REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

       CIVIL APPEAL NO.7588 OF 2005

M/s. Royal Orchid Hotels Limited and another … Appellants

Versus

G. Jayarama Reddy and others … Respondents

With

CIVIL APPEAL NO.7589 OF 2005

Karnataka State Tourism Development Corporation … Appellant

Versus

G. Jayarama Reddy and others … Respondents

J U D G M E N T

G.S. Singhvi, J.

1. Whether land acquired by the State  Government  at  the instance  of  the  

Karnataka State Tourism Development Corporation (for short, ‘the Corporation’)

for  the  specified  purpose  i.e.  Golf-cum-Hotel  Resort  near  Bangalore  Airport,  

Bangalore could be transferred by the Corporation to a private individual and  

corporate entities is the question which arises for determination in these appeals  

filed against the judgment of the Karnataka High Court whereby the acquisition  

of land measuring 1 acre 3 guntas comprised  in Survey No.122 of Kodihalli  

village, Bangalore South Taluk was quashed.

The facts relating to the acquisition of land and details of the 3 cases decided  by the High Court in 1991:   2. On a requisition sent  by the Corporation,  the State Government  issued  

notification dated 29.12.1981 under Section 4(1) of the Land Acquisition Act,  

1894  (for  short,  ‘the  Act’)  for  the  acquisition  of  39  acres  27  guntas  land  

comprised in various survey numbers including Survey No.122 of Kodihalli and  

Challaghatta  villages,  Bangalore  South  Taluk.  After  considering  the  reports  

submitted by the Special Deputy Commissioner, Bangalore under Section 5A(2)  

and  Section  6(1A)  (added  by  the  Karnataka  Act  No.17  of  1961),  the  State  

Government issued declaration under Section 6 in respect of 37 acres 4 guntas  

land.  A combined reading of the two notifications makes it clear that the public  

purpose for which land was sought to be acquired was to establish Golf-cum-

Hotel Resort near Bangalore Airport, Bangalore by the Corporation. The Special  

Land Acquisition Officer  passed award dated 7.4.1986.  However, as will  be  

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seen hereinafter, instead of utilizing the acquired land for the purpose specified  

in the notifications or for any other public purpose, the Corporation transferred  

the same to private parties.  

3. One Dayananda Pai, a real estate developer, who is said to have entered  

into agreements with the landowners for purchase of land comprised in Survey  

Nos.160/1, 160/2, 160/3, 160/4, 163/1, 163/2, 164/1, 164/2, 165/1, 165/2, 165/3,  

165/4, 165/6, 166/1, 166/2, 166/3, 166/4, 153, 159, 167 for putting up a group  

housing  scheme  and  obtained  approval  from  the  Bangalore  Development  

Authority appears to be the person behind the move made by the Corporation for  

the acquisition of land for execution of tourism related projects including Golf-

cum-Hotel Resort.  This is the reason why his role prominently figured in the  

meeting  of  senior  officers  of  the  Bangalore  Development  Authority  and  the  

Corporation  held  on  13.1.1987  to  discuss  the  steps  to  be  taken  for  securing  

possession  of  the  acquired  land.   In  that  meeting,  Managing  Director  of  the  

Corporation gave out that the Corporation does not have necessary finances for  

deposit of cost of the acquisition and Dayananda Pai had agreed to provide funds  

subject  to  the furnishing of  bank guarantee  by the Deputy  Commissioner  on  

behalf of the Corporation and release of 12 acres 34 guntas in his favour for the  

purpose  of  implementing  the  group  housing  scheme.  In  furtherance  of  the  

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decision taken in that meeting, an agreement dated 8.5.1987 was executed by the  

Corporation in favour of Dayananda Pai conveying him 12 acres 34 guntas of the  

acquired land.  Likewise,  6 acres 8 guntas land was transferred to Bangalore  

International Centre and 5 acres including 2 acres 30 guntas land belonging to  

respondent No.1 and his brothers, G. Ramaiah Reddy and G. Nagaraja Reddy,  

was leased out to M/s. Universal Resorts Limited (predecessor of appellant No.1  

in Civil Appeal No.7588 of 2005).   

4. Mrs. Behroze Ramyar Batha and others, who owned different parcels of  

land which were  transferred  by the Corporation to  Dayananda Pai  filed  writ  

petitions  questioning  the  acquisition  proceedings.  The  learned  Single  Judge  

dismissed the writ petitions on the ground of delay.  The Division Bench of the  

High  Court  reversed  the  order  of  the  learned  Single  Judge  and  quashed  the  

acquisition proceedings qua land of the appellants in those cases.  The Division  

Bench referred to the minutes of the meeting held on 13.1.1987, resolution dated  

10.9.1987 passed by the Corporation and observed:

“………..We have made our comments then and there. Nevertheless  we cannot refrain our feelings in commenting upon the same once  over again.  We cannot  think of  anything more  despicable  than the  candid admission by the Tourism Development Corporation that they  did  not  have  the  necessary  funds  required  to  meet  the  cost  of  acquisition.  If  really  there  was  no  amount  available,  how  the  acquisition was embarked upon, we are left to the realm of guess. Not  only that, this particular resolution makes it appear that respondent-5  

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Dayanand Pai was the only saviour of the Karnataka State Tourism  Development Corporation from the difficult situation. For our part we  do not know what exactly was the difficulty then, Land acquisition  proceedings were complete in all material respects. All that required  was possession to be taken. Merely because there are Writ Petitions or  some  cases  pending,  does  it  mean  that  the  Tourism  Development  Corporation  must  plead  helplessness?  Does  not  it  have  the  wherewithal  to  contest  these  litigations?  Is  it  not  a  part  of  the  Government although it be a Corporation? What is it that it wants to  do? In consideration of the withdrawal of the cases which were thorns  in the flesh of the Tourist Development Corporation, he is given of a  silver salver an extent of 12 acres 31 guntas of land. To say the least,  it appears right from the beginning respondent-5 Dayananda Pai had  an  eye  on  these  lands.  That  would  be  evident  because  though  he  entered into an agreement on 30-9-1981 with the land-owners it never  occurred to him to put forth any objection during Section 5A Enquiry,  nor  again  at  any  point  of  time  did  he  take  any  interest.  He  was  patiently waiting for somebody to take chestnut out of the fire so that  he  could  have  the  fruits  thereof.  That  is  also  evident  from  the  Resolution dated 13-1-1987 wherein it is stated as under:

"Sri Dayananda Pai was very particular that the block of land  comprising  of  12  acres  34  guntas  comprising  the  following  Sy.Nos. 160/1, 160/2, 160/3, 160/4, 163/1, 163/2, 164/1, 164/2,  165/1, 165/2, 165/3, 165/4, 165/6, 166/1, 166/2, 166/3, 166/4,  153, 159, 167 should be released to him as he has got a firm  commitment for putting up a Group Housing Scheme on this  land."

