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  IN THE SUPREME COURT OF INDIA    CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.9091-9119 OF 2016 (Arising Out of SLP (C) Nos. 13656-13684 of 2004)

R. RAJASHEKAR AND ORS.                   …APPELLANTS Vs.

TRINITY HOUSE BUILDING CO-OPERATIVE SOCIETY AND ORS.                         …RESPONDENTS                          WITH

CIVIL APPEAL NOS.9120-9148 OF 2016 (Arising Out of SLP (C) Nos.18090-18118 of 2004)  

AND CIVIL APPEAL NOS.9149-9152 OF 2016

(Arising Out of SLP (C) Nos.23336-23339 of 2004)  

J U D G M E N T

V. GOPALA GOWDA, J.

Leave granted in all the Special Leave Petitions.

 2. The  present  appeals  arise  out  of  the  common

impugned judgment and order dated 06.05.2004 in

Writ Appeal Nos. 7543-7557 of 1996 and connected

REPORTABLE

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matters passed by the Division Bench of the High

Court  of  Karnataka,  wherein  the  judgment  and

order  dated  11.07.1996,  passed  by  the  learned

Single Judge of the High Court in Writ Petition

Nos.  8188-8201  of  1989  and  other  connected

petitions quashing the acquisition notifications

issued under Sections 4(1) and 6(1) of the Land

Acquisition Act, 1894 (hereinafter referred to

as the “L.A. Act”) was set aside.

3.The relevant facts which are required for us to

appreciate the rival legal contentions advanced

on behalf of the parties are stated in brief

hereunder:

    The lands involved in all these acquisition

proceedings are agricultural lands belonging to

poor  agriculturalists.  On  09.01.1984,  Trinity

House Building Co-Operative Society (hereinafter

referred  to  as  the  “respondent-Society”)  was

registered  with  the  object  of  providing  sites

for building residential houses for its members.

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On 12.03.1985, the said society, represented by

its President and Vice President entered into an

agreement  with  M/S  Srinivasa  Enterprises,

represented  by  its  proprietor,  Mr.  S.

Rangarajan. The said agreement was entered into

between the parties essentially for getting the

lands  acquired  in  favour  of  the

respondent-Society. The relevant clauses of the

agreement  will  be  extracted  in  the  reasoning

portion of the judgment. As per the agreement, a

contract of agency was created in favour of Mr.

S. Rangarajan to act as a middleman between the

respondent-Society and the State Government to

get  the  lands  mentioned  therein  acquired  in

favour of the respondent-Society.

 4.It  is  also  an  undisputed  fact  that  between

06.05.1987  and  12.06.1989,  the  land  owners  of

the  lands  mentioned  in  the  agreement  dated

12.03.1985  have  also  executed  power  of

attorney(s) in favour of Mr. S. Rangarajan.  The

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state government of Karnataka by its order dated

23.06.1986,  fixed  the  last  date  as  30.06.1984

for  the  registration  of  the  societies.  The

respondent-Society finds a place at Serial No.

43  in  the  annexure  attached  to  the  above

government order.

5.By  way  of  order  dated  30.04.1987,  the  state

government of Karnataka constituted a ‘Three Men

Committee’ to verify  the claims of land for

acquisition being made by the various societies,

and a State level Co-ordination Committee also

was  constituted  by  the  Government  to  inquire

into  the  affairs  of  the  society  before

recommending their claim for acquisition.

6.The case of the respondent-Society came up for

consideration  before  the  State  Level

Coordination Committee on 25.09.1987. The State

Level  Coordination  Committee,  without

application of mind to the facts of the case,

cleared the case of the respondent-Society for

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acquisition of lands in its favour. The relevant

portion pertaining to the Society reads thus:  

“14.  Trinity  HBSC:  Avalahalli  and Herohalli  (correct  name  Harohalli) villages,  cleared  for  acquisition  of 94-18 acres, Avalahalli (73-33 Acres) and Herohalli (22-25 acres)(both in Yelahanka Bobli) (Action: Revenue Department)”

On  10.03.1988,  the  Additional  Registrar  of

Co-Operative Societies, Bangalore passed an order

under  Section  64  of  the  Karnataka  Co-operative

Societies  Act,  1959,  to  inquire  into  certain

allegations  made  against  98  House  Building

Co-Operative  Societies  of  Bangalore  City,

including  the  respondent-Society,  and  appointed

Sri G.V.K. Rao, the then Controller of Weights and

Measures to investigate into the allegations of

irregularities  and  malpractices  against  the

concerned societies.

7. In  the  meanwhile,  on  15.04.1988, an  agreement was entered into between the state government of

Karnataka and the respondent-Society as required

under Section 39 read with Section 41 of Part

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VII of the L.A. Act. The relevant portions of

the Agreement are extracted hereunder: “AND WHEREAS THE SOCIETY has applied to 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 the 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 trinity House Building  Co-Operative  Society  Ltd.  at Avalahalli and Herohalli, Yelahanka hobli, Bangalore North Taluk, Bangalore District. AND WHEREAS the Government having caused an 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.”

8.Subsequently, on 09.05.1988, the report of the

G.V.K.  Rao  Committee  was  submitted  to  the

Government  for  its  action.  The  Report  found

irregularities  in  the  manner  in  which  the

respondent-Society has granted membership to its

members. It was stated in the report that the

Vice  President  of  the  respondent-Society

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accepted  these  lapses  and  even  attempted  to

justify the same.

9.Even  after  the  G.V.K.  Rao  Committee  submitted

its  report,  the  state  government  of  Karnataka

proceeded to issue the preliminary notification

under Section 4(1) of the L.A. Act, which was

published  in  the  official  gazette  dated

09.06.1988,  proposing  to  acquire  the  lands  in

question to the extent of 92 acres 38 guntas in

Avalahalli and Herohalli villages of Yelahanka

Hobli, Bangalore North Taluk, Bangalore District

in favour of the respondent-Society.

10. Subsequently, around 33 Objection Petitions were

filed before the Land Acquisition Officer by the

landowners,  which  were  all  rejected  under  the

inquiry conducted by him under Section 5-A(2) of

the L.A. Act. The objections filed by some of

the landowners were rejected by land acquisition

officer  primarily  on  the  ground  that  the

objections are not valid, and that the concerned

lands come in the middle of the layout and that

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the lands are being acquired for the formation

of house sites by the respondent society, which

is a public purpose as per the definition of

Section  3  (f)  (vi)  of  the  L.A.  Act.  On

18.03.1999,  the  state  government  issued  the

final  notification  under  Section  6(1)  of  the

L.A. Act declaring that the lands were required

for public purpose without proper application of

mind  to  the  report  received  from  the  Land

Acquisition Officer. The relevant portion of the notification is extracted hereunder:

“And whereas the Government of Karnataka is  satisfied  after  considering  the report  of  the  special  Deputy Commissioner,  Bangalore  District, Bangalore  under  sub-section  (2)  of Section 5A and section 6(1) of special Land Acquisition Act (Central Act 1 of 1894) as amended by Karnataka Act No. 17 of 1961 and Land Acquisition (Amendment Act 1984) that the said lands are needed to be acquired for the purpose specified above.”

11. Aggrieved  of  the  impugned  acquisition

notifications,  the  landowners  challenged  the

validity  of  the  same  by  way  of  filing  Writ

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Petitions  before  the  High  Court  of  Karnataka

urging  various  legal  grounds  and  prayed  for

quashing the same. The learned single Judge of

the  High  Court,  after  hearing  the  parties

arrived at the conclusion that the facts of the

case were similar to those in the decision of

this Court in the case of H.M.T. House Building

Co-Operative  Society  v. Syed  Khader1. On  the

facts of the case, the learned single Judge, by

way  of  common  judgment  and  order  dated

11.07.1996 held as under: “In  the  instant  case,  the  4th respondent along with the statement of objections has produced Audit Report as Annexure-I. In the said  report  there  is  reference  that  the landowners have been paid the consideration for their lands through M/S Sree Srinivasa Enterprises. There is also a reference that the society entered into an agreement dated 13.03.1985 with that of M/S Sree Srinivasa Enterprises and as per the said agreement the society has to pay Rs. 160/- per sq. yard  to  M/S  Sree  Srinivasa Enterprises...... In the statement of objections it is stated that the society through the agency of M/S Srinivasa Enterprises, represented by its proprietor  has  made  payments  to  the landowners. This fact shows that the facts

1 (1995) 2 SCC 677

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involved in these petitions are identical with  that  of  the  case  involved  in  the decision of HMT House Building Co-Operative Society (supra). The Supreme Court in the said decision has held that the power u/s 4(1) and 6(1) of the Act has been exercised for  extraneous  consideration  at  the instance of the persons who have no role in the decision making process. In the said view  of  the  matter,  I  hold  that  the decision rendered by the Supreme Court is applicable in all fours and therefore the impugned  notifications  are  liable  to  be quashed.  In view  of the  decision of  the Supreme  Court  referred  to  above,  I  hold that  the  petitioners  are  entitled  to challenge  the  impugned  acquisition  since the  land  acquisition  proceedings  is  the product of colourable exercise of power at the instance of the third parties.”

