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Judgment
The Hon''ble Single Judge dismissed a batch of writ
petitions by a common judgment and order dated
February 25, 2014, primarily, on the ground of delay
and laches. In all those writ petitions, the writ
petitioners claimed themselves to be the owners of
various pieces of land, which had been the subject
matter of acquisition by the State Government for the
benefit of the Bengaluru City Co-operative Housing
Society Limited (hereinafter referred to as "the Society" in short).
The writ petitioners challenged the acquisition
proceedings, inter alia, on the grounds that the said
acquisition was not for the public purpose, but was
initiated in violation of the provisions of the Land
Acquisition Act, 1894 ("the said Act" in short) inasmuch
the society did not prepare any housing scheme nor
there was any prior approval by the State Government
to any housing scheme as mandatorily required by
Section 3(f)(vi) of the said Act. It was contended that
the acquisition was at the instance of a middleman
engaged by the said society for influencing the
Government to acquire those lands, by using his
influence and monetary power, although no public
purpose was involved. The writ petitioners contended
that, while considering challenge to the very same
acquisition, relying upon the decision of the Supreme
Court of India in the case of HMT House Building Co-
operative Society Vs. Syed Khader and others,
reported in 1995(2) SCC 677, wherein it was held that
the acquisition was vitiated by fraud and was not for
public purpose, on account of non-framing of any
scheme by the society and in the absence of prior
approval of the scheme as contemplated under Section
3(f)(vi) of the said Act, and on account of involvement of
a middlemen, the entire acquisition was quashed by this
Court and, therefore, the writ petitioners prayed for the
similar reliefs.
Admittedly, the very same acquisition proceedings
were challenged in various writ petitions by the
interested owners. One Shrimati Geetha Devi Shah filed
a writ petition assailing the notification of acquisition,
which was registered as Writ Petition No. 16419 of 1992.
P.Ramaiah and others filed yet another Writ Petition
challenging the acquisition being No. 10406 of 1991.
During pendency of the aforementioned writ
petitions, the State Government issued a notification
under Section 48(1) of the said Act of 1894 for
denotification of some of the lands owned by said
Shrimati Geetha Devi Shah. The said notification was
challenged by the society by filing an application under
Article 226 of the Constitution of India, which was
registered as Writ Petition No. 29603 of 1994.
The Hon''ble Single Judge, by judgment and order
dated November 18, 1996, dismissed Writ Petition No.
16419 of 1992 filed by said Shrimati Geetha Devi Shah
on the grounds of delay and laches. Simultaneously,
Writ Petition No. 29603 of 1994 filed by the society,
challenging the aforesaid denotification, was, also,
dismissed.
The said judgment and order of the Hon''ble Single
Judge in Writ Petition No. 16419 of 1992 was challenged
by said Shrimati Geetha Devi Shah by filing an appeal
before the Division Bench, which was registered as Writ
Appeal No. 9913 of 1996.
The appeal Bench held that the Hon''ble Single
Judge was not justified in dismissing the writ petition
on the grounds of delay and laches and, relying upon
the decision of the Supreme Court of India in the case of
HMT House Building Co-operative Society (supra),
inter alia, held that there was no housing scheme
approved by the State Government and there was no
compliance with the mandatory requirement as
contemplated in Section 3(f)(vi) of the said Act. It was,
further, held that the Special Land Acquisition Officer
submitted his report without giving an opportunity of
hearing to the said Shrimati Geetha Devi Shah and this
was sufficient to nullify the acquisition of her lands.
Accordingly, the appeal Bench set aside the order of the
Hon''ble Single Judge and quashed the acquisition
proceedings.
The appeal filed by the society, challenging the
judgment and order passed in Writ Petition No. 29603 of
1994, was, also, dismissed by judgment and order dated
March 12, 1998.
The society filed an application for review being
Civil Petition No. 366 of 1998, which was, also,
dismissed, clarifying that the orders in the writ petitions
and the writ appeals would remain confined in relation
to the lands of the writ petitioners in those writ
petitions.
Writ Petition No. 10406 of 1991 filed by the said
P.Ramaiah and others was allowed by the Hon''ble Single
Judge and the acquisition proceedings were quashed.
