BANGALORE CITY COOPERATIVE HOUSING SOCIETY LTD. v. STATE OF KARNATAKA AND OTHERS

Citation: [2012] 3 S.C.R. 295

Court: Supreme Court of India

Bench: G.S. SINGHVI, A.K. GANGULY

Case summary

BANGALORE CITY COOPERATIVE HOUSING SOCIETY LTD. v. STATE OF KARNATAKA AND OTHERS.pdf

Judgment text

[2012) 3 S. C. R. 295 BANGALORE CITY COOPERATIVE HOUSING SOCIETY LTD. v. STATE OF KARNATAKA AND OTHERS (Civil Appeal Nos. 7425-7426 of 2002) FEBRUARY 02, 2012 [G. S. SINGHVI AND ASOK KUMAR GANGULY, JJ. ] Land Acquisition Act, 1894: ss. 4, 6 and 3(f)(vi) - Acquisition of land for public purpose for appellant-Co-operative Housing Society - Agreement ...... entered into between the Housing Society and the State Government - Issuance of notification u/s.

4(1) and 6 - Passing of award - Quashing of acquisition of land by the High Court on the ground that it was vitiated due to violation of the provisions of the Act and the manipulation done by Housing Society through Estate Agent while acquiring the land - On appeal, held: Agreement entered into between the Housing Society and the State Government did not contain any inkling about the housing scheme framed by the Housing Society - It merely mentioned about the proposed formation of sites and construction of houses for the members of the Housing Society and payment of cost for the acquired land - Housing Society did not frame any housing scheme and did not obtain approval by the State Government before the issuance of notification uls.

4(1) - No material produced before the High Court or Supreme Court to show that scheme had been framed and approved by the State Government - Thus, the High Court rightly held that in the absence of housing scheme framed by the housing society, acquisition of land belonging to the land owner was not for public purpose as defined in s. 3(f)(vi) - Housing society executed agreement with the Estate Agent for facilitating the acquisition of land in lieu of payment of more than rupees five crores - Said amount was charged by Estate Agent. for manipulating the State Apparatus for facilitating the acquisition of land and sanction of layout etc. without any obstruction - Thus, such agreement is violative of s. 23 of the 1872 Act - However, the member of the society who had already constructed their houses on the land allotted to them allowed to negotiate with. the State for purchase of their land at the prevailing market price to the rightful land owners - Contract Act, 1872. ss.

3(f), 3(f)(vi) - Expression 'public purpose' - Meaning and scope of - Held: Expression 'public purpose' contained in s. 3(f) is inclusive - Acquisition of land for carrying out any education, housing, health or slum clearance scheme by a .. registered society or a Co-operative society can be regarded as an acquisition for public purpose only if the Scheme has been approved by the appropriate Government before initiation of the acquisition proceedings - In case acquisition of land is for any purpose other than public purpose as defined in s. 3(f), then provisions of Part VII would be attracted and mandate thereof would have to be complied with. ss. 3(f)(vi), 41 - Acquisition of land for public purpose - Housing scheme of Co-operative housing society - Agreement signed by the State Government with the cooperative society - Nominal contribution of Rs.

1001- by the Special Deputy Commissioner - Held: The nominal contribution cannot be construed as State Government's implicit approval of the housing scheme which had never been prepared. s. 5A - Opportunity of hearing under - Finding by Division Bench of High Court that land owner not given opportunity of hearing - Correctness of - Held: Land owner was given opportunity of hearing as her son appeared before the Special Land Acquisition Officer along with his· advocate - Said error not sufficient to nullify the conclusion by the Division Bench of the High Court that land acquisition was not v. STATE OF KARNATAKA for a public purpose and the exercise undertaken by the State Government was vitiated due to the influence of the extraneous considerations. Mysore High Court Act, 1884 - ss. 17, 18 and 19 - Karnataka High Court Act, 1961 - ss.

4, 9 and 10 - Writ 8 appeal - Jurisdiction of High Court - Division Bench sustaining the order of Single Judge on a new ground by relying upon the Supreme Court's decision - Challenge to, on the ground that the Division Bench did not have the jurisdiction to decide the appeal relying upon the Supreme Court's judgment because that ground was not taken by the Single Judge and should have remitted the matter - Held: The ground is not sustainable since parties agreed for that course - Thus, the Division Bench not acted in violation of the provisions of the 1884 and 1961 Act.

Constitution of India, 1950 - Article 226 - Land acquisition - Challenge to, by filing writ petition after a Jong delay - Explanation by land owner that she was hopeful that after having withdrawn the acquisition in respect of one parcel of land, the State Government would accept her prayer for withdrawal of the acquisition in respect of adjoining land - Writ petition dismissed by the High Court on the ground of delay - Division Bench holding that land owner not guilty of /aches - On appeal, held: Non-consideration of the vital facts and documents by the Single Judge resulted in miscarriage of justice - Division Bench did not commit any error by holding that the land owner was not guilty of /aches - Delay! Jaches.

Doctrines - Doctrine of prospective overruling - Invocation of - Acquisition of land by State Government for the benefit of appellant-Cooperative Housing Society quashed by the High Court on the ground of violaUon of the provisions of the Land Acquisition Act and the manipulations made for the acquisition of land - Plea of the appellant that the doctrine of prospective overruling be invoked since crores of rupees spent for formation of layouts, 17191 plots allotted to members and 200 already constructed, 50% land given to Development Authority and some land given to Power Transmission Corporation, such that people who have already constructed houses would not suffer incalculable harm - Held: Doctrine of prospective overruling cannot be invoked since it would result in conferring legitimacy to the influence of money power over the rule of law, which is edifice of the Constitution. There was unprecedented increase in the population of Bangalore City.

Since it was not possible for the Bangalore Development Authority to meet the demand of developed residential sites, the State Government decided to encourage formation of private layouts by the house building co-operative societies. The guidelines for the approval of private layouts were revised. The appellant-Co-operative Housing Societies filed representation to the State Government for the acquisition of land for formation of a layout for its members. The appellant entered into an agreement with the Estate Agent 'RE' who promised to secure the acquisition of land on payment of the specific amount. The State Level Co-ordination Committee (SLCC) considered the case of the appellant and declared that it was eligible for the acquisition of 208 acres 18 guntas land.

- The State Government directed the Deputy Commissioner, Bangalore to initiate acquisition proceedings of 207 acres 29 guntas land at place 'V' and 'R' for the appellant by issuing notification under Section 4(1) of the 1894 Act. Thereafter, the appellant entered into an agreement with the State Government. The Deputy Commissioner, Bangalore issued notification under Section· 4(1) of the Land Acquisition Act, 1894 for the acquisition of the land including the land comprised in Survey Nos. 49 and 50/1 belonging to respondent No. 3 and Survey Nos. 7/1 and 8/1 belonging to the prede. cessor of 'PR' and others. The land owners- v. STATE OF KARNATAKA respondent No. 3 and 'PR' and others filed objections against the proposed acquisition of their land. Thereafter, the Special Land Acquisition Officer issued declaration under Section 6(1) and the same was published.

During the currency of the acquisition proceedings, an inquiry was conducted into the membership of the appellant and s other societies and it was found that they had admitted ineligible persons as their members. Subsequently, the Special Land Acquisition Officer, Bangalore passed an award and determined market value of the acquired land. The award was approved by the State Government. However, before the possession of the acquired land could be taken, the State Government withdrew the acquisition proceedings in respect of land comprised in Survey No. 50/2. Respondent No. 3 made a representation for withdrawal of the acquisition of Survey No. 49 but no 0 final decision was taken. After eighteen months of the passing of the award, the State Government issued Notification under Section 16(2) in respect of various parcels of lands including Survey No. 49.

The Special Land Acquisition Officer handed over the possession of 150 acres 9% guntas of land at place 'V' and 'R' to the appellant-Society. However, the entire exercise showing taking over of possession of the respondents' land and transfer thereof to the appellant was only on papers and physical possession continued with them. Respondent No. 3 challenged the acquisition of her land comprised in Survey No. 49 by filing a writ petition. Appellant also filed a writ petition questioning the legality of notification issued under Section 48(1 ). The Single Judge of the High Court dismissed the writ petition filed by respondent No. 3 on the ground of 2% years' delay between the issue of the declaration under Section 6(1) of the 1894 Act and filing of the writ petition. The writ petition of the appellant was dismissed holding that the State Government has absolute power to withdraw the acquisition before the possession of the acquired land can be taken.

'PR" and others also filed challenged the acquisition proceedings but the same was allowed. Respondent No. 3 challenged the order of the Single Judge in Writ Appeal. The appellant, the State Government and the Special Land Acquisition Officer also filed writ appeal. The Division 8 Benches of the High Court quashed the acquisition of lands by the State Government for the benefit of the appellant on the grounds of violation of the provisions of the Land Acquisition Act, 1894 and the manipulations made by the appellant through the Estate Agent for acquiring the land. Therefore, the appellants filed the instant appeals. Dis~issing the appeals, the Court· HElD: 1.