The learned single Judge has further held that

the  lands  could  not  have  been  acquired  by  the

state government in favour of a society for the

purpose  of  providing  residential  sites  to  its

members without following the procedure provided

under Part VII of the L.A. Act. The learned single

Judge  accordingly,  quashed  the  impugned

notifications and also the acquisition proceedings

in exercise of the extraordinary and discretionary

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power  under  Article  226  of  the  Constitution  of

India.

12. Aggrieved  of  the  common  judgment  and  order

passed  by  the  learned  Single  Judge,  the

respondent-Society filed Writ Appeals before the

Division Bench of the High Court challenging the

correctness  of  the  same  urging  certain  legal

grounds. The Division Bench of the High Court

held that there was no evidence on record to

suggest that the “outside agency” (M/s Srinivasa

Enterprises)  had  influenced  the  acquisition

proceedings. On the other hand, it is clear from

the material placed on record that the case of

the  respondent-Society  was  considered  by  the

State  Level  Co-ordination  Committee  on

25.09.1987, and on the basis of the clearance

granted  by  the  Committee  the  state  government

granted  approval  to  acquire  the  lands  in

question.  Accordingly,  the  Division  Bench,  by

way of common final impugned judgment and order

dated  06.05.2004  allowed  the  appeals  and  set

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aside  the  judgment  and  order  passed  by  the

learned  single  judge  and  restored  the

acquisition  proceedings.  Hence,  the  present

appeals.

13. We have heard Mr. Shekhar Naphade, Mr. V. Giri

and  Mr.  Basava  Prabhu  S.  Patil,  the  learned

senior  counsel  appearing  on  behalf  of  the

appellants  and  Mr.  Shanti  Bhushan,  learned

senior  counsel  appearing  on  behalf  of  the

respondent-Society and Mr. H.N. Nagamohan Das,

the learned senior counsel appearing on behalf

of  the  respondent-original  landowners  in  the

first  two  appeals  filed  by  the  so-called

purchasers.

14. The learned senior counsel appearing on behalf

of  the  appellants  vehemently  question  the

correctness of the findings and reasons recorded

by the Division Bench of the High Court in the

impugned  judgment  and  order.  It  is  contended

that the findings and reasons recorded on the

contentious points are not only erroneous in law

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but also suffer from error in law. They place

strong  reliance  on  the  three  judge  bench

decision of this Court in the case of HMT House

Building Cooperative Society  (supra), which has

been  followed  in  the  subsequent  decisions  of

this Court in the cases of H.M.T. House Building

Cooperative  Society  v.  M.  Venkataswamappa2,

Bangalore City Cooperative Housing Society Ltd.

v. State of Karnataka3, B. Anjanappa and Ors. v.

Vyalikaval  House  Building  Cooperative  Society

Limited  and  Ors.4.  The  learned  senior  counsel

further  sought  to  distinguish  the  decision  of

this Court in the case of Kanaka Gruha Nirmana

Sahakara  Sangha  v.  Narayanamma5,  upon  which

strong reliance has been placed by the Division

Bench of the High Court, which has been followed

by  this  Court  in  the  cases  of  Sumitramma  v.

State of Karnataka6 and  Muniyappa  v.  State of

2 (1995) 3 SCC 128 3 (2012) 3 SCC 727 4 (2012) 10 SCC 184 5 (2003) 1 SCC 228  6 SLP (C) No. 10270 of 1996, decided on 04.10.1996

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Karnataka7.  It  is  submitted  that  the  reliance

placed upon the said judgments by the Division

Bench of the High Court, in the absence of a

scheme framed and approved by the government as

required under Section 3 (f)(vi) of the L.A. Act

in favour of the respondent-Society, is held to

be  violative  of  not  only  the  statutory

provisions  of  law,  but  also  the  decisions  of

this Court referred to supra.

15. It is further contended by the learned senior

counsel  appearing  on  behalf  of  the  appellants

that  the  framing  of  a  scheme  and  its  prior

approval by the state government is sine qua non

for initiating acquisition proceedings for the

purpose of Section 3(f)(vi) of the L.A. Act. It

is submitted that in the instant case, neither

any  such  scheme  has  been  framed  by  the

respondent-Society  nor  has  there  been  any

approval accorded by the state government before

7 SLP (C) No. 14681 of 1995 decided on 04.10.1996

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initiating land acquisition proceedings in its

favour  and  therefore,  they  submit  that  the

entire proceedings are vitiated in law.   

16. It is further submitted by the learned senior

counsel that this Court in the case of HMT House

Building Co-Operative Society (supra) elaborated

upon  the  scope  of  the  term  housing  for  the

purpose of Section 3(f)(vi) of the L.A. Act. It

was held therein as under: “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 the Parliament while  introducing  a  new  definition  of "public  purpose",  said  that  any  scheme submitted  by  any  co-operative  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 to be for public purpose.  If  requirement  of  Section  3(f) (vi)  is  not  strictly  enforced,  every housing  co-operative  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

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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  co-operative society.”            (emphasis laid by this Court)

17. It is further submitted that a perusal of the

above  extracted  portion  of  the  judgment  would

show that prior approval of the government to

the  Housing  Scheme,  as  contemplated  under

Section 3(f) (vi) of the L.A. Act is a condition

precedent  for  the  exercise  of  eminent  domain

power by the state government for acquisition of

lands for the purpose of the housing scheme of a

Co-operative  society.  Consequently,  the

existence  of  Housing  Scheme  framed  by  the

respondent-Society is a pre-condition for grant

of approval of the same by the State Government.

Further reliance is placed on the decision of

this Court in the case of B. Anjanappa (supra),

wherein it was held as under:

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“20.  We  then  enquired  from  Shri  Bhat whether  his  client  had  submitted  housing scheme  for  the  approval  of  the  State Government.  Shri  Bhat  responded  to  the Court's  query  by  relying  upon  the recommendations  made  by  the  State  Leval Coordination Committee for the acquisition of 179 acres, one and half guntas land. We have  carefully  gone  through  the recommendations  of  the  State  Level Coordination Committee but do not find any trace of housing scheme which was under the consideration of the Committee.

21. Shri Bhat then relied upon the approval accorded by the State Government for the acquisition  of  land  and  the  directions issued to Deputy Commissioner, Bangalore to issue  notification  under  Section  4(1)  of the  1894  Act.  He  also  relied  upon  the judgment in Kanaka Gruha Nirmana Sahakara Sangha v. Narayanamma.

22. In Bangalore City Cooperative Housing Society Limited v. State of Karnataka and Ors.  decided  on  2.2.2012,  this  Court considered  the  question  whether  the approval  granted  by  the  State  Government for  the  acquisition  of  land  can  be considered as an approval of the housing scheme within the meaning of Section 3(f) (vi) of the Act and answered the same in negative.

23.  The  judgment  in  Kanak  Gruha  Nirmana Sahakara Sangha v. Narayanamma (supra), if read in the light of the 1st and 2nd HMT judgments and the finding recorded by us that Respondent No. 1 had not framed any housing  scheme  and  secured  its  approval from  the  State  Government,  the  direction

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given to the Deputy Commissioner to issue notification under Section 4(1) cannot be treated as the State Government's approval of the housing scheme framed by Respondent No. 1. It is also apposite to note that in Kanak  Gruha's  case,  this  Court  was  not called upon to consider a case in which the State  Government  had  come  out  with  a specific stand that the housing society had not framed any scheme.”