Yes. He might have had a commitment. What then is the purpose of  eminent domain? Eminent domain, as we consider and as it is settled  law as was said by Nichols, is an attribute of sovereignty. Where the  Deputy Commissioner is convinced that the lands are to be acquired  for  a public purpose notwithstanding the fact  that  the rights  of the  private parties might be interfered with, the acquisition will have to be  gone through. In other words, the private purpose must be subservient  to public purpose. Forget all that. In order to enable Dayananda Pai to  fulfil his commitment if valuable portion of the lands acquired viz., 12  acres 31 guntas is transferred in his favour we cannot find a more  vivid  case  of  fraud  on  power  than  this.  We  hold  so  because  the  

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apparent object as evidenced by Section 4(1) Notification is a public  purpose.  If  really as was sought to be made out by the Resolution  dated 13-1-1987 the Tourism Development Corporation was anxious  to have these lands and the delay was telling upon it, certainly selling  away the lands is not the solution as we could see. Therefore, there  has been a clear diversification of purpose. Not only an extent of 12  acres  31  guntas  have  been  sold  away  in  favour  of  respondent-5  Dayanand Pai as has been noted in the narration of facts, 8 acres had  come to be leased for Bangalore International Centre and another 5  acres had come to be leased for the amusement park. Why all these if  the Tourism Development Corporation does not have funds to meet  the cost of acquisition? Therefore it appears to us this is nothing more  than a conspiracy to deprive the owners of the lands by use of the  power of the eminent domain which is to be used for an avowedly  public purpose and for strong compelling reasons and not whimsically  or to satisfy the private needs of an individual.”

        (emphasis supplied)

The Division Bench then referred to some judicial precedents including  

the judgment in Industrial Development & Investment Company Private Limited  

v. State of Maharashtra AIR 1989 Bombay 156 and observed:

“………..But, in the case on hand what is most striking is negotiations  took  place  even  before  taking  possession  of  lands.  On  8-5-1987  agreement was entered into and in the wake of taking possession on  12-11-1987, transfers are made on 23-3-1988 and 24-3-1988. This is  where  we  consider  that  with  the  motive  of  securing  lands  to  respondent-5  Dayanand Pai,  acquisition  had come  to  be  embarked  upon. This  was the reason why we conclude that  this  is  a  case of  fraudulent  exercise  of  power.  It  is  no  consolation  to  say  that  the  owners of lands have accepted the compensation because in Industrial  Development & Investment Co. Pvt. Ltd. v. State of Maharashtra it is  stated thus:

"...The  State  itself  which  has  acted  illegally  and  without  jurisdiction cannot plead that it should be allowed to retain the  sum awarded  in  its  favour  by  the  Land Acquisition  Officer.  

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Respondent 5 who is described as the owner of the land has  conveyed to us that it would submit to the order of the Court.  We  also  record  the  submission  of  Mr.  Dhanuka,  learned  Counsel for the appellants, that in the event the other awardees  who were awarded paltry sums by the award under Section 11  Land  Acquisition  Act,  do  not  refund  sums  withdrawn,  the  appellants are prepared to refund and/or deposit the said sums.  Therefore,  we  conclude  that  on  the  ground  of  delay  the  appellants  could  not  be  deprived of  the  relief  to  which they  were otherwise entitled."

The  ratio  of  this  case  squarely  applies  here.  Nor  again,  in  our  considered opinion, the previous Decisions upholding the validity of  the acquisitions would be of any value because as we have observed  earlier the causes of action arose only on 23-3-1988 and 24-3-1988  when the transfers came to be effected, or on subsequent days when- leases had come to be effected. Therefore, where in ignorance of these  transactions if compensation had come to be accepted we should not  put that against such of those land owners. But that question does not  arise in this case. Therefore, we shall relegate the same to the other  cases.

Lastly, what remains to be seen is what is the effect of fraud. Does it  render the entire acquisition bad or is it to be held to be bad only in so  far as these appellants are concerned? We are of the view that if fraud  unravels  everything,  it  cannot be valid in part  and invalid in other  parts. But, we need not go to that extent because there are other Writ  Petitions including a Writ Appeal in which this question may arise  direct.  We  do  not  want  to  prejudice  those  petitioners/appellants.  Therefore, this question we relegate to those cases.”

(emphasis supplied)

5. Annaiah  and others,  who  owned land comprised  in  Survey  Nos.146/1,  

156/1,  147/1,  147/2  and  156,  filed  Writ  Petition  Nos.9032  to  9041  of  1988  

questioning  the  acquisition  of  their  land.   The  same  were  dismissed  by  the  

learned Single Judge on the ground of delay.  Thereafter, they filed Writ Petition  

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Nos.19812 to 19816 of 1990 for issue of a mandamus to the State Government  

and  the  Corporation  to  return  the  land  by  asserting  that  the  same  had  been  

illegally  transferred  to  private  persons.   They  pleaded  that  the  acquisition  

proceedings were vitiated due to mala fides and misuse of power for oblique and  

collateral purpose.  Those petitions were allowed by the Division Bench of the  

High  Court  vide  order  dated  18.9.1991,  the  relevant  portions  of  which  are  

extracted below:  

“In  our  considered  view,  it  is  one  thing  to  say  that  acquisition  is  actuated by legal malafides, but it is totally different thing to say that  acquisition for all intents and purposes is embarked on an apparent  public purpose and ultimately that  purpose is not  served.   In other  words, what we mean is their where the lands have been acquired,  undoubtedly for public purpose for the benefit of the Karnataka State  Tourism Development Corporation and after acquisition, even before  taking possession, if agreements were entered into on the ground that  the Karnataka State Tourism Development Corporation did not have  enough money to meet the cost of acquisition and that it would be  better to get rid of the litigation by selling away the same or leasing  away the properties and thereby give it to private individuals.  We are  of the view that it  is a clear case of diversification of purpose.  It  requires to be carefully noted that it is not for any public purpose.  But  it is a diversification to a private purpose.  Therefore, to the extent the  acquisition proceeded with even up to the stage of declaration under  Section  6  or  to  certain  point  beyond  that,  it  could  not  be  validly  challenged on the ground that it is not for public purpose.  But where  under the cover of public purpose, the owners are dispossessed and  there is diversifications, we hold that it is fraudulent exercise of the  power of eminent domain.  This is exactly the view we have taken in  W.A. Nos.1094 to 1097 of 1987.  This aspect of the matter was not  before our learned brother Justice Bopanna.  All that was stated was  the acquisition, namely, Notification under Section 4(1) culminating  in Declaration under Section 6 of the Act was not actuated by legal  malafides.   That  is  far  different  from  diversification  for  public  

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purpose.   It  might  be  that  agreements  dated  23.03.1988  and  24.03.1988 might have been buttressed in respect of legal malafides.  On that score we cannot conclude that the issue as dealt with by us in  W.A. Nos. 1094 to 1097 of 1987 was ever before Justice Bopanna.  Therefore,  we  are  unable  to  agree  with  Mr.  Datar  that  the  earlier  ruling of Justice Bopanna in W.P. Nos.9032 to 9041 of 1988 dated 8 th  July 1988 would constitute res judicata so as to deprive the Petitioners  of the benefit of the Judgment.

