  specific  purposes  determined  by  Bangalore  Development Authority. In cases where it is found  necessary to allot sites for other purpose, proper  justification will have to be furnished.

10. The purpose for which the sites are proposed  shall  not  be  violated  by  the  housing  societies/private developers.

11. Underground drainage and electricity works in  private  layouts  shall  be  carried  out  only  by  the  Bangalore  Water  Supply  &  Sewerage  Board  and  Karnataka  Electricity  Board.  Bangalore  Development  Authority  may  permit  the  Housing  societies to carry out the civil works only in case of  societies getting the work done by Civil Engineers  of the required competence.  

12. After the formation of sites, allotment of sites  to  individual  members  of  the  housing  societies  must  be  in  accordance  with  the  eligibility  conditions  of  allotment  of  the  Bangalore  Development  Authority  which  are  in  force  including the lease-cum-sale conditions.

13. Conditions shall be enforced in the approval of  layouts in favour of housing societies that the sites  should  be  allotted  only  to  the  members  of  the  societies and not to other individuals for purposes  of  land  speculation.  A  list  of  members  shall  be  submitted  by  the  societies  along  with  the  application for approval of private layouts.”

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3.4 The aforesaid decision of the State Government was  

misused by  the  housing  societies  which started purchasing  

lands  directly  from  the  landlords  for  forming  the  layouts  

resulting  in  uncontrolled,  unplanned  and  haphazard  

development  of  the  city.  It  also  created  acute  problem  of  

providing civic amenities,  transport facilities etc.   Therefore,  

by  an  order  dated  18.6.1985,  the  State  Government  

abandoned the existing policy of acquiring land through the  

Revenue Department and entrusted this task to the BDA for  

the Bangalore Metropolitan Area.  The State Government also  

stopped registration of the housing societies and conversion of  

agricultural  lands  in  favour  of  the  existing  societies.  

Simultaneously,  the  State  Government  constituted  a  Three  

Men  Committee  (TMC)  consisting  of  the  Registrar  of  

Cooperative  Societies,  Karnataka,  T.  Thimme  Gowda,  

Secretary,  BDA  and  the  Special  Deputy  Development  

Commissioner  to  scrutinize  the  land  requirements  of  the  

housing societies which had already been registered and also  

fixed 30.6.1984 as the  cut  off  date  for  consideration of  the  

applications made by the housing societies for the acquisition  

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

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

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

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

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

off date was extended to 30.6.1987.

3.5 The Executive Director of  the appellant  submitted  

representation dated 7.12.1984 to the Minister for Revenue,  

Government of Karnataka for the acquisition of 238 acres 27  

guntas  land  at  Vajarahalli  and  Raghuvanahalli  villages  for  

formation of a layout for its members. The relevant portions  

thereof are extracted below:

“We are happy to inform you that our society was  registered  under  Section  7  of  the  Mysore  Cooperative Societies Act, 1959 by the Registrar of  Cooperative Societies, Bangalore, during the year  1927 vide No. 1737 C.S. dated 12.9.1927.

2.  The  object  of  the  society  is  to  provide  house  sites to its members who belong to working class  and  other  backward  class  people  belonging  to  weaker sections of the society.  The members are  poor  people  and  they  are  siteless.  They  are  residents of Bangalore City for several decades.

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3.  Because  of  the  restrictions  imposed  by  Land  Reforms Act and other enactments, the activities of  our society have come to stand still, with the result  the  society  is  not  in  a  position  to  discharge  its  primary obligations entrusted as per the bye-laws.  

4. Your Hon’ble authority is fully aware that it is  humbly  impossible  to  secure  residential  sites  in  these  days  of  soaring  prices  of  lands  and  sites  which have gone up beyond all proportions.  

5.  The  lands  which  are  now  requested  by  the  society for acquisition are not fit  for agricultural  purposes  and  they  are  laying  in  the  vicinity  of  residential  layout  abutting  Bangalore  City  and  there  are  no  proposals  for  acquisition  of  these  survey  numbers  by  the  Bangalore  Development  Authority for any of its developmental activities, as  per endorsement issued by B.D.A.

6. Due to our sincere efforts we are able to locate  suitable  land  in  the  village  Vajarahalli  and  Raghuvanahalli,  Uttarahalli  Hobli,  Bangalore  south  Taluk  to  an  extent  of  250  acres.  A  list  showing the sy.  numbers and extent  of  lands is  enclosed.

7. We request your kindself to acquire these lands  in favour of our society and handover possession  to form layout to distribute sites to the members  who are in great need of sites to construct their  own houses.

8.  We  have  collected  sital  amounts  from  the  members. The cost of  acquisition will  be met by  the  society.  Necessary  amount  towards  compensation  will  be  deposited  with  the  acquisition authorities on receipt of intimation and  after obtaining approval of Government.

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It  is  submitted  that  the  society  is  agreeable  to  abide by all terms and conditions to be laid down  by the Government in the matter.”

3.6 The Revenue Department of the State Government  

vide  its  letter  dated  29.12.1984  forwarded  the  aforesaid  

representation to Special Deputy Commissioner, Bangalore for  

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

109 AQB 84 dated 26.7.1984.  

3.7 Between January,  1985 and 1987 the  appellant’s  

application  made  several  rounds  before  the  TMC,  the  State  

Level Coordination Committee (SLCC), constituted by the State  

Government and the officers of the Cooperative Department.  

The Assistant Registrar,  Cooperative Societies issued several  

notices to the appellant to furnish the details of its members  

and supply other particulars along with copy of the agreement  

entered with the  Estate  Agent  engaged for  formation of  the  

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

the President of the appellant submitted memorandum dated  

17.9.1987  to  the  Joint  Registrar,  Cooperative  Societies  (for  

short, ‘the Joint Registrar’) stating therein that the appellant  

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

procuring 250 acres land from the landowners.  The copies of  

agreements dated 1.6.1984 and 4.12.1984 executed with M/s.  

Manasa  Enterprises  were  also  submitted  along  with  the  

memorandum.   Along  with  letter  dated  26.3.1987,  the  

appellant  furnished  additional  information  to  the  Joint  

Registrar.  

3.8 The  appellant’s  application  was  considered in  the  

meeting of the TMC held on 5.10.1987 and the Joint Registrar  

was asked to conduct verification of the information supplied  

by the appellant.  After conducting the necessary inquiry, the  

Joint  Registrar  sent  report  dated  9.10.1987,  of  which  the  

salient features were as follows:

i. The  appellant  had  neither  collected  sital  deposit  

from the members nor it  had paid any advance to the  

Estate Agent or the landowners upto 30.6.1984.

ii. During  1984-85,  the  appellant  collected  

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

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

procurement of the land from the landowners.

iii. During 1985-86, another sum of Rs.5,45,500/- was  

collected  from the  members  towards  sital  deposit  and  

Rs.10,00,000/- were paid to the Estate Agent.

iv. Upto 30.6.1986, the total amount collected from the  

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

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

of 235 acres land in Vajarahally.

v. Letter  dated  24.10.1986  of  the  Estate  Agent  

revealed  that  it  had  made  advance  payment  of  

Rs.16,70,000/- to 17 landowners.

3.9 In its meeting on 17.10.1987, the TMC directed the  

Joint  Registrar  to  conduct  an  investigation  about  the  land  

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

done in the wake of the information supplied by the appellant  

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

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

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Registrar  could  make  the  necessary  investigation,  the  

appellant’s application was considered in the meeting of the  

SLCC held on 24.10.1987 and the following proceedings were  

recorded:

“The  Deputy  Commissioner,  Bangalore  raised  a  question as to whether the entitlement for acquisition  would depend upon the number of enrolled members  as of the cut off date of 30.4.1984 or the number of  enrolled  members who had paid the  sital  value  by  that date. The Revenue Commissioner clarified that  as per the GO, the entitlement depended on the total  number of enrolled members irrespective of whether  they had applied for a site. The Secretary, HUD also  agreed with this and stated that as per the bye-laws  of these societies, all members would be eligible for  grant  of  sites  so  long  as  they  had  paid  the  membership fees prior to the cut off date. The Deputy  Commissioner however pointed out that the previous  and even the present Three Member Committee had  based  its  recommendations  disregarding  those  members who had not paid the sital value. The SLCC  decided that as it would not be equitable or fair to  follow two different sets of principles for determining  extent of land entitlement for acquisition, the number  of members who had paid required sital fee would be  the  sole  guiding  factor  in  determining  land  to  be  cleared  for  acquisition  in  the  1st stage.  But  the  Secretary, Cooperation may keep the Chief Minister  informed  of  this  decision  and  report  back  to  the  SLCC before pending cases are taken up for 2  nd   stage    of scrutiny as per GO dt. 30.4.1987.”

(underlining is ours)

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3.10 The  appellant’s  case  was  again  considered in  the  

meeting  of  the  TMC held  on  27.11.1987  and  the  following  

points were recorded:

“a. Society had 3821 members as on 30.6.1987 and  sital value had been paid by 1362 as per which  the Society’s land requirement is 184 acres 11  guntas. If the SLCC decides that the Society is  eligible for entitlement on this basis the Society  will  have to be allowed to select  lands to this  extent and furnish survey number-wise details.

b. The question of survey numbers and violation of  various Acts does not arise as the Three Man  Committee  considers  that  the  Society  is  not  eligible  for  any  entitlement  as  there  are  no  agreements and also no member had paid the  sital value as on 30.6.1984.

c. The  JRCS  reported  that  the  Society  had,  in  pursuance of an agreement, paid Rs. 13.5 lakhs  to the estate agent who died in a car crash. But  even  this  amount  was  paid  after  the  cut  off  date.”  

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

considered the cases of various societies and opined that the  

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

stages of scrutiny because it did not have valid agreements as  

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

meeting of the SLCC held on 22.12.1987 cognizance was taken  

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

eligibility of the housing societies should be considered on the  

strength of the members enrolled as on 30.06.1984 in respect  

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

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

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

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

of the members enrolled by it.

3.12 On  21.2.1988,  the  appellant  entered  into  an  

agreement with M/s. Rajendra Enterprises whereby the latter  

promised to secure the acquisition of land on payment of the  

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

have bearing on consideration of one of the issues arising in  

these appeals read as under:

“1. THIS AGREEMENT entered into on this the 21st  (Twenty  first)  day  of  February  1988  between  The  Bangalore  City  Co-operative  Housing  Society  Limited,  No.2,  Seethapathi  Agrahara,  Bangalore- 560002, a Cooperative Societies Act, represented by  its  President  and  the  Executive  Director  and  hereinafter referred to as the ‘FIRST PARTY’, which  term shall mean and include its successors, assigns  in  office,  administrators  etc.  and  M/s.  Shri  Rajendra  Enterprises,  No.4507,  5th  Floor,  High  

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Point-IV,  4,  Palace  Road,  Bangalore-560  001,  represented  by  its  Managing  Partner  M.  Krishnappa,  Estate  Agent  and  Engineering  Contractor,  hereinafter  called  the  Agent  of  the  ‘SECOND  PARTY’  which  term  shall  mean  and  include its successors in interest and successors in  office, assigns, administrators etc., witnesseth:-

2. WHEREAS  THE  FIRST  PARTY  has  selected  about 228 acres land as detailed in the schedule, in  Vajarahalli  village  and  Raghuvanahalli  village,  Uttarahalli Hobli, Bangalore South Taluk, more fully  described  in  the  schedule  hereunder  and  hereinafter,  referred to as the ‘Schedule  Land’  for  making house sites for the benefit of its members  for the construction of dwelling houses with various  amenities  including  road,  water  supply,  sewerage  facilities, street lighting, etc.  

3.  WHEREAS  the  Second  Party  has  offered  his  services to the First Party to negotiate and complete  the acquisition and development of  schedule  land  for the said purpose to form a layout, make sites in  accordance with the rules and regulations in force  and hand over the said sites to the First Party.  

4. WHEREAS NOW that the Managing Partner of  M/s.  Manasa  Enterprises,  First  Party’s  earlier  promoters  died of  an accident  and as  such work  could  not  be  continued  and  subsequently  M/s.  Landscape,  Layout  promoters  agreed to  take  over  the  entire  project  with  all  its  advanced  to  M/s.  Manasa  Enterprises  i.e.  Rs.13,50,000/-  (Rupees  Thirteen Lakhs Fifty Thousand only) for procuring  lands from the agriculturists in favour of the First  Party,  at  the  time  of  the  agreement.  The  said  Agreement dated 31.12.87 was signed between the  First Party and M/s. Landscape. But this Agreement  was  cancelled  with  effect  from  1.2.1988  as  M/s.  

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Landscape  failed  to  furnish  the  agreed  Bank  Guarantee of Rs.13,50,000/-.

5. NOW  the  Second  Party,  M/s.  Rajendra  Enterprises have come forward and agreed to take  over  the  entire  project  for  the  formation  of  the  proposed layout and start the work ‘ab initio’ with  all  its  previous  liabilities  and  have  furnished  the  required Bank Guarantee No.4/88 dated 8.2.1988  from  Syndicate  Bank,  Vijaynagar  Branch,  Bangalore-560  040  of  Rs.13,50,000/-  (Rupees  Thirteen  Lakhs  Fifty  Thousand  only)   already  advanced  to  previous  promoters  M/s.  Manasa  Enterprises  (for  procuring  lands  from  the  agriculturists).

