Page 1 1

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

Page 2 2

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.

Page 3 3

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

Page 4 4

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

Page 5 5

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

Page 6 6

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

Page 7 7

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

Page 9 9

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 Khader

1

. 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 4

th

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

Page 10 10

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

Page 12 12

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

Page 13 13

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. Venkataswamappa

2

,

Bangalore City Cooperative Housing Society Ltd.

v. State of Karnataka

3

, 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. Narayanamma

5

, 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 Karnataka

6

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

Page 14 14

Karnataka

7

. 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

Page 15 15

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

Page 16 16

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:

Page 17 17

“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

Page 18 18

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

Page 19 19

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

Page 20 20

****

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

Page 21 21

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

Page 22 22

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

Page 23 23

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

Page 24 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.

Page 25 25

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

Page 26 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

Page 27 27

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?

Page 28 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

Page 29 29

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

Page 30 30

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

Page 31 31

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/-

Page 32 32

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

Page 33 33

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

Page 34 34

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.....

Page 35 35

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

Page 36 36

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

Page 37 37

the case of Narayana Reddy v. State of Karnataka

9

,

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

Page 38 38

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 Jung

10

, 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

Page 39 39

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

Page 40 40

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

Page 41 41

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).

Page 42 42

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

Page 43 43

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

Page 44 44

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)”

Page 45 45

Further, in the case of Vyalikaval House

Building Coop. Society v. V. Chandrappa

11

, 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

Page 46 46

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

Page 47 47

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

Page 48 48

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

Page 49 49

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

Page 50 50

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.

Page 51 51

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

Page 52 52

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

Page 53 53

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.

Page 54 54

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

Page 55 55

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

Page 56 56

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

Page 57 57

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

Page 58 58

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

Page 59 59

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.

Page 60 60

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

Page 61 61

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

Page 62 62

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

Page 63 63

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

Page 64 64

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.

Page 65 65

(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

Page 66 66

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

Page 67 67

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

Page 68 68

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.

Page 69 69

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)

Page 70 70

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.

Page 71 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)