The cause of action challenging the validity of acquisition arose not  after issue of final notification under section 6 but after the alienation  of lands in favour of third parties and thus the Corporation in whose  favour  the  lands  have  been  acquired  have  been  deviated.   In  my  opinion the decision rendered in Mrs. Behroze Ramyar Batha is fully  applicable  to  the  facts  of  this  case.   It  is  true  that  acquisition  is  challenged after quite a long time to final notification.  But challenge  is not made to the legality of the acquisition.   The challenge is to  deviation of the purpose for which the land was acquired.  That then is  the eminent domain was the question posed by the Division Bench  and answered in the words of Nichols as an attribute of sovereignty.  Acquisition in this case is actuated by malafides.  Though lands were  acquired  for  public  purpose  as  declared  in  6(1)  notification  and  possession was taken for  the said public purpose,  agreements were  entered into even before possession was taken to part with substantial  portion of  the land.   Where object  of  providing lands  to  a  private  individuals,  if  acquisition  proceedings  are  reported  to  or  power  of  eminent domain comes to be exercised, it would nothing more than  fraud  on  power.   There  it  is  a  case  of  fraud  it  would  unreveal  everything.  It cannot be valid in part and invalid in other parts (See  Lazarus Estates Ltd. VS. Gurdial Singh – AIR 1980 SC 319: Pratap  Singh v. State of Punjab – AIR 1964 SC 73: Narayana Reddy v. State  of  Karnataka – ILR 1991 KAR. 2248.)   Therefore the question of  limitation does not arise in such cases.  Where the actions are found to  be mala fide, courts have not failed to strive down those actions as  laid down by the Supreme Court in Pratap Singh v. State of Punjab’s  case cited supra.”

        (emphasis supplied)

The operative portion of the order passed in that case is extracted below:

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“In  the  result,  we allow these  writ  petitions  quash the  notification  issued under Section 4(1) and the declaration under Section 6 of the  Act and all subsequent proceedings.”

6. Smt.  H.N.  Lakshmamma  and  others  also  questioned  the  acquisition  of  

their land comprised in Survey Nos.165/3 and 166/4 of Kodihalli village.  The  

writ petition filed by them was dismissed.  On appeal, the Division Bench of the  

High Court framed the following question:

“Whether  in  view  of  the  judgment  cited  above,  namely,  W.A.  Nos.1094 & 1095/87 and W.P. 19812 to 19816/90 wherein we have  held that the land acquisition proceedings concerning the very same  notification and declaration are liable to be set aside on the ground of  fraudulent  exercise  of  power,  could  be  extended  in  favour  of  the  appellants?”  

The Division Bench relied upon the passages from Administrative Law by  

W.H.R.  Wade and De Smith  and Ker  on Fraud and rejected  the plea of  the  

respondents  (appellants  herein)  that  by  having  accepted  the  amount  of  

compensation,  the  writ  petitioners  will  be  deemed to have acquiesced  in  the  

acquisition proceedings.  The Division Bench then referred to the judgment of  

the  Bombay  High  Court  in  Industrial  Development  &  Investment  Company  

Private Limited v. State of Maharashtra (supra) and the order passed in Writ  

Petition Nos. 19812 – 19816 of 1990 and held that the appellants are entitled to  

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return of land subject to the condition of deposit of the amount of compensation  

together with interest at the rate of 12% per annum.

Facts  relating  to  transfer  of  land  owned  by  respondent  No.1  and  his  brothers and details of the cases filed by them:

7. After  receiving  compensation  in  respect  of  2  acres  30  guntas  land  

comprised  in  Survey  No.122  of  Kodihalli  village,  respondent  No.1  and  his  

brothers filed applications under Section 18 of the Act for making reference to  

the  Court  for  determination  of  the  compensation.   During  the  pendency  of  

reference, the Corporation invited bids for allotment of 5 acres land including 2  

acres 30 guntas belonging to respondent No.1 and his brothers for putting up a  

tourist resort.  M/s. Universal Resorts Limited gave the highest bid, which was  

accepted by the Corporation and lease agreement dated 21.4.1989 was executed  

in  favour  of  the  bidder.  Thereafter,  the  Corporation  approached  the  State  

Government  for  grant  of  permission  under  Section  20  of  the  Urban  Land  

(Ceiling and Regulation) Act, 1976 for leasing out a portion of the acquired land  

to M/s. Universal Resorts Limited.  The State Government granted the required  

permission vide order dated 17.6.1991.  After 6 months, registered lease deed  

dated 9.1.1992 was executed by the Corporation in favour of  M/s.  Universal  

Resorts Limited through its Managing Director, Sri C.K. Baljee purporting to  

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lease out 5 acres land for a period of 30 years on an annual rent of Rs.1,11,111/-  

per acre for the first 10 years.

8. In the meanwhile, Shri C.K. Baljee, Managing Director of M/s. Universal  

Resorts Limited filed suit for injunction against respondent No.1 and his brothers  

by alleging that they were trying to forcibly encroach upon the acquired land.  

He also filed an application for temporary injunction.  By an ex parte order dated  

29.10.1991,  the trial  Court  restrained respondent  No.1 and his  brothers  from  

interfering  with the  plaintiff’s  peaceful  possession and enjoyment  of  the suit  

schedule property.   After about two years, the brothers of respondent No.1 filed  

Writ Petition Nos.2379 and 2380 of 1993 for quashing the acquisition of land  

measuring 0.29 guntas and 0.38 guntas respectively, which came to their share in  

the family partition effected in 1968.  They relied upon the judgments of the  

Division  Bench  in  Mrs.  Behroze  Ramyar  Batha  and  others  v.  Special  Land  

Acquisition  Officer  (supra)  and  Writ  Appeal  No.2605  of  1991  –  Smt.  H.N.  

Lakshmamma and others v. State of Karnataka and others decided on 3.10.1991  

and pleaded that once the acquisition has been quashed at the instance of other  

landowners,  the  acquisition  of  their  land  is  also  liable  to  be  annulled.   The  

appellants, who were respondents in those cases, pleaded that the writ petitions  

should be dismissed because 5 acres land had been leased out by adopting a  

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transparent method and there was no justification to nullify the acquisition after  

long lapse of time.  The learned Single Judge did notice the judgments of the  

Division  Bench  on  which  reliance  was  placed  by  the  writ  petitioners  but  

distinguished the same by making the following observations:

“The dictum therein cannot be applied to the instant case.  The land of  the  petitioners  were  acquired  for  the  public  purpose  of  Golf-cum- Hotel Resort near the Airport.  The statement of objection filed by  respondents 4 and 5 clearly shows that the land was transferred to  them  for  the  need  of  tourist  industry  namely  construction  of  Hotel/Tourist  Complex.   The  order  passed  by  the  Government  exempting the 3rd Respondent from the purview of the Urban Land  (Ceiling  & Regulation)  Act  1976 also  shows  the  intended  transfer  being  made  by  the  3rd respondent  is  for  the  establishing  of  Hotel/Tourist Complex.  This is also borne out from the lease deeds  executed by respondents 4 and 5.  These materials are sufficient to  hold that the land is being put by the 3rd respondent for the purpose for  which it was acquired. These materials are sufficient for this court for  the present and indeed from conducting any further rowing enquiry on  the basis of the allegation made by the petitioners in this writ petition.  Without anything more it can be held that the dictum of the decision  of  this  Court  referred  to  supra  is  inapplicable  to  the  facts  of  the  present case.  Hence, the petitioners cannot take shelter under the said  decision viz. ILR 1991 Karnataka 3556 and successfully challenge the  land acquisition proceedings.”

The learned Single Judge finally dismissed the writ petitions by observing  

that even though the writ petitioners were aware of the order of injunction passed  

by the Civil Court in the suit filed by the Managing Director, M/s. Universal  

Resorts Limited – C.K. Baljee, they did not question the acquisition for a period  

of almost two years and approached the Court after long lapse of time counted  

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from the date of acquisition.  Writ Appeal Nos.4536 and 4541 of 1995 filed by  

G.  Ramaiah  Reddy  and G.  Nagaraja  Reddy  were  dismissed  by  the  Division  

Bench of the High Court on 1.1.1996 by a one word order and the special leave  

petitions filed by them were summarily dismissed by this Court vide order dated  

26.2.1996.   