1 The framers of the Constitution have not prescribed any period of limitation for filing a petition under Article 226 of the Constitution and it is only one of the several rules of self-imposed restraint evolved by the superior Courts that the jurisdiction of the High Court under Article 226 of the Constitution, which is essentially an equity jurisdiction, should not be exercised in favour of a person who approaches the Court after long lapse of time and no cogent explanation is given for the delay. [Para 8) [346-E-F] 1:2 In the writ petition respondent no. 3 spell out the reasons for her seeking interventi. on of the High Court. The said averments were not controverted by respondent Nos. 1 and 2. Notwithstanding this, the Single Judge refused to accept the explanation given by respondent No. 3 that she was hopeful that after having withdrawn the acquisition in respect of one parcel of land, i. e. , Survey No.

50/2, the State Government would accept her prayer for withdrawal of the acquisition in respect of Survey No. 49 as well. Unfortunately, the Single Judge altogether ignored the fact that soon after the issue of the v. STATE OF KARNATAKA declaration under Section 6(1) of the 1894 Act and notices under Sections 9 and 10 of the said Act, the writ petitioner received letter that she should make herself available for inspection of the land and the then Land Acquisition Officer in_spected the site and felt satisfied that the same could be deleted because it was an orchard and was at the end of the area proposed to be acquired. The Single Judge also omitted to consider that the notices were issued to respondent No. 3 informing her about the proposed inspection of the site; that she made a complaint to the Revenue Secretary that no one had come for inspection; that yet another notice was received by respondent No. 3 for inspection would be held on 14. 5.

1990 but the concerned officer did not turn up; that letters were sent by the Revenue Department to Special Deputy Commissioner, Ban'galore requiring him to submit report in the matter of withdrawal of acquisition; and in writ petition, she had disclosed the cause for her filing the writ petition after the long delay. Nonconsideration of these vital tac. ts and documents by the Single Judge resulted in miscarriage of justice. The Division Bench did not commit any error by holding that respondent No. 3 was not guilty of laches. [Para 12] [347- H; 348-A-H] Tilokchand Motichand v. H. B. Munshi (1969) 1 SCC 110 - relied on. Ajodhya Bhagat v. State of Bihar (1974) 2 SCC 501; State of Mysore v. V. K. Kangan (1976) 2 SCC 895: 1976 (1) SCR 369; Pt. Girdharan Prasad Missir v. State of Bihar (1980) 2 sec 83; Hari Singh v. state of U. P. (1984) 2 sec 624: 1984 (3) SCR 417; Municipal Corpn. of Greater Bombay v. Industrial Development Investment Co. (P) Ltd. (1996) 11 SCC 501 1996 (5) Suppl.

SCR 551; Urban Improvement Trust, Udaipur v. Bheru Lal (2002) 7 SCC 712: 2002 (2) Suppl. SCR 512; Swaika Properties (P) Ltd. v. State of Rajasthan (2008) 4 SCC 695: 2008 (2 ) SCR 521; Sheikhupura Transport Co. Ltd. v. Northern India Transport Insurance Company (1971) 1 SCC 785; C. K. Prahalada v. State of Karnataka (2008) 15 SCC 577: 2008 (7) SCR 852 - . referred to. 2. 1 All the co-operative societies have been classified into two categories. The first category consists of the cooperative societies in which not less than 51% of the paid-up share capital is held by the Central Government or any State Government or partly by the Central Government and partly by one or more _State Governments. The second category consists of the cooperative societies other than those falling within the definiti. on of the expression 'corporation owned or controlled by the State' [Section 3(cc)].

The definition of the term 'company' contained in Section 3(e) takes within its fold a company as defined in Section 3 of the Companies Act, 1956 other than a government company referred to in clause (cc), a society registered under the Societies Registration Act or under any corresponding law framed by the State legislature, other than a society referred to in clause (cc) and a co-operative society defined as such in any law relating to co-operative societies for the time being in force in any State, other than a co-operative society referred to in clause (cc). The definition of the expression 'public purpose' contained in Section 3(f) is inclusive.

As per clause (vi) of the definition, the expression 'public purpose' includes the provision of land for carrying out any educational, housing health or slum clearance scheme sponsored by Government or by any authority established by Government for carrying out any such scheme, or, with the prior approval of the appropriate Government, by a Local Authority, or a society registered under the Societies Registration Act, 1860 or any corresponding law in force in a State or a co-operative society as defined v. STATE OF KARNATAKA in any law. relating to co-operative societies for the time being in force in any State. To put it differently, the acquisition of land for carrying out any education, housing, health or slum clearance scheme by a registered society or a co-operative society can be regarded as an acquisition for public purpose only if the scheme has been approved by the appropriate Government before initiation of the acquisition proceedings. If the acquisition .

of land for a co-operative society, which is covered by the definition of the term 'company' is for any purppse other than public purpose as defined in· Section 3(f), then the provisions of Part VII would be attracted and mandate thereof would have to be complied with. [Para 19] [357- C-H; 358-A-C] 2. 2 In the writ petition, respondent no. 3 averred that "the acquisition of any land under the Act for the benefit of the 2nd respondent would not be for a public purpose and would have to be in accordance with the provisions contained in Part VII . of the Act. In any case, even if the acquisition is for carrying out any educational, housing, health or slum clearance scheme of the 2nd respondent, the same shall be with the prior approval of the appropriate Government.

The appellant neither controverted the said averments nor produced any document before the High Court to show that it had prepared a housing scheme and the same had been approved by the State Government before the issue of notification under Section 4(1) of the 1894 Act. Therefore, the Division Bench of the High Court rightly held that the acquisition was not for a public purpose as defined in Section 3(f)(vi) of the 1894 Act. The submission that the Division Bench of the High Court committed an error by recording a finding on the issue of violation of Section 3(f)(vi) of the 1894 Act because respondent No. 3 had not raised any such pl. ea in the writ petition, cannot be accepted. [Para 20] [358-C-G] 2. 3 A close and careful reading of the documentsrepresentation dated 7. 12. 1984 made by the Executive Director of the appellant to the Minister of Revenue, Government of Karnataka, letter dated 21. 5.

1988 sent by the State Government to Deputy Commissioner, Bangalore to issue notification under Section 4(1) of the 1894 Act and agreement dated 7. 8. 1988 entered into between the Executive Director of the appellant and. the State Government, reveals that altho. ugh, in the representation made by him to the Revenue Minister, the Executive Director of the appellant did make a mention that the object of the society is to provide house sites to its members who belong to working class and other backward. class people belonging to weaker class of society and the members are poor and siteless people, there was not even a whisper about any housing scheme. 0 The direction issued by the State Government to Deputy Commissioner, Bangalore to issue the preliminary notification for an extent of 207 acres 29 guntas land also does not speak of any housing scheme.

The agreement·· entered into between the appellant through its Executive Director and the State Government does not contain any· inkling about the housing scheme framed by the appellant. It merely mentions about the proposed formation of sites and construction of houses for the members of the appellant and payment of cost for the acquired land. The agreement also speaks of an inquiry having been got made by the State Government in conformity with the provisions of the 1894 Act and the grant of consent for the acquisition of land for the benefit of society's members. The agreement then goes on to say that the appellant shall pay to the Government the entire costs of the acquisition of land and expenses. Paragraph 2 of the conditions incorporated in the agreement speaks of transfer of land to the society as to vest in the company. Clause 9(a) of the agreement did provide for token contribution of Rs. 100 by the Deputy v.

STATE OF KARNATAKA Commissioner/Special Deputy Commissioner towards the compensation to be determined by the Assistant Commissioner/Special Land Acquisition Officer, but that is not relatable to any housing scheme framed by the appellant. It is, thus, evident that the appellant had not framed any housing scheme and obtained its approval before the issue of notification under Section 4(1) of the· Act. [Para 21] [359-A-H; 360-A] 2. 4 Although, the appellant may not have been required to frame a scheme in strict conformity with the provisions of the 1976 Act and the Karnataka Housing Board Act, but it was bound to frame scheme disclosing the total number of members eligible for allotment of sites, the requirement of land including the size of the plots and broad indication of the mode and manner of development of the land as a layout. The State Government could then apply mind whether or not the housing scheme framed by the appellant should be approved.