6.   WHEREAS  the  Second  Party  has  agreed  to  provide  all  the  required  services  towards  the  acquisition  of  scheduled  land  for  the  First  Party,  obtain  all  necessary  approvals  for  forming  the  layout,  roads,  water lines,  electric  lines,  drainage,  sewerage connection, etc., and to carry out on the  said land the items of work such as laying of roads  with  culverts,  drainages,  etc.,  provision  of  bore- wells, ground level and overhead tanks, water lines,  etc.,  for  the  provision of  water  laying of  electrical  lines, sewerage lines, etc., and in accordance with  the details approved by the respective Statutory and  Government  authorities  on  the  schedule  lands  in  consideration of the amount to be paid by the First  Party as per the B.D.A. rate prevailing at the time of  execution of the above specified works.

7. WHEREAS  the Second Party at the behest of the  First  Party  is  taking  action  to  move  various  Government and Statutory authorities towards the  publication  of  Notification  in  the  Official  Gazette  under Section 4(1) of the Land Acquisition Act, for  the acquisition of the schedule lands.

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8. NOW the First Party and the Second Party agree  to undertake the above works as detailed below: -

SECOND PARTY

PROCUREMENT OF LANDS

FIRST PARTY

1) To  get  Notification  under  Section 4(1) of the LAR within  four months

1) At  the  time of  execution of  the  Agreement  of  Rs.  1.5  lakhs and upto issue of 4(1)  Notification Rs. 15/- per Sq.  Yd.  against  Bank  Guarantee.

2) Issue  of  Notification  under  Section  4(1)  and  subsequent  enquiry  under  Section  5(1)  completed within 4 months

2) Rs.  25/-  per  Sq.  Yd.  including the award amount  paid to Government.

3) Issue  of  Notification  under  Section 6(1) within 3 months  of  the  completion  of  enquiry  under Section 5(1)

3) Rs. 26/- per Sq. Yd.

4) Submission of layout plan to  BDA  within  4  months  after  the issue of notification under  Section 6(1)

4) Rs. 5/- per Sq. Yd.

5) Sanction of layout plan within  3 months of its submission.

5) Rs. 4/- per Sq. Yd.

The Second Party has agreed to complete the  above mentioned works within 18 months from the  day of the agreement subject to any delay caused at  the  BDA and  other  authorities  in  procuring  land  sanctioning or issuing of layout plan.”

(The amount  which the  appellant  had agreed to  pay to the  Estate  Agent for  securing the  acquisition of  228 acres land  and submission and sanction of layout plan by the BDA was  Rs.5,42,37,652/-).

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3.13 Within  five  days of  the  execution of  the  aforesaid  

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

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

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

portion of the minutes of that meeting are reproduced below:  

“7) BANGALORE CITY HBCS:

The  Society  is  eligible  for  acquisition  of  208  acres 18 guntas in stage I/III. As against this they  have  given  survey  number-wise  details  for  250  acres.  They  should  therefore  be  given  time  upto  15th March, 1988 to select the specific lands to be  acquired on their behalf to the extent of 208 acres.”

3.14 In furtherance of the recommendations made by the  

SLCC, the State  Government sent  letter  dated 21.5.1988 to  

Deputy Commissioner, Bangalore and directed him to initiate  

proceedings for the acquisition of 207 acres 29 guntas land in  

Vajarahalli  and Raghuvanahalli  for  the appellant  by issuing  

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

that letter are reproduced below:

“The Deputy Commissioner, Bangalore.

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Sub:  Acquisition  of  land  in  Vajarahalli  and  Raghuvanahalli  villages  of  Uttarahalli  hobli,  Bangalore South Taluk in favour of the Bangalore  City Co-operative, Housing Society Ltd., Bangalore.

I  am  directed  to  state  that  the  State  Level  Coordination  Committee  has  recommended  for  acquisition  of  208  acres  18  guntas  of  land  in  Ist/IIIrd  stage  in  favour  of  Bangalore  City  Cooperative  Housing  Soceity.  As  against  this  the  society  has  furnished  S.No.  wise  details  for  207  acres 29 guntas (list enclosed) which is within the  extent  recommended  by  State  Level  Coordination  Committee.  Hence  you  are  directed  to  initiate  acquisition  proceedings  by  issue  of  notification  under  Section 4(1)  for  an extent  of  207 acres 29  guntas of land as recommended by S.L.C.C. in the  village of Vajarahalli and Raghuvanahalli in favour  of  Bangalore  City  House  Building  Cooperative  Society  Ltd.,  Bangalore  subject  to  the  following  conditions:  

i)  The extent involved (if  any) under Section 79(A)  and  B  may  be  excluded  while  issue  of  4(1)  notification for  the present,  which can be notified  after  the  pending proceedings  under  the  said  Act  are finalised.

(ii)  Move  the  Spl.  Deputy  Commissioner,  ULC  to  finalise  the  proceedings  pending  under  ULC  Act  before 31.5.1988.

Yours faithfully,

(MAHDI HUSSAINA) Under Secretary to Government

Revenue Department.”

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3.15 On 7.8.1988, the Executive Director of the appellant  

entered  into  an  agreement  with  the  State  Government,  the  

relevant portions of which are extracted hereunder:

“  AGREEMENT

An  Agreement  made  on  this  Eighth  day  of  July,  One  Thousand  Nine  Hundred  Eighty  Eight  between the Executive Director, The Bangalore  City  Co-operative   Housing   Society   Limited,    No.2,  Seethapathi  Agrahara,  Bangalore-560002  (hereinafter  called  the  Society  which  expression  shall  unless  excluded  by  or  repugnant  to  the  context,  be  deemed to  include its  successors  and  assigns) of the ONF PART and the GOVERNOR OF  KARNATAKA on the OTHER PART.

AND WHEREAS  the  Society  has  applied  the  Government of Karnataka (hereinafter referred to as  "THE  GOVERNMENT")  that  certain  land  more  particularly  described  in  the  schedule  hereto  annexed and hereinafter referred to as "THE SAID  LAND" should be acquired under the provisions of  LAND  ACQUISITION  ACT,  1894  (I  of  1894)  hereinafter referred to as "THE SAID ACT", for the  following purpose namely :-

Formation of Sites and Construction of Houses to  the  members  of  the  Bangalore  City  Co-operative  Housing Society Ltd., No.2, Seethapatha Agrahara,  Bangalore-560002.

AND WHEREAS The Government, having caused an  enquiry be made in conformity with the provisions  of the SAID ACT and being satisfied as a result of  such inquiry that the acquisition of the SAID LAND  is  needed  for  the  purpose  referred  to  above,  has  

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consented to the provisions of the SAID ACT, being  put in force in order to acquire the SAID LAND for  the benefit of the Society Members, to enter into an  agreement  hereinafter  contained  with  the  GOVERNMENT. How, these presents witness and it  is  hereby agreed that  GOVERNMENT shall  put  in  force  the  provisions  of  the  said  Act,  in  order  to  acquire the SAID LAND for the benefit of the Society  Members on the following conditions namely:

1. The  Society  shall  pay  to  the  GOVERNMENT  the  entire  costs  as  determined  by  the  GOVERNMENT of the acquisition of the SAID LAND  including all compensation damages, costs, charges  and other  expenses  whatsoever,  which have  been  OR may be paid OR incurred in respect of OR on  account of such acquisition OR in connection with  any litigation arising put of such acquisition either  in  the  original  or  APPELLATE  COURTS,  and  including  costs  on  account  of  any  establishment  and  salary  of  any  Officer  OR  officers  of  the  GOVERNOR who the GOVERNMENT may think it  necessary to employ OR deputation Special duty for  the purpose of such acquisition and also including  the  percentage  charges  on  the  total  amount  of  compensation  awarded  as  prescribed  by  GOVERNMENT.  The monies which shall be payable  by the Society under this clause shall be paid to the  Special  Deputy  Commissioner  of  Bangalore  (hereinafter  called  the  "SPECIAL  DEPUTY  COMMISSIONER")  within  fourteen  days  after  demand by the SPECIAL DEPUTY COMMISSIONER  in  writing  of  such  amount  or  amounts  as  the  SPECIAL DEPUTY COMMISSIONER shall from time  to time estimate to be required for the purpose of  paying OR disbursing any compensation, damages,  costs, charges, OR expenses herein before referred  to, for which the COMPANY has made provision in  their finance.

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2. On  payment  of  the  entire  cost  of  the  acquisition  of  the  SAID  LAND  as  hereinabove  referred to the whole of the said land shall as soon  as conveniently may be transferred to the SOCIETY  as to vest in the COMPANY subject to the provision  of  the  Karnataka  Land  Revenue  Act  (hereinafter  called  the  SAID  ACT)  and  the  rules  made  thereunder  subject  also  to  the  provisions  of  this  agreement as to the terms on which the land shall  be held by the Society.

3. The  SAID LAND when so  transferred to  and  vested  in  the  SOCIETY  shall  be  held  by  the  SOCIETY  if  its  property  to  be  used  only  in  furtherance of the and for purpose for which it is  acquired,  subject  nevertheless  to  the  payment  or  agricultural, non-agricultural OR other assessment  if and so far as the said land is OR may from time to  time  be  liable  to  such  assessment  under  the  provisions  of  the  SAID  ACT  and  the  rules  made  thereunder,  and  the  local  fund  cess,  as  the  case  may be, THE SOCIETY shall :-

(i) not use the SAID LAND for any purpose other  than that for what it is acquired.

(ii)  Undertake  the  work  of  construction  of  the building  within  three  years  from  the  date  on which  possession  of  the  land  handed  to  the Society and complete the same within three years  from the aforesaid date;

(iii) AT ALL TIMES, KEEP AND MAINTAIN the said land  and  the  building  OR  buildings  effected thereon in good order and condition,  maintain all  records of the SOCIETY properly to the satisfaction  of the DEPUTY COMMISSIONER and supply to the  GOVERNMENT punctually such.

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(iv) Returns and other information as may from time  to time be required by the GOVERNMENT.

(v) Not use the SAID LAND or any building that may  be  erected upon it  for  any  purpose  which  in  the  opinion of GOVERNMENT is objectionable.

5. The Society shall from time to time and at all  times permit  the  GOVERNMENT or  any officer  or  officers  authorised  by  the  GOVERNMENT in  that  behalf to inspect the SAID LAND any works of the  SOCIETY  upon  the  SAID  LAND  whether  in  the  course  of  construction  or  otherwise  and  shall  furnish  to  the  Government  from time  to  time  on  demand correct statements of the monies spend by  SOCIETY upon its said land.

6. In  case  the  SAID LAND is  not  used  for  the  purpose which it is acquired as herein refers recited  or  is  used  for  any  other  purpose  01  in  case  the  SOCIETY  commits  a  breach  of  any  of  conditions  thereof, the SAID LAND together with the buildings,  if any erected thereon shall be liable to resumption  by  the  Government  subject  however  to  the  conditions that the amount spent by the SOCIETY  for the acquisition of the SAID LAND or its value as  undeveloped  land  at  the  time  of  resumption,  whichever is less (but excluding the cost of value of  any  improvements  made  by  the  SOCIETY  to  the  SAID LAND or  on  any  structure  standing  on  the  SAID LAND shall  be paid as compensation to the  SOCIETY.

Provided that the SAID LAND and the buildings, if  any, erected thereon shall not be so resumed unless  due notice of the breaches complained of the been  given to the Company and the Society has failed to  make  good  the  break  or  to  comply  with  any  directions  issued  by  the  GOVERNMENT  in  this  

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behalf, within the time specified in the said notice  for compliance therewith.

7. If at any time or times, the whole or any part of  the SAID LAND is required by GOVERNMENT or for  the purpose of making any new public road or for  any purpose connected with public health,  safety,  utility or necessary the Company on being required  by the  GOVERNMENT in writing shall  transfer  to  the GOVERNMENT the whole or  part of  the SAID  LAND  as  the  GOVERNMENT  shall  specify  to  the  necessary  for  any  of  the  aforesaid  purposes  the  SOCIETY  A  SUM  equal  to  the  amount  of  the  compensation awarded under the said Act, and paid  by the SOCIETY IN respect of the land to transferred  including  the  percentages  awarded  under  Section  23(2) of the SAID ACT, together with such amount  as  shall  be  estimated  by  the  SOCIETY  whose  decision in the matter shall be final as to the cost of  the  development of  the  land so transferred which  shall include the value at the date of transfer of any  structures  standing  thereon  and  when  part  of  a  building is on the land so transferred and part is on  an adjoining land, reasonable compensation for the  injuries effected of the part of the building on the  adjoining land.

8. All  the  cost  and  expenses  incidental  to  the  preparation and execution of these presents shall be  paid by the SOCIETY.

9.(a) The  Deputy  Commissioner/Special  Deputy  Commissioner  should  make  a  token  contribution  towards  the  compensation  framed  by  Assistant  Commissioner/Special  Land  Acquisition  Officer  at  the  rate  of  Rs.  100.00  in  respect  of  each  Land  Acquisition Case of the Society.

(b) The Special Deputy Commissioner shall  after  taking over possession of the land U/s. 16(1) Land  

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Acquisition  to  the  Society  should  report  to  the  Government  the  fact  of  having  taken  physical  possession  of  the  land  for  clearance  of  the  Government.  The  Society  should  agree  unconditional to pay the compensation as awarded  or  if  enhanced  by  the  Court  decides  in  favour  of  land owners.

(c) The Society shall not from the layouts without  getting  the  plan  duly  approved  by  the  Town  Planning Wing of Bangalore Development Authority  keeping in view the zoning regulations. In respect of  places  other  than  Bangalore,  the  approval  of  Planning  Authority,  Municipality  as  the  case  may  shall be obtained.

(d) In case the violation of any of the conditions  Government will be competent to resume the lands  acquired in favour of Societies.