9. In a separate petition filed by him, which came to be registered as Writ  

Petition No.34891 of 1995, respondent No.1 prayed for quashing notifications  

dated 29.12.1981 and 16.4.1983 insofar as the same related to 1 acre 3 guntas  

land  comprised  in  Survey  No.122/1  of  Kodihalli  village  and  for  issue  of  a  

mandamus  to  respondent  Nos.3  to  5  (the  appellants  herein)  to  redeliver  

possession of the said land.  He pleaded that in the garb of acquiring land for a  

public purpose, the official respondents have misused the provisions of the Act  

with the sole object of favouring private persons.  In the counter affidavits filed  

on behalf  of  the appellants,  it  was  pleaded that  the  writ  petition was  highly  

belated and that by having accepted the compensation determined by the Special  

Land Acquisition Officer, respondent No.1 will be deemed to have waived his  

right to challenge the acquisition proceedings.

10. The writ petition filed by respondent No.1 was decided in two rounds.  In  

the first round, the learned Single Judge rejected the objection of delay raised by  

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the appellants.  He referred to the judgments of the High Court in Mrs. Behroze  

Ramyar Batha and others v. Special Land Acquisition Officer (supra) and Writ  

Appeal  No.2605  of  1991  –  Smt.  H.N.  Lakshmamma  and  others  v.  State  of  

Karnataka  and  others  (supra)  declined  to  follow  the  course  adopted  by  the  

coordinate Bench, which had dismissed the writ petitions filed by the brothers of  

respondent No.1 and observed:

“…………………….The cause of action challenging the validity of  acquisition arose not after issue of final notification under section 6  but after the alienation of lands in favour of third parties and thus the  Corporation in whose favour the lands have been acquired have been  deviated.   In  my  opinion  the  decision  rendered  in  Mrs.  Behroze  Ramyar Batha is fully applicable to the facts of this case.  It is true  that  acquisition  is  challenged  after  quite  a  long  time  to  final  notification.   But  challenge  is  not  made  to  the  legality  of  the  acquisition.  The challenge is to deviation of the purpose for which the  land was acquired.  That then is the eminent domain was the question  posed by the Division Bench and answered in the words of Nichols as  an attribute of sovereignty.  Acquisition in this case is actuated by  malafides.   Though  lands  were  acquired  for  public  purpose  as  declared in 6(1) notification and possession was taken for  the said  public purpose, agreements were entered into even before possession  was taken to part with substantial portion of the land.  Where object of  providing lands to a private individuals, if acquisition proceedings are  reported to or  power  of  eminent  domain  comes to be exercised,  it  would nothing more than fraud on power.  There it is a case of fraud it  would unreveal everything.  It cannot be valid in part and invalid in  other parts (See Lazarus Estates Ltd. v. Gurdial Singh – AIR 1980 SC  319: Pratap Singh v. State of Punjab – AIR 1964 SC 73: Narayana  Reddy v. State of Karnataka – ILR 1991 Kar. 2248).  Therefore the  question of limitation does not arise in such cases.  Where the actions  are found to be mala fide, courts have not failed to strive down those  actions as laid down by the Supreme Court in Pratap Singh v. State of  Punjab’s case cited supra.”

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11. The writ  appeals  filed by the  appellants  were allowed by the  Division  

Bench on the ground that the learned Single Judge was not justified in ignoring  

the order passed by the coordinate Bench.  The Division Bench observed that  

merits of the case could have been considered only if he was convinced that the  

writ  petitioner  had  given  cogent  explanation  for  the  delay  and,  accordingly,  

remitted the matter for fresh disposal of the writ petition.

12. In the second round, the learned Single Judge dismissed the writ petition  

by observing that even though fraud vitiates all actions, the Court is not bound to  

give relief to the petitioner ignoring that he had approached the Court after long  

lapse  of  time.   Writ  Appeal  No.7772 of  1999 filed by respondent  No.1 was  

allowed  by  the  Division Bench  of  the  High  Court.   While  dealing  with  the  

question  whether  the  learned  Single  Judge  was  justified  in  non  suiting  

respondent  No.1  on the  ground of  delay,  the Division Bench referred to  the  

explanation given by him, took cognizance of the fact that even after lapse of  

more than a decade and half land had not been put to any use and observed:

“……………..It is the definite case of the appellant that he came to  know of the fraud committed by the 3rd respondent in diverting the  acquired land clandestinely  in  favour  of  Respondents  4  and 5 and  certain others,  that  too,  for  the purpose other  than the purpose for  which the land was acquired, only in the year 1993. It is his further  case that even then, he did not approach this Court for legal remedies  immediately after he came to know of the fraud committed by the 3rd  

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respondent and also the judgment of this Court in the case of Batha  (supra), because, under a wrong legal advice, he filed I.A.I. in L.A.C.  No. 37 of 1988. In other words, even after the appellant came to know  of the fraud committed by the 3rd respondent, under a wrong advice,  he was prosecuting his case before a wrong forum. The question for  consideration is whether that circumstance can be taken into account  for condoning the delay. A three Judge Bench of the Supreme Court  in the case of Badlu and another. v. Shiv Charan and others., (1980) 4  SCC 401 where a party under a wrong advice given to them by their  lawyer was pursuing an appeal bonafide and in good faith in wrong  Court,  held  that  the  time  taken  for  such  prosecution  should  be  condoned  and  took  exception  to  the  order  of  the  High  Court  in  dismissing  the  second  appeal.  Further,  the  Supreme  Court  in  M/s  Concord of India Insurance Company Limited v. Smt. Nirmala Devi  and Others., [1979] 11 8 ITR 507 (SC) has held that the delay caused  on  account  of  the  mistake  of  counsel  can  be  sufficient  cause  to  condone the delay and the relief should not be refused on the ground  that the manager of company is not an illiterate or so ignorant person  who could not calculate period of limitation.

It  is  the  further  case  of  the  appellant  that  only  in  the  month  of  September, 1995 he was advised by another counsel that the appellant  was  wrongly  prosecuting  his  case  before  the  Civil  Court  by  filing  I.A.I.  in  L.A.C.  No.  37  of  1988  and  that  the  civil  court  has  no  jurisdiction to quash the notification issued under Section 4(1) and  declaration under Section 6(1) of the Act and for that relief, he should  necessarily file writ petition in this Court. The appellant on receiving  such advice from the counsel, without any further loss of time, filed  the present Writ Petition No. 34891 of 1995 in this Court on 18-9- 1995. It further needs to be noticed that the pleading of the appellant  would clearly demonstrate that but for the fraud committed by the 3rd  respondent in diverting the acquired land in favour of respondents 4  and 5 and others clandestinely for the purposes other than the purpose  for  which  it  was  acquired,  perhaps,  the  appellant  would  not  have  challenged the land acquisition proceedings at  all.  It  is  his definite  case  that  he  was  approaching  this  Court  under  Article  226  for  quashing the impugned notifications only because the acquired land  was sought to be diverted by the 3rd respondent-beneficiary in favour  of third parties, that too, for the purposes other than the one for which  it was acquired and the acquisition of the entire extent of land under  