However, the appellant did not produce any evidence before the High Court to show that it had framed a housing scheme and the same was approved by the State Government before the issue of notification under Section 4(1) of the 1894 Act. Even before this Court, no material was produced to show that, in fact, such a scheme had been framed and approved by the State Government. Therefore, the Division Bench of the High Court rightly referred to Section 3(f)(vi) and held that in the absence of a housing scheme having been framed by the appellant, the acquisition of land belonging to respondent No. 3 was not for a public purpose as defined in Section 3(f)(vi). [Para 23] [361-8-E] 2. 5 In the instant case, no housing scheme was framed by the appellant which is sine qua non for treating the acquisition of land for a co-operative society as an acquisition for public purpose within the meaning of Section 3(f). Not only this, the appellant executed agreement dated 21. 2.

1988 for facilitating the acquisition of land in lieu of payment of a sum of rupees more than 5 crores. The Estate Agent engaged by the appellant had promised that it would get the notifications issued under Sections 4(1) and 6(1) within four months and three months respectively. The huge amount which the appellant had agreed to pay to the Estate Agent had no co-relation with the services provided by it. Rather, the amount· was charged by the Estate Agent for manipulating the State apparatus and facilitating the acquisition of land and sanction of layout etc. without any obstruction. Such an agreement is clearly violative of Section 23 of the Contract Act. [Para 29] [371-G-H; 371- ·B] 2.

6 None of the orders and judgments referred to, could be relied upon for holding that even though the appellant had not framed any housing scheme, the acquisition in question should be deemed to have been made for a public purpose as defined in Section 3(f)(vi) simply because in the representation made by him to the Revenue Minister of the State, the Executive Director of the appellant had indicated that the land would be used for providing sites to poor and people belonging to backward class and on receipt of the recommendations of SLCC the State Ciovernment had directed Special Deputy Commissioner to issue notification under Section 4(1) of the 1894 Act and that too by ignoring the ratio of the judgments of three Judge Benches in *1st and **2nd H. M. T. cases and the judgment of two Judge Bench in *** Vyalikawa/ House Building Cooperative Society's case. In the instant case,.

whereby the Estate Agent agreed to ensure the acquisition of land within a specified time frame subject to payment of huge money and the fact that agreement entered into between the society and the Government was in the nature of an agreement v. STATE OF KARNATAKA contemplated by Part VII. While in *1st H:M. T. 's case, the amount paid to 'SR' Constructions was rupees one crore, in the instant case, the appellant had agreed to pay more than rupees five crores for facilitating issue of Notifications under Sections 4(1) and 6(1) and sanction of the layouts and plans by the BOA within a period of less than one year. 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. [Para 32] [378-F-H; 379-G-H; 380-A] *H. M. T. House Building Cooperative Society v. Syed Khader and Ors. (1995) 2 SCC 677: 1995 (2) SCR 200; **H. M. T. House Building Co-operative Society v. M.

Venkataswamappa (1995) 3 SCC 128; ***Vyalikawal House Building. Co-operative Society v. V. Chandrappa (2007) 9 sec 304 - relied on. Mis. Tulasidas Khimji v. Their Workmen (1963) 1 SCR 675; Third Income-tax Officer, Mangalore v. M. Damodar Bhat (1969) 2 SCR 29; Ram Sarup v. Land Acquisition Officer (1973) 2 SCC 56; Sockieting Tea Co. (P) Ltd. v. Under Secy. to the Govt. of Assam (1973) 3 SCC 729; Bharat Singh v. State of Haryana (1988) 4 SCC 534: 1988 (2) Suppl. SCR 10; Umashanker Pandey v. B. K. Uppal (1991) 2 SCC 408; Mis. Jindal Industries Ltd. v. State of Haryana 1991 Supp (2) SCC 587; D. S. Parvathamma v. A. Srinivasan (2003) 4 SCC . 705: 2003 (3) SCR 197; Shipping Corpn. of India Ltd. v. Machado Bros. (2004) 11 SCC 168: 2004 (3) SCR 584; J. P. Srivastava & Sons (P) Ltd. v. Gwalior Sugar Co. Ltd. ; (2005) 1 SCC 172: 2004 (5) Suppl. SCR 648; Shakti Tubes Ltd. v. State of Bihar (2009) 7 SCC 673: 2009 (10) SCR 739; Kanaka Gruha Nirmana Sahakara Sangha v.

Narayanamma (2003) 1 SCC 228: 2002 (3) Suppl. SCR 97; The State of Punjab and Ors. (1963) 2 SCR 774; Pratibha Nema v. State of M. P. (2003) 10 SCC 626; Narayana Reddy v. State of Karnataka ILR 1991 (3) KAR 2248; Narayana Raju v. State of Karnataka ILR 1989 KAR 376; Narayana Raju v. State of Karnataka ILR 1989 KAR 406; State of Gujarat v. Chaturbhai Narsibhai AIR 1975 SC 629: 1975 (3) SCR 284; General Government Servants Co-operative Housing Society Limited v. Kedar Nath (1981) 2 SCC 352 :1981 (3) SCR 46; Mis. Fomento Resorts and Hotels Limited v. Gustavo Ranato Da . Cruz Pinto AIR 1985 SC 736: 1985 (2) SCR 937; Rattan Chand Hira Chand v. Askar Nawaz Jung JT 1991 (1) SC 433: 1991 (1) SCR 327; Kanaka Gruha Nirmana Sahakara Sangha v. Narayanamma (2003) 1 SCC 228: 2002 (3) Suppl. SCR 97; Subramani v Union of India ILR 1995 Kar 3139 - referred to. 3. The appellant's challenge to the judgment in the case of respondent No.

3 that even if there was no express approval by the State Government to the acquisition of land, the approval would be deemed to have been granted because the State Government had contributed Rs. 100 towards the acquisition of land; and that the decision of the State Government to execute an agreement with the appellant should be construed as its approval of the proposal made for the acquisition of land, lacks merit. The agreement was signed by the Executive Director of the appellant and the State Government in compliance of Section 41, which finds place in Part VII of the 1894 Act. Therefore, a nominal contribution of Rs. 100 by the Special Deputy Commissioner cannot be construed as the State Government's implicit approval of the housing scheme which had never been prepared. [Para 33] [381-8-E] Smt. Somavanti and Ors. v. The State of Punjab and Ors. (1963) 2 SCR 774; Pratibha Nema v. State of M. P. (2003) 10 SCC 626: 2003 (1) Suppl. SCR 890 - Distinguished. 4.

The ground of challenge that in view of the provisions contained in Sections 17, 18 and 19 of the Mysore High Court Act, 1884 and Sections 4, 9 and 10 of the Karnataka High Court Act, 1961, the Division Bench v. STATE OF KARNATAKA did not have the jurisdiction to decide the appeal by relying upon the judgment in *1st H. M. T. case because that was not the ground on which the Single Judge had quashed the acquisition proceedings; that if the Division Bench was of the view that the order of the Single Judge should be sustained on a new ground by relying upon the judgment of this Court in *1st H. M. T. case, then it should have remitted the matter to the Single Judge for fresh disposal of the writ petition, is rejected since the Division Bench had decided the writ appeal preferred by the appellant by relying upon the judgment in *1st H. M. T. case because the counsel appearing for the parties had agreed for that course.

It is nobody's case that the advocate who appeared on behalf of the appellant had not made a request that instead of remanding the case to the Single Bench, the Division Bench should hear the 0 parties on merits and dispose of the matter. Therefore, it is not open for the appellant to make a grievance that the Division Bench had acted in violation of the provisions of the Mysore High Court Act, 1884 and the Karnataka High Court Act, 1961. [Paras 35, 36, 37) [382-F-H; 383-C- G-H] 5. 1 The appellant's challenge to the finding recorded by the Division Bench that respondent No. 3 had not been given opportunity of hearing under Section 5A is well-founded. From the proceedings of the Special Land Acquisition Officer it is found that son of respondent no. 3 had appeared along with his Advocate and after hearing him along with other objectors, the concerned officers submitted report to the State Government.

However, this error in the impugned judgment of the Division Bench is not sufficient for nullifying the conclusion that the acquisition of land was not for a public purpose and that the exercise undertaken by the State Government was vitiated due to the influence of the extraneous considerations. The appellant's challenge to the judgment I ~ in 'PR's case on the ground that no evidence had been produced by the writ petitioner to show that the Estate Agent had indulged in malpractices is rejected in view of the conclusion recorded in relation to the case of respondent No. 3. [Para 38) [384-A-D] 8 5. 2 The appellant criticized the decision of the State Government to entertain the representation made by respondent No. 3 for withdrawal of the notification, and submitted that notification under Section 48 could not have been issued without hearing t'1e beneficiary, i. e. , the appellant.

This argument appears to have substance, but it is not necessary to examine the same in detail because the appellant's challenge to notification dated 3. 9. 1991, vide which the acquisition of land comprised in Survey No. 50/2 was withdrawn, was negatived by the Single Judge and the Division Bench of the High Court and the appellant is not shown to have challenged the judgment of the Division Bench and insofar as notification dated 25. 6'. 1999 is concerned, the State Government had withdrawn the same on 15. 11. 1999. [Para 39] [384-E-H] Larsen & Toubro Ltd. v. State of Gujarat (1998) 4 SCC 387; State Government House/ess Harijan Employees' Association v. State of Karnataka (2001) 1 SCC 610 referred to. 6. 1 The submission of the appellant that they have already spent Rs. 18.