(e) The expenditure incurred in this behalf  shall  be  debited  to  the  Head  of  the  Account  -  253"  +  District  Administration-5,  Other  expenditure-E.  Acquisition  of  land  on  behalf  of  other  acquiring  bodies (Non-Plan).”

3.16. In furtherance of  the direction given by the  State  

Government,  Deputy  Commissioner,  Bangalore  issued  

notification  dated  23.8.1988,  which  was  published  in  the  

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

Act for the acquisition of 201 acres 17 guntas land including  

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

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

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

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

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

to 7 in Civil Appeal Nos. 774-778/2005).

3.17 Respondent No.  3 filed detailed objections against  

the proposed acquisition of her land and pointed out that the  

same were garden lands; that she and her predecessor had  

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

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

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

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

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

residential house and a pump house with electric connection  

and  the  area  had  been  fenced  by  barbed  wires  and  stone  

pillars. Shri P. Ramaiah also filed objections dated 6.9.1988  

and claimed that the proposed acquisition was contrary to the  

provisions of the 1894 Act and that the lands comprised in  

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

his family.

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3.18 The  objections  filed  by  respondent  No.  3  were  

considered by the Special Land Acquisition Officer along with  

the  reply  of  the  acquiring  body  and  the  following  

recommendation was made:

“There are AC Sheet houses and since there are good  number  of  Malkies:  Mango,  etc,  Government  may  take suitable decision”.  

3.19 The objections raised by Shri P. Ramaiah were also  

considered and the following recommendation was made:

“There are no valid ground in the objections raised,  the lands may be acquired.”

3.20 Thereafter,  the  Special  Land  Acquisition  Officer  

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

the Official Gazette dated 25.9.1989.

3.21 During the currency of the acquisition proceedings,  

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

Recovery  Officer  was  asked  to  conduct  an  inquiry  into  the  

membership  of  the  appellant.   He  submitted  report  dated  

7.11.1988 with the finding that the appellant had admitted 40  

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persons  who  were  not  residing  within  its  jurisdiction  and  

recommended that their names be removed from the rolls of  

the appellant and the committee of the management, which is  

responsible  for  admitting  such  ineligible  persons  should  be  

proceeded against.

3.22 It appears that similar reports had been received by  

the Government in respect of other societies.  After considering  

these reports, Joint Secretary to the Government, Housing and  

Urban Development Department prepared a note on the basis  

of the decision taken by the Executive Council in its meeting  

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

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

societies responsible for admitting ineligible persons as their  

members.

3.23 Before publication of the declaration issued under  

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

letter dated 23.6.1989 informed Respondent No. 3 to remain  

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

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

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

the  Special  Deputy  Commissioner  would  conduct  spot  

inspection.   A  memo  dated  11.5.1990  was  issued  to  

Respondent No.  3 that  Special  Deputy Commissioner would  

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

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

dated 16.5.1990 was sent by Respondent No. 3.

3.24 Special Land Acquisition Officer, Bangalore passed  

award dated 23.6.1990 and determined market value of  the  

acquired  land.  The  award  was  approved  by  the  State  

Government on 11.3.1991. However, before the possession of  

the  acquired  land  could  be  taken,  the  State  Government  

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

1894 Act and withdrew the acquisition proceedings in respect  

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

9.10.1991, the Revenue Department requested Special Deputy  

Commissioner, Bangalore to examine the representation made  

by  Respondent  No.  3  for  withdrawal  of  the  acquisition  of  

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

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sent  by  the  Secretary,  Revenue  Department  to  the  Special  

Deputy Commissioner.  However, no final decision appears to  

have been taken on these communications.

3.25 After one year and over six months of the passing of  

the  award,  the  State  Government  issued  Notification  dated  

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

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

9½ guntas of land of Vajarahalli and Raghuvanahalli is said to  

have been handed over by the Special Land Acquisition Officer  

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

seen hereinafter,  the  entire  exercise  showing  taking  over  of  

possession of the respondents’ land and transfer thereof to the  

appellant  was  only  on  papers  and  physical  possession  

continued with them.

THE DETAILS  OF THE LITIGATION BEFORE THE HIGH  COURT

A. Smt. Geetha Devi Shah’s case.

4.1 Respondent No. 3 challenged the acquisition of her  

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

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

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29603/1994  questioning  the  legality  of  notification  issued  

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

the  learned Single  Judge dismissed both the  writ  petitions.  

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

on the  ground of  2½ years’  delay between the  issue of  the  

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

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

on her representations,  the  Government had withdrawn the  

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

awaiting the Government’s decision in respect of other parcel  

of land, was not considered satisfactory by the learned Single  

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

learned Single Judge by observing that the State Government  

has  absolute  power  to  withdraw  the  acquisition  before  the  

possession of the acquired land can be taken.

4.2 Respondent  No.  3  challenged  the  order  of  the  

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

Division Bench of the High Court first considered the question  

whether the learned Single Judge was right in dismissing the  

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writ petition only on the ground of delay and answered the  

same in negative by making the following observations:

“After hearing the rival contentions of the appellant  and  contesting  respondent  and  perusing  the  pleadings of both the parties, we are of the opinion  that the learned Single Judge has erred in taking  into consideration the delay of 2 ½ years from the  date of final notification. The learned Single Judge  has  not  considered  the  explanation  given  by  the  petitioner at paragraphs 12 to 15 wherein, he has  explained  regarding  delay.  The  State  Government  has  issued notice  dated 6.1.1990 of  inspection of  lands  proposed  to  be  held  at  10.30  a.m.  on  16.8.1990  and  the  Land  Acquisition  Officer  conducted  spot  inspection  and  satisfied  that  the  lands could be deleted and further another notice  dated 6.2.1990 of fixing the inspection of the spot  on 9.2.1990 was received in pursuance of the same  spot inspection was held and one more notice dated  7.3.1990, 11.5.1990 on those days inspection was  not  made.  Thereafterwards,  he  submitted  the  petition  to  the  Revenue  Secretary.  His  enquiries  with  the  Revenue  Secretary  revealed  the  proceedings  bearing  No.  RD  294  AQB  90  dated  5.10.1991 one Mr. N. Lokraj, Under Secretary to the  Government  called  for  reports  on the  matter  vide  Notification  dated  29.1.1992.  Therefore,  the  grievance  of  the  petitioner  was  pending  consideration before the Government under Section  15A of the Land Acquisition Act as on 29th January,  1992. In this regard,  we have perused the record  produced  by  the  Government.  These  facts  with  reference to the denotification of the acquisition in  respect  of  the  land  in  question  along  with  other  lands are reflected therein. Further the explanation  offered by the appellant at paragraph 15 in the writ  

34

petition clearly show the bonafides on the part of  the  appellant  in  the  matter  of  challenging  the  acquisition  proceedings,  as  he  had submitted  the  representation to the Revenue Department seeking  for  denotification  of  the  land  in  question.  In  our  opinion the delay with regard to the challenge of the  proceedings has been satisfactorily explained by the  appellant.  Therefore,  non-consideration  of  the  explanation  and  rejection  of  the  petition  by  the  learned Single Judge solely on the ground of delay  and  latches  cannot  be  sustained.  Moreover  relief  cannot be denied to a party merely on the ground of  delay. In fact, in view of the subsequent events after  the  final  notification,  it  cannot  be  said  that  the  appellant has approached this Court belatedly.”

4.3 The  Division  Bench  then  scrutinized  records  

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

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

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

HMT Case’) and held:

“It    is    a     mandatory requirement    in    law,  since no prior    approval    of    the scheme has  been obtained by the second respondent    from the  State    Government    first    respondent    herein,  the acquisition by the first respondent can not be  held  to  be  for  public  purpose  as  the  mandatory  requirement as contemplated under Section 3(f)(VI)  has not been complied with. Hence the acquisition  proceedings have to be held as invalid, and on this  ground the acquisition proceedings are liable to be  quashed.   In its  counter  at  paragraph it  has  not  

35

positively  stated  with  regard  to  the  fact  of  prior  approval of the scheme as required under    Section  3(f)(VI) of the Act is granted by the    Government.  On the other hand, what is  stated by the second  respondent at paragraph 5 of the counter is that the  said   society  had  submitted necessary  scheme to  the first    respondent for    the purpose of initiating  acquisition  proceedings under  Section 4(1) of    the  Act.   The  acquisition  proceedings  were  to  be  initiated  after  fully  satisfying  the  requirement  under Section 3(f)(VI)    of the   Act. Therefore,  the  contention  of  the  learned  Counsel  for  the  respondent that the acquisition proceedings are    in  accordance    with law which can not be accepted in  the  absence  of  specific,  positive  assertion  and  proof   in this  regard.  The burden is on the first  and  second respondents to show that there is prior  approval  of  the  housing  scheme  to  initiate  the  acquisition  proceedings  in  respect  of  the  land  in  question. The same is not established. In this view  of the matter and in view of the law declared by the  Apex court in H.M.T. case supra, we have no option  but  to  hold  that  there  is  no  housing  scheme  approved by the State Government. Hence on this  ground the acquisition proceedings are liable to be  quashed.”

The  Division  Bench  also  opined  that  the  Special  Land  

Acquisition  Officer  had  submitted  report  without  giving  

opportunity  of  hearing  to  respondent  No.  3  and  this  was  

sufficient to nullify the acquisition of her land.   

36

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

review  of  judgment  dated  16.3.1998  was  dismissed  by  the  

Division Bench by observing that once the Government had  

issued notification  under  Section 48(1)  nothing  survives  for  

consideration.

4.5 Writ  Appeal  No.  1459/1997  filed  by  appellant  

against  the  negation  of  its  challenge  to  notification  issued  

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

judgment  dated  12.3.1998  along  with  other  similar  writ  

appeals and writ petition.

B. Shri P. Ramaiah and others case.

5.1 Shri  P.  Ramaiah  and  others  also  challenged  the  

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

learned Single Judge allowed the writ petition by relying upon  

order dated 15.6.1998 passed by the Division Bench of  the  

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

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

of 1984, the Deputy Commissioner did not have the authority  

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

37

5.2 The appellant  challenged the  order of  the learned  

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

Karnataka and the Special Land Acquisition Officer also filed  

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

Court dismissed both the appeals by common judgment dated  

6.2.2004. The Division Bench referred to the judgment of this  

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

vitiated due to adoption of corrupt practice by the appellant,  

which had engaged an agent for ensuring the acquisition of  

land  and  large  amounts  of  money  changed  hands  in  the  

process.

5.3 When the learned counsel for Shri P. Ramaiah and  

other respondents pointed out that there were certain errors in  

judgment  dated  6.2.2004  inasmuch  as  Smt.  Geetha  Devi  

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

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

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

errors vide order dated 11.2.2004.

38

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

the appellant were dismissed by another Division Bench of the  

High Court  which declined to entertain the  appellant’s  plea  

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

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

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

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

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

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

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

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

error apparent requiring its review.

6. Before  proceeding  further,  we  consider  it  

appropriate  to  mention  that  in  furtherance  of  the  

directions  contained  in  judgments  in  Writ  Appeal  No.  

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

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

State Government issued notification under Section 48(1)  

dated  25.6.1999 for  release  of  the  lands  comprised in  

39

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

appellant  filed  Contempt  Petition  No.  946/1999,  the  

Government  vide  its  order  dated  15.11.1999  withdrew  

Notification dated 25.6.1999.

The grounds of challenge and the arguments.

7.1 The  appellant  has  challenged  the  impugned  

judgments on several grounds most of which relate to the case  

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

grounds.   Shri  Dushyant  Dave  and  Shri  P.  Vishwanatha  

Shetty,  learned senior counsel for the appellant argued that  

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

and the Division Bench of the High Court committed serious  

error  by  interfering  with  the  discretion  exercised  by  the  

learned  Single  Judge  not  to  entertain  her  challenge  to  the  

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

years.  In  support  of  this  argument,  learned  senior  counsel  

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

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

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

40

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

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

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

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

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

(2008) 4 SCC 695.  

7.2 Shri P.P. Rao,  learned senior counsel appearing for  

the private respondents argued that respondent No. 3 was not  

guilty  of  delay  and  laches  and  the  Division  Bench  rightly  

accepted  the  explanation  given by  her.  Shri  Rao  submitted  

that  respondent  No.  3  had  represented  to  the  State  

Government and its functionaries to withdraw the acquisition  

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

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

3.8.1991, she was very hopeful that the acquisition in respect  

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

reason why she did not  approach the  Court  soon after  the  

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

Learned  senior  counsel  pointed  out  that  vide  letters  dated  

41

5.10.1991 and 29.1.1992, the Revenue Department had asked  

Special  Deputy  Commissioner,  Bangalore  to  submit  report  

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

that the State Government would withdraw the acquisition in  

respect of  that parcel of land. Learned senior counsel relied  

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

Northern India Transport Insurance Company (1971) 1 SCC  

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

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

the  Constitution,  this  Court  will  not  interfere  with  the  

discretion  exercised  by  the  High  Court  in  the  matter  of  

condonation of delay.