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the same notification in its entirety is already quashed by this Court as  fraud  on  power  and  tainted  by  malafide.  Therefore,  the  Court  has  necessarily to consider the question of delay and laches in the premise  of the specific case of the appellant and it will be totally unfair and  unjust to take into account only the dates of Section 4(1) notification  and Section 6(1) declaration. It is also necessary to take into account  the  fact  that  well  before  the  appellant  approached  this  Court,  the  Division Bench of this Court in Writ Appeal No. 2605 of 1991 and  Writ Petition Nos. 19812 to 19816 of 1990 preferred by certain other  owners of the acquired land vide its orders dated 18-9-1991 and 3-10- 1991 had already quashed Section 4(1) Notification and Section 6(1)  declaration in their entirety and directed the State Government and the  LAO to handover the acquired land to the owners concerned on red  positing of the compensation money received by the owners with 12%  interest p.a. In that view of the matter, it is trite, the acquisition of the  schedule land belonging to the appellant also stood quashed by virtue  of the above judgments of the Division Bench. Strictly speaking, the  State  Government  and the LAO even in the absence  of  a  separate  challenge  by  the  appellant  to  the  land  acquisition  proceedings,  in  terms of the orders made in the above writ appeal and writ petitions,  ought  to  have  handed  over  the  schedule  land  to  the  appellant  by  collecting  the  amount  of  money  received by  him as  compensation  with  interest  at  12%  p.a.  Be  that  as  it  may,  the  appellant  as  an  abundant  caution  separately  filed  writ  petition  for  quashing  of  the  notifications  issued  under  Sections  4(1)  and  6(1)  of  the  Act  with  regard  to  the  schedule  land.  The  relief  cannot  be  refused  to  the  appellant,  because,  the  appellant  herein  and the  appellants  in  Writ  Appeal Nos. 1094-1097 of 1987 and W.A. No. 2065 of 1991 and the  petitioners  in  Writ  petition  Nos.  19812  to  19816  of  1990  are  all  owners of the acquired land under the same notifications and all of  them belong to a 'well-defined class' for the purpose of Article 14 of  the  Constitution.  There  is  absolutely  no  warrant  or  justification  to  extend different treatment to the appellant herein simply, because, he  did not join the other owners at an earlier point of time. It is not that  all the owners of the acquired land except the appellant instituted the  writ petitions jointly and the appellant alone sat on fence awaiting the  decision in the writ  petitions filed by the other owners.  Some writ  petitions were filed in the year 1987 and other writ petitions in the  year 1990 as noted above. Since the appellant came to know of the  fraud committed by the 3rd respondent only in the year 1993 after this  

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Court delivered the judgment in Batha's case (supra) and since he was  prosecuting his case before a wrong forum under a wrong legal advice  and therefore, the time so consumed has to be condoned in view of the  judgment of the Supreme Court already referred to above, we are of  the considered opinion that the learned single Judge is not justified in  dismissing the writ petition on the ground of delay and laches.

It needs to be noticed further that admittedly, no developments have  taken place in the schedule land despite considerable passage of time.  Further more, admittedly, no rights of third parties are created in the  schedule  land.  The  schedule  land  being  a  meagre  extent  of  land  compared to the total extent of land acquired for the public purpose,  cannot be put to use for which it  was originally acquired. Looking  from any  angle,  we do not  find  any  circumstance  on the  basis  of  which we would be justified in refusing the relief on the ground of  delay and laches even assuming that there was some delay on the part  of the appellant before approaching this Court by way of writ petition  in the year 1995.”

The Division Bench then referred to orders dated 18.9.1991 and 3.10.1991  

passed in Writ Petition Nos.19812 to 19816 of 1990 – Annaiah and others v.  

State of Karnataka and others and Writ Appeal No.2605 of 1991 – Smt. H.N.  

Lakshmamma and others v. State of Karnataka and others (supra) respectively  

and held:  

“………………………..Since the appellant herein and the appellants  and writ petitioners in W.A.No. 2605 of 1991 and W.P. Nos. 19812 to  19816 of 1990 are the owners of the acquired land under the same  notification and similarly circumstanced in every material aspect, they  should be regarded as the persons belonging to a 'well-defined class'  for the purpose of Article 14 of the Constitution. In other words, the  appellant herein is also entitled to the same relief which this Court  granted in Writ Appeal No. 2605 of 1991 and W.P. Nos. 19812 to  19816  of  1990  to  the  owners  therein.  Apart  from that,  as  already  

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pointed out, the schedule land is a very meagre land compared to the  total  extent  of  land  acquired  and  except  the  schedule  land  the  acquisition  of  the  remaining  land  has  been  set  at  naught  and  the  possession  of  the  land  has  been  handed  over  to  the  owners.  The  schedule  land  being  a  meagre  in  extent,  cannot  be  used  for  the  purpose for which it was acquired. That is precisely the reason why  the schedule land is kept in the same position as it was on the date of  Section 4(1) notification without any improvement or development.”   

The arguments:

13. Shri  Basava  Prabhu  S.  Patil  and  Shri  S.S.  Naganand,  learned  senior  

counsel  appearing  for  the  appellants  criticized  the  impugned  judgment  and  

argued that the Division Bench of the High Court committed serious error by  

entertaining and allowing the writ appeal filed by respondent No.1 despite the  

fact that the writ petitions, the writ appeals and the special leave petitions filed  

by his brothers had been dismissed by the High Court and this Court.  Learned  

counsel submitted that even though judgments and order passed by the Division  

Bench  in  other  cases  had become final,  relief  could  not  have  been  given to  

respondent No.1 by overlooking the unexplained delay of 12 years.  They further  

submitted that the cause of action for challenging the transfer of land in favour of  

M/s.  Universal  Resorts  Limited  accrued  to  respondent  No.1  in  1992  when  

registered lease deed was executed by the Corporation and the Division Bench of  

the High Court was not at all justified in entertaining the prayer of respondent  

No.1  after  lapse  of  more  than  three  years.   Shri  Naganand  relied  upon  the  

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judgment of this Court in Om Parkash v. Union of India (2010) 4 SCC 17 and  

argued that  quashing of  notifications  by the High Court  in  three  other  cases  

would  enure  to  the  benefit  of  only  those  who  approached  the  Court  within  

reasonable time and respondent No.1, who had kept quiet for 12 years cannot  

take  advantage  of  the  same.   Shri  Naganand  lamented  that  even  though  his  

clients  had  given  highest  bid  in  May,  1987 and lease  deed was  executed  in  

January, 1992, they have not been able to utilize the land on account of pendency  

of litigation for last more than 16 years and have suffered huge financial loss.   

14. Shri  Mahendra Anand, learned senior  counsel  appearing for  respondent  

No.1 supported the impugned judgment and argued that the Division Bench of  

the  High  Court  did  not  commit  any  error  by  directing  return  of  land  to  

respondent  No.1 because  acquisition  thereof  was  vitiated  by fraud.   Learned  

senior counsel emphasised that in view of the unequivocal finding recorded in  

Mrs.  Behroze  Ramyar  Batha  and others  v.  Special  Land Acquisition  Officer  

(supra) and other cases that land acquired for the specified public purpose, i.e.  

Golf-cum-Hotel Resort could not have been transferred to private persons and  

that there was conspiracy to deprive the owners of their land by use of the power  

of  eminent  domain,  the  Division  Bench  rightly  annulled  the  action  of  the  

Corporation.   