73 crores for formation of the layouts and 1791 plots were allotted to the members, out of which, 200 have already constructed their houses; they pointed out that 50% of the land was given to the BOA for providing civil amenities and 16154 sq. ft. was given to Karnataka Power Transmission Corporation, and as such it is a fit case for invoking the doctrine of prospective overruling so that those who have already constructed houses may not suffer incalculable harm, can·not be accepted. [Paras 40 and 41] [385-A-C] v. STATE OF KARNATAKA 6. 2 The instant case is not a fit case for invoking the doctrine of prospective overruling because that would result in conferring legitimacy to the influence of money power over the rule of law, which is the edifice of our Constitution. The Estate Agent, namely, 'RE' with whom the appellant had entered into an agreement dated 21. 2. 1988 had played crucial role in the acquisition of land.

The tenor of that agreement does not leave any manner of doubt that the Estate Agent has charged huge money from the appellant for getting the notifications issued under Sections 4(1) a1_1d 6(1) of the 1894 Act and sanction of layout plan by the BOA. The respondents could not have produced any direct evidence that the Estate Agent had paid money for facilitating the acquisition of land but it is not too difficult for any person of reasonable prudence to presume that the appellant had parted with crores of rupees knowing fully well that a substantial portion thereof would be used by the Estate Agent for manipuJating the State apparatus. Therefore, there is no any justification to invoke the doctrine of prospective overruling and legitimize what was found by the Division Bench of the High Court to be ex-facie illegal. [Paras 40, 41] [385-G-H; 386-B-E] ECIL v. B. Karunakar (1993) 4 SCC 727: 1993 (2) Suppl. SCR 576; Abhey Ram v.

Union of India (1997) 5 SCC 421: 1997 (3) SCR 931; Baburam v. C. C. Jacob (1999) 3 SCC 362; Somaiya Organics (India) Ltd. v. State of U. P. (2001) 5 SCC 519: 2001 (3) SCR 33; Padma Sundara Rao v. State of T. N. (2002) 3 SCC 533: 2002 (2) SCR 383; Sarwan Kumar v. Madan Lal Aggarwal (~003) 4 SCC 147: 2003 (1) SCR 918; Girias Investment Private Limited v. State of Karnataka (2008) 7 SCC 53; G. Mal/ikarjunappa v. Shamanur Shivashankarappa; (2001) 4 SCC 428; Uday Shankar Triyar v. Ram Kalewar Prasad Singh (2006) 1 SCC 75: 2005 (5) Suppl. SCR 157; /. C. Golak Nath v. State of Punjab AIR 1967 SC 1643: (1967) 2 SCR 762 - referred to. 7. Keeping in view the fact that some of the members of the appellant may have built their houses on the sites allotted to them, liberty is given to the appellant to negotiate with the respondents for purchase of their land at the.

prevailing market price and hope that the landowners would, notwithstanding the judgments of the High Court and this Court, agree to accept the market price so that those who have built the houses may not suffer. At the same time, it is made clear that the appellant must return the vacant land to the respondents irrespective of the fact that it may have carved out the sites and allotted the same to its members. This must be done within the stipulated period and during that period the appellant shall not change the present status of the vacant area/sites. The members of the appellant who may have been allotted the. sites shall also not change the present status/character of the land. [Para 43] [387-B-D] Case Law Reference: ILR 1995 KAR 3139 Referred to Para 5. 4 (1971) 1 sec 785 Referred to Para 7. 2 2008 (7) SCR 852 Referred to Para 7.

2 (1969) 1 sec 110 Relied on Paras (1974) 2 sec 501 Referred to Para 13 1976 (1) SCR 369 Referred to Para 13 (1980) 2 sec 83 Referred to Para 13 1984 (3) SCR 417 Referred to Para 13 1996 (5) Suppl. SCR 551 Referred to Para 13 2002 (2) Suppl. SCR 512 Referred to Para 13 2008 (2) SCR 521 Referred to Para13 v. STATE OF KARNATAKA (1963) 1 SCR 675 Referred to Para 14 (1969) 2 SCR 29 Referred to Para 14 (1973) 2 sec 56 Referred to Para 14 (1973) 3 sec 129 Referred to Para 14 1988 (2) Suppl. SCR 10 Referred to Para 14 (1991) 2 sec 408 · Referred to Para 14 1991 Supp (2) sec 587 Referred to Para 14 2003 (3) SCR 197 Referred to Para 14 2004 (3) SCR 584 Referred to Para 14 2004 (5) Suppl. SCR 648 Referred to Para 14 2009 (10) SCR 739 Referred to Para 14 2002 (3) Suppl.

SCR 97 Referred to Para 15 ILR 1991 (3) KAR 2248 Referred to Para 24 ILR 1989 KAR 376 Referred to Para 24 ILR 1989 KAR 406 Referred to Para 21 1975 (3) SCR 284 Referred to Para 24 1981 (3) SCR 46 Referred to Para 24 1985 (2) SCR 937 Referred to Para 24 1991 (1) SCR 327 Referred to Para 25 2002 (3) Suppl. SCR 97 Referred to Para 30 1995 (2) SCR 200 Relied on Para 32 (1995) 3 sec 128 Relied o·n Para 32 (2001) 9 sec 304 Referred to Para32 (1963) 2 SCR 774 Distinguished Para 33 2003 (1) Suppl. SCR 890 Distinguished Para 33 1993 (2) Suppl. SCR 576 Referred to Para 40 1997 (3) SCR 931 Referred to Para 40 (1999) 3 sec 362 Referred to Para 40 2001 (3) SCR 33 Referred to Para 40 2002 (2) SCR 383 Referred to Para 40 2003 (1) SCR 918 Referred to Para 40 (2008) 1 sec 53 Referred to Para 40 (2001) 4 sec 428 Referred to Para 40 2005 (5) Suppl. SCR 157 Referred to Para 40 (1967) 2 SCR 762 Referred to Para 41 CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 7245-7426 of 2002.

From the Judgment & Order dated 16. 3. 1998 & 9. 7. 1999 of the High Court of Karnataka at Bangalore in Writ Appeal No. 9913 of 1996 & Civil Petition No. 366 of 1998. WITH C. A. No. 774-778 of 2005 Dushyant Dave, P. Vishwanatha Shetty, Shashi Kiran Shetty, M. Sreenivasa, Bramjeet Mishra, Yatish Mohan, Haripriya Padmanabhan, E. G. Vidya Sagar, V. Mohana for the Appellant. P. P. Rao; R. S. Hegde, Chandra Prakash, Amit Wadhwa, AS. Bhasme, P. P.. Singh, Sanjay R. Hegde, A. Rohen Singh, Ramesh K. Mishra, Ramesh S. Jadhav, Vikrant Yadav for the Respondent. v. STATE OF KARNATAKA The Judgment of the Court was delivered by G. S. SINGHVI, J. 1. These appeals are directed against two sets of judgments and orders passed by the Division Benches of the Karnataka High Court whereby the acquisition of lands by the State Government for the benefit of the appellant was quashed. Civil Appeal Nos. 7425-26/2002 are directed against judgment dated 16. 03. 1998 passed by the High Court in Writ Appeal No.

9913/1996 and order dated 09. 07. 1999 passed in Civil Petition No. 366/1998. Civil Appeal Nos. 774- 78/2005 are directed against judgment dated 06. 02. 2004 passed in Writ Appeal No. 4246/1998, C/W W. A. No. 6039/ 1998 and orders dated 11. 02. 2004 and 15. 09. 2004 passed in. I. A. No. 1 for rectification in Writ Appeal No. 4246/1998, Cl WW. A. No. 6039/1998 and Review Petition Nos. 166 and 170 of 2004, respectively. 2. Although, the High Court quashed the acquisition proceedings mainly on the grounds of violation of the provisions of the Land Acquisition Act, 1894 (for short, 'the 1894 Act') and the manipulations made by the appellant through the Estate Agent for acquiring the land, during the pendency of these appeals the parties filed voluminous papers and arguments were advanced by both the sides by relying upon those documents as also the records summoned by the Court from the State Government. 3.

For appreciating the contentions of the parties in a correct perspective, it will be useful to notice the events which culminated in the acquisition of the lands belor1ging to the private respondents and others. 3. 1 Bangalore Development Authority (BOA) was constituted by the State Government under Section 3 of the Bangalore Development Authority Act, 1976, (for short, 'the 1976 Act'), which was enacted by the State legislature for ensuring planned development of the City of Bangalore and areas adjacent thereto. In terms of Section 15 of the 1976 Act, the BOA is empowered to draw up detailed schemes for the development of the Bangalore Metropolitan Area and with the previous approval of the Government, undertake works for the development of the Bangalore Metropolitan Area and incur expenditure therefor.