18. In the instant case there was no scheme framed

by  the  respondent-Society  for  the  purpose  of

providing  housing  sites  to  its  members  and

therefore,  no  prior  approval  could  have  been

accorded to it by the State Government. It is

submitted that the cut-off date for registration

of  societies  and  enrolment  of  members  being

30.06.1984,  and  the  respondent-Society  having

been  registered  just  before  the  said  cut-off

date,  i.e.  on  01.02.1984,  and  there  being  no

Board of Directors constituted prior to December

1984, and therefore, it could not have enrolled

any members before the cut off date. As such,

there was no scheme framed before the cut off

date. In the absence of the same, there could

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not  have  been  any  government  approval  of  the

scheme  for  initiating  acquisition  proceedings,

so as to justify the acquisition of lands under

Section 3(f) (vi) of the L.A. Act. It is further

submitted by the learned senior counsel that the

letter dated 26.11.1987; on which reliance has

been placed by the division bench of the High

Court  in  the  impugned  judgment  also  does  not

amount to an “approval” of a scheme in law. The

letter reads as under: “Government of Karnataka Karnataka Government Secretariat, Vidhana Soudha, Bangalore, dated 26.11.1987

No.RD 77 AQB 86

From :

The Revenue Commissioner and  Secretary to Government, Revenue Department, Bangalore.

To The Special Deputy Commissioner, Bangalore.

Sir,

Sub : Acquisition of land in favour of  Trinity House Building Co-op. Society

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                   **** I am directed to convey the approval of Government for initiating the acquisition proceedings for an extent of 94-18 acres of  land  in  Avalahalli  and  Harohalli village  in  favour  of  Trinity  House Building Co-Op. Society as recommended by the 3 men Committee and the State Level Co-Ordination Committee. The extent of land to be notified under Section 4(1) may be selected out of the list of Sy. No. Furnished by the 3 men committee.....”

19. It is submitted that the above communication

does not reflect the existence of any Housing

Scheme and the application of mind by the state

Government  for  according  approval  thereto.  It

mechanically  directs  for  publication  of  the

notification under Section 4(1) of the L.A. Act.   

20. The learned senior counsel appearing on behalf

of the appellants contend that the lands in the

instant  case  could  not  have  been  acquired  in

favour of the respondent-Society in the absence

of there being an housing scheme framed by it

and approval of the same. It is thus, contended

that acquisition of lands in the instant case is

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violative  of  both  the  statutory  provisions  of

law as well as the law laid down by this Court.

21. On  the  other  hand,  Mr.  Shanti  Bhushan,  the

learned  senior  counsel  appearing  on  behalf  of

the  respondent-Society  vehemently  opposes  the

legal  contentions  advanced  on  behalf  of  the

learned  senior  counsel  appearing  on  behalf  of

the  appellants  and  sought  to  justify  the

impugned  judgment  and  order  by  placing  strong

reliance on the decision of this Court in the

case of Kanaka Gruha (supra). The learned senior

counsel  further  submits  that  the  state

government after accepting the report of Three

Men Committee and State High Level Co-ordination

Committee,  by  way  of  its  letter  dated

26.11.1987, granted approval for  acquisition of

lands  in  question  in  favour  of  the

respondent-Society,  the  relevant  portion  of

which has been extracted supra.

22. The learned senior counsel further questions the

locus  standi of  the  appellants  in  filing  the

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first batch and second batch of appeals. It is

submitted  that  the  agreement  dated  12.05.1985

entered into between the respondent-Society and

M/s.  Srinivasa  Enterprises  stipulates  the

respondent-Society to pay consideration to Mr.

S.  Rangarajan  for  getting  the  layout  plan

approved, costs of the entire lands purchased,

execution of layout work etc. It is submitted

that the original landowners in the instant case

executed  the  general  power  of  attorney    in

favour of Mr. S. Rangarajan to get the lands in

question acquired. It is further submitted that

the  preliminary  notification  was  issued  under

Section 4(1) of the L.A. Act dated 09.06.1988,

and the final notification issued under Section

6(1)  of  the  L.A.  Act  dated  18.03.1989  were

challenged by the respondent-original landowners

by way of Writ Petitions before the High Court

of Karnataka, wherein the learned single judge,

by  way  of  common  judgment  and  order  dated

11.07.1996  quashed  the  land  acquisition

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proceedings. It is submitted that within a few

days,  Mr.  S.  Rangarajan  sold  the  lands  in

question in favour of his daughter, son and son

in law, who are the appellants in first batch of

appeals. It is contended that the purported sale

transactions in respect of lands covered in the

acquisition notifications is illegal as the same

is  nothing  but  fraud  played  by  the  said

middleman on the original land owners and the

society with a mala fide intention to deprive

the landowners of their constitutional rights,

thereby  deceiving  not  only  the  original

landowners, but also the respondent-Society. It

is thus, contended that since the alleged sale

of lands in favour of some of the appellants by

Mr.  Rangarajan  on  the  basis  of  the  power  of

attorney executed by the landowners is  void ab

initio in  law,  they  have  no  locus  standi to

challenge the legality of the impugned judgment

and  acquisition  proceedings  in  respect  of  the

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24

lands involved in these proceedings before this

Court.

23. Mr.  H.N.  Nagamohan  Das,  the  learned  senior

counsel  appearing  on  behalf  of  the  respondent

original  landowners-farmers  sought  to  justify

the impugned judgment and order passed by the

Division Bench of the High Court. It is further

submitted  by  the  learned  senior  counsel  that

during the pendency of the Writ Appeals before

the High Court, there came to be a compromise

between  the  farmers  and  the  society.  The

compromise is immensely beneficial to farmers as

for the acquisition of every acre, each one of

them are entitled for allotment of one site and

the  society  has  agreed  to  deposit  the  award

amount  as  determined  by  the  Land  Acquisition

Officer. The learned senior counsel submits that

if the acquisition proceedings are not upheld,

the farmers will be deprived of both the award

amount as well as a site for every acre of land.

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In such a scenario, the only party which stands

to  gain  is  the  fraudulent  purchasers  of  the

lands.  Alternatively,  he  submits  that  even  if

the acquisition proceedings are quashed on the

basis of the non compliance with Section 3(f)

(vi) of the L.A. Act and decisions of this Court

referred  to  supra  and  the  sale  transactions

between  Mr.  S.  Rangarajan  and  some  of  the

appellants  are  held  void,  then  also  the

landowners will get justice for depriving them

and their family members of livelihood for more

than  28  years  by  preventing  them  from

cultivating  the  said  lands  and  earning  their

livelihood.  

24. We  have  heard  the  learned  senior  counsel

appearing on behalf of the parties. Before we

turn our attention to the essential questions of

law  that  arise  for  our  consideration  in  the

present case, it is important to advert to a

submission made on behalf of the appellants. The

learned  senior  counsel  appearing  on  behalf  of

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26

the appellants have also sought to contend that

the  respondent-Society  had  no  locus  standi to

file  the  Writ  Appeal  as  it  did  not  have  any

right over the said lands in the instant case.

It is submitted that a right would vest in the

society  only  once  possession  of  the  land  was

taken by the state government and award passed

in favour of the landowners, and thus, it did

not  have  the  locus  standi to  challenge  the

quashing  of  the  acquisition  proceedings.  The

said submission has been sought to be rebutted

by  Mr.  Shanti  Bhushan,  the  learned  senior

counsel  appearing  on  behalf  of  the

respondent-Society,  by  placing  reliance  on  a

constitution bench decision of this Court in the

case of  U.P. Awas Evam Vikas Parishad  v. Gyan

Devi (D) by LRS. & Ors.8.

25. We  are  unable  to  agree  with  the  contention

advanced on behalf of the learned senior counsel

appearing on behalf of the appellants. Once the

8 (1995) 2 SCC 326

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land is sought to be acquired in favour of the

respondent-society  and  notifications  issued

under Sections 4(1) and 6(1) of the L.A. Act

regarding  the  same,  the  respondent-Society

acquires the right to challenge the quashing of

the acquisition proceedings by a court of law.