8. We have considered the respective arguments. The  

framers  of  the  Constitution  have  not  prescribed  any  

period of limitation for filing a petition under Article 226  

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

of self-imposed restraint evolved by the superior Courts  

that the jurisdiction of the High Court under Article 226  

of  the  Constitution,  which  is  essentially  an  equity  

42

jurisdiction, should not be exercised in favour of a person  

who approaches the Court after long lapse of time and no  

cogent explanation is given for the delay. In Tilokchand  

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

Constitution Bench considered the question whether the  

writ petition filed under Article 32 of the Constitution for  

refund of the amount forfeited by the Sales Tax Officer  

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

according to the petitioner, was ultra vires the powers of  

the State legislature should be entertained ignoring the  

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

the view that even though the petitioner had approached  

the Court with considerable delay, the writ petition filed  

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

Bombay Sales Tax Act was declared unconstitutional by  

the  Division  Bench  of  the  High  Court.  Bachawat  and  

Mitter,  JJ.  opined  that  the  writ  petition  should  be  

dismissed  on  the  ground  of  delay.  Chief  Justice  

Hidayatullah who agreed with Bachawat and Mitter, JJ.  

noted that no period of limitation has been prescribed for  

43

filing a petition under Article 32 of the Constitution and  

proceeded to observe:

“Therefore, the question is one of discretion for this  Court to follow from case to case. There is no lower  limit  and there is  no upper limit.  A case may be  brought  within  Limitation  Act  by  reason  of  some  article but this Court need not necessarily give the  total time to the litigant to move this Court under  Article  32.  Similarly in a suitable  case this  Court  may entertain such a petition even after a lapse of  time. It will  all  depend on what the breach of the  Fundamental  Right  and  the  remedy  claimed  are  when and how the delay arose.”

9. The  ratio  of  the  aforesaid  decision  is  that  even  

though there is no period of limitation for filing petitions  

under  Articles  32  and  226  of  the  Constitution,  the  

petitioner should approach the Court without loss of time  

and if there is delay, then cogent explanation should be  

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

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

for deciding whether or not this Court or the High Court  

should  entertain  a  belated  petition  under  filed  under  

Article  32 or  Article  226 of  the  Constitution and each  

case must be decided on its own facts.  

44

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

whether respondent No.3 had satisfactorily explained the  

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

filed  by  her,  respondent  No.  3  made  the  following  

averments.  

“12. ENQUIRY REGARDING DELETION

Annexure  “L”  dated  6.1.1990  is  a  notice  of  inspection  of  lands  proposed  to  be  held  at  10.30a.m. on 16.8.1990. On 16.1.1990, Shri Harish  Gowda,  the  then  Land  Acquisition  Officer  was  pleased to hold an inspection and was also satisfied  that  the  lands  could  be  deleted  since  the  same  comprised a well-maintained orchard, though on a  very uneven land also for  reasons that  they were  situated on one extreme end of the area proposed to  be  acquired.  Strange  to  say,  the  said  officer  was  transferred, the petitioner is at Serial No. 5 among  the addressee of the said notice.

13. ANNEXURE ‘M’ dated 6.2.1990 is yet another  notice of inspection fixed for 10.00 AM on 2.2.1990.  No  inspection  have  been  held  on  that  day,  the  petitioner  received ANNEXURE ‘N’  dated  7.5.1990  intimating  that  an  inspection  will  be  held  at  11.30AM on 14.3.1990. The petitioner submits that  nobody turned up on that day also. The petitioner  once  again  complained  to  the  Revenue  Secretary.  Thereupon  the  petitioner  received  ANNEXURE  ‘O’  dated 11.5.1990 intimating that the inspection will  be held at  11.00 AM on 14.5.1990.  However,  the  Land Acquisition Officer did not visit the lands on  14.5.1990 or on the following day as orally stated.  On  the  very  next  day,  i.e.,  16th May,  1990,  the  

45

petitioner submitted ANNEXURE ‘P’  to the Special  Land Acquisition Officer with a copy to the Revenue  Secretary,  requesting for  an inspection on a fixed  time and date. The petitioner submits that to this  day  no  inspection  has  been  held  by  any  of  the  officers who had succeeded Shri Harish Gowda in  pursuance of notices mentioned above at Annexures  ‘L’, ‘M’, ‘N’, ‘O’ respectively. The petitioner was given  to  understand  that  she  will  be  informed  in  due  course. However, the petitioner has not received any  such notice.

14. The  plaintiff  submits  that  recent  enquiries  show  that  the  Secretariat  (Revenue  Department)  had addressed two communications to the Special  Deputy  Commissioner,  Krishi  Bhavan,  Bangalore,  bearing No. RD 294 AQB 90 dated 5.10.1991 and  22.1.1992  under  the  signature  of  Sri.  M.  Lokraj,  Under  Secretary  to  Government,  Revenue  Department  calling  for  reports  on  the  matter  immediately.  ANNEXURE  ‘Q’  and  ‘R’  are  Xerox  copies of the said communications dated 5.10.1991  and 29.1.1992. These clearly go to show that  the  petitioner’s  grievances  regarding  the  legality  and  propriety  of  the  proceedings  and  the  question  of  deletion had been taken up for consideration under  Section 15(A) of the Land Acquisition Act and that  the enquiry was still  pending even as late as 29th  January, 1992, which is the date of Annexure ‘R’.”

11. Paragraph  15  of  the  writ  petition  in  which  

respondent No. 3 spelt out the reasons for her seeking  

intervention of the High Court reads as under:

46

“15. However, a couple of days ago, the petitioner’s  son  received  an  anonymous  telephone  call  informing  that  the  office  of  the  Special  Land  Acquisition  Officer  at  the  instance  of  the  2nd  respondent is about to create documents for having  taken  possession  of  the  petitioner’s  lands  on  the  basis  of  an  ante-dated  “Award”.  The  petitioner  submits that she immediately took legal advice and  was  advised  that  no  award  having  been  passed  within  2  years  of  Section  6(1)  declaration,  the  proceedings had lapsed. She was also advised that  in  the  light  of  the  latest  decision  of  this  Hon’ble  Court  reported  in  ILR  1991  KAR  2248,  the  notifications are vitiated in law and a writ petition  may  be  filed  seeking  appropriate  reliefs  including  stay  of  all  further  proceedings  and  injunction  against unlawful dispossession. Hence this writ on  the following among other grounds.”

12. The aforesaid averments were not controverted  

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

the  learned  Single  Judge  refused  to  accept  the  

explanation  given  by  respondent  No.  3  that  she  was  

hopeful  that  after  having  withdrawn the  acquisition  in  

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

State Government will accept her prayer for withdrawal of  

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

Unfortunately,  the  learned  Single  Judge  altogether  

47

ignored  the  fact  that  soon  after  the  issue  of  the  

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

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

petitioner received letter dated 6.1.1990 that she should  

make herself available for inspection of the land and on  

16.1.1990 Shri Harish Gowda, the then Land Acquisition  

Officer inspected the site and felt satisfied that the same  

could be deleted because it was an orchard and was at  

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

Single Judge also omitted to consider the following:

(i) notices dated 6.2.1990 and 7.5.1990 were issued  

to  respondent  No.3  informing  her  about  the  

proposed inspection of the site;

(ii) she made a complaint to the Revenue Secretary  

that no one had come for inspection;

(iii) yet another notice dated 11.5.1990 was received  

by respondent No.3 for inspection will be held on  

14.5.1990 but the concerned officer did not turn  

up;

48

(iv) letters dated 5.10.1991 and 22.1.1992 were sent  

by  the  Revenue  Department  to  Special  Deputy  

Commissioner,  Bangalore  requiring  him  to  

submit  report  in  the  matter  of  withdrawal  of  

acquisition; and  

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

disclosed the cause for her filing the writ petition  

in May 1992.

In  our  view,  non-consideration  of  these  vital  facts  and  

documents  by  the  learned  Single  Judge  resulted  in  

miscarriage of justice.  The Division Bench did not commit any  

error by holding that respondent No.3 was not guilty of laches.  

13. The judgments relied upon by learned counsel  

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

not contain any binding proposition of law.  However, we  

may  briefly  notice  the  reasons  which  influenced  the  

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

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

Court noted that the writ petition had been filed after 6  

49

years of  finalization of  the acquisition proceedings and  

held that the High Court was justified in declining relief  

to  the  petitioner  on  the  ground  that  he  was  guilty  of  

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

of 2 years in challenging the acquisition proceedings was  

unreasonable because it came to the conclusion that the  

respondents’  primary  challenge  to  the  acquisition  

proceedings  was  legally  untenable.  In  Pt.  Girdharan  

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

by the High Court that unexplained delay of 17 months  

in challenging the award was sufficient to non-suit the  

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

even though the  High Court  had summarily  dismissed  

the  writ  petition  without  assigning  reasons,  the  

appellants’  challenge  to  the  acquisition  proceedings  

cannot  be  entertained  because  co-owners  had  not  

challenged  the  acquisition  proceedings,  disputed  

questions of fact were involved and there was delay of 2½  

years.  In  Municipal  Corporation  of  Greater  Bombay’s  

case, this Court reversed the order of the Bombay High  

50

Court  which  had  quashed  the  acquisition  proceedings  

ignoring the fact that the respondent had approached the  

Court after substantial delay calculated with reference to  

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

had been taken by the Corporation for implementing the  

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

order  of  the  High  Court  which  had  quashed  the  

acquisition  proceedings  and  observed  that  the  writ  

petition  should  have  been  dismissed  because  the  

respondent had not offered any explanation for the delay  

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

that the appellant had first challenged the acquisition of  

land  situated  in  Rajasthan  by  filing  a  petition  in  the  

Calcutta High Court and after three years, it  filed writ  

petition in the Rajasthan High Court and concluded that  

the delay in challenging the acquisition was sufficient to  

deny relief to the petitioner.  

14. The second ground on which judgment dated  

16.3.1998  has  been  questioned  is  that  the  Division  

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Bench of the High Court committed an error by nullifying  

the  acquisition  on  the  ground  of  non-compliance  of  

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

Shri  Vishwanatha  Shetty,  learned  counsel  for  the  

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

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

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

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

and that the factual foundation having not been laid by  

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

did  not  have  the  jurisdiction  to  declare  that  the  

acquisition was not for a public purpose. Learned senior  

counsel  relied  upon  the  judgments  in  M/s.  Tulasidas  

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

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

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

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

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

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

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

52

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

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

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

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

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

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

and submitted that the Division Bench of the High Court  

should  not  have  entertained  an  altogether  new  plea  

raised for the first time.    

15. Shri  Dushyant Dave also relied upon order dated  

12.4.1996 passed by the High Court in Writ Petition Nos.  

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

Karnataka, order dated 3.12.1996 passed by the Division  

Bench  in  Writ  Appeal  No.  7953/1996  and  connected  

matters, order dated 23.7.1997 passed by this Court in  

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

passed by the learned Single Judge in Writ Petition No.  

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

Karnataka and others, order dated 1.1.1996 passed by  

53

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

5081/1995  with  the  same  title  and  order  dated  

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

Gruha  Nirmana  Sahakara  Sangha  v.  Narayanamma  

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

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

dated  21.5.1988  sent  by  State  Government  to  Deputy  

Commissioner, Bangalore and argued that the direction  

given by the State Government to Deputy Commissioner,  

Bangalore  for  initiating  the  acquisition  proceedings  

should  be  treated  as  approval  of  the  housing  scheme  

framed by the appellant.  

16. Shri Vishwanatha Shetty argued that even if there  

was no express approval by the State Government to the  

acquisition of land of the appellant, the required approval  

will be deemed to have been granted because the State  

Government  had  contributed  Rs.100  towards  the  

acquisition  of  land.  In  support  of  this  argument,  Shri  

Shetty relied upon the judgments of this Court in Smt.  

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Somavanti and others v. The State of Punjab and others  

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

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

8.7.1988 executed between the appellant and the State  

Government.  

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

writ petition, respondent No. 3 had specifically pleaded  

that  the  acquisition  of  land  for  carrying  out  any  

educational,  housing, health or slum clearance scheme  

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

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

argued that the averments contained in that paragraph  

were  sufficient  to  enable  the  High  Court  to  make  an  

inquiry whether the acquisition of the land in question  

was preceded by the State Government’s approval to the  

housing scheme framed by the appellant. Learned senior  

counsel submitted that the Division Bench of the High  

Court did not commit any error by recording a finding  

that the acquisition of the land belonging to respondent  

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

because  the  appellant  had  not  prepared  any  housing  

scheme.   