Under Section 15(2), the BOA can take up new or additional development schemes either on its own or on the recommendations of the Local Authority or as per the directions of the State Government. Section 16 lays down that e'lery development scheme shall, within the limits of the area comprised in the scheme, provide among other things for the acquisition of. any land necessary for or affected by the execution of the scheme. Section 16(3) lays down that the scheme may provide for construction of houses. Sections 17 and 18 contain the procedure for finalization and sanction of the scheme. Section 19 prov. ides for the acquisition of land for 0 the purposes of the Scheme. 3. 2 In exercise of the powers vested in it under Section 15 and other relevant provisions of Chapter Ill of the 1976 Act, the BOA has been preparing the development schemes and forming layouts for the purpose of allotment of houses/plots to various sections of the society. 3.

3 Due to unprecedented increase in the population of Bangalore City (by 1981, the population of the Bangalore City had swelled to 29. 13 lakhs), the State Government realized that it may not be possible for the BOA to meet the demand of developed residential sites and, therefore, it was decided to encourage formation of private layouts which is permissible under Section 32 of the 1976 Act, by the house building cooperative societies (for short, 'the housing societies'). For this purpose the existing guidelines, which were being followed by the erstwhile City Improvement Trust Board and the BOA for the approval of private layouts were revised vide Circular No. HUD 260 MNX 82 dated 3. 3. 1983, the relevant portions of which are extracted below: "1. The area proposed for a layout should be within the residential zone of the Outline Development Plan/ Comprehensive Development Plan approved by Government.

In special cases where lands are reserved for purposes other than green belt and which are suitable for residential purpose, layouts may be considered after obtaining prior approval of Government for the change in land use. . ' 2. The Co-operation Department shall register the names of the Housing Societies only after getting the opinion of the planning Authority (BOA) which shall verify whether the lands proposed for the societies are in the residential zone or are suitable for residential purpose as indicated in para 1, or whether they are required by Bangalore Development Authority. 3. If the Housing Society has purchased land, no objection certificate from the competent authority, Urban land ceiling should be produced. 4. The Housing Societies/Private developers should produce the title deeds to prove ownership of the land. 5. The Bangalore City Corporation, the HAL Sanitary Board, ITI.

, Notification area, Yelahanka and Kengeri Municipal authorities and such other authorities shall not approve any bifurcation of land into plots or any private layout. Such approval should be done only by the planning Authority (BDA) ~ccording to the Karnataka Town & Country Planning Act, 1961. 6. Khatha shall not be issued by the Revenue Section of the Bangalore City Corporation and the Bangalore Development Authority HAL Sanitary Board, LT. I. Notified area, Yelahank? Town Municipality, Kengeri Town Municipality/ Panchayaths and such other authorities, unless the layout is approved by the Bangalore • Development Authority. 7. The following minimum land allocations shall be insisted in the approval of private layouts by the Bangalore Development Authority. Residential Not Exceeding 50% Parks & Playgrounds 15% Roads 25% to 30% Civic amenities 50% to 10% 8. (a) Except in case of layouts for economically weaker sections standard road width shall be enforced line 12 metre (40 feet) 18.

5 metres (60 feet), 24. 5 metres (80 feet) and 30. 5 metres (100'). (b) While working out the road pattern of the private layouts, major road pattern of the outline Development Plan/ Comprehensive Development Plan should not be affected. Minor. roads may be designed suitable within the framework of roads approved in the Outline Development Plan/Co,mprehensive Development Plan. The civic amenity sites earmarked should be for specific purposes determined by Bangalore Development Authority. In cases where it is found necessary to allot sites for other purpose, proper justification will have to be furnished. 10. The purpose for which the sites are proposed shall not be violated by the housing societies/private developers. 11. Underground drainage and electricity works in private layouts shall be carried out only by the Bangalore Water Supply & Sewerage Board and Karnataka Electricity Board.

Bangalore Development Authority may permit the Housing societies to carry out the civil works only in case • of societies getting the work done by Civil Engineers of the required competence. 12. After the formation of sites, allotment of sites to individual members of the housing societies must be in accordance with the eligibility conditions of allotment of the Bangalore Development Authority which are in force including the lease-cum-sale conditions. 13. Conditions shall be enforced in the approval of layouts in favour of housing societies that the sites should be allotted only to the members of the societies and not to other individuals for purposes of land speculation. A list of members shall be submitted by the societies along with the application for approval of private layouts. " 3.

4 The aforesaid decision of the State Government was 0 misused by the housing societies which started purchasing lands directly from the landlords for forming the layouts resulting in uncontrolled, unplanned and haphazard development of the city. It also created acute problem of providing civic amenities, transport facilities etc. Therefore, by an order dated 18. 6. 1985, the State Government abandoned the existing policy of acquiring land through the Revenue Department and entrusted this task to the BOA for the Bangalore Metropolitan Area. The State Government also stopped registration of the housing societies and conversion of agricultural lands in favour of the existing societies. Simultaneously, the State Government constituted a Three Men Committee (TMC) consisting of the Registrar of Cooperative Societies, Karnataka, T.

Thimme Gowda, Secretary, BOA and the Special Deputy Development Commissioner to scrutinize the land requirements of the housing societies which had already been registered and also fixed 30. 6. 1984 as the cut off date for consideration of the applications made by the housing societies for the acquisition of land. The constitution of the committee was made known to the public vide Order No. HUD 113 MNXA 85 dated 23. 6. 1986. It was also made clear that only those persons will be eligible for allotment of sites who had been enrolled as members of the housing societies before the cut off date. Subsequently, the cut off date was extended to 30. 6. 1987. 3. 5 The Executive Director of the appellant submitted representation dated 7. 12. 1984 to the Minister for Revenue, Government of Karnataka for the acquisition of 238 acres 27 guntas land at Vajarahalli and Raghuvanahalli villages for formation of a layout for its members.

The relevant portions thereof are extracted below: "We are happy to inform you that our society was registered under Section 7 of the Mysore Cooperative Societies Act, 1959 by the Registrar of Cooperative Societies, Bangalore, during the year 1927 vide No. 1737 C. S. dated 12. 9. 1927. 2. The object of the society is to provide house sites to its members who belong to working class and other backward class people belonging to weaker sections of the society. The members are poor people and they are siteless. They are residents of Bangalore City for several decades. 3. Because of the restrictions imposed by Land Reforms Act and other enactments, the activities of our society have come to stand still, with the result the society is not in a position. to discharge its primary obligations entrusted as per the bye-laws. 4.

Your Hon'ble authority is fully aware that it is humbly impossible to secure residential sites in these days of soaring prices of lands and sites which have gone up beyond ~II proportions. 5. The lands which are now requested by the society for acquisition are not fit for agricultural purposes and they are laying in the vicinity of residential layout abutting Bangalore City and there are no proposals for acquisition of these survey numbers by the Bangalore Development Authority for any of its developmental activities, as per endorsement issued by B. D. A. 6. Due to our sincere efforts we are able to locate suitable land in the village Vajarahalli and Raghuvanahalli, Uttarahalli Hobli, Bangalore south Taluk to an extent of 250 acres. A list showing the sy. numbers and extent of lands is enclosed. 7.

We request your kindself to acquire these lands in favour of our society and handover possession to form layout to distribute sites to the members who are in great need of sites to construct their own houses. 8. We have collected sital amounts from the members. The cost of acquisition will be met by the society. Necessary amount towards compensation will be deposited with the acquisition authorities on receipt of intimation and after obtaining approval of Government. It is submitted that the society is agreeable to abide by all terms and conditions to be laid down by the Government in the matter. " 3. 6 The Revenue Department of the State Government vide its letter dated 29. 12. 1984 forwarded the aforesaid representation to Special Deputy Commissioner, Bangalore for being placed before the TMC constituted vide letter No. RD- 109 AQB 84 dated 26. 7. 1984. 3.

7 Between January, 1985 and 1987 the appellant's application made several rounds before the TMC, the State Level Coordination Committee (SLCC), constituted by the State Government and the officers of the Cooperative Department. The Assistant Registrar, Cooperative Societies issued several notices to the appellant to furnish the details of its members and supply other particulars along with copy of the agreement entered with the Estate Agent engaged for formation of the layout, but the needful was not done. After lapse of long time, the President of the appellant submitted memorandum dated 17. 9. 1987 to the Joint Registrar, Cooperative Societies (for short, 'the Joint Registrar') stating therein that the appellant had engaged Mis. Manasa Enterprises (Estate Agent) for procuring 250 acres land from the landowners. The copies of agreements dated 1. 6. 1984 and 4. 12. 1984 executed with Mis. Manasa Enterprises were also submitted along with the memorandum. Along with letter dated 26. 3.