The decision of the Hon''ble Single Judge was challenged
by the society in an appeal, which was registered as Writ
Appeal No. 4246 of 1998. The State of Karnataka and
the Special Land Acquisition Officer, also, filed Writ
Appeal No. 6039 of 1998 against the selfsame order.
The Division Bench, by a common judgment and order
dated February 6, 2004, held, relying upon the decision
of the Supreme Court of India in the case of HMT House
Building Co-operative Society (supra), that, as the
society engaged an agent for ensuring acquisition of the
lands and as much amount of money had changed
hands in the process, the entire acquisition was total
fraud inasmuch as the modus operandi and the pattern
to acquire the lands was identical to the case of HMT
House Building Co-operative Society (supra). Therefore,
ultimately, the entire acquisition was quashed and set
aside on the ground of fraud.
The decisions of the Division Bench in both the
cases of Shrimat Geetha Devi Shah and P.Ramaiah and
others were challenged before the Supreme Court of
India. By a common judgment and order dated
February 9, 2012, the Supreme Court of India affirmed
the decision of the Division Bench of this Court in the
aforesaid two matters. The decision of the Supreme
Court of India has since been reported in 2012(3) SCC
727 in the case of Bangalore City Co-operative
Housing Society Limited Vs. State of Karnataka
and others.
On behalf of the appellants, Mr. Udaya Holla,
learned senior advocate, and Mr. Radhakrishna
S.Hegde, learned advocate, submit that, since the
Supreme Court of India had quashed the entire
acquisition in the case of Bengaluru City Co-operative
Society (supra), the acquisition in relation to the lands
of these writ petitioners ought to be quashed as the
Supreme Court of India held that the acquisition
proceedings was fraudulent and illegal. It is submitted
that the acquisition was vitiated by fraud because of the
involvement of a middleman, namely, M.Krishnappa,
who influenced the State authorities to initiate the
acquisition proceedings and the State authorities, in
colourable exercise of powers, proposed to acquire the
lands of the writ petitioners.
It was strenuously argued that there has been no
delay in filing the writ petition. The writ petitioners
were compelled to file the writ petitions, in terms of the
aforementioned decisions of the Supreme Court of India,
where the entire acquisition proceeding was quashed,
but the relief was not extended to them by the
authorities. The writ petitions were filed based on the
findings recorded in Shrimati Geetha Devi Shah''s case
and the decision of the Supreme Court of India in the
case of HMT House Building Co-operative Society
(supra). The writ petitions were filed immediately on
noticing the fraud practiced for acquiring the lands.
Moreover, it is submitted that the pleas of delay and
laches, the consent award, the acquiescence to
acquisition and the alleged receipt of the compensation
are not available to the other side as the entire
acquisition was vitiated by fraud and mala fide,
involvement of middlemen and colourable exercise of
power. As the fraud vitiates everything, the delay could
not be a ground for denying the relief. Heavy reliance
was placed on the decision in the case of Vyalikaval
House Building Co-operative Society and others Vs.
Chandrappa and others, reported in 2007(9) SCC
It was submitted that once it was held that the
notification for acquisition was vitiated by fraud, the
pleas of acquiescence, the consent award and the
alleged receipt of compensation amount could not have
any bearing and the acquisition should be quashed.
Mr. Nanjunda Reddy, Mr. Jayakumar S.Patil, Mr.
Ashok Haranhalli and Mr. Shashikiran Shetty, senior
advocates representing the respondents and the
allottees from the society, urged that, consent award
has been passed and compensation was received by the
land owners through their constituted attorneys. They
pointed out to the affidavits stated to have been filed by
the land owners agreeing to the acquisition. It is
submitted that the writ petitioners are not entitled to
the relief claimed in terms of the decision in the case of
Shrimati Geetha Devi Shah. In the review application,
it was clarified that the decision in the said case would
confine only to the writ petitioners of those cases. It
was submitted that another writ petition relating to the
very acquisition in question was dismissed on the
ground of delay and laches. The Special Leave Petition
against such decision was, also, dismissed. Reliance
was placed upon the decision in the case of
B.Anjanappa and others Vs. Vyalikaval House
Building Co-operative Society Limited and others,
reported in 2012(10) SCC 184, and submitted that, as
there has been inordinate delay, the writ petition was
rightly dismissed by the Hon''ble Single Judge. They
submit that as a consent award was passed, the
challenge to the acquisition was not maintainable.