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15. Before  dealing  with  the  arguments  of  the  learned  counsel,  we  may  

mention that the Committee of the Karnataka Legislature on Public Undertakings  

had in its Fifty-Second Report severely criticized the exercise undertaken by the  

Corporation in the matter  of acquisition of 39 acres 27 guntas land.   This is  

evident from paragraph 2.24 of the Report, which is extracted below:

“2.24.  After  full  examination,  the Committee  makes  the  following  observations and recommendations.:

(i) Most  of  the  projects  envisaged  to  be  taken  up  in  1981  and  subsequently  by  the  Company  were  farfetched  and  grandiose  ones  lacking in the basic sense of realism as regards details and specifies  assured modes of financing, benefits and income to be derived and  viability. By no stretch of imagination, could they be deemed to meet  the main objectives of the Company to promote and maximise tourism  by offering catering, lodging, recreational, picnic and other facilities  to  as  broad  a  spectrum of  tourists  as  possible.  In  fact,  they  were  designed mainly to cater to the requirements of a small  number of  elitist and affluent tourists and could never have boosted tourism in  the State.  For these grave dereliction of duties, the Committee holds  the then Managing Directors and the then Government nominees on  the Board of Directors, as responsible.

(ii) The  proper  and  sound  objections  raised  by  Government  in  August, 1984 went unheeded by successive Boards of Directors of the  Company who pursued with reckless abandon their fanciful schemes  and led the Company on a wild goose chase. As a result, ultimately,  the Company has been left  virtually holding the sack with none of  these schemes materialising and the Company having been put to an  infructuous  expenditure  of  Rs.18.97  lakhs  towards  interest  on  the  bank  borrowings  to  finance  land  acquisition,  not  to  speak  of  the  wasted precious time and effort of the whole Management and organi- sation  of  the  Company  for  nearly  10  years.  The  then  Managing  

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Director  of  the  Company,  Sri  K.  Sreenivasan  and  the  Boards  of  Directors  of  the  Company  at  the  relevant  periods  have  to  bear  responsibility in this regard.

(iii) In  the  opinion  of  the  Committee,  the  Company  had  an  opportunity  to  reconsider  and  give  up  these  unnecessary  schemes  when it encountered difficulties in acquiring the required land of 39  acres  in  1986-87 as  a  result  of  the land owners/power  of  attorney  holders  moving the Courts  for  stay  of  the acquisition proceedings.  Instead, the Company opted to pursue the acquisition of land even at  the cost of surrendering 14 acres and 8 guntas of land (out of 23 acres  36 guntas acquired) to Sri Dayananda Pai, a power of attorney holder,  for  a  group housing scheme for  employees of public/private sector  undertakings, which was a purpose/scheme not contemplated by the  Company and in no way connected with the Company's objectives.  The  so-called  compromise  Agreement  of  March  1987  with  Sri  Dayananda Pai had the effect of only compromising the Company's  interests in that it contained no provisions regarding commitment and  penalties on Sri Dayananda Pai to assist the Company to acquire the  entire lands of 39 acres 27 guntas while he was presented with 14  acres 8 guntas of land on a platter as it were for executing the group  housing scheme for his purpose and pecuniary benefits.

Whether  Sri  Dayananda  Pai  has  really  implemented  the  Group  Housing  Scheme  in  Challaghatta  for  the  employees  of  Public  and  Private Undertakings is not clear.  The Committee wants Government  to find out the true position in this regard and intimate the Committee.

In the end, with all this compromise, the Company could acquire and  take possession of only 23 acres and 36 guntas (as against 39 acres  and 27 guntas envisaged) of which 14 acres and 8 guntas were parted  to Sri Dayananda Pai, and the Company was left with only 9 acres 28  guntas for its schemes. Further, to go through with the acquisition, the  Company has to borrow Rs. 43.54 lakhs from the Canara Bank for  depositing  with  the  land  acquisition  authorities  and  had  to  incur  interest charges of Rs.18.97 lakhs, which have become infructuous.  There  were  highly  injudicious  acts  leading  to  avoidable  loss  of  Rs.18.97 lakhs.

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(iv) The  Committee  notes  that  out  of  more  than  seven  projects  envisaged  in  1981,  the  Company,  is  a  result  of  the  tortuous  and  adverse  developments,  omissions,  commissions  and  irregularities  described in the preceding paragraphs, could manage to initiate only  two schemes, viz., International Centre and Tourist Complex and, that  too only to the extent of handing over land to the concerned parties,  viz.  Bangalore  International  Centre  and  M/s.  Universal  Resorts  Limited. Even these two schemes have remained non-starters  because  in  the  first  case the Board   of Directors of  the Company did not  approve  the  leasing  of  land  and  in  the  second  case  the  initial  formalities  like  registration  of  sale  deed,  urban land  clearance  etc.  have dragged on.      

In this connection, the Committee takes serious note of the fact that  possession  of  lands  was  given  by  the  Company  to  Bangalore  International  Centre  and  M/s.  Universal  Resorts  Ltd.,  prematurely  without obtaining approval of the Board of Directors or completing  even the initial formalities etc., as the case may be.”

16. The first question which needs consideration is whether the High Court  

committed an error by granting relief to respondent No.1 despite the fact that he  

filed writ petition after long lapse of time and the explanation given by him was  

found unsatisfactory by the learned Single Judge, who decided the writ petition  

after remand by the Division Bench.   

17. Although, framers of the Constitution have not prescribed any period of  

limitation for filing a petition under Article 226 of the Constitution of India and  

the power conferred upon the High Court to issue to any person or authority  

including  any  Government,  directions,  orders  or  writs  including  writs  in  the  

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nature of habeas corpus, mandamus, prohibition, quo-warranto and certiorari is  

not hedged with any condition or constraint, in last 61 years the superior Courts  

have evolved several rules of self-imposed restraint including the one that the  

High Court may not enquire into belated or stale claim and deny relief to the  

petitioner if he is found guilty of laches.  The principle underlying this rule is  

that  the one who is  not  vigilant  and does not  seek intervention of  the Court  

within reasonable time from the date of accrual of cause of action or alleged  

violation  of  constitutional,  legal  or  other  right  is  not  entitled  to  relief  under  

Article 226 of the Constitution.  Another reason for the High Court’s refusal to  

entertain belated claim is that during the intervening period rights of third parties  

may have crystallized and it  will  be inequitable to disturb those rights at the  

instance of a person who has approached the Court after long lapse of time and  

there is no cogent explanation for the delay.  We may hasten to add that no hard  

and fast rule can be laid down and no straightjacket formula can be evolved for  

deciding the question of delay/laches and each case has to be decided on its own  

facts.

18. In  Dehri  Rohtas  Light  Railway  Company  Limited  v.  District  Board,  

Bhojpur (1992) 2 SCC 598, this Court set aside the judgment of the Patna High  

Court whereby the writ petition filed by the appellant against the demand notice  

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issued for levy of cess for the period 1953-54 to 1966-67 was dismissed only on  

the ground of delay.  The facts of that case show that the writ petition filed by  

the appellant questioning the demand for 1967-68 to 1971-72 was allowed by the  

High Court.  However, the writ petition questioning the demand of the earlier  

years  was  dismissed  on the  premise  that  the  petitioner  was  guilty  of  laches.  