18. The question whether the acquisition of the land in  

question can be treated as one made for public purpose  

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

a reference to the following provisions of the 1894 Act:

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

3.(cc)  the  expression  “corporation  owned  or  controlled by the State” means any body corporate  established  by  or  under  a  Central,  Provincial  or  State Act, and includes a Government company as  defined in section 617 of the Companies Act, 1956  (1 of 1956), a society registered under the Societies  Registration Act,  1860 (21 of 1860),  or under any  corresponding law for the time being in force in a  State,  being a society  established or  administered  by  Government  and  a  co-operative  society  within  the  meaning  of  any  law  relating  to  co-operative  societies  for  the time being in force in any State,  being a co-operative society in which not less than  fifty-one per centum of the paid-up share capital is  held by the Central  Government,  or  by any State  Government  or  Governments  or  partly  by  the  Central  Government  and  partly  by  one  or  more  State Governments;

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

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

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(i) a  company  as  defined  in  section  3  of  the  Companies  Act,  1956  (1  of  1956),  other  than  a  Government company referred to in clause (cc);  

(ii)  a  society  registered  under  the  Societies  Registration Act, 1860 (21 of 1860), or under any  corresponding law for the time being in force in a  State, other than a society referred to in clause (cc);  

(iii) a  co-operative  society  within  the  meaning of  any  law  relating  to  co-operative  societies  for  the  time being in force in any State, other than a co- operative society referred to in clause (cc);

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

(f) the  expression  “public  purpose”  includes-  

(i) the provision of village-sites, or the extension,  planned  development  or  improvement  of  existing  village-sites;   

(ii) the  provision  of  land  for  town  or  rural  planning;   

(iii) the provision of land for planned development  of  land  from  public  funds  in  pursuance  of  any  scheme  or  policy  of  Government  and  subsequent  disposal  thereof  in  whole  or  in  part  by  lease,  assignment  or  outright  sale  with  the  object  of  securing  further  development  as  planned;   

(iv) the provision of land for a corporation owned  or controlled by the State;  

(v) the provision of land for residential purposes  to  the  poor  or  landless  or  to  persons  residing  in  areas affected by natural calamities, or to persons  

57

displaced  or  affected  by  reason  of  the  implementation  of  any  scheme  undertaken  by  Government,  any  local  authority  or  a  corporation  owned or controlled by the State;

(vi)  the  provision  of  land  for  carrying  out  any  educational,  housing,  health  or  slum  clearance  scheme  sponsored  by  Government  or  by  any  authority  established  by  Government  for  carrying  out any such scheme, or with the prior approval of  the appropriate Government, by a local  authority,  or  a  society  registered  under  the  Societies  Registration Act, 1860 (21 of 1860), or under any  corresponding law for the time being in force in a  state, or a co-operative society within the meaning  of any law relating to co-operative societies for the  time being in force in any State;

(vii) the provision of land for any other scheme of  development sponsored by Government or with the  prior approval of the appropriate Government, by a  local authority;  

(viii) the provision of any premises or building for  locating a public office,  

but  does  not  include  acquisition  of  land  for  Companies;

Section 39 as amended by Act No.68 of 1984

39. Previous consent of appropriate Government  and  execution  of  agreement  necessary.  -  The  provisions of sections 6 to 16 (both inclusive) and  sections 18 to 37 (both inclusive) shall not be put in  force  in  order  to  acquire  land  for  any  company  under this Part, unless with the previous consent of  

58

the  appropriate  Government,  not  unless  the  Company  shall  have  executed  the  agreement  hereinafter mentioned.  

40. Previous enquiry. - (1) Such consent shall not  be  given  unless  the  appropriate  Government  be  satisfied, either on the report of the Collector under  section 5A, sub-section (2), or by an enquiry held as  hereinafter provided, -  

(a) that the purpose of the acquisition is to obtain  land  for  the  erection  of  dwelling  houses  for  workmen  employed  by  the  Company  or  for  the  provision of amenities directly connected therewith,  or  

(aa)  that  such  acquisition  is  needed  for  the  construction  of  some  building  or  work  for  a  Company which is  engaged or is  taking steps for  engaging itself in any industry or work which is for  a public purpose, or

(b)  that  such  acquisition  is  needed  for  the  construction of some work, and that such work is  likely to prove useful to the public.  

(2) Such enquiry shall be held by such officer and at  such time and place as the appropriate Government  shall appoint.  

(3)  Such  officer  may  summon  and  enforce  the  attendance of witnesses and compel the production  of  documents by the  same means and,  as far  as  possible, in the same manner as is provided by the  Code of  Civil  Procedure,  1908 (5  of  1908)  in  the  case of Civil Court.  

41. Agreement with appropriate Government. - If  the  appropriate  Government  is  satisfied  after  

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considering the report, if any, of the Collector under  section 5A, sub-section (2), or on the report of the  officer making an inquiry under section 40 that the  proposed  acquisition  is  for  any  of  the  purposes  referred to in clause (a) or clause (aa) or clause (b)  of sub-section (1) of section 40, it shall require the  Company  to  enter  into  an  agreement  with  the  appropriate  Government,  providing  to  the  satisfaction of the appropriate Government for the  following matters, namely:-

(1) the payment to the appropriate Government of  the cost of the acquisition;

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

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

(4)  where  the  acquisition  is  for  the  purpose  of  erecting  dwelling  houses  or  the  provision  of  amenities  connected  therewith,  the  time  within  which, the conditions on which and the manner in  which  the  dwelling  houses  or  amenities  shall  be  erected or provided;  

(4A) where the acquisition is for the construction of  any  building  or  work  for  a  Company  which  is  engaged or is taking steps for engaging itself in any  industry or work which is for a public purpose, the  time within which, and the conditions on which, the  building or work shall be constructed or executed;  and

(5) where the acquisition is for the construction of  any  other  work,  the  time  within  which  and  the  conditions on which the work shall be executed and  

60

maintained and the terms on which the public shall  be entitled to use the work.

42.  Publication  of  agreement.  -  Every  such  agreement  shall,  as  soon  as  may  be  after  its  execution, be published in the Official Gazette, and  shall  thereupon  (so  far  as  regards  the  terms  on  which the public shall be entitled to use the work)  have the same effect as if it had formed part of this  Act.”

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

(4)  where  the  acquisition  is  for  the  purpose  of  erecting  dwelling  houses  or  the  provision  of  amenities  connected  therewith,  the  time  within  which, the conditions on which and the manner in  which  the  dwelling  houses  or  amenities  shall  be  erected or provided;  

(4A) where the acquisition is for the construction of  any  building  or  work  for  a  Company  which  is  engaged or is taking steps for engaging itself in any  industry or work which is for a public purpose, the  time within which, and the conditions on which, the  building or work shall be constructed or executed;  and

(5) where the acquisition is for the construction of  any  other  work,  the  time  within  which  and  the  conditions on which the work shall be executed and  maintained and the terms on which the public shall  be entitled to use the work.

42.  Publication  of  agreement.  -  Every  such  agreement  shall,  as  soon  as  may  be  after  its  execution, be published in the Official Gazette, and  shall  thereupon  (so  far  as  regards  the  terms  on  

61

which the public shall be entitled to use the work)  have the same effect as if it had formed part of this  Act.”

19. An  analysis  of  the  definitions  noted  

hereinabove shows that all the cooperative societies have  

been classified  into  two  categories.   The  first  category  

consists  of  the  cooperative  societies  in  which  not  less  

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

Central Government or any State Government or partly  

by the Central Government and partly by one or more  

State Governments. The second category consists of the  

cooperative societies other than those falling within the  

definition  of  the  expression  ‘corporation  owned  or  

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

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

its  fold  a  company  as  defined  in  Section  3  of  the  

Companies Act, 1956 other than a government company  

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

Societies  Registration  Act  or  under  any  corresponding  

law framed by the State legislature, other than a society  

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

as such in any law relating to cooperative societies for the  

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

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

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

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

expression ‘public purpose’ includes the provision of land  

for carrying out any educational, housing health or slum  

clearance scheme sponsored by Government or by any  

authority established by Government for carrying out any  

such  scheme,  or,  with  the  prior  approval  of  the  

appropriate  Government,  by  a  Local  Authority,  or  a  

society  registered under  the  Societies  Registration  Act,  

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

cooperative  society  as  defined  in  any  law  relating  to  

cooperative societies for  the time being in force in any  

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

carrying  out  any  education,  housing,  health  or  slum  

clearance scheme by a registered society or a cooperative  

society  can  be  regarded  as  an  acquisition  for  public  

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purpose  only  if  the  scheme has been approved by the  

appropriate  Government  before  initiation  of  the  

acquisition proceedings.  If the acquisition of land for a  

cooperative society, which is covered by the definition of  

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

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

Part VII would be attracted and mandate thereof will have  

to be complied with.  

20. In our view, there is no merit in the argument of  

learned  senior  counsel  for  the  appellant  and  learned  

counsel for the State that the Division Bench of the High  

Court committed an error by recording a finding on the  

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

because respondent No. 3 had not raised any such plea  

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

respondent No. 3 made the following averments:  

“The acquisition of any land under the Act for the  benefit of the 2nd respondent will  not be for a public  purpose and will have to be in accordance with the  provisions contained in Part VII of the Act.  In any  case, even if the acquisition is for carrying out any  

64

educational,  housing,  health  or  slum  clearance  scheme  of  the  2nd respondent,  the  same  shall  be  with  the  prior  approval  of  the  appropriate  Government (Vide Sec. 3(f)(vi) of the Act).”

The  appellant  neither  controverted  the  above-extracted  

averments nor produced any document before the High Court  

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

had been approved by the State Government before the issue  

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

the  Division Bench of  the  High Court  rightly  held  that  the  

acquisition in question was not for a public purpose as defined  

in Section 3(f)(vi) of the 1894 Act.

21. We shall now examine whether the appellant  

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

been  approved  by  the  State  Government.  The  first  of  

these documents is representation dated 7.12.1984 made  

by the Executive Director of the appellant to the Minister  

of  Revenue,  Government  of  Karnataka.  The  other  two  

documents are letter dated 21.5.1988 sent by the State  

Government to Deputy Commissioner, Bangalore to issue  

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

agreement  dated  7.8.1988  entered  into  between  the  

Executive  Director  of  the  appellant  and  the  State  

Government.  A  close  and  careful  reading  of  these  

documents reveals that although, in the representation  

made  by  him  to  the  Revenue  Minister,  the  Executive  

Director of  the appellant  did make a mention that  the  

object  of  the  society  is  to  provide  house  sites  to  its  

members  who  belong  to  working  class  and  other  

backward  class  people  belonging  to  weaker  class  of  

society and the members are poor  and siteless people,  

there was not even a whisper about any housing scheme.  

The direction issued by the State Government to Deputy  

Commissioner,  Bangalore  to  issue  the  preliminary  

notification for  an extent  of  207 acres 29 guntas  land  

also  does  not  speak  of  any  housing  scheme.   The  

agreement entered into between the appellant through its  

Executive Director and the State  Government does not  

contain any inkling about the housing scheme framed by  

the appellant.   It  merely mentions about  the proposed  

66

formation  of  sites  and  construction  of  houses  for  the  

members of  the appellant  and payment of  cost for  the  

acquired land.  The agreement also speaks of an inquiry  

having  been  got  made  by  the  State  Government  in  

conformity with the provisions of the 1894 Act and the  

grant of consent for the acquisition of land for the benefit  

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

that the appellant shall pay to the Government the entire  

costs of the acquisition of land and expenses.  Paragraph  

2 of the conditions incorporated in the agreement speaks  

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

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

token  contribution  of  Rs.100  by  the  Deputy  

Commissioner / Special  Deputy Commissioner towards  

the  compensation  to  be  determined  by  the  Assistant  

Commissioner/Special Land Acquisition Officer, but that  

is  not  relatable  to  any housing  scheme framed by  the  

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

framed any housing  scheme and obtained its  approval  

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

1894 Act.

22. The  1976  Act  does  provide  for  framing  of  

various schemes including housing scheme.  Section 15  

of that Act empowers the BDA to undertake works and  

incur expenditure for development.  In terms of Section  

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

for the development of the Bangalore Metropolitan Area  

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

approval of the Government undertake any work for the  

development  of  the  Bangalore  Metropolitan  Area  and  

incur expenditure therefor and also for the framing and  

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

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

additional development scheme either on its own or on  

the recommendations of the Local Authority or as per the  

direction  of  the  State  Government.   Section  16  of  the  

1976 Act lays down that every development scheme shall  

provide  for  the  acquisition  of  any  land  which  is  

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considered necessary for or affected by the execution of  

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

including  the  construction  and  reconstruction  of  

buildings  and  formation  and  alternation  of  scheme,  

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

Section 16 envisages construction of houses by the BDA  

as  part  of  the  development  scheme.  Section  32  which  

contains a non obstante clause postulates forming of new  

extensions or layouts by private persons.  Though, sub-

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

provides for  formation of  any extension or  layout by a  

private person with the written sanction of the BDA and  

subject to the terms and conditions which it may specify.  

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

written  application  along  with  plans  and  sections  

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

Similar  provisions  are  contained  in  Section  18  of  the  

Karnataka Housing Board Act.   

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23. Although,  the  appellant  may  not  have  been  

required to frame a scheme in strict conformity with the  

provisions of the 1976 Act and the Housing Board Act,  

but it  was bound to frame scheme disclosing the total  

number  of  members  eligible  for  allotment  of  sites,  the  

requirement of land including the size of the plots and  

broad indication of the mode and manner of development  

of  the  land as a  layout.   The State  Government could  

then  apply  mind  whether  or  not  the  housing  scheme  

framed by the appellant should be approved. However, as  

mentioned  above,  the  appellant  did  not  produce  any  

evidence  before  the  High  Court  to  show  that  it  had  

framed a housing scheme and the same was approved by  

the  State  Government  before  the  issue  of  notification  

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

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

fact, such a scheme had been framed and approved by  

the State Government.  Therefore, the Division Bench of  

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

that  in the  absence  of  a  housing  scheme having  been  

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framed by the appellant, the acquisition of land belonging  

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

defined in Section 3(f)(vi).  