The contention advanced by Mr. Shanti Bhushan,

the learned senior counsel appearing on behalf

of  the  respondent-Society  that  the

appellant-purchasers  have  no  locus  standi to

file  these  special  leave  petitions  cannot  be

accepted by us for the reason that they had been

impleaded  as  respondents  in  the  Writ  Appeals

before the High Court.

26. The  essential  questions  of  law  that  would

arise for our consideration in the instant case

are: 1. Whether the acquisition of lands in

favour of the respondent-society in the impugned acquisition proceedings is  covered  under  the  definition  of the term public purpose, as defined under  Section  3(f)(vi)  of  the  L.A. Act?

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28

2. Whether  the  sale  transactions  in favour of the appellants in the first and  second  batch  of  appeals  during the  pendency  of  the  proceedings  by the Power of Attorney(s) holder Mr. S. Rangarajan, on behalf of some of the land owners and sale of lands by some of the other landowners during the pendency of the Writ Petitions in favour of the appellant-purchasers in connected second appeals is legal and valid?

3. Whether the appellant-purchasers are entitled for the reliefs as prayed by them?

4. What order?

Answer to Point Nos. 1 and 2: Point  nos.  1  and  2  are  interrelated  and  are

answered together as under:

27. Section  3(f)(vi)  of  the  L.A.  Act  reads  as

under:

“(f) the expression “public purpose” includes- ..... (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

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law relating to co-operative societies for the time being in force in any State......”

28. The  respondent-Society  and  M/s  Srinivasa

Enterprises by its proprietor Mr. S. Rangarajan,

entered into an agreement dated 13.03.1985. The

relevant  clauses  from  the  said  agreement  are

extracted hereunder:  “2.  WHEREAS  the  second  party  is  the contractors,  Representatives,  Estate agents and Builders, acting as agents for  providing  lands  to  Co-operative societies,  has  entered  into  sale agreements with owners of the lands in Sy. Nos. 64, 66/5, 66/7, 66/11, 66/13 and Sy. Nos. 50,53, 57/3, 57/4B, 57, 57/7  57/6,  90/1,  60/2,  60/5,  61/2, 61/3, 62, 63/2, 63/3, 64, 64/2, 65/1, 67, 67/4, 67/2, 3, 64/1, 67/3A, 68/I, 68/3   of  Herohalli  and  Avalahally villages of Yelahanka Hobli, Bangalore North  Taluk  respectively  and  WHEREAS the second party has offered the first party  its  services  in  the  matter  of securing sale of the above said lands in  the  First  Party  from  the  owners thereof, free from encumbrances....”

5.  The Second Party shall secure in the name of the First Party by way of acquisition to the First Party lands in Sy. Nos. 64, 66/5, 66/7, 66/11, 66/13 and Sy. Nos. 50, 53, 57/3, 57/4B, 57, 57/7  57/6,  60/1,  60/3,  60/2,  60/5, 61/2, 61/3, 62, 63/2, 63/3, 64, 64/2, 65/1, 67, 67/4, 67/2, 3, 64/1, 67/3A, 68/I, 68/3 measuring about 180 acres at

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Harohally  and  Avalahally  villages  of Yelahanka Hobli, Bangalore North Taluk respectively  in  one  continguous  plot from the respective owners thereof…”  

6.The  Second  Party  shall  arrange  to initiate  land  Acquisition  Proceedings as per the Karnataka Land Acquisition Act  under  Clause  4(1),  6(1) Notifications issued in the name of the First Party.”

7. All Acts, Deeds and things connected with  the  Acquisition  of  lands  as aforesaid shall be got completed by the Second Party with a view to facilitate Acquisition of lands within a period of 18 months or any period to be extended in writing by the First Party.

8.  The  Second  Party  shall  take necessary steps to get the said lands Acquired in the name of the First Party through  the  Government  for  the formation  of  residential  sites  and handover the possession of said lands in favour of the First Party within a period of 18 months from the date of this Agreement.”

It  becomes  clear  from  a  perusal  of  the

aforesaid  conditions  incorporated  in  the

agreement  that  M/S  Srinivasa  Enterprises,

represented by its proprietor Mr. S. Rangarajan,

had agreed to undertake the responsibility to get

the lands mentioned therein acquired in favour of

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the respondent-Society from the state government

and prepare a Layout Plan as per the regulations

of  the  Bangalore  Development  Authority

(hereinafter  referred  to  as  “BDA”)  and  Town

Planning  Authority,  and  to  get  the  plan

sanctioned  by  BDA  in  favour  of  the

respondent-Society. In addition to the aforesaid

responsibility, he had also undertaken to execute

the layout work in accordance with the sanctioned

layout plan under the supervision of the BDA and

get the sites released from the said authority in

favour of the respondent-Society. In terms of the

agreement, Mr. S. Rangarajan was to be paid Rs.

160/- per square yard by the respondent-Society,

the calculation of which was to be done at Rs.

100 per sq. yard and calculation of cost of land

at Rs. 60 per sq. yard for the layout charges.

The details of the payment plan are outlined as

under:    “

a.Initial advance at the time of signing this agreement

Rs. 50,000/-

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b.On  production  of  document  of Title  relating  to  the  lands forming Subject matter of this agreement  And  after verification by the lawyers Of the society and at the time of Submission  of  Application  for Acquisition.

25%

c.Upon section 4(1) notification is  published  in  the  official gazette

30%

d.Upon section 6 (1) notification is  published  in  official gazette

30%

e.Upon  approval  of  the  plan  of the  Bangalore  Development Authority

15%

                                   ”

The aforementioned amount was enhanced to Rs. 170

per acre by way of supplementary agreement dated

05.03.1992.

29. Thus, Mr. Rangarajan was essentially required

to  act  as  a  middleman  between  the

respondent-Society and the state government to

ensure that lands are acquired in favour of the

respondent-Society  for  the  purpose  of  its

housing project. Further, between the years 1985

and 1987, the respondent landowners had executed

power of attorney(s) of the lands in favour of

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Mr. Rangarajan. A sample clause from these Power

of Attorney(s) reads as under:

“WHEREAS  the  schedule  property  has been sold by us under agreement to sell:  AND  we  have  also  agreed  and declared to relinquish our rights for acquiring  the  schedule  property  in favour of the Trinity House Building Co-Operative Society Ltd., Bangalore AND WHEREAS we have received the full consideration for the said schedule property  as  per  Agreement  under separate document and receipt.

AND  WHEREAS  the  registration formalities  or  the  acquisition proceedings  is  yet  to  be  completed AND WHEREAS the entire consideration/ compensation/ award has been received by  us  under  separate  documents  as said above we hereby give this Power of  Attorney  in  favour  of  SRI  S. RANGARAJAN, S/o Late K.S.S. Naidu, as desired by the Trinity House Building Co-Operative  Society  Ltd., Bangalore.”

A perusal of the agreement executed between

the  respondent-Society  and  Mr.  Rangarajan,  as

well as the power of attorney(s) executed by the

landowners  in  favour  of  Mr.  Rangarajan  would

clearly  show  that  the  ultimate  intent  of  the

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parties was to get the lands of the landowners

acquired in favour of the respondent-Society.

30. It was also brought to our attention by the

learned  senior  counsel  appearing  on  behalf  of

the appellants that the fact that co-operative

societies  were  indulging  in  malpractices  had

also come to the notice of the state government.

Accordingly, the state government of Karnataka,

on 23.06.1986 issued an order stating: “A  large  number  of  House  Building Co-operative Societies in Bangalore were purchasing  lands  directly  from  the landlords or under Land Acquisition Act for  formation  of  layout.  This  has resulted  in  uncontrolled,  un-planed  and haphazard growth of city of Bangalore. It also  created acute  problem of  order to regulate the orderly development of the city, it was felt hat the activities of such  societies  should  be restricted.....However it was proposed to continue  acquisition  of  lands  for  70 House  Building  Co-Operative  Society subject to the clearance from the Three Men Committee appointed for scrutiny of such  proposal.  Additional  49  societies listed  in  the  schedule  to  this  order could not come within the purview of the said Government Order....The cut-off date was fixed as 30-6-1984 for the purpose of Registration  of  societies  and  enrolment of members for the said purpose.....

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It  has  been  considered  necessary  to reconstitute the THREE MEN COMMITTEE for Verification  and  for  reporting  to  the revenue Department regarding the extent of lands to be acquired for each society and for relaxation of cut-off date for registration of certain societies and for enrolment  of  members  even  beyond 30.06.1984.”