While dealing with the question of delay, this Court observed:

“The question thus for consideration is whether the appellant should  be deprived of the relief on account of the laches and delay. It is true  that the appellant could have even when instituting the suit agitated  the question of legality of the demands and claimed relief in respect of  the  earlier  years  while  challenging  the  demand  for  the  subsequent  years  in  the writ  petition.  But  the failure  to  do so  by itself  in  the  circumstances  of  the  case,  in  our  opinion,  does  not  disentitle  the  appellant from the remedies open under the law. The demand is per se  not based on the net profits of the immovable property, but on the  income  of  the  business  and  is,  therefore,  without  authority.  The  appellant  has  offered  explanation  for  not  raising  the  question  of  legality  in  the  earlier  proceedings.  It  appears  that  the  authorities  proceeded under a mistake of law as to the nature of the claim. The  appellant  did  not  include  the  earlier  demand  in  the  writ  petition  because the suit  to enforce the agreement limiting the liability was  pending in appeal, but the appellant did attempt to raise the question  in  the  appeal  itself.  However,  the  Court  declined  to  entertain  the  additional ground as it was beyond the scope of the suit. Thereafter,  the present writ petition was filed explaining all  the circumstances.  The High Court considered the delay as inordinate.  In our view, the  High Court failed to appreciate all material facts particularly the fact  that the demand is illegal as already declared by it in the earlier case.

The rule which says that the Court may not enquire into belated and  stale claim is not a rule of law but a rule of practice based on sound  and proper  exercise  of  discretion.  Each case must  depend upon its  own facts. It will all depend on what the breach of the fundamental  right and the remedy claimed are and how delay arose. The principle  

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on which the relief to the party on the grounds of laches or delay is  denied is that the rights which have accrued to others by reason of the  delay  in  filing  the  petition  should  not  be  allowed  to  be  disturbed  unless there is a reasonable explanation for the delay. The real test to  determine delay in such cases is that the petitioner should come to the  writ court before a parallel right is created and that the lapse of time is  not attributable to any laches or negligence. The test is not to physical  running  of  time.  Where  the  circumstances  justifying  the  conduct  exists, the illegality which is manifest cannot be sustained on the sole  ground  of  laches.  The  decision  in  Tilokchand  case relied  on  is  distinguishable on the facts of the present case. The levy if based on  the net profits of the railway undertaking was beyond the authority  and  the  illegal  nature  of  the  same  has  been  questioned  though  belatedly in the pending proceedings after the pronouncement of the  High Court in the matter relating to the subsequent years. That being  the case, the claim of the appellant cannot be turned down on the sole  ground of delay.   We are of the opinion that the High Court was  wrong in dismissing the writ petition in limine and refusing to grant  the relief sought for.”

(emphasis supplied)

19. In Ramchandra Shankar Deodhar v. State of Maharashtra (1974) 1 SCC  

317, the Court overruled the objection of delay in filing of a petition involving  

challenge to the seniority list of Mamlatdars and observed:

“…….Moreover, it may be noticed that the claim for enforcement of  the fundamental right of equal opportunity under Art. 16 is itself a  fundamental right guaranteed under Art. 32 and this Court which has  been assigned the role of a sentinel on the  qui vive for protection of  the fundamental rights cannot easily allow itself to be persuaded to  refuse relief solely on the jejune ground of laches, delay or the like.”

20. In Shankara Cooperative Housing Society Limited v. M. Prabhakar and  

others (2011) 5 SCC 607, this Court considered the question whether the High  

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Court should entertain petition filed under Article 226 of the Constitution after  

long delay and laid down the following principles:

“(1) There is no inviolable rule of law that whenever there is a delay,  the Court must necessarily refuse to entertain the petition; it is a rule  of practice based on sound and proper exercise of discretion, and each  case must be dealt with on its own facts.

(2) The principle on which the Court refuses relief on the ground of  laches or delay is that the rights accrued to others by the delay in  filing the petition should not be disturbed, unless there is a reasonable  explanation for  the delay,  because Court  should not  harm innocent  parties  if  their  rights  had emerged by the delay on the part  of  the  petitioners.

(3) The satisfactory way of explaining delay in making an application  under  Article  226  is  for  the  petitioner  to  show  that  he  had  been  seeking relief elsewhere in a manner provided by law. If he runs after  a remedy not provided in the statute or the statutory rules, it is not  desirable for the High Court to condone the delay. It is immaterial  what the petitioner chooses to believe in regard to the remedy.

(4) No hard-and-fast rule, can be laid down in this regard. Every case  shall have to be decided on its own facts.

(5) That representations would not be adequate explanation to take  care of the delay.”

21. Another principle of law of which cognizance deserves to be taken is that  

in exercise of power under Article 136 of the Constitution, this Court would be  

extremely slow to interfere with the discretion exercised by the High Court to  

entertain  a  belated  petition  under  Article  226  of  the  Constitution  of  India.  

Interference  in  such matters  would  be  warranted  only  if  it  is  found that  the  

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exercise of discretion by the High Court was totally arbitrary or was based on  

irrelevant consideration.   In Smt. Narayani Debi Khaitan v. State of Bihar [C.A.  

No.140 of 1964 decided on 22.9.1964], Chief Justice Gajendragadkar, speaking  

for the Constitution Bench observed:

“It is well-settled that under Article 226, the power of the High Court  to issue an appropriate writ is discretionary. There can be no doubt  that if a citizen moves the High Court under Article 226 and contends  that his fundamental rights have been contravened by any executive  action, the High Court would naturally like to give relief to him; but  even in such a case, if the petitioner has been guilty of laches, and  there are other relevant circumstances which indicate that it would be  inappropriate  for  the  High  Court  to  exercise  its  high  prerogative  jurisdiction in favour of the petitioner, ends of justice may require that  the High Court should refuse to issue a writ. There can be little doubt  that if it is shown that a party moving the High Court under Article  226 for a writ is, in substance, claiming a relief which under the law  of limitation was barred at the time when the writ petition was filed,  the High Court would refuse to grant any relief in its writ jurisdiction.  No hard and fast rule can be laid down as to when the High Court  should  refuse  to  exercise  its  jurisdiction  in  favour  of  a  party  who  moves it  after considerable delay and is otherwise guilty of laches.  That is a matter which must be left to the discretion of the High Court  and like all matters left to the discretion of the Court, in this matter  too discretion must be exercised judiciously and reasonably.”

(emphasis supplied)

22. In the light of the above, it is to be seen whether the discretion exercised  

by the Division Bench of the High Court to ignore the delay in filing of writ  

petition is vitiated by any patent error or the reasons assigned for rejecting the  

appellants’  objection of  delay  are  irrelevant  and extraneous.   Though it  may  

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sound  repetitive,  we  may  mention  that  in  the  writ  petition  filed  by  him,  

respondent  No.1  had  not  only  prayed  for  quashing  of  the  acquisition  

proceedings, but also prayed for restoration of the acquired land on the ground  

that instead of using the same for the public purpose specified in the notifications  

issued under Sections 4(1) and 6, the Corporation had transferred the same to  

private persons.  Respondent No.1 and other landowners may not be having any  

serious  objection  to  the  acquisition  of  their  land  for  a  public  purpose  and,  

therefore,  some  of  them not  only  accepted  the  compensation,  but  also  filed  

applications under Section 18 of the Act for determination of market value by  

the Court.  However, when it was discovered that the acquired land has been  

transferred to private persons, they sought intervention of the Court and in the  

three cases, the Division Bench of the High Court nullified the acquisition on the  

ground of fraud and misuse of the provisions of the Act.   

23. Insofar as land of respondent No.1 is concerned, the same was advertised  

in  1987  along  with  other  parcels  of  land  (total  measuring  5  acres)  and  

Corporation executed lease in favour of M/s. Universal Resorts Limited in 1992.  