1987, the appellant furnished additional information to the Joint Registrar. 3. 8 The appellant's application was considered in the meeting of the TMC held on 5. 10. 1987 and the Joint Registrar was asked to conduct verification of the information supplied by the appellant. After conducting the necessary inquiry, the 0 Joint Registrar sent report dated 9. 10. 1987, of which the salient features were as follows: i. The appellant had neither collected sital deposit from the members nor it had paid any advance to the Estate Agent or the landowners upto 30. 6. 1984. ii. During 1984-85, the appellant collected Rs. 20,72,5001- from the members and paid Rs. 3,50,0001 - to the Estate Agent as an advance for procurement of the land from the landowners. iii. During 1985-86, another sum of Rs. 5,45,5001- was collected from the members towards sital deposit and Rs:10,00,000l-were paid to the Estate Agent. iv. Upto 30. 6. 1986, the total amount collected from the members was Rs.

26,18,0001- and the total amount paid to the Estate Agent was Rs. 13,50,0001- for procurement of 235 acres land in Vajarahally. v. Letter dated 24. 10. 1986 of the Estate Agent revealed that it had made advance payment of Rs. 16,70,000/- to 17 landowners. 3. 9 In its meeting on 17. 10. 1987, the TMC directed the Joint Registrar to conduct an investigation about the land available with the appellant before the cut off date. This was done in the wake of the information supplied by the appellant about the death of the proprietor of M/s. Manasa Enterprises in a car accident on 28. 2. 1987. However, before the Joint Registrar could make the necessary investigation, the appellant's application was considered in the meeting of the SLCC held on 24. 10. 1987 and the following proceedings were recorded: ''The Deputy Commissioner, Bangalore raised a question as to whether the entitlement for acquisition would depend upon the number of enrolled members as of the cut off date of 30. 4.

1984 or the number of enrolled members who had paid the sital value by that date. The Revenue Commissioner clarified that as per the GO, the entitlement depended on the total number of enrolled members irrespective of whether they had applied for a site. The Secretary, HUD also agreed with this and stated that as per the bye-laws of these societies, all members would be eligible for grant of sites so long as they had paid the membership fees prior to the cut off date. The Deputy Commissioner however pointed out that the previous and even the present Three Member Committee had based its recommendations disregarding those members who had not paid the sital value. The SLCC decided that as it would not be equitable or fair to follow two different sets of principles for determining extent of land entitlement for acquisition, the number of members who had paid required sital fee would be the sole guiding factor in determining land to be cleared for acquisition in the 1st stage.

But the Secretary, Cooperation may keep the Chief Minister informed of this decision and report back to the A SLCC before pending cases are taken up for 2nd stage of scrutiny as per GO dt. 30. 4. 1987. " (underlining is ours) 3. 10 The appellant's case was again considered in the B meeting of the TMC held on 27. 11. 1987 and the following points were recorded: "a. Society had 3821 members as on 30. 6. 1987 and sital value had been paid by 1362 as per which the c Society's land requirement is 184 acres 11 guntas. If the SLCC decides that the Society is eligible for entitlement on this basis the Society will have to be allowed to select lands to this extent and furnish survey number-wise details. D b. The question of survey numbers and violation of various Acts does not arise as the Three Man Committee considers that the Society is not eligible for any entitlement as there are no agreements and also no member had paid the sital value as on E 30. 6. 1984. c.

The JRCS reported that the Society had, in pursuance of an agreement, paid Rs. 13. 5 lakhs to the estate agent who died in a car crash. But even this amount was paid after the cut off date. " F 3. 11 In its 14th meeting held on 28. 11. 1987, the SLCC considered the cases of various societies and opined that the appellant was not eligible for acquisition of land in 1st and 2nd G stages of scrutiny because it did not have valid agreements as on the cut off date i. e. , 30. 6. 1984. However, in the r:iext meeting of the SLCC held on 22. 12. 1987 cognizance was taken of the clarification given by the Chief Minister of the State that eligibility of the housing societies should be considered on the strength of the members ehrolled as on 30. 06. 1984 in respect H of the 1st stage of scrutiny and as on 30. 6.

1987 in respect of the 2nd stage of scrutiny, irrespective of the fact whether the enrolled members had paid sital fee or not and, accordingly, decided that the appellant's case be examined by taking note of the members enrolled by it. 3. 12 On 21. 2. 1988, the appellant entered into an agreement with M/s. Rajendra Enterprises whereby the latter promised to secure the acquisition of land on payment of the specific amount. Paragraphs 1 to 8 of the agreement, which have bearing on consideration of one of the issues arising in these appeals read as under: "1. THIS AGREEMENT entered into on this the 21st (Twenty first) day of February 1988 between The Bangalore City Co-operative Housing Society Limited, No. 2, Seethapathi Agrahara, Bangalore-560002, a Cooperative Societies Act, represented by its President and the Executive Director and hereinafter referred to as the 'FIRST PARTY', which term shall mean and include its successors, assigns in office, administrators etc. and M/ s.

Shri Rajendra Enterprises, No. 4507, 5th Floor, High Point-IV, 4, Palace Road, Bangalore-560 001, represented by its Managing Partner M. Krishnappa, Estate Agent and Engineering Contractor, hereinafter called the Agent of the 'SECOND PARTY' which term shall mean and include its successors in interest and successors in office, assigns, administrators etc. , witnesseth:- 2. WHEREAS THE FIRST PARTY has selected about 228 acres land as detailed in the schedule, in Vajarahalli village and Raghuvanahalli village, Uttarahalli Hobli, Bangalore South Taluk, more fully described in the schedule hereunder and hereinafter, referred to as the 'Schedule Land' for making house sites for the benefit of its members for the construction of dwelling houses with various amenities including road, water supply, sewerage facilities, street lighting, etc. A 3.

WHEREAS the Second Party has offered his seNices to the First Party to negotiate and complete the acquisition and development of schedule land for the said purpose to form a layout, make sites in accordance with the rules and regulations in force and hand over the said sites to the First B Party. 4. WHEREAS NOW that the Managing Partner of M/s. Manasa Enterprises, First Party's earlier promoters died of an accident and as such work could not be continued and subsequently Mis. Landscape, Layout promoters c agreed to take over the entire project with all its advanced to Mis. Manasa Enterprises i. e. Rs. 13,50,000/- (Rupees Thirteen Lakhs Fifty Thousand only) for procuring lands from the agriculturists in favour of the First Party, at the time of the agreement. The said Agreement dated 31. 12. 87 D was signed between the First Party and M/s. Landscape. But this Agreement was cancelled with effect from 1. 2. 1988 as M/s. Landscape failed to furnish the agreed Bank Guarantee of Rs.

13,50,000/-. E 5. NOW the Second Party, Mis. Rajendra Enterprises have come forward and agreed to take over the entire project for the formation of the 'proposed layout and start the work 'ab initio' with all its previous liabilities and have furnished the required Bank Guarantee No. 4/88 dated 8. 2. 1988 from Syndicate Bank, Vijaynagar Branch, F Bangalore-560 040 of Rs. 13,50,000/- (Rupees Thirteen Lakhs Fifty Thousand only) already advanced to previous promoters M/s. Manasa Enterprises (for procuring lands from the agriculturists). G 6. WHEREAS the Second Party has agreed to provide all the required seNices towards the acquisition of scheduled land for the First Party, obtain all necessary approvals for forming the layout, roads, water lines, el~ctric lines, drainage, sewerage connection, etc. , and to carry out on H the said land the items of work such as laying of roads with culverts, drainages, etc. , provision of bore-wells, ground level and overhead tanks, water lines, etc.

, for the provision of water laying of electrical lines, sewerage lines, etc. , and in accordance with the details approved by the respective Statutory and Government authorities on the schedule lands in consideration of the amount to be paid by the First Party as per the B. D. A. rate prevailing at the time of execution of the above specified works. 7. WHEREAS the Second Party at the behest of the First Party is taking action to move various Government and Statutory authorities towards the publication of Notification in the Official Gazette under Section 4(1) of the Land Acquisition Act, for the acquisition of the schedule lands. a: NOW the First Party and the Second Party agree to undertake the above works as detailed below: - SECOND PARTY FIRST PARTY PROCUREMENT OF LANDS 1) To get Notification under 1) At the time of execution of Section 4(1) of the LAR the Agreement of Rs. 1. 5 within four months lakhs and upto issue of 4(1) Notification Rs. 15/per Sq. Yd. against Bank Guarantee.