The G.V.K. Rao Committee report also mentions the

irregularities  in  the  functioning  of  the

respondent-Society. The relevant portions of the

report are extracted as under:

“…it appears that the society had entered into an agreement with Estate Agents for acquisition of land under Land Acquisition Act and in the process, the amount being paid  to  the  Estate  Agents  towards  his service charges itself is more than the costs of the land under land acquisition. This  is  a  clear  case  of  the  Society frittering  away  the  advances  collected from  the  members  and  the  site  deposit collected  from  the  members  are  not employed in a prudent manner. ........  The  society  had  admitted  18  members without  applications  for  membership,  3 members with incomplete applications, at least  21  members  from  out-side  the jurisdiction of the society (all are from outside Bangalore) and 8 members without resolution  of  the  committee.....At  one stage  he  has  also  stated  that  many  of their  members  are  Senior  Government Officers  and  this  demolishes  the

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contention  of  the  Vice-president  that because  of  their  inexperience  and ignorance,  they  have  committed  the mistakes.  The  way  society  is  admitting members  from  Bombay,  Mangalore,  Kolar, Andaman, Secunderabad etc, makes it clear that they have absolutely no intention of following their byelaws. ...........

When  these  lapses  were  brought  to  the notice  of  the  Vice-President  of  the society  he  has  explained  that,  in  the initial  stages, since  they did  not get the prescribed application forms printed, they had admitted a few members without applications and thereafter when they had asked  the  members  to  fill  in  the prescribed  applications  they  have  not filled in....Further he has stated that since there is a lot of pressure from the members  of  their  community,  they  have admitted  members  from  outside  the jurisdiction  (mostly  outside  the  state) and  subsequently,  they  made  efforts  to amend the Byelaws, the same has not been approved  by the  Department, and  he has pleaded that because of the inexperience of the committee, some mistakes have been committed by the society while admitting the members and they will take steps to ensure  that  the  same  mistakes  are  not repeated.”

The G.V.K. Committee Report was considered by

a Division Bench of the Karnataka High Court in

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the case of Narayana Reddy v. State of Karnataka9,

wherein it was held as under: “39.  As  regards  the  Agreements  entered into between the six respondent-Societies and  their  agents,  inter  alia,  for  the purpose of influencing the Government and to procure the preliminary and the final notifications under Section 4 and 6 of the Land  Acquisition  Act,  which  they  did procure and which are subject matter of challenge  in  these  Petitions,  the questions which arises for consideration is,  if the agreements are hit by Section 23 of the Contract Act on the ground that they were opposed to public policy whether the impugned notifications are liable to be quashed on the grounds that they were the result of exercise of influence by the agents on the Government which submission of the petitioners stand substantiated by the approval given for acquisition is all such cases which has made the Government itself  to  realise  that  it  has  totally bungled in the matter as is evident from the G.V.K. Rao Committee.....As far as the question that the agreements in question are opposed to public policy is concerned, it is seen that the real purpose of the Agreement  entered  into  between  the respondent-Societies and their agents was that the agent should get the preliminary and  the  final  notifications  from  the Government  and  for  that  purpose  huge amounts were paid or agreed to be paid. Any  power  conferred  on  the  Government under a statute like the power conferred under Section 4 and 6 of the Act has to be exercised bona fide and for the purpose

9  ILR 1991 Kar 2248

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for which it is conferred, therefore an agreement  under  which  a  party  to  the agreement  is  required  to  influence  the statutory  authority  and  to  procure  a decision favourable to the other party, is certainly opposed to public policy.”               (emphasis laid by this Court)

The principle of law that an agreement under which

a party to an agreement is required to influence a

statutory  authority  and  to  procure  a  decision

favourable  to  the  other  party,  is  certainly

opposed to public policy, has been elaborated by

this Court in the case of Rattan Chand Hira Chand

v. Askar  Nawaz  Jung10,  wherein  it  was  held  as

under: “The contract such as the present one which is found by the City Civil Court as well as the High Court to have been entered into with the obvious purpose of  influencing  the  authorities  to procure  a  verdict  in  favour  of  the late Nawab was obviously a "carrier" contract. To enforce such a contract although  its  tendencies  to  injure public wealth is manifest is not only to abdicate one's public duty but to assist  in  the  promotion  of  a pernicious  practice  of  procuring decisions  by  influencing  authorities when they should abide by the law. To strike down such contracts is not to

10 (1991) 3 SCC 67

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invent a new head of public policy but to  give  effect  to  its  true implications. A democratic society is founded  on  the  rule  of  law  and  any practice  which  seeks  to  subvert  or circumvent the law strikes at its very root.  When the  Court discountenances such practice, it only safeguards the foundation  of  the  society.  Even assuming,  therefore,  that  the  Court finds a new head of public policy to strike  down  such  practice,  its activism  is  not  only  warranted  but desired.”

Further, in the first  HMT case (supra), this

Court has held as under: “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  No. 11. On the materials on record, High Court was justified in coming to the conclusion  that  the  proceedings  for acquisition of the lands had not been initiated  because  the  State Government  was  satisfied  about  the existence of the public purpose but at  the  instance  of  agent  who  had collected more than a crore of rupees for getting the lands acquired by the State Government.”

31. In the instant case, the learned single Judge of

the  High  Court  rightly  placed  strong  reliance

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upon  the  judgment  in  the  first  H.M.T.  House

Building Co-operative Society case (supra) and

held that the said decision is applicable on all

fours to the facts of the case on hand, holding

that  neither  was  a  scheme  framed  by  the

respondent-Society nor prior approval granted by

the  state  government.  The  said  finding  was

erroneously  reversed  by  the  Division  Bench  of

the High Court, which placed reliance upon the

letter dated 26.11.1987 of the State Government

addressed  to  the  Special  Deputy  Commissioner,

Bangalore District and held that facts of the

instant  case  were  similar  to  those  of  the

decision of this Court in the case of  Kanaka

Gruha (supra), wherein it was held as under: “For emphasizing that prior approval of the appropriate Government in the present case was not just an empty formality, we would refer to Annexure R-1, which is as under: "Dated:  14.11.85  The  Revenue  Commissioner and Secretary to Government, Bangalore.

The Special Deputy Commissioner, Bangalore.

Sir,  Sub:  Acquisition  of  Land  in  Sy. Nos.19/2,  26,  29  of  Kadirenahalli

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village  and  Sy.  No.29/3  of Konanakunt village Bangalore South Taluk  in  favour  of  Kanaka Gruhaniramana  Sahakara  Sangha, Bangalore.

I  am  directed  to  convey  the approval of Government to initiate acquisition proceedings by issuing 4(1)  notification  in  respect  of lands measuring 8 acres 03 guntas as  recommended  by  the  Official Committee in Sy. Nos.19/2, 26, 29 of  Kadirenehalli  village  and  Sy. No.29/3  of  Kenanakunte  village, Bangalore South Taluk in favour of Kanaka  Gruha  Nirmana  Sahakara Sangha Bangalore. Yours faithfully, Sd/- (Mandi Hussain)  Under  Secretary  to  Government Revenue Department. Copy to the President, Kanaka Gruha Nirmana  Sahakara  No.435  Middle School  Road,  V.V.  Puram, Bangalore-4."

Considering the fact that State Government directed  the  Assistant  Registrar  of Co-operative  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).

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Prior  approval  is  granted  after  due verification and scrutiny.”