24. In Narayana Reddy v. State of Karnataka ILR  

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

considered  whether  the  acquisition  of  land  made  on  

behalf of 7 house building cooperative societies including  

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

House  Building  Cooperative  Society  was  for  a  public  

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

colourable exercise of power by the State Government.  A  

reading  of  the  judgment  shows  that  when  the  writ  

petitions questioning the acquisition of land were placed  

before the learned Single Judge, he felt that the points  

which  were  raised  by  the  petitioners  had  not  been  

considered in the earlier judgment of the Division Bench  

in Narayana Raju v. State of  Karnataka ILR 1989 KAR  

376,  which  was  confirmed  by  this  Court  in  Narayana  

Raju  v.  State  of  Karnataka  ILR  1989  KAR  406  and  

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referred the matter to the Division Bench under Section 9  

of the Karnataka High Court Act. The Division Bench first  

considered whether the acquisition of land on behalf of  

house  building  cooperative  societies  was  for  a  public  

purpose.  After noticing the relevant statutory provisions,  

the  Division  Bench  referred  to  the  judgments  of  this  

Court in State  of  Gujarat v.  Chaturbhai  Narsibhai  AIR  

1975 SC 629, General Government Servants Cooperative  

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

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

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

earlier  decisions support  the  writ  petitioners’  plea that  

they  were  entitled  to  be  heard  before  the  Government  

could grant approval for the acquisition of land on behalf  

of cooperative societies, but their plea cannot be accepted  

in  view  of  the  latter  judgment.   The  Division  Bench  

further held that the aggrieved person can raise all points  

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

the 1894 Act.  The Division Bench then referred to the  

averments  contained  in  Writ  Petition  Nos.7683-

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7699/1988 in which the acquisition of land for various  

House Building Cooperative Societies was challenged, the  

advertisement issued by the society, agreement entered  

into  between  HMT Cooperative  Society  and  the  Estate  

Agent  who  assured  that  he  will  get  the  acquisition  

approved  at  an  early  date  subject  to  payment  of  the  

specified  amount,  various  reports  including  the  one  

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

the State Government and quashed the acquisition.        

25. The Division Bench of the High Court held that the  

whole  acquisition  was  vitiated  due  to  malafides  and  

manipulations done by the House Building Cooperative  

Societies through the Estate Agent.  The Division Bench  

also referred to Section 23 of the Contract Act, judgment  

of  this  Court  in  Rattan  Chand  Hira  Chand  v.  Askar  

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

“Applying  the  ratio  of  the  above  judgment,  there  can  be  no  doubt  that  the  Agreements  entered  into  between  the  six  respondent- Societies and their respective agents in which  one  of  the  condition  was  payment  of  huge  sums of money by the Society to the agent in  

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consideration of which the agent had to get the  Preliminary and Final  Notifications issued by  the  Government,  was  for  the  purpose  of  influencing  the  Government  and  to  secure  approval  for  acquisition  of  the  lands  and  therefore opposed to public policy.

The question however, for our consideration is,  whether the impugned Notifications are liable  to be quashed.  In our opinion, once it is clear  that  the Agreement entered into between the  Societies  and  the  agents  concerned,  under  which the purport of  one of  the clauses was  that  the  agent  should  influence  the  Government  and  to  procure  Preliminary  and  Final Notifications under Sections 4 and 6 of  the  Act  respectively  are  opposed  to  public  policy,  the  impugned  Notifications  being  the  product  or  fruits  of  such  an  agreement  are  injurious to public interest and detrimental to  purity of administration and therefore cannot  be allowed to stand.  As seen from the findings  of G.V.K. Rao Inquiry Report, in respect of five  respondent-Societies  and  the  report  of  the  Joint Registrar in respect of Vyalikaval House  Building  Cooperative  Society,  these  Societies  had  indulged  in  enrolling  large  number  of  members  illegally  inclusive  of  ineligible  members and had also  indulged in enrolling  large  number  of  bogus  members.   The  only  inference that is possible from this is that the  office bearers of the Societies had entered into  unholy alliance with the respective agents for  the  purpose  of  making  money,  as  submitted  for  the  petitioners.   Otherwise,  there  is  no  reason as to why such an Agreement should  have been brought about by the office bearers  of  the Society and the agents.   Unless these  persons  had  the  intention  of  making  huge  

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profits as alleged by the petitioners, they would  not  have  indulged  in  entering  into  such  Agreements  and would  not  have  indulged in  enrolment  of  ineligible  and  bogus  members.  The circumstance that without considering all  these relevant materials the Government had  accorded its approval, is sufficient to hold that  the agents had prevailed upon the Government  to take a decision to acquire the lands without  going  into  all  those  relevant  facts.   The  irresistible inference flowing from the facts and  circumstances of these cases is, whereas the  power  conferred  under  the  Land  Acquisition  Act  is  for  acquiring  lands  for  carrying  out  housing scheme by a housing society, in each  of the cases the acquisition of lands is not for a  bona fide Housing Scheme but is substantially  for  the  purpose  of  enabling  the  concerned  office bearers of respondent-Societies and their  agents to indulge in sale of sites in the guise of  allotment  of  sites  to  the  Members/Associate  Members of the Society and to make money as  alleged by the petitioners and therefore it is a  clear  case  of  colourable  exercise  of  power.  Thus  the  decision  of  the  Government  to  acquire the lands suffers from legal mala fides  and therefore  the  impugned Notifications are  liable to be struck down.”

26. In  the  1st H.M.T.  Case,  this  Court  approved  the  

judgment of the Division Bench of the High Court. The  

three-Judge Bench considered questions similar to those  

raised in these appeals, referred to the agreement entered  

into  between  the  appellant  and  the  State  Government  

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whereby  the  former  agreed  to  abide  by  the  conditions  

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

and held:

“12. There is no dispute that the society with which  we  are  concerned  shall  not  be  covered  by  the  expression “corporation owned or controlled by the  State”, because the said expression shall include a  cooperative  society,  being a cooperative  society  in  which not less than 51 per centum of the paid-up  share capital is held by the Central Government, or  by any State Government or Governments, or partly  by  the  Central  Government  and partly  by  one  or  more State Governments.

13.  The  substituted  definition  of  the  expression  ‘company’  in  Section 3(e)(iii)  will  certainly  include  the appellant-Society. The substituted definition of  the expression ‘company’ shall include cooperative  society, within the meaning of any law relating to  cooperative societies other than those referred to in  clause (cc) of Section 3 of the Act. Such cooperative  society shall be deemed to be a company, to which  provisions of Chapter VII relating to acquisition of  land for company shall be applicable.

14.  In  view  of  the  substituted  definition  of  the  expression “public purpose”, in Section 3(f)(vi), the  provision  for  carrying  out  any  housing  scheme  sponsored by the Government or by any authority  established  by  Government  for  carrying  out  any  such  scheme  shall  be  deemed  to  be  a  “public  purpose”. It further says that the provision of land  for  carrying  out  any  housing  scheme  with  prior  approval of the State Government by a cooperative  society within the  meaning of  any law relating to  cooperative societies for the time being in force in  

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any State, shall be deemed to be a “public purpose”.  As such for any housing cooperative society lands  can  be  acquired  by  the  appropriate  Government,  treating  the  same  as  acquisition  for  the  public  purpose. But, in that event, there has to be a prior  approval  of  such  scheme  by  the  appropriate  Government. When the lands are acquired for any  cooperative  society  with  prior  approval  of  the  scheme  by  the  State  Government,  there  is  no  question of application of the provisions of Part VII  of the Act. Such acquisition shall be on the mode of  acquisition by the appropriate Government for any  public purpose.

18. Now the question which is to be answered is as  to  whether  in  view  of  the  definition  of  “public  purpose” introduced by the aforesaid Amending Act  68  of  1984  in  Section  3(f)(vi),  is  it  open  to  the  appropriate  Government  to  acquire  land  for  cooperative  society  for  housing  scheme  without  making proper enquiry about the members of  the  society  and  without  putting  such  housing  cooperative society to term in respect of nature of  construction, the area to be allotted to the members  and restrictions on transfer thereof?

19.  According  to  us,  in  Section  3(f)(vi)  the  expression  ‘housing’  has  been  used  along  with  educational  and  health  schemes.  As  such  the  housing  scheme  contemplated  by  Section  3(f)(vi)  shall be such housing scheme which shall serve the  maximum number of members of the society. Such  housing scheme should prove to be useful  to the  public. That is why Parliament while introducing a  new definition  of  “public  purpose”,  said  that  any  scheme  submitted  by  any  cooperative  society  relating to housing, must receive prior approval of  the  appropriate  Government  and  then  only  the  acquisition of the land for such scheme can be held  

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to be for public purpose. If requirement of Section  3(f)(vi)  is  not  strictly  enforced,  every  housing  cooperative society shall approach the appropriate  Government for acquisition by applying Section 3(f) (vi) instead of pursuing the acquisition under Part  VII of the Act which has become more rigorous and  restrictive.  In  this  background,  it  has  to  be  held  that the prior approval, required by Section 3(f)(vi),  of  the  appropriate  Government  is  not  just  a  formality; it is a condition precedent to the exercise  of  the  power  of  acquisition  by  the  appropriate  Government for a housing scheme of a cooperative  society.

20. In the present case, a hybrid procedure appears  to  have  been  followed.  Initially,  the  appellant- Society through M/s S.R. Constructions purported  to acquire the lands by negotiation and sale by the  landholders.  Then  from  terms  of  the  agreement  dated  17-3-1988,  it  appears  that  the  procedure  prescribed in Part VII was to be followed and the  lands  were  to  be  acquired  at  the  cost  of  the  appellant-Society treating it to be a ‘company’. The  allegation made on behalf of the appellant-Society  that the housing scheme had been approved by the  appropriate Government on 7-11-1984 shall not be  deemed to be a prior approval within the meaning of  Section 3(f)(vi) but an order giving previous consent  as required by Section 39 of Part VII of the Act. In  the  agreement  dated  17-3-1988  it  has  been  specifically stated:

“And whereas the Government having caused  inquiry  to  be  made  in  conformity  with  the  provisions of the said Act and being satisfied  as a result of such inquiry that the acquisition  of  the  said  land  is  needed  for  the  purpose  referred  to  above  has  consented  to  the  provisions  of  the  said  Act  being  in  force  in  

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order to acquire the said land for the benefit of  the society members to enter in the agreement  hereinafter contained with the Government.”

But,  ultimately,  the  lands have  been acquired on  behalf of the appropriate Government treating the  requirement of the appellant-Society as for a public  purpose within the meaning of Section 3(f)(vi). It is  surprising  as  to  how  respondent  M/s  S.R.  Constructions  entered  into  agreement  with  the  appellant-Society assuring it that the lands, details  of which were given in the agreement itself, shall be  acquired by the State Government by following the  procedure  of  Sections  4(1)  and  6(1)  and  for  this,  more than one crore of rupees was paid to M/s S.R.  Constructions (Respondent 11).”

27. The  three  Judge  Bench  also  approved  the  view  

taken by the High Court that the acquisition of land was  

vitiated  because  the  decision  of  the  State  Government  

was  influenced  by  the  Estate  Agent  with  whom  the  

appellant had entered into an agreement.  Paragraphs 21  

and 22 of the judgment, which contain discussion on this  

issue are extracted hereunder:

“21. Mr  G.  Ramaswamy,  learned  Senior  Counsel appearing on behalf of the appellant,  submitted that merely because the appellant- Society  had  entered  into  an  agreement  with  Respondent  11,  M/s  S.R.  Constructions,  in  which the latter for the consideration paid to it  had assured that the lands in question shall  

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be  acquired  by  the  State  Government,  no  adverse  inference  should  be  drawn  because  that  may  amount  to  a  tall  claim  made  on  behalf  of  M/s  S.R.  Constructions  in  the  agreement.  He  pointed  out  that  the  notifications under Sections 4(1) and 6(1) have  been issued beyond the time stipulated in the  agreement and as such, it should be held that  the  State  Government  has  exercised  its  statutory power for acquisition of the lands in  normal course, only after taking all facts and  circumstances into consideration. There is no  dispute that in terms of agreement dated 1-2- 1985  payments  have  been  made  by  the  appellant-Society  to  M/s  S.R.  Constructions.  This  circumstance  alone  goes  a  long  way  to  support the contention of the writ petitioners  that their lands have not been acquired in the  normal  course  or  for  any public  purpose.  In  spite  of  the  repeated  query,  the  learned  counsel  appearing  for  the  appellant-Society  could not point out or produce any order of the  State Government under Section 3(f)(vi) of the  Act  granting  prior  approval  and  prescribing  conditions  and  restrictions  in  respect  of  the  use of the lands which were to be acquired for  a public purpose. There is no restriction or bar  on the part of the appellant-Society on carving  out  the  size  of  the  plots  or  the  manner  of  allotment or in respect of construction over the  same. That is why the framers of the Act have  required the appropriate Government to grant  prior  approval  of  any  housing  scheme  presented by any cooperative society before the  lands are acquired treating such requirement  and  acquisition  for  public  purpose.  It  is  incumbent  on  the  part  of  the  appropriate  Government  while  granting  approval  to  examine different aspects of the matter so that  

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it  may serve the  public  interest  and not  the  interest  of  few  who  can  as  well  afford  to  acquire  such  lands  by  negotiation  in  open  market. According to us, the State Government  has not granted the prior approval in terms of  Section  3(f)(vi)  of  the  Act  to  the  housing  scheme in question. The power under Sections  4(1) and 6(1) of the Act has been exercised for  extraneous consideration and at the instance  of the persons who had no role in the decision- making process — whether the acquisition of  the  lands  in  question  shall  be  for  a  public  purpose.  This  itself  is  enough  to  vitiate  the  whole  acquisition  proceeding  and  render  the  same invalid.

22. In  the  present  case  there  has  been  contravention  of  Section  3(f)(vi)  of  the  Act  inasmuch as  there  was  no  prior  approval  of  the State Government as required by the said  section before steps for acquisition of the lands  were  taken.  The  report  of  Shri  G.K.V.  Rao  points  out  as  to  how  the  appellant-Society  admitted large number of persons as members  who cannot be held to be genuine members,  the  sole  object  being  to  transfer  the  lands  acquired for “public purpose”, to outsiders as  part of commercial venture, undertaken by the  office-bearer  of  the  appellant-Society.  We are  in  agreement  with  the  finding  of  the  High  Court  that  the  statutory  notifications  issued  under Sections 4(1) and 6(1) of  the Act have  been issued due to the role played by M/s S.R.  Constructions,  Respondent  11.  On  the  materials  on  record,  the  High  Court  was  justified in coming to the conclusion that the  proceedings  for  acquisition  of  the  lands  had  not  been  initiated  because  the  State  Government was satisfied about the existence  

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of  the  public  purpose but at  the instance of  agent who had collected more than a crore of  rupees for  getting  the  lands acquired by the  State Government.”