2) Issue of Notification under 2) Rs. 25/- per Sq. Yd. Section 4(1) and subse- including the award quent enquiry under amount paid to Section 5(1) completed Government. within 4 months 3) Issue of Notification under 3) Rs. 26/- per Sq. Yd. Section 6(1) within 3 months of the completion of enquiry under Section 5(1) 4) Submission of layout plan to 4) Rs. 5/- per Sq. Yd. BDA within 4 months after l:he issue of notification under Section 6(1) 5) Sanction of layout plan within 5) Rs. 4/- per Sq. Yd. 3 months of its submission. The Second Party has agreed to complete the above mentioned works within 18 months from the day of the agreement subject to any delay caused at the BDA and other authorities in procuring land sanctioning or issuing of layout plan. " (The amount which the appellant had agreed to pay to the Estate Agent for securing the acquisition of 228 acres land and submission and sanction of layout plan by the BDA was Rs. 5,42,37,652/-).

3,_ 13 Within five days of the execution of the aforesaid agreement, the SLCC reconsidered the appellant's case in its 20th meeting held on 26. 2. 1988 and declared that it is eligible for the acquisition of 208 acres 18 guntas land. The relevant portion of the minutes of that meeting are reproduced below: "? ) BANGALORE CITY HBCS: The Society is eligible for acquisition of 208 acres 18 guntas in stage 1/111. As against this they have given survey number-wise details for 250 acres. The·y should therefore be given time upto 15th March, 1988 to select the specific lands to be acquired on their behalf to the extent of 208 acres. " 3. 14 In furtherance of the recommendations made by the SLCC, the State Government sent letter dated 21. 5. 1988 to Deputy Commissioner, Bangalore and directed him to initiate proceedings for the acquisition of 207 acres 29 guntas land in Vajarahalli and Raghuvanahalli for the appellant by issuing notification under Section 4(1) of the 1894 Act.

The contents of that letter are reproduced below: "The Deputy Commissioner, Bangalore. Sub: Acquisition of land in Vajarahalli and Raghuvanahalli villages of Uttarahalli hobli, Bangalore South Taluk in favour of the Bangalore City Co-operative, Housing Society Ltd. , Bangalore. I am directed to state that the State Level Coordination Committee has recommended for acquisition of 208 acres 18 guntas of land in lst/lllrd stage in favour of Bangalore City Cooperative Housing Soceity. As against this the society has furnished S. No. wise details for 207 acres 29 guntas (list enclosed) which is within the extent recommended by State Level Coordination Committee. Hence you are directed to initiate acquisition proceedings by issue of notification under Section 4(1) for an extent of 207 acres 29 guntas of land as recommended by S. L. C. C. in the village of Vajarahalli and Raghuvanahalli in favour of Bangalore City House Building Cooperative Society Ltd.

, Bangalore subject to the following conditions: i) The extent involved (if any) under Section 79(A) and 8 may be excluded while issue of 4(1) notification for the present, which can be notified after the pending proceedings under the said Act are finalised. (ii) Move the Spl. Deputy Commissioner, ULC to finalise the proceedings pending under ULC Act before 31. 5. 1988. Yours faithfully, (MAHDI HUSSAINA) Under Secretary to Government Revenue Department. " 3. 15 On 7. 8. 1988, the Executive Director of the appellant entered into an agreement with the State Government, the relevant portions of which are extracted hereunder: "AGREEMENT An Agreement made on this Eighth day of July, One 'Thousand Nine Hundred Eighty Eight between the Executive Director, The Bangalore City Co-operative Housing Society Limited, No. 2, Seethapathi Agrahara, Bangalore-560002 (hereinafter called the Society which ..

expression shall unless excluded by or repugnant to the context, be deemed to include its successors and assigns) of the ONF PART and the GOVERNOR OF KARNATAKA . on the OTHER PART. AND WHEREAS the Society has applied the Government of Karnataka (hereinafter referred to as "THE GOVERNMENT") that certain land more particularly described in the schedule hereto annexed and hereinafter referred to as "THE SAID LAND" should be acquired under the provisions of LAND ACQUISITION ACT, 1894 (I of 1894) hereinafter referred to as "THE SAID ACT", for the following purpose namely :-. Formation of Sites and Construction of Houses to the members of the Bangalore City Co-operative Housing Society Ltd. , No. 2, Seethapatha Agrahara, Bangalore- 560002.

AND WHEREAS The Government, having caused an enquiry be made in conformity with the provisions of the SAID ACT and being satisfied as a result of such inquiry that the acquisition of the SAID LAND is needed for the purpose referred to above, has consented to the provisions of the SAID ACT, being put in force in order to acquire the SAID LAND for the benefit of the Society Members, to enter into an agreement hereinafter contained with the GOVERNMENT. How, these presents witness and it is hereby agreed that GOVERNMENT shall put in force the provisions of the said Act, in order to acquire the SAID LAND for the benefit of the Society Members on the following conditions namely: 1.

The Society shall pay to the GOVERNMENT the entire costs as determined by the GOVERNMENT of the acquisition of the SAID LAND including all compensation damages, costs, charges and other expenses whatsoever,· which have been OR may be paid OR incurred in respect of OR on account of such acquisition OR in connection with any litigation arising put of such acquisition either in the original or APPELLATE COURTS, and including costs on account of any establishment and salary of any Officer OR officers of the GOVERNOR who the GOVERNMENT may think it necessary to employ OR deputation Special duty · for the purpose of such acquisition and also including the percentage charges on the total amount of compensation awarded as prescribed by GOVERNMENT.

The monies which shall be payable by the Society under this clause shall be paid to the Special Deputy Commissioner of Bangalore (hereinafter called the "SPECIAL DEPUTY COMMISSIONER") within fourteen days after demand by the SPECIAL DEPUTY COMMISSIONER in writing of such amount or amounts as the SPECIAL DEPUTY COMMISSIONER shall from time to time estimate to be required for the purpose of paying OR disbursing any compensation, damages, costs, charges, OR expenses herein before referred to, for which the COMPANY has made provision in their finance. 2.

On payment of the entire cost of the acquisition of the SAID LAND as hereinabove referred to the whole of the said land shall as soon as conveniently may be transferred to the SOCIETY as te vest in the COMPANY subject to the provision of the Karnataka Land Revenue Act (hereinafter called the SAID ACT) and the rules made thereunder subject also to the provisions of this agreement as to the terms on which the land shall be held by the Society. 3.

The SAID LAND when so transferred to and vested in the SOCIETY shall be held by the SOCIETY if its property to be used only in furtherance of the and for purpose for which it is acquired, subject nevertheless to the payment or agricultural, non-agricultural OR other assessment if and so far as the said land is OR may from time to time be liable to such assessment under the provisions of the SAID ACT and the rules made thereunder, and the local fund cess, as the case may be, THE SOCIETY shall:- (i) not use the SAID LAND for any purpose other than that for what it is acquired.

' (ii) Undertake the work of construction of the building \)'ithin three years from the date on which possession of the land handed to the Society and complete the same within three years from the aforesaid date; (iii) AT ALL TIMES, KEEP AND MAINTAIN the said land and the building OR buildings effected thereon in good order and condition, maintain all records of the SOCIETY properly to the satisfaction of the DEPUTY COMMISSIONER and supply to the GOVERNMENT punctually such. (iv) Returns and other information as may from time to time be required by the GOVERNMENT. (v) Not use the SAID LAND or any building that may be erected upon it for any purpose which in the opinion of GOVERNMENT is objectionable. 5.

The Society shall from time to time and at all times permit the GOVERNMENT or any officer or officers authorised by the GOVERNMENT in that behalf to inspect 8 the SAID LAND any works of the SOCIETY upon the SAID LAND whether in the course of construction or otherwise and shall furnish to the Government from time to time on demand correct statements of the monies spend by SOCIETY upon its said land. 6.

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

Provided that the SAID LAND and the buildings, if any, erected thereon shall not be so resumed unless due notice of the breaches complained of the been given to the Company and the Society has failed to make good the break or to comply with any directions issued by the GOVERNMENT in this behalf, within the time specified in the said notice for compliance therewith. 7.

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

8. All the cost and expenses incidental to the preparation and execution of these presents shall be paid by the SOCIETY. 9. (a) The Deputy Commissioner/Special Deputy Commissioner should make a token contribution towards the compensation framed by Assistant Commissioner/ Special Land Acquisition Officer at the rate of Rs. 100. 00 in respect of each Land Acquisition Case of the Society. (b) The Special Deputy Commissioner shall after taking over possession of the land U/s. 16(1) Land Acquisition to the Society should report to the Government the fact of having taken physical possession of the land for clearance of the Government. The Society should agree unconditional to pay the compensation as awarded or if enhanced by the Court decides in favour of land owners. (c) The Society shall not from the layouts without getting the plan duly approved by the Town Planning Wing of Bangalore Development Authority keeping in view the v. STATE OF KARNATAKA [G. S. SINGHVI, J. ] zoning regulations.