32. The  Division  Bench  of  the  High  Court  in  the

instant  case,  accordingly,  held  that  the

approval  granted  in  the  case  on  hand

sufficiently  satisfied  the  requirements  of

Section 3(f)(vi) of the L.A. Act. The Division

Bench  of  the  High  Court,  however,  crucially

fails  to  appreciate  the  fact  that  the  said

letter  issued  by  the  state  Government  to  the

Deputy  Commissioner  does  not  speak  of  either

framing  of  a  Housing  Scheme  as  contemplated

under  Section  3(f)(vi)  of  the  L.A.  Act  or

approval of the same as has been interpreted by

the three judge bench decision of this Court in

the case of  H.M.T. House Building Co-operative

Society (supra),  which  has  been  reiterated  by

this  Court  in  subsequent  judgments  on  the

similar set of facts including that of Bangalore

City  Coop.  Housing  Society  Ltd.(supra),  the

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relevant  paragraphs  of  which  are  extracted

hereunder:

20. 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  co-operative society to term in respect of nature of  construction,  the  area  to  be alloted  to  the  members  and restrictions on transfer thereof?

xxxxxxxxxxxxxxxxxxxxx

22.  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 land holders. 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

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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 order to acquire the said land for the benefit  of  the  society  members  to enter  in  the  agreement  hereinafter contained  with  the  Government". [emphasis  supplied]  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 No. 11)”

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    Further, in the case of  Vyalikaval House

Building  Coop.  Society  v.  V.  Chandrappa11,  this

Court held as under: “109.  The  Court  in  Kanaka  Gruha  case noted  that  the  Assistant  Registrar  of Cooperative  Societies,  Three-Man Committee and the State Level Committee had recommended the acquisition of land on  behalf  of  the  appellant  and  the Government  had  directed  the  Special Deputy  Commissioner,  Bangalore  to initiate  acquisition  proceedings  by issuing  Section  4(1)  notification  and proceeded to observe:

‘17. 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.’

110. In our view, none of the orders and judgments referred to hereinabove can be

11  (2007) 9 SCC 304

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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 the 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 the three-Judge Benches  in  1st  H.M.T.  and  2nd  H.M.T. cases and the judgment of the two-Judge Bench in Vyalikaval House Building Coop. Society case.

111. 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  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  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 case an order has been passed on 14-10-1985 conveying the Government’s

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approval for the issuance of Notification dated 21-1-1986 under Section 4(1) of the 1894 Act. In Kanaka Gruha case also, this Court treated the direction contained in letter  dated  14-11-1985  of  the  Revenue Commissioner  and  Secretary  to  the Government  to  the  Special  Deputy Commissioner, Bangalore to initiate the acquisition  proceedings  by  issuing notification  under  Section  4(1)  as  an approval  within  the  meaning  of  Section 3(f)(vi).

112.  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  1st  H.M.T.  and  2nd  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 amount of money and the fact that the agreement  entered  into  between  the society  and  the  Government  was  in  the nature  of  an  agreement  contemplated  by Part VII of the Act.”

113. While in 1st H.M.T. 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 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

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1st H.M.T. and 2nd H.M.T. cases and the High Court did not commit any error by relying upon the judgment in 1st H.M.T. case for declaring that the acquisition was not for a public purpose.”              (emphasis laid by this Court)

33. The stand of the respondent-Society is that

the acquisition of lands by the State Government

is under Section 3 (f) (vi) of the L.A. Act and

that a scheme has been submitted and the same

has been approved.  But from a perusal of the

original  acquisition  file  of  the  state

government, it is clear that there is no such

scheme and no prior approval of the same by the

State Government as required under Section 3 (f)

(vi) of the L.A. Act.   

34. Thus, in the light of the judgments of this

Court referred to supra, and in the absence of

framing of scheme by the respondent-Society and

approval of the same by the State Government as

required  under  Section  3  (f)(vi)  of  the  L.A.

Act, the Division Bench, holding that the letter

dated  26.11.1987  referred  to  supra  amounts  to

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approval of the scheme, is wholly erroneous in

law for the reason that neither the Three Men

Committee,  nor  the  State  Level  Co-ordination

Committee even adverted to the said letter in

their  proceedings.  Further,  no  details  are

forthcoming from the original file regarding the

details of the scheme, and the application of

mind  by  the  state  government  to  approve  the

same.  In  the  light  of  the  decisions  of  this

Court, as well as the wording of Section 3(f)

(vi) of the L.A. Act, we are constrained to hold

that the acquisition proceedings in the instant

case  cannot  be  said  to  be  one  for  ‘public

purpose’ as defined under Section 3 (f) (vi) of

the L.A. Act, especially in the light of the

fact  that  not  only  was  there  no  scheme

formulated  by  the  respondent-Society  and

approved by the State Government for the said

purpose  before  initiating  the  acquisition

proceedings,  but  that  the  evidence  on  record

clearly  indicates  that  the  respondent-Society

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paid consideration to Mr. S. Rangarajan to act

as  the  agent  between  it  and  the  state

government,  to  ensure  that  the  lands  of  the

original land owners are acquired in its favour.

Upholding such an acquisition would be akin to

approving to such type of agreements which are

opposed to public policy and the same cannot be

allowed by this Court under any circumstances,

as the concept of hiring middlemen to get lands

of the poor agricultural workers acquired by the

state  government  in  favour  of  a  Cooperative

Society is abhorrent and cannot be granted the

sanction of law.

35. Even  as  far  as  the  terms  of  the  so-called

agreement are concerned, the parties failed to

meet those as well. The relevant clause of the

agreement is extracted as under: “7.  All  Acts,  Deeds  and  things connected with the Acquisition of lands as aforesaid shall be got completed by the  Second  Party  with  a  view  to facilitate Acquisition of lands within a period of 18 months or any period to be  extended  in  writing  by  the  First Party.

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8.  The  Second  Party  shall  take necessary steps to get the said lands Acquired in the name of the First Party through  the  Government  for  the formation  of  residential  sites  and handover the possession of said lands in favour of the First Party within a period of 18 months from the date of this Agreement.”

It is clear that the parties to the said agreement

were  not  even  able  to  honour  the  terms  of  the

same. Thus, the acquisition of the lands cannot be

allowed to sustain for that reason as well.

36. Further, the state government did not even take

into consideration the finding of the G.V.K. Rao

Committee  report,  which  found  that  the

respondent-Society  was  issuing  membership  to

persons fraudulently, including to those persons

who were not even residing within the area of

operation  of  the  jurisdiction  of  the  society.

Further,  the  acquisition  of  lands  of  two

different  villages  by  issuing  the  impugned

notifications  by  the  State  Government  in

exercise  of  its  eminent  domain  power  at  the

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instance of a middleman amounts to a mala fide

exercise of power by the state government. This

is  further  made  clear  from  the  stand  of  the

state  government  reflected  throughout  the

proceedings,  not  just  before  this  Court,  but

also before the High Court, where it remained a

silent spectator to the proceedings, and neither

actively defended the acquisition of lands nor

opposed  it.  Even  in  the  affidavit  dated

03.08.2016 submitted before this Court in these

proceedings, the stand of the state government

is merely that it will proceed to make an award

under  Section  24(1)(a)  of  the  Right  to  Fair

Compensation  and  Transparency  in  Land

Acquisition,  Rehabilitation  and  Resettlement

Act, 2013 (hereinafter referred to as the “New

L.A.  Act,  2013”),  if  the  validity  of  the

acquisition of the lands in question is upheld.

This stand of the state government clearly goes

to  show  the  seriousness  in  which  it  has

exercised  its  eminent  domain  power  in  such

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important case of acquisition of lands of poor

agricultural workers in blatant violation of the

provisions of the L.A. Act and law laid down by

this Court.

37. Thus, the impugned notifications issued under

Sections 4(1) and Section 6(1) of the L.A. Act

are bad in law as the same suffer from not only

legal mala fides but also legal malice, which

amounts to colourable exercise of power by the

state  government  and  therefore,  the  same  are

liable to be quashed and accordingly quashed.

38. At this stage, it is also important to reflect

on  another  argument  advanced  by  the  learned

senior  counsel  appearing  on  behalf  of  the

appellants, that since till date no award has

been passed in favour of the landowners by the

Land Acquisition Officer and therefore, the land

acquisition proceedings are lapsed on that count

also by virtue of Section 11A of the L.A. Act.

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39. The learned senior counsel appearing on behalf

of the appellants submit that since no award has

been passed within two years from the date of

the acquisition of the lands, which got over in

April 1991, thus, by virtue of Section 11A of

the  L.A.  Act,  the  acquisition  proceedings  are

lapsed.  A  question  which  was  sought  to  be

examined was whether Section 24(1)(a) of the New

L.A.  Act,  2013,  which  came  into  force  from

01.01.2014  would  save  the  proceedings  in  the

instant case, even if the award has not been

passed within two years from the date of the

acquisition of the lands. Before we deal with

the  argument  advanced  by  the  learned  senior

counsel appearing on behalf of the appellants,

it would be useful to advert to the relevant

statutory provisions.