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

was reiterated by another three Judge Bench in the case  

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

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

Bench in Vyalikawal House Building Cooperative Society  

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

mentioned judgment, this Court declined to accept the  

argument of the appellant’s counsel that the respondents  

have accepted the amount and observed:

“Learned counsel for the appellant tried to persuade  us  that  as  the  amount  in  question  has  been  accepted by the respondents, it is not open for them  now to wriggle out from that agreement. It may be  that the appellant might have tried to settle out the  acquisition  but  when  the  whole  acquisition  emanates from the aforesaid tainted notification any  settlement on the basis of that notification cannot  be validated. The fact remains that when the basic  notification under which the present land is sought  to be acquired stood vitiated then whatever money  that the appellant has paid, is at its own risk. Once  the notification goes no benefit could be derived by  the  appellant.  We  are  satisfied  that  issue  of  notification was mala fide and it was not for public  

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purpose,  as  has  been  observed  by  this  Court,  nothing  turns  on  the  question  of  delay  and  acquiescence.”

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

scheme was framed by the appellant which is  sine qua  

non for treating the acquisition of land for a cooperative  

society as an acquisition for public purpose within the  

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

executed agreement dated 21.2.1988 for facilitating the  

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

more than 5 crores.  This agreement was similar to the  

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

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

Estate Agent engaged by the appellant had promised that  

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

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

The huge amount which the appellant had agreed to pay  

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

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

Estate Agent for manipulating the State apparatus and  

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facilitating the acquisition of land and sanction of layout  

etc.  without  any  obstruction.   Such  an  agreement  is  

clearly violative of Section 23 of the Contract Act.  

30. The stage has now reached for taking note of  

the orders passed by the High Court and this Court in  

other  cases  as  also  the  judgment  in  Kanaka  Gruha  

Nirmana  Sahakara  Sangha  v.  Narayanamma  (2003)  1  

SCC 228, which have been relied upon by the learned  

senior  counsel  for  the  appellant  in  support  of  their  

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

other similar cases.  We have also taken note of  some  

other orders, copies of which have been produced by the  

appellant.

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

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

learned  Single  Judge  vide  order  dated  12.4.1996.  The  only  

contention raised in that  case was that the acquisition was  

tainted by fraud. The learned Single Judge briefly adverted to  

the  averments  contained  in  writ  petitions  and  the  counter  

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affidavits  and  negatived  challenge  to  the  acquisition  

proceeding.   Paragraphs  3  to  6  of  that  order  are  extracted  

below:  

“3.  The contention of  the  learned counsel  for  the  petitioner  is  that  the  acquisition  was  made  fraudulently and there were some mediators, which  clearly  shows  that  the  entire  acquisition  proceedings are fraudulent.  He, therefore, relies on  the  Judgment  of  the  Supreme  Court  in  H.M.T.  House  Building  Cooperative  Society  Vs.  Syed  Khader (ILR 1995 Kar. 1962).  He further submits  that the petitioners being villagers, were not aware  of their rights, and they did not approach this Court  earlier.

4.  On being issued notice, the respondents 1 and 2  have  filed  their  statement  of  objections.   The  various dates mentioned above are furnished to the  Court,  stating the various steps taken during the  acquisition  proceedings.   It  was  further  stated,  there  was  no  middle  man  and  that  the  General  Power of Attorney was given only after the issuance  of  Notification  under  Section  6(1)  Notification.   It  was, therefore, contended that there was no fraud  played at any stage.   

5. Based on the decision mentioned above and the  facts stated in the objections, it is clear that there  was no fraud in the  acquisition  proceedings.  The  purpose of acquisition being for a society has to be  held to be for a public purpose.

6. The petitioners have not explained the long delay  in  approaching  this  Court.  The  dates  mentioned  above  clearly  show  that  the  petitioners  have  approached this  Court after  nearly six years.  The  

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contention of the learned Counsel for the petitioners  that the petitioners being villagers were unaware of  their rights, cannot be accepted. No other reason is  given explaining the laches. Apart from there being  no merits in the case, the writ petitions are to be  dismissed on the ground of  long laches,  which is  not explained. The writ petitions are dismissed.”

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

Karnataka  and  others  and  batch  was  dismissed  by  the  

Division Bench by relying upon the observations made by the  

learned Single Judge that no middlemen was involved in the  

transaction;  that  the  acquisition  was  for  a  public  purpose  

within the meaning of the 1894 Act and the appellants had  

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

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

and  others  were  dismissed  by  this  Court  by  recording  the  

following order:

“The SLPs are dismissed.”

(ii) Writ  Petition  No.  35837/1994  -  Subramani  and  

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

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

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as party respondents was disposed of by the Division Bench of  

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

3139.  The  Division  Bench  rejected  the  plea  that  the  

acquisition of land for Karnataka State Judicial  Department  

Employees’  House  Building  Cooperative  Society  was vitiated  

because the middlemen were responsible for the acquisition of  

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

noted that the terms of the agreement entered into between  

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

acquisition of land but only for development of the acquired  

land. The Division Bench also noted that the agreement was  

entered  into  between  the  Society  and  the  owners  in  1985,  

whereas the Government gave approval for acquisition in 1985  

and  the  agreement  with  the  developer  was  of  1986.   The  

Division Bench also noted that no stranger had been inducted  

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

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

declared  illegal  because  the  concerned  House  Building  

Cooperative Society has not framed any housing scheme and  

obtained approval  thereof  from the  State  Government.   The  

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Division  Bench also  expressed  the  view that  remedy under  

Article 226 was discretionary and it was not inclined to nullify  

the acquisition made for the society because the petitioners  

had approached the Court after long lapse of time and there  

was no explanation for the delay.  

(iii) Writ Appeal No. 2074/1994 - Sh. Ramchandrappa  

v. State of Karnataka and connected cases were dismissed by  

the Division Bench of the High Court mainly on the ground  

that award had already been passed and the appellants had  

participated  in  the  award  proceedings  and  further  that  the  

appellants had approached the Court at the instance of some  

rival  developers.  The  Division  Bench  further  held  that  the  

disputed acquisition cannot be termed as colourable exercise  

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

were summarily dismissed by this Court on 1.5.1997

(iv) Writ Petition No. 15508/1998 - Bachappa v. State of  

Karnataka  was  dismissed by  the  learned Single  Judge  vide  

order dated 9.7.1998 by observing that the acquisition cannot  

be nullified by entertaining writ petitions filed after three years  

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

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

the order of the learned Single Judge were dismissed by the  

Division  Bench  vide  order  dated  24.8.1998  albeit  without  

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

dismissed  by  this  Court  on  14.5.1999  by  recording  the  

following order:

“Special Leave Petitions are dismissed.’

(v) Writ Petition Nos. 7287-7300/1993 were dismissed by  

the learned Single Judge on 3.1.1996 on the ground of  

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

and  batch  filed  against  the  aforesaid  order  was  

dismissed  by  the  Division  Bench  vide  order  dated  

7.7.1997 on the ground that the appellants had failed  

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

dismissed by this Court by the usual one line order.

(vi) Writ Petition Nos. 30868-70/1996 were dismissed by  

the learned Single Judge vide order dated 29.11.1996  

on the ground that in the earlier round they had failed  

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to  convince  the  Court  on  the  issue  of  invalidity  of  

acquisition.  Writ Appeal No.146/1997 and connected  

matters  were  dismissed  by  the  Division  Bench  on  

2.6.1997 by recording its agreement with the learned  

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

dismissed by this Court on 20.1.1998.  

(vii) Writ  Petition  No.  586/1991  Muniyappa  v.  State  of  

Karnataka, in which the petitioner had challenged the  

acquisition on the ground that no scheme had been  

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

dismissed by the learned Single Judge on 24.11.1994  

by relying upon the  judgments in  Narayana Raju v.  

State of Karnataka ILR 1989 KAR 376 and Narayana  

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

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

learned Single  Judge was dismissed by the  Division  

Bench vide judgment dated 14.2.1995.  The Division  

Bench held that framing of Rules is not a condition  

precedent for the acquisition of land for the purpose of  

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

Muniyappa  v.  State  of  Karnataka  was  dismissed  by  

this  Court  on  4.10.1996  by  recording  the  following  

order:  

“We have heard the learned counsel for the parties.  The contention that has been raised by the learned  counsel  for  the  petitioner    on   the  basis  of  the    decision of this Court of HMT House Building Co- operative Society vs. Syed Khader & Ors. (1995) 2  SCC 677,  cannot  be  accepted in  view of  the  fact  that  a  scheme had been prepared in  the  present  case  and  it  had  been  approved  by  the  State  Government and there is nothing to show that the  said approval is vitiated. The special leave petition  is, therefore dismissed.

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

dismissed by the learned Single Judge on 21.6.1996  

by relying upon the judgment in Subramani v. Union  

of India ILR 1995 KAR 3139. The learned Single Judge  

held  that  the  petitioners  had  approached  the  Court  

after  almost  seven  years  of  finalization  of  the  

acquisition  proceedings  and  there  was  no  cogent  

explanation  for  the  delay.  Writ  Appeal  Nos.  7057-

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

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dismissed  by  the  Division  Bench  vide  order  dated  

12.8.1996  on  the  ground  that  the  appellants  had  

already received compensation more than four years  

ago and they had entered into an agreement for sale of  

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

summarily dismissed by this Court on 20.9.1996.

(ix) Writ  Petition  No.  17603/1989  Smt.  Sumitramma  v.  

State  of  Karnataka  was  dismissed  by  the  learned  

Single  Judge  on  22.11.1995  by  relying  upon  the  

averment  contained  in  the  counter  affidavit  of  

respondent No. 4 that it had submitted a scheme to  

the State Government and the acquisition was made  

after approval of the scheme. The learned Single Judge  

also relied upon the judgment in Narayana Raju’s case  

in support of  his conclusion that  if  the Government  

decides to acquire the land for a cooperative society on  

its being satisfied that the land was to put up houses  

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

scheme  can  be  inferred from the  very  fact  that  the  

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Government  was  a  party  to  an  agreement  which  

ensured  that  the  lands  will  be  utililised  for  

implementing  the  purpose  of  the  acquisition.  Writ  

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

learned Single  Judge was dismissed by the  Division  

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

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

on 4.10.1996 by recording the following order:  

“Strong reliance is placed by the learned counsel for  the petitioner on this Court’s decision H.M.T. House  Building  Cooperative  Society  v.  Syed  Khader  and  others (1995) 2 SCC 677. The submission is that in  the  case  cited  above  the  Enquiry  committee  had  submitted a report on the basis whereof a provision  was  made in the  agreement  dated 17.3.88 which  recited that the Government having caused enquiry  to be made in conformity with the provisions of the  Act  and  being  satisfied  with  the  result  of  such  enquiry that the acquisition of such land is needed  for  the  purpose  referred  to  above  and  the  Government having consented to acquire the said  land  for  the  benefit  of  the  society  members  they  have  entered  into  an  agreement  with  the  Government.  While this recital  indeed is  found in  the agreement dated 17.3.88 no separate order was  made by the Government granting approval  as in  the  present  case.  In  the  present  case  a  separate  order  dated  14.10.1985  was  passed  by  the  Government and under the signatures of the Under  Secretary to the Government, Revenue Department,  

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conveying  the  approval  of  the  Government  in  the  issuance of  the Notification dated 21.1.86  under  Section  4  of  the  Land  Acquisition  Act  to  acquire  certain  parcels  of  land  in  favour  of  L.R.D.E.  Employees  Housing  Co-operative  Society,  Bangalore.  Therefore,  there  is  a  separate  specific  order made by the Government on the basis of the  recommendation  of  the  Committee  unlike  in  the  H.M.T. case. We, therefore, do not see any merit in  this petition and dismiss the same. No orders in I.A.  No. 2.”

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

Karnataka was dismissed by the learned Single Judge  

mainly  on  the  ground  that  the  writ  petitioners  had  

participated in the award proceedings and agreed that  

the  compensation  be  disbursed  to  his  power  of  

attorney and also approached the society for allotment  

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

appellant  was  dismissed  by  the  Division  Bench  on  

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

dismissed by this Court on 3.2.1997.

(xi) Writ Appeal Nos. 7122-34/1996 - Smt. Hanumakka v.  

State  of  Karnataka  were  dismissed  by  the  Division  

Bench of the High Court vide order dated 12.9.1996 on  

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the ground of delay and also on the ground that the  

appellant  had  not  approached the  Court  with  clean  

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

dismissed by this Court on 9.12.1996.