In respect of places other than Bangalore, the approval of Planning Authority, Municipality as the case may shall be obtained. (d) In case the violation of any of the conditions Government will be competent to resume the lands acquired in favour of Societies. (e) The expenditure incurred in this behalf shall be debited to the Head of the Account - 253" + District Administrations, Other expenditure-E. Acquisition of land on behalf of other acquiring bodies (Non-Plan). " 3. 16. In furtherance of the direction given by the State Government, Deputy Commissioner, Bangalore issued notification dated 23. 8. 1988, which was published in the Official Gazette on 1. 9. 1988, under Section 4(1) of the 1894 Act for the acquisition of 201 acres 17 guntas land including the land comprised in Survey Nos. 49 and 50/1 belonging to Smt. Geetha Devi Shah, who shall hereinafter be referred to as respondent No. 3 and Survey Nos. 7/1 and 8/1 belonging to the predecessor of P.

Ramaiah, Munikrishna, Keshava Murthy, Smt. Nagaveni and Smt. Chikkathayamma (respondent Nos. 3 to 7 in Civil Appeal Nos. 774-778/2005). · 3. 17 Respondent No. 3 filed detailed objections against the proposed acquisition of her land and pointed out that the same were garden lands; that she and her predecessor had planted 165 fruit bearing mango trees, 75 coconut plants, 15 lime plants, 15 guava trees, 100 papaya trees, 40 eucalyptus trees, 6 custard apple trees, 100 teakwood trees, 3 neem trees, one big tamarind tree, 2 gulmohar trees, 10 firewood trees and 10 banana plants. She also pointed out that there was a residential house and a pump house with electric connection and the area had been fenced by barbed wires and stone pillars. Shri P. Ramaiah also filed objections dated 6. 9. 1988 and claimed that the proposed acquisition was contrary to the provision~ of the 1894 Act and that the lands comprised in Survey Nos. 7/1 and 8/1 were the only source of livelihood of his family. 3.

18 The objections filed by respondent No. 3 were considered by the Special Land Acquisition Officer along with the reply of the acquiring body and the following 8 recommendation was made: "There are AC Sheet houses and since there are good number of Malkies: Mango, etc, Government may take suitable decision". 3. 19 The objections raised by Shri P. Ramaiah were also considered and the following recommendation was made: "There are no valid ground in the objections raised, the lands may be acquired. " 3. 20 Thereafter, the Special Land Acquisition Officer issued declaration under Section 6(1) which was published in the Official Gazette dated 25. 9. 1989. 3. 21 During the currency of the acquisition proceedings, Shri G. V. K. Rao, Controller of Weights and Measures and Recovery Officer was asked to conduct an inquiry into the membership of the appellant. He submitted report dated 7. 1. 1.

1988 with the finding that the appellant had admitted 40 p~rsons who were not residing within its jurisdiction and recommended that their names be removed from the rolls of the appellant and the committee of the management, which is responsible for admitting such ineligible persons should be proceeded against. ' 3. 22 It appears that similar reports had been received by the Government in respect of other societies. After considering these reports, Joint Secretary to the Government, Housing and Urban Development Department prepared a note on the basis of the decision taken by the Executive Council in its meeting v. STATE OF KARNATAKA [G. S. SINGHVI, J. ] held on 31. 5. 1989. The name of the appellant was shown in Annexure 3B of the note which contained the list of housing societies responsible for admitting ineligible persons as their members. · 3. 23 Before publication of the declaration issued under Section 6(1) of the 1894 Act, the State Government vide its letter dated 23. 6.

1989 informed Respondent No. 3 to remain present for spot inspection of her land. After publication of the declaration issued under Section 6(1 ), notices dated 6. 1. 1990 and 7. 3. 1990 were issued to Respondent No. 3 and others that the Special Deputy Commissioner would conduct spot inspection. A memo dated 11. 5. 1990 was issued to Respondent No. 3 that Special Deputy Commissioner would inspect Survey Nos. 49 and 50/2 on 14. 5. 1990. However, no one appears to have gone for inspection and to this effect letter dated 16. 5. 1990 was sent by Respondent No. 3. 3. 24 Special Land Acquisition Officer, Bangalore passed award dated 23. 6. 1990 and determined market value of the acquired land. The award was approved by the State Government on 11. 3. 1991. However, before the possession of the acquired land could be taken, the State Government issued notification dated 3. 8.

1991 under Section 48(1) of the 1894 Act and withdrew the acquisition proceedings in respect of land comprised in Survey No. 50/2. Vide letter dated 9. 10. 1991, the Revenue Department requested Special Deputy Commissioner, Bangalore to examine the representation made by Respondent No. 3 for withdrawal of the acquisition of Survey No. 49. To the same effect letter dated 29. 1. 1992 was sent by the Secretary, Revenue Department to the Special Deputy Commissioner. However, no final decision appears to have been taken on these communications. 3. 25 After one year and over six months of the passing of the award, the State Government issued Notification dated 7. 1. 1992 under Section 16(2) in respect of various parcels of lands including Survey No. 49. The possession of 150 acres 91h guntas of land of Vajarahalli and Raghuvanahalli is said to have been handed over by the Special Land Acquisition Officer to the Secretary of the appellant-Society.

However, as will be seen hereinafter, the entire exercise showing taking over of possession of the respondents' land and transfer thereof to the appellant was only on papers and physical possession continued with them. THE DETAILS OF THE LITIGATION BEFORE THE HIGH COURT A. Smt. Geetha Devi Shah's case. 4. 1 Respondent No. 3 challenged the acquisition of her land comprised in Survey No. 49 in Writ Petition No. 16419/ 1992. The appellant also filed Writ Petition No. 29603/1994 0 questioning the legality of notification issued under Section 48(1). By two separate orders dated 18. 11. 1996, the learned Single Judge dismissed both the writ petitions. The writ petition filed by respondent No. 3 was dismissed only on the ground of 21h years' delay between the issue of the declaration under Section 6(1) of the 1894 Act and filing of the writ petition. The explanation given by Respondent No.

3 that on her representations, the Government had withdrawn the acquisition of land comprised in Survey No. 50/2 and she was awaiting the Government's decision in respect of other parcel of land, was not considered satisfactory by the learned Single Judge. The writ petition of the appellant was dismissed by the learned Single Judge by observing that the State Government has absolute power to withdraw the acquisition before the possession of the acquired land can be taken. 4. 2 Respondent No. 3 challenged the order of the learned Single Judge in Writ Appeal No. 9913/1996.

The Division Bench of the High Court first considered the question whether the learned Single Judge was right in dismissing the writ petition only on the ground of delay and answered the same in negative by making the following observations: "After hearing the rival contentions of the appellant and contesting respondent and perusing the pleadings of both the parties, we are of the opinion that the learned Single 8 Judge has erred in taking into consideration the delay of 2 ~years from the date of final notification. The learned Single Judge has not considered the explanation given by the petitioner at paragraphs 12 to 15 wherein, he has explained regarding delay. The State Government has issued notice dated 6. 1. 1990 of inspection of lands proposed to be held at 10. 30 a. m. on 16. 8. 1990 and the Land Acquisition Officer conducted spot inspection and satisfied that the lands could be deleted and further another notice dated 6. 2. 1990 of fixing the inspection of the spot on 9. 2.

1990 was received in pursuance of the same spot inspection was held and one more notice dated 7. 3. 1990, 11. 5. 1990 on those days inspection was not made. Thereafterwards, he submitted the petition to the Revenue Secretary. His enquiries with the Revenue Secretary revealed the proceedings bearing No. RD 294 AQB 90 dated 5. 10. 1991 one Mr. N. Lokraj, Under Secretary to the Government called for reports on the matter vide Notification dated 29. 1. 1992. Therefore, the grievance of the petitioner was pending consideration before the Government under Section 15A of the Land Acquisition Act as on 29th January, 1992. In this regard, we have perused the record produced by the Government. These facts with reference to the denotification of the acquisition in respect of the land in question along with other lands are reflected therein.

Further the explanation offered by the appellant at paragraph 15 in the writ petition clearly show the bonafides on the part of the appellant in the matter of challenging the acquisition proceedings, as he had submitted the representation to the Revenue Department seeking for denotification of the land in question. In our opinion the delay with regard to the challenge of the proceedings has been satisfactorily explained by the appellant. Therefore, non-consideration of the explanation . and rejection of the petition by the learned Single Judge solely on the ground of delay and latches cannot be sustained. Moreover relief cannot be denied to a party merely on the ground of delay. In fact, in view of the subsequent events after the final notification, it cannot be said that the appellant has approached this Court belatedly. " 4. 3 The Division Bench then scrutinized records relating to the acquisition of land, relied upon the judgment in H. M. T. House Building Cooperative Society v.

Syed Khader and