Section 11A of the L.A. Act reads as under: “11A.  Period  shall  be  which  an  award within made. - The Collector shall make an  award  under  section  11  within  a period of two years from the date of the publication of the declaration and if no award is made within that period, the

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entire proceeding for the acquisition of the land shall lapse....”

The  relevant  provisions  of  the  New  L.A.  Act,

2013 read as under: “24. Land acquisition process under Act No. 1 of 1894 shall be deemed to have lapsed in certain cases.–(1) Notwithstanding anything contained in this Act, in any case of land acquisition proceedings initiated under the Land Acquisition Act, 1894,—

(a) where no award under section 11 of the said Land Acquisition Act has been made, then,  all  provisions  of  this  Act relating  to  the  determination  of compensation shall apply; or

............ ”

“114.  Repeal  and  saving.–(1)  The  Land Acquisition Act, 1894 (1 of 1894) is hereby repealed. (2) Save as otherwise provided in this Act the repeal under sub-section (1) shall not be held to prejudice or affect the general application of section 6 of the General Clauses Act, 1897 (10 of 1897) with regard to the effect of repeals.    .........                               ”

Section 6 of the General Clauses Act reads as under:  

“6. Effect of repeal- Where this Act, or any or Regulation made after the commencement of this  Act,  repeals  any  enactment  hitherto made or hereafter to be made, then, unless a

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different  intention  appears,  the  repeal shall not-— (a)  revive  anything  not  in  force  or existing  at  the  time  at  which  the  repeal takes effect; (b)  affect  the  previous  operation  of  any enactment so repealed or anything duly done or suffered thereunder; or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; .....”

It was contended that when the New L.A. Act,

2013 came into force, the acquisition proceedings

had already lapsed by virtue of Section 11A of the

L.A.  Act. Section  6 of  the General  Clauses Act

clearly lays down that the repeal of the L.A. Act

does not revive anything not in force or existing

at  the  time  the  repeal  takes  effect.  It  is

submitted  that  the  repeal  took  effect  on

01.01.2014 and as on that date, the acquisition

proceedings  were  no  longer  alive.  Thus,  Section

24(1)(a)  of  the  New  L.A.  Act,2013  read  with

Section  6  of  the  General  Clauses  Act  does  not

revive the acquisition proceedings which were dead

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long before coming into force of the New L.A. Act,

2013.   

40. On  the  other  hand,  Mr.  Shanti  Bhushan,  the

learned  senior  counsel  appearing  on  behalf  of

the respondent-Society very strongly opposed the

said  contention  placing  reliance  upon  Section

24(1)(a) of the New L.A. Act, 2013 and Section

11A of the L.A. Act that an Award could not be

passed because of the status quo order passed by

way of an interim order that had been passed

during the pendency of the writ petitions, writ

appeals and as well as the proceedings before

this  Court.  Therefore,  the  acquisition

proceedings  cannot  be  said  to  have  lapsed  on

that ground alone.

41. In  view  of  the  fact  that  for  the  reasons

stated  supra,  we  have  already  come  to  the

conclusion that the acquisition proceedings in

respect of the acquired lands are liable to be

quashed and there is no need for us to render an

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opinion on this question of law in these cases,

as interesting as it is.

Answer to Point nos. 3 and 4:

42. Having arrived at the conclusion on the points

framed in these appeals for the reasons stated

supra,  the  acquisition  proceedings  in  the

instant case are liable to be quashed, we now

turn our attention to answer the question of the

relief required to be granted by this Court  in

favour of the appellants in the appeals arising

out of SLP (C) Nos. 13656-13684 of 2004 and the

appeals arising out of SLP (C) Nos. 18090-18118

of 2004. The appellants in the connected third

appeals arising out of SLP (C) No. 23336-23339

of 2004 are the original owners of lands who had

approached the High Court after a long lapse of

time.  Therefore,  Mr.  Shanti  Bhushan  learned

senior  counsel  appearing  on  behalf  of  the

respondent-Society  submits  the  appeals  arising

out  of  SLP  (C)  Nos.  23336-23339  of  2004  are

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liable to be dismissed on account of delay and

laches as they have approached the High Court

after  long  lapse  of  time  without  proper  and

sufficient explanation in approaching belatedly

to the High Court by filing writ petitions. Mr.

Shekhar  Naphade,  the  learned  senior  counsel

appearing  on  behalf  of  the  said

appellants-landowners has seriously opposed the

above  contention  by  contending  that  the  said

question has already been answered by this Court

in  H.M.T. House Building Coop. Society  (supra)

wherein it was held that once the proceedings

are  void  ab  initio  in  law  for  non-compliance

with  mandatory  statutory  requirement  of  prior

approval  of  the  Scheme,  the  original  owners

cannot be shut out from the Court in challenging

the acquisition proceedings and therefore, they

are entitled to challenge the same at any point

of time even in the collateral proceedings. We

have accepted the above contention as the same

is well founded and tenable in law.

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 43. On  the  issue  of  whether  the  so  called

purchasers of the lands during the pendency of

Writ petitions were entitled to relief as prayed

for by them in the instant cases, our answer

must  be  in  the  negative  for  the  following

reasons:

The  respondent-original  landowners  in  the

first appeal had executed power of attorney(s)

in favour of Mr. S. Rangarajan to facilitate him

to  get  the  lands  acquired  in  favour  of  the

respondent-Society, the relevant terms of which

have been extracted supra to show that they have

not executed the power of attorney in his favour

to  sell  their  lands  other  than  the

respondent-Society.   On the basis of the same the acquisition proceedings were initiated and

the notifications under Section 4(1) and 6(1) of

the  L.A.  Act  were  issued.  Some  of  the

respondent-original  landowners  objected  to  the

same  by  submitting  their  objections  to  the

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proposed acquisition of their lands before the

Land  Acquisition  Officer  after  Section  4(1)

notification  was  published.  No  doubt  their

objections have been mechanically overruled by

the  Land  Acquisition  Officer  and  the  State

Government without application of mind to the

facts of the case and the provisions of the L.A.

Act. The fact that the report submitted by the

Special Deputy Commissioner under Section 5A(2)

of the L.A. Act has not been even considered by

the State Government properly and objectively is

evident from the original file produced in these

cases. After the Writ Petitions were allowed by

the learned single Judge of the High Court, the

middleman, Mr. S. Rangarajan played fraud on the

land owners and the society by making use of

said Power of Attorney(s) and executed the sale

deeds  in  favour  of  his  son,  daughter  and

son-in-law who are the appellants in the appeals

arising out of SLP (C) Nos. 13656-13684 of 2004,

within a span of a few days from the date of

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passing the judgment by the learned Single Judge

in the writ petitions. The said action of Mr. S.

Rangarajan tantamounts to fraud played by him

upon  the  respondent-original  landowners  and

therefore, the said transaction of executing the

sale deeds in favour of his son, daughter and

son in law is void ab initio in law.

44. As far as the sale in favour of the appellants

in  the  appeals  arising  out  of  SLP  (c)  Nos.

18090-18118  of  2004  is  concerned  during  the

pendency of the writ petitions, the same is also

void  ab  initio in  law  as  the  same  happened

during the pendency of the Writ Petition before

the learned single Judge of the High Court. A

Division  Bench  of  this  Court  in  the  case  of

Uddar  Gagan  Properties  Ltd.  v.  Sant  Singh  &

Ors.12 held that the  sale transactions  of  a

similar nature is void  ab initio in law. Thus,

the  transactions  of  the  alleged  sales  made

during  the  pendency  of  the  proceedings  are

12 C.A. No. 5072 of 2016, decided on 13.05.2016

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wholly illegal and  void ab initio in law and

therefore the same cannot be allowed to sustain

in  law.  The  said  sale  transactions  are  also

contrary to law which is in operation in respect

of agricultural lands.   

45. The  Impleadment  Application  Nos.  74-102  of

2010 filed in the appeals arising out of the SLP

(C) Nos. 13656-13684 of 2004 are also liable to

be rejected, as the applicant therein claims to

be the Power of Attorney(s) holder of some of

the lands in question and agreements of sale.