31. In Kanaka Gruha Nirmana Sahakara Sangha’s case,  

two  questions  were  considered  by  this  Court.   The  first  

question was whether  there  was any inconsistency between  

the Land Acquisition (Mysore Extension and Amendment) Act,  

1961  and  the  1894  Act.   After  examining  the  relevant  

constitutional provisions and the two enactments, this Court  

answered  the  question  in  negative.   The  second  question  

considered  by  the  Court  was  whether  the  Government  had  

approved the housing scheme framed by the appellant.  The  

Court noted that Assistant Registrar of Cooperative Societies,  

Three  Men  Committee  and  the  State  Level  Committee  had  

recommended  the  acquisition  of  land  on  behalf  of  the  

appellant  and the  Government  had directed Special  Deputy  

Commissioner,  Bangalore  to  initiate  acquisition  proceedings  

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

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“Considering  the  fact  that  the  State  Government  directed  the  Assistant  Registrar  of  Cooperative  Societies of Bangalore to verify the requirement of  the members of the Society and also the fact that  the matter was placed before the Committee of three  members  for  scrutiny  and  thereafter  the  State  Government has conveyed its approval for initiating  the  proceedings  for  acquisition  of  the  land  in  question by letter dated 14-11-1985, it  cannot be  said that there is lapse in observing the procedure  prescribed under  Section 3(f)(vi).  Prior  approval  is  granted after due verification and scrutiny.”

32. In  our  view,  none  of  the  orders  and  judgments  

referred to  hereinabove can be relied upon for  holding  that  

even  though  the  appellant  had  not  framed  any  housing  

scheme, the acquisition in question should be deemed to have  

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

simply  because  in  the  representation  made  by  him  to  the  

Revenue Minister of the State, the Executive Director of the  

appellant  had  indicated  that  the  land  will  be  used  for  

providing sites to poor and people belonging to backward class  

and  on  receipt  of  the  recommendations  of  SLCC  the  State  

Government  had  directed  Special  Deputy  Commissioner  to  

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

too  by  ignoring  the  ratio  of  the  judgments  of  three  Judge  

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

Judge  Bench  in  Vyalikawal  House  Building  Cooperative  

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

Court  to  which  reference  has  been  made  hereinabove,  the  

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

or  participation  in the  award proceedings.   In  Muniyappa’s  

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

premise that a scheme had been framed and the same had  

been approved by the State Government and further that the  

petitioner had failed to show that  the approval  was vitiated  

due  to  intervention  of  the  extraneous  consideration.  In  

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

no separate order was made by the Government for grant of  

approval  whereas in Sumitramma’s case an order has been  

passed on 14.10.1985 conveying the Government’s  approval  

for the issuance of Notification dated 21.1.86 under Section 4  

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

treated the direction contained in letter dated 14.11.1985 of  

the Revenue Commissioner and Secretary to Government to  

Special  Deputy  Commissioner,  Bangalore  to  initiate  the  

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acquisition proceedings by issuing Notification under Section  

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

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

whether the decision taken by the Government to sanction the  

acquisition of land in the backdrop of an agreement executed  

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

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

agreed to ensure the acquisition of land within a specified time  

frame subject  to payment of  huge money and the  fact  that  

agreement  entered  into  between  the  society  and  the  

Government was in the nature of an agreement contemplated  

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

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

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

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

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

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

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

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

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

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case for  declaring that  the acquisition was not  for  a public  

purpose.

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

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

was  no  express  approval  by  the  State  Government  to  the  

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

granted  because  the  State  Government  had  contributed  

Rs.100  towards  the  acquisition  of  land.   Shri  Vishwanatha  

Shetty  relied  upon  the  judgments  of  this  Court  in  Smt.  

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

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

and agreement dated 8.7.1988 and argued that the decision of  

the  State  Government  to  execute  an  agreement  with  the  

appellant should be construed as its approval of the proposal  

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

the  learned  senior  counsel  lacks  merit.   At  the  cost  of  

repetition,  we  consider  it  appropriate  to  mention  that  the  

agreement  was  signed  by  the  Executive  Director  of  the  

appellant and the State Government in compliance of Section  

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

nominal  contribution  of  Rs.100  by  the  Special  Deputy  

Commissioner cannot be construed as the State Government’s  

implicit approval of the housing scheme which had never been  

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

challenged  the  acquisition  of  their  land  by  the  State  

Government on the ground that the provisions of the 1894 Act  

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

was  interested  in  setting  up  an  industry  over  the  acquired  

land.  The majority of the Constitution Bench held that the  

declaration made by the State  Government that  the land is  

required for a public purpose is conclusive and the same was  

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

the petitioners that there could be no acquisition for a public  

purpose unless the Government had made a contribution for  

the acquisition at public expense and that the contribution of  

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

small  quantum  of  contribution  by  the  State  Government  

cannot lead to an inference that the acquisition was made in  

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

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challenge  was  to  the  acquisition  of  73.3  hectares  dry  land  

situated  at  Rangwasa  village  of  Indore  district  for  

establishment  of  a  diamond  park  by  Madhya  Pradesh  

Audyogik Kendra Vikas Nigam Ltd.   It  was argued that  the  

Nigam  did  not  have  sufficient  amount  for  payment  of  

compensation.  While dealing with the argument, this Court  

observed:

“It  seems to  be  fairly  clear,  as  contended  by  the  learned counsel for the appellants, that the amount  paid by the Company was utilized towards payment  of  a  part  of  interim  compensation  amount  determined by the Land Acquisition Officer on 7-6- 1996 and in the absence of this amount, the Nigam  was  not  having  sufficient  cash  balance  to  make  such  payment.  We  may  even  go  to  the  extent  of  inferring  that  in  all  probability,  the  Nigam would  have advised or persuaded the Company to make  advance payment towards lease amount as per the  terms of the MOU on a rough-and-ready basis, so  that the said amount could be utilized by the Nigam  for  making  payment  on  account  of  interim  compensation. Therefore, it could have been within  the  contemplation  of  both  the  parties  that  the  amount paid by the Company will  go towards the  discharge  of  the  obligation of  the  Nigam to  make  payment towards interim compensation. Even then,  it does not in any way support the appellants' stand  that the compensation amount had not come out of  public  revenues.  Once  the  amount  paid  towards  advance  lease  premium,  maybe  on  a  rough-and- ready basis, is credited to the account of the Nigam,  obviously, it becomes the fund of the Nigam. Such  

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fund, when utilized for the purpose of payment of  compensation,  wholly  or  in  part,  satisfies  the  requirements of the second proviso to Section 6(1)  read with Explanation 2. The genesis of the fund is  not  the determinative factor,  but its  ownership  in  praesenti that matters.”

34. Neither of the aforesaid decisions has any bearing  

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

acquisition  of  land  was  for  a  public  purpose  within  the  

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

vitiated  due  to  manipulations,  malafides  and  extraneous  

considerations.  

35. The  following  are  the  three  ancillary  grounds  of  

challenge:

i. The  finding  recorded  by  the  Division  Bench  that  

respondent No. 3 had not been given opportunity of  

hearing under Section 5A is  ex facie incorrect and is  

liable  to be set aside because her  son Sandip Shah  

had  appeared  before  the  Special  Land  Acquisition  

Officer  along  with  Shri  S.V.  Ramamurthy,  Advocate  

and he was given opportunity of personal hearing.

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ii. The judgment in P. Ramaiah’s case is vitiated by an  

error apparent because the Division Bench relied upon  

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

taking note of the fact that no evidence was produced  

to  show  that  the  Estate  Agent  had  indulged  in  

malpractices for facilitating the acquisition of land on  

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

could not have been recorded without impleading the  

Estate  Agent  as  a  party  respondent  and  giving  him  

opportunity to controvert the allegation.  

iii. In view of the provisions contained in Sections 17, 18  

and 19 of the Mysore High Court, 1884 and Sections  

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

the  Division  Bench  did  not  have  the  jurisdiction  to  

decide the appeal by relying upon the judgment in 1st  

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

the learned Single Judge had quashed the acquisition  

proceedings.  Shri  Vishwanatha Shetty argued that  if  

the Division Bench was of the view that the order of  

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the  learned  Single  Judge  should  be  sustained  on  a  

new  ground  by  relying  upon  the  judgment  of  this  

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

the  matter  to  the  learned  Single  Judge  for  fresh  

disposal of the writ petition.  Shri Shetty relied upon  

the  judgment  of  the  larger  Bench  of  the  Karnataka  

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

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

approach adopted by the learned Presiding Officer of  

the Division Bench in taking up the cases, which are  

required  to  be  heard  by  the  Single  Bench  was  not  

approved by the larger Bench.

36. We shall first take up the last ground, which, in our  

considered  view,  deserves  outright  rejection  because  the  

Division Bench had decided the writ appeal preferred by the  

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

because learned counsel appearing for the parties had agreed  

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

the opening paragraph of the judgment:

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“When the appeal came up for hearing before  us, all the learned counsel submitted that by  virtue  of  the  subsequent  decision  of  the  Supreme court, that the order of the learned  Single Judge would no longer survive and that  consequently,  the  writ  petition  itself  would  have  to be heard on merits.   A request  was  conveyed  to  the  Court  that  instead  of  remanding  the  case  to  the  learned  Single  Judge at this late stage for a haring on merits,  and depending on the view taken the matter  once again coming up to the appeal court that  it was far from desirable that the appeal court  itself  should  hear  the  parties  on  merits  and  dispose of the writ petition.”

37. It is nobody’s case that the advocate who appeared  

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

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

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

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

that  the  Division  Bench  had  acted  in  violation  of  the  

provisions  of  the  Mysore  High  Court  Act,  1884  and  the  

Karnataka High Court Act, 1961.

38. The appellant’s challenge to the finding recorded by  

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

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

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have  carefully  gone  through  the  proceedings  of  the  Special  

Land Acquisition Officer and find that Shri Sandip Shah (son  

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

and  after  hearing  him  along  with  other  objectors,  the  

concerned officers submitted report to the State Government.  

However, this error in the impugned judgment of the Division  

Bench is not sufficient for nullifying the conclusion that the  

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

exercise undertaken by the State Government was vitiated due  

to  the  influence  of  the  extraneous  considerations.  The  

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

the ground that no evidence had been produced by the writ  

petitioner  to  show  that  the  Estate  Agent  had  indulged  in  

malpractices deserves to be rejected in view of the conclusion  

recorded by us in relation to the case of respondent No.3.

39. Shri Vishwanatha Shetty also criticized the decision  

of the State Government to entertain the representation made  

by  respondent  No.  3  for  withdrawal  of  the  notification  and  

argued that notification under Section 48 could not have been  

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

supported this  argument  by  relying  upon the  judgments  in  

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

and  State  Government  Houseless  Harijan  Employees'  

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

argument  of  the  learned  senior  counsel  appears  to  have  

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

same in detail because the appellant’s challenge to notification  

dated 3.9.1991, vide which the acquisition of land comprised  

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

learned Single Judge and the Division Bench of the High Court  

and  the  appellant  is  not  shown  to  have  challenged  the  

judgment  of  the  Division  Bench and  insofar  as  notification  

dated  25.6.1999  is  concerned,  the  State  Government  had  

withdrawn the same on 15.11.1999.

40. In the end, Shri Dave and Shri Shetty referred to  

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

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

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

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

already constructed their houses. They pointed out that 50%  

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

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

Power Transmission Corporation. Learned counsel submitted  

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

overruling so that those who have already constructed houses  

may  not  suffer  incalculable  harm.  In  support  of  this  

submission, the learned counsel relied upon the judgments in  

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

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

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

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

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

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

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

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

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

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41. We have given serious thought to the submission of  

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

fit  case  for  invoking  the  doctrine  of  prospective  overruling,  

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

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

examining  the  challenge  to  the  constitutionality  of  

Constitution  (Seventeenth  Amendment)  Act,  1964.  That  

doctrine has been applied in the cases relied upon by learned  

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

is  not  a  fit  case  for  invoking  the  doctrine  of  prospective  

overruling because that would result in conferring legitimacy  

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

the edifice  of  our Constitution.  The finding recorded by the  

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

that  money had played an important role  in facilitating the  

acquisition of land, which was substantially approved by this  

Court in three cases, is an illustration of how unscrupulous  

elements  in  the  society  use  money  and  other  extraneous  

factors  for  influencing  the  decision  making  process  by  the  

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

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Rejendra  Enterprises  with  whom the  appellant  had  entered  

into an agreement dated 21.2.1988 had played crucial role in  

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

leave any manner of doubt that the Estate Agent has charged  

huge money from the  appellant  for  getting  the  notifications  

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

sanction of layout plan by the BDA.  The respondents could  

not have produced any direct evidence that the Estate Agent  

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

not  too  difficult  for  any  person  of  reasonable  prudence  to  

presume that the appellant had parted with crores of rupees  

knowing fully well  that a substantial  portion thereof will  be  

used  by  the  Estate  Agent  for  manipulating  the  State  

apparatus.   Therefore,  we  do  not  find  any  justification  to  

invoke  the  doctrine  of  prospective  overruling  and  legitimize  

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

to be ex-facie illegal.

42. Before  concluding  we  consider  it  necessary  to  

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

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

case  and  Vyalikawal  House  Building  Cooperative  Society’s  

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

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

approval thereof can be presumed from the direction given by  

the State Government to the Special Deputy Commissioner to  

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

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

revoked the certificate granted by the High Court cannot be  

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

the High Court on the validity of the acquisition.

43. In the result, the appeals are dismissed. However,  

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

appellant may have built their houses on the sites allotted to  

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

respondents  for  purchase  of  their  land  at  the  prevailing  

market  price  and  hope  that  the  landowners  will,  

notwithstanding  the  judgments  of  the  High  Court  and  this  

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

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

clear that the appellant must return the vacant land to the  

respondents irrespective of  the fact that it may have carved  

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

be  done  within  a  period  of  three  months  from  today  and  

during that period the appellant shall not change the present  

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

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

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

bear their own costs.

…..…..…….………………….…J.   [G.S. Singhvi]

 …..…..……..…..………………..J.

   [Asok Kumar Ganguly]

New Delhi, February 02, 2012.

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