In all the cases where acquisitions have been
found to be tainted on account of involvement of
middleman, who, by using his financial power, had
influenced the Government in the decision making
process for acquiring the land, and where the
mandatory requirements of Section 3(f) (vi) of the said
Act, requiring framing of scheme and prior approval by
the Government were absent, the entire acquisition had
been quashed. In the cases in hand, M.Krishnappa has
been the Managing Partner of Rajendra Enterprises, and
he acted as the middleman. He was engaged for
influencing the Government for the purpose of acquiring
the lands in question. A general power of attorney and
affidavits were executed in favour of said M.Krishnappa.
A bare perusal of the affidavits and the general power of
attorney indicates that the land owners were virtually
illiterate people; many of them had put their left thumb
impressions in both the general power of attorney and
the affidavits. Some of them had signed. However, on
perusal of the signatures and their style of subscribing
the signatures clearly indicate that the land owners
were virtually illiterate and rustic village people. It is
apparent, therefore, that fraud has been perpetrated
upon the land owners. An indemnity bond was executed
by the said M.Krishnappa in favour of the State. In the
indemnity bond, the said Krishnappa claimed himself
that he had been the owner of the lands and the society
permitted him to execute the indemnity and to collect
the compensation from the Government. It is, thus,
clear that the middleman, namely, the said
M.Krishnappa, entered into a purported agreement with
the society, influenced the Government and received the
compensation. The land owners did not receive the
compensation and the consent given by the said
M.Krishnappa, by virtue of his power of attorney and the
affidavits, has been a product of fraud.
In these cases, the lands of various land owners
had been acquired under the same notification, at the
instance of the same middleman and without the society
framing any scheme and obtaining prior approval of the
Government. Mr. Nanjunda Reddy, learned senior
advocate appearing for the said society, contended that,
though this Court and the Supreme Court of India have
found that the acquisition was vitiated by fraud and for
non-compliance of the mandatory requirement of
Section 3(f)(vi) of the said Act, the same could not be
applied in respect of the lands of these appellants as, in
the said review petition being Civil Petition No.366 of
1998, this Court confined the order only to the lands of
the petitioners in those writ petitions. It is true that, in
the review petition, it was observed that the decision
would confine to the petitioners in those writ petitions.
However, the Supreme Court of India in Bangalore City
Housing Co-operative Housing Society (supra)
considered the entire matter and held that the approval
of the housing scheme, as mandatorily required under
Section 3(f)(vi) of the said Act, was absent; therefore, the
entire acquisition was vitiated. It was found that a
middleman was employed for influencing the
Government to acquire the property and that
tantamounts to fraud. It was specifically held by the
Apex Court that the entire acquisition was bad.
In Bangalore City Co-operative Housing Society
Limited (supra) the Apex Court refused to confer
legitimacy to the influence of money power over the rule
of law, as the rule of law had been the edifice of our
Constitution. Money played the important role in
facilitating acquisition of land. It shows how an
unscrupulous element in the society uses money and
extraneous consideration for influencing the decision
making process.
In this case M.Krishnappa, with whom the society
had entered into an agreement, had played a crucial role
in persuading the Government to acquire the land for
the benefit of the said society. The tenor of the
agreement does not leave any manner of doubt that the
said M.Krishnappa played a pivotal role in persuading
the Government to acquire the property. Of course,
there is no definite and clear evidence that
M.Krishnappa paid money for facilitating acquisition of
the land, but, it is not too difficult, looking at the tenor
of the agreement, the general power of attorney, and the
affidavits, for any person of reasonable prudence, to
decipher that the society parted with substantial money
for manipulating the State authorities. Merely because
the layout was formed and certain plots were allotted to
the alleged members of the society and that some of the
members had constructed their houses, that itself is not
sufficient to apply the doctrine of prospective overruling
resulting in conferring legitimacy to the influence of
money power.