Since he neither approached the High Court, nor

this Court by way of filing SLPs and neither the

agreements of sale nor the power of attorney(s)

confer any right upon him at this time, as the

same is barred by the provisions of the Land

Reforms  Act,  1952,  provisions  of  the  Specific

Relief Act as well as the Limitation Act, the

applicant has no legal right to come on record

to challenge the impugned judgment and therefore

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the  Impleadment  Applications  are  rejected,  as

the same are wholly unsustainable in law.

46. For  the  reasons  stated  supra,  we  pass  the

following orders:

(a) The  appeals  filed  by  the  so-called

purchasers  and some  of the  landowners

seeking to set aside the common impugned

judgment  and  order  dated  06.05.2004

passed by the Division Bench of the High

Court of Karnataka  in Writ Appeal Nos.

7543-7557  of 1996  and other  connected

appeals  are  allowed  to  the  extent  as

indicated  below  and  the  impugned

judgment and order is hereby set aside.

The  common  judgment  and  order  dated

11.07.1996 passed by the learned single

Judge of the High Court in Writ Petition

No.  8188-8201  of  1989  and  other

connected writ petitions in quashing the

acquisition  notifications  and

proceedings are restored.

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 (b) We also hold that the transfer of the

acquired  lands  by  way  of  the  alleged

sale deeds executed by Mr. S. Rangarajan

in  favour  of  the  appellants  in  the

appeals  arising  out  of  SLP  (C)  Nos.

13656-13684  of  2004,  as  well  as  the

transfer of lands by way of alleged sale

deeds  in  favour  of  some  of  the

appellant-purchasers  in  the  appeals

arising out of SLP (C) Nos. 18090-18118

of 2004 are illegal and void ab initio

in law.

(c) Since the learned single Judge of the

High  Court  quashed  the  acquisition

notifications  and  proceedings  at  the

instance  of  the  original  landowners,

which common judgment and order has been

restored by this Court by setting aside

the impugned judgment and order passed

by the Division Bench of the High Court

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in  the  Writ  Appeals  filed  by  the

respondent-Society, we grant the relief

as  has  been  granted  by  the  learned

single  Judge  in  favour  of  the  said

original  landowners,  who  are  the

respondents  in  the  first  two  appeals

before  us  and  also  allow  the  appeals

filed by some of the landowners in the

civil appeals arising out of SLP (C) No.

23336-23339 of 2004.

(d) Since  we  have  set  aside  the  common

impugned  judgment  and  order  of  the

Division  Bench  of  the  High  Court  of

Karnataka, we consequently restore the

common judgment and order of the learned

single  Judge  passed  in  the  Writ

Petitions,  wherein  the  acquisition

notifications and proceedings in respect

of  the  lands  of  some  of  original

landowners  have been  quashed at  their

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instance. The same shall now be enjoyed

by them. So also the appellants in the

appeals  arising  out  of  SLP  (C)  Nos.

23336-23339 of 2004 are entitled for the

same  relief  as  we  quashed  the

acquisition  notifications  and

proceedings. For this purpose, we direct

the  Deputy  Commissioner  of  Bangalore,

Urban District and also the Commissioner

of  Police/DGP  to  extend  all  such

protection  and  assistance  to  the

landowners to ensure that this judgment

and order is implemented properly.

All pending applications are disposed of.

     ……………………………………………………J.                                [V.GOPALA GOWDA]

……………………………………………………J.                                [ADARSH KUMAR GOEL]

New Delhi, September 15, 2016

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REVISED ITEM NO.1A-For JUDGMENT      COURT NO.8               SECTION IVA                S U P R E M E  C O U R T  O F  I N D I A                        RECORD OF PROCEEDINGS C.A. Nos.9091-9119/2016 @ Petition(s) for Special Leave to Appeal (C) No(s).  13656-13684/2004 R. RAJASHEKAR AND ORS.                             Petitioner(s)                                 VERSUS TRINITY HOUSE BUILD COOP. SOCIETY & ORS.           Respondent(s) WITH C.A. Nos.9120-9148/2016 @ SLP(C) No. 18090-18118/2004 C.A. Nos.9149-9152/2016 @ SLP(C) No. 23336-23339/2004 Date : 15/09/2016 These matters were called on for pronouncement of  JUDGMENT today. For Petitioner(s)  Mr. R.S. Hegde, Adv.

Mrs. Farhat Jahan Rehmani, Adv.  Mr. Shanti Prakash, Adv.

                    Mr. Rajeev Singh,Adv.  Mr. Basava Prabhu Patil, Sr. Adv.  Mr. Anirudh Sanganeria, Adv.  Mr. Chinmay Deshpande, Adv.  Mr. Amjid Maqbool, Adv.                      

                    Mr. A. S. Bhasme,Adv. For Respondent(s)                      Mr. E. C. Vidya Sagar,Adv.

Mr. Kartik Seth, Adv.  Mr. Subhash Chandra Sagar, Adv.  Ms. Jennifer John, Adv.

                    Mr. Irshad Ahmad,Adv.                      Mr. V. N. Raghupathy,Adv.                      Mr. Kunal Verma,Adv.

Ms. Yugandhara P. Jha, Adv.

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Mr. Prasanna Mohan, Adv.  Mr. Pulkit Tare, Adv.  Ms. Ruchi Sahay, Adv.

Hon'ble Mr. Justice V.Gopala Gowda pronounced the judgment  of  the  Bench  comprising  His  Lordship  and Hon'ble Mr. Justice Adarsh Kumar Goel.

Leave granted. The  appeals  are  allowed  in  terms  of  the  signed

Reportable Judgment. I.A.  Nos.  74-102/2010,  applications  for

impleadment are rejected. Pending application(s), if any, stand(s) disposed

of.        

(VINOD KUMAR JHA) AR­CUM­PS

(MALA KUMARI SHARMA) COURT MASTER

    (Signed corrected Reportable Judgment is placed on the file)  

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ITEM NO.1A-For JUDGMENT      COURT NO.8               SECTION IVA                S U P R E M E  C O U R T  O F  I N D I A                        RECORD OF PROCEEDINGS C.A. Nos.9091-9119/2016 @ Petition(s) for Special Leave to Appeal (C) No(s).  13656-13684/2004 R. RAJASHEKAR AND ORS.                             Petitioner(s)                                 VERSUS TRINITY HOUSE BUILD COOP. SOCIETY & ORS.           Respondent(s) WITH C.A. Nos.9120-9148/2016 @ SLP(C) No. 18090-18118/2004 C.A. Nos.9149-9152/2016 @ SLP(C) No. 23336-23339/2004 Date : 15/09/2016 These matters were called on for pronouncement of  JUDGMENT today. For Petitioner(s)  Mr. R.S. Hegde, Adv.

Mrs. Farhat Jahan Rehmani, Adv.  Mr. Shanti Prakash, Adv.

                    Mr. Rajeev Singh,Adv.  Mr. Basava Prabhu Patil, Sr. Adv.  Mr. Anirudh Sanganeria, Adv.  Mr. Chinmay Deshpande, Adv.  Mr. Amjid Maqbool, Adv.                      

                    Mr. A. S. Bhasme,Adv. For Respondent(s)                      Mr. E. C. Vidya Sagar,Adv.

Mr. Kartik Seth, Adv.  Mr. Subhash Chandra Sagar, Adv.  Ms. Jennifer John, Adv.

                    Mr. Irshad Ahmad,Adv.                      Mr. V. N. Raghupathy,Adv.                      Mr. Kunal Verma,Adv.

Ms. Yugandhara P. Jha, Adv.  Mr. Prasanna Mohan, Adv.

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71

Mr. Pulkit Tare, Adv.  Ms. Ruchi Sahay, Adv.

Hon'ble Mr. Justice V.Gopala Gowda pronounced the judgment  of  the  Bench  comprising  His  Lordship  and Hon'ble Mr. Justice Adarsh Kumar Goel.

Leave granted. The  appeals  are  allowed  in  terms  of  the  signed

Reportable Judgment. I.A.  Nos.  74-102/2010,  applications  for

impleadment are rejected. Pending application(s), if any, stand(s) disposed

of.        

(VINOD KUMAR JHA) AR­CUM­PS

(MALA KUMARI SHARMA) COURT MASTER

(Signed Reportable Judgment is placed on the file)