However, no material has been placed on record to show that the said exercise  

was undertaken after issuing notice to the landowners.   When respondent No.1  

discovered that his land has been transferred to private entity, he made grievance  

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and  finally  approached  the  High  Court.   During  the  intervening  period,  he  

pursued his claim for higher compensation.  Therefore, it cannot be said that he  

was sleeping over his right and was guilty of laches.

24. A reading of the impugned judgment, the relevant portions of which have  

been extracted hereinabove shows that the Division Bench of the High Court  

adverted to all the facts, which had bearing on the issue of delay including the  

one that on the advice given by an advocate, respondent No.1 had availed other  

remedies and opined that  the delay had been adequately explained.   Thus,  it  

cannot be said that the discretion exercised by the High Court to entertain and  

decide the writ petition filed by respondent No.1 on merits is vitiated by any  

patent legal infirmity.  It is true that the writ petitions filed by the brothers of  

respondent No.1 had been dismissed by the learned Single Judge on the ground  

of delay and the writ  appeals and the special leave petitions filed against the  

order of the learned Single Judge were dismissed by the Division Bench of the  

High Court and this Court respectively, but that  could not be made basis for  

denying relief to respondent No.1 because his brothers had neither questioned  

the diversification of land to private persons nor prayed for restoration of their  

respective shares.  That apart, we find it extremely difficult, if not impossible, to  

approve the approach adopted by the learned Single Judge in dealing with Writ  

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Petition Nos. 2379 and 2380 of 1993 filed by the brothers of respondent No.1.  

He distinguished the judgments of the Division Bench in Mrs. Behroze Ramyar  

Batha and others  v.  Special  Land Acquisition Officer  (supra)  and Smt.  H.N.  

Lakshmamma  and  others  v.  State  of  Karnataka  and  others,  without  any  real  

distinction and did not adhere to the basic postulate of judicial discipline that a  

Single Bench is bound by the judgment of the Division Bench.  Not only this, the  

learned Single Judge omitted to consider order dated 3.10.1991 passed in Writ  

Petition Nos. 19812 to 19816 of 1990 – Annaiah and others v. State of Karnataka  

and others in which the same Division Bench had quashed notifications dated  

28.12.1981 and 16.4.1983 in their entirety.  Unfortunately, the Division Bench of  

the High Court went a step further and dismissed the writ appeals filed by the  

brothers of respondent No.1 without even adverting to the factual matrix of the  

case, the grounds on which the order of the learned Single Judge was challenged  

and ignored the law laid down by the coordinate Bench in three other cases.  The  

special leave petitions filed by the brothers of respondent No.1 were summarily  

dismissed by this Court.  Such dismissal did not amount to this Court’s approval  

of  the  view taken  by  the  High  Court  on  the  legality  of  the  acquisition  and  

transfer of land to private persons.  In this connection, reference can usefully be  

made to the judgment in Kunhayammed v. State of Kerala (2000) 6 SCC 359.

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25. The next question which merits examination is whether the High Court  

was  justified  in  directing  restoration  of  land  to  respondent  No.1.   In  Mrs.  

Behroze Ramyar Batha and others v. Special Land Acquisition Officer (supra),  

the  Division  Bench  of  the  High  Court  categorically  held  that  the  exercise  

undertaken for the acquisition of land was vitiated due to fraud.  The Division  

Bench was also  of  the  view that  the acquisition cannot  be valid  in  part  and  

invalid in other parts, but did not nullify all the transfers on the premise that  

other  writ  petitions  and  a  writ  appeal  involving  challenge  to  the  acquisition  

proceedings were pending.  In Annaiah and others v. State of Karnataka and  

others  (supra),  the same Division Bench specifically  adverted to the issue of  

diversification of purpose and held that where the landowners are deprived of  

their land under the cover of public purpose and there is diversification of land  

for a private purpose, it amounts to fraudulent exercise of the power of eminent  

domain.

26. The pleadings and documents filed by the parties in these cases clearly  

show that the Corporation had made a false projection to the State Government  

that land was needed for execution of tourism related projects.  In the meeting of  

officers held on 13.1.1987, i.e. after almost four years of the issue of declaration  

under Section 6, the Managing Director of the Corporation candidly admitted  

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that the Corporation did not have the requisite finances to pay for the acquisition  

of land and that Dayananda Pai, who had already entered into agreements with  

some of the landowners for  purchase of land, was prepared to provide funds  

subject to certain conditions including transfer of 12 acres 34 guntas land to him  

for house building project.  After 8 months, the Corporation passed resolution for  

transfer  of  over  12  acres  land  to  Dayananda  Pai.   The  Corporation  also  

transferred two other parcels of land in favour of Bangalore International Centre  

and M/s. Universal Resorts Limited.  These transactions reveal the true design of  

the  officers  of  the  Corporation,  who  first  succeeded  in  persuading  the  State  

Government  to  acquire  huge  chunk  of  land  for  a  public  purpose  and  then  

transferred major portion of the acquired land to private individual and corporate  

entities by citing poor financial health of the Corporation as the cause for doing  

so.  The Courts have repeatedly held that in exercise of its power of eminent  

domain, the State can compulsorily acquire land of the private persons but this  

proposition  cannot  be  over-stretched  to  legitimize  a  patently  illegal  and  

fraudulent  exercise  undertaken  for  depriving  the  landowners  of  their  

constitutional right to property with a view to favour private persons.  It needs no  

emphasis that if land is to be acquired for a company, the State Government and  

the company is bound to comply with the mandate of the provisions contained in  

Part VII of the Act.  Therefore, the Corporation did not have the jurisdiction to  

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transfer  the land acquired for  a public purpose to the companies and thereby  

allow them to bypass  the  provisions  of  Part  VII.   The  diversification  of  the  

purpose for which land was acquired under Section 4(1) read with Section 6  

clearly amounted to a fraud on the power of eminent domain.  This is precisely  

what the High Court has held in the judgment under appeal and we do not find  

any valid ground to interfere with the same more so because in Annaiah and  

others v. State of Karnataka and others (supra), the High Court had quashed the  

notifications issued under Sections 4(1) and 6 in their entirety and that judgment  

has become final.

27. The judgment in Om Parkash v. Union of India (supra) on which reliance  

has been placed by Shri Naganand is clearly distinguishable.  What has been  

held in that case is that quashing of the acquisition proceedings would enure to  

the benefit of only those who had approached the Court within reasonable time  

and  not  to  those  who  remained  silent.   In  this  case,  respondent  No.1  

independently  questioned  the  acquisition  proceedings  and  transfer  of  the  

acquired land to M/s. Universal Resorts Ltd.  In other words, he approached the  

High Court for vindication of his right and succeeded in convincing the Division  

Bench  that  the  action  taken  by  the  Corporation  to  transfer  his  land  to  M/s.  

Universal Resorts Limited was wholly illegal, arbitrary and unjustified.

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28. In the result, the appeals are dismissed.  Respondent No.1 shall, if he has  

already not done so,  fulfil  his obligation in terms of the impugned judgment  

within a period of 8 weeks from today.  The appellant shall fulfil their obligation,  

i.e. return of land to respondent No.1 within next 8 weeks.

………………….………………….…J.            [G.S. Singhvi]

………………….………………….…J.      [Sudhansu Jyoti Mukhopadhaya]

New Delhi September 29, 2011.

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