In the case of Byanna Vs. State of Karnataka (Writ
Petition Nos. 28577-86 of 1995), this Court dismissed
the writ petitions by order dated April 12, 1996 holding,
inter alia, that there was no middleman and the general
power of attorneys were given only after issuance of the
notification under Section 6(1) of the said Act and, thus,
no fraud was played at any stage. This court dismissed
those writ petitions not only on the ground of delay and
laches, but holding that no fraud was played.
On the contrary, in Bangalore City Co-operative
Housing Society limited (supra) the Supreme Court of
India found that there was a middleman for the purpose
of acquisition and, therefore, the entire acquisition was
vitiated on the ground of fraud. We hold that Byanna
(supra) has no application in these cases. As fraud
vitiates everything, delay is inconsequential. In identical
circumstances when acquisition was found to be vitiated
on the grounds of fraud and malafides, resulting from
the use of middleman to influence the Government, the
Apex Court held that the delay was of no consequence.
It was categorically held that when the acquisition was
found to be totally malafide and not for bonafide
purpose, the grounds of delay and acquiescence had no
substance. All the facets of fraud get attracted to the
case at hand.
In R.Rajashekar and others Vs. Trinity House
Building Co-operative Society and others, reported in
AIR 2016 SC 4329, the Supreme Court of India held
that, once the proceedings are void ab initio for non-
compliance of the mandatory statutory requirement of
prior approval of the scheme, the original owners could
not be shut out from the court in challenging the
acquisition proceedings and, therefore, they were
entitled to challenge the same at any point of time, even
in collateral proceedings. In this case the evidence on
record clearly indicates that the said society paid money
to the middleman to act as the agent between the
society and the State Government to ensure acquisition
of the lands of these original landowners for the benefit
of the said society. Hiring of middleman to get the land
of rustic villagers acquired by the State is opposed to
public policy.
It was urged that there has been a consent award
and, thus, the challenge to acquisition must fail. The
consent was given by the middleman, namely,
M.Krishnappa, by virtue of the affidavits and the power
of attorney executed by virtually illiterate and rustic
villagers. Therefore, the compensation was received by
the middleman and not by the land owners. The
consent award, therefore, is of no consequence. The
foundation for acquisition is the approval of the housing
scheme under Section 3(f)(vi) of the said Act; such
approval is, admittedly, not available. Further, fraud
vitiates the whole acquisition. When the very
foundation of the acquisition is vitiated, consent or
otherwise is of no consequence. In the case of
Vyalikaval House Building Co-operative Society
(supra) awards were passed and compensation amounts
were, also, disbursed in favour of the land owners.
Nevertheless, the Apex Court held that the acquisition
was vitiated and it could not be saved on the ground of
acquiescence.
We are of the opinion that the decision in the case
of Bangalore City Co-operative Housing Society
Limited (supra) has universal application. In these
cases, a middleman was engaged to influence the
Government and prior approval of the scheme was
absent as mandatorily required under Section 3(f)(vi) of
the said Act. Hence, we have no hesitation in holding
that the Hon''ble Single Judge was not right in
dismissing the writ petitions on the grounds of delay
and laches. The acquisition is, therefore, liable to be
quashed.
However, certain members of the co-operative
society had acquired the plots of land even prior to
passing of an order of injunction against the society by
the Hon''ble Single Judge on March 14, 2005 and some
of them have even constructed their houses. We feel
that they should be permitted to retain their houses on
the sites allotted to them, on payment of reasonable
compensation to the land owners at the prevailing
market price as on the dates of their purchases. Some
persons have purchased the property after the order of
injunction. They are given liberty to negotiate with the
land owners for purchase of the land at an agreed price,
preferably the market price prevailing in the year 2005.
Therefore, the appeals are allowed. The impugned
judgment and order are set aside. The writ petitions are
allowed. The entire acquisition is quashed with the
rider that the persons, who got sites from the said
society prior to the said order of injunction and
constructed their houses, would be permitted to retain
their houses on payment of compensation to the land
owners by offering market price as prevailing on the
dates of their purchases. Simultaneously, the persons,
who had acquired the plots of land from the said society
after the order of injunction and constructed their
houses, shall be entitled to negotiate with the land
owners to retain their houses on payment of
compensation to the land owners at an agreed price,
preferably the market price prevailing in the year 2005.
We direct the authorities to return vacant lands to the
land owners, immediately.
We make no order as to costs.