N. Arasappa v. State of Karnataka & Ors.

2026 INSC 1151 Reportable

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

Civil Appeal Nos.13744-13747 of 2015

N. Arasappa …. Appellant Versus State of Karnataka & Ors. …. Respondents

WITH

Civil Appeal Nos.13749-13752 of 2015

Civil Appeal Nos.13759-13762 of 2015

Civil Appeal Nos.13754-13757 of 2015

Civil Appeal No.13753 of 2015

JUDGMENT

K. VINOD CHANDRAN, J.

“The power of eminent domain, next to that of conscription of manpower for war, is the most awesome grant of power under the law of the land.” Winger v. Aires (371 Pa. 242 (1952)

Signature Not Verified What the Supreme Court of Pennsylvania observed applies Digitally signed by VISHAL ANAND

equally in our shores too. Condemnation of privately owned Date: 2026.10.26 14:09:35 IST Reason:

land for public purpose can only be with authority of law and C.A. Nos.13744-13747 of 2015 etc. Page 1 of 71

with just compensation being paid. That, such authority of law

can be exercised only for public purpose, is without cavil; with

just compensation being an ancillary right, which does not by

itself justify an acquisition. However just the compensation be, if

the authority of law is lacking or the public purpose is absent,

there can be no eminent domain exercised. The appellants

herein allege lack of authority in law; complete absence of

public purpose and fraud having vitiated the instant acquisition.

Arguments of the Appellants: -

2. Ms. Kiran Suri, learned Senior Counsel and Mr. Basava

Prabhu S. Patil, learned Senior Counsel appeared for the

appellants. Mr. Vikas Singh, learned Senior Counsel appeared

for the 4th respondent/Society and Mr. Sanjay Hegde, learned

Senior Counsel appeared for the State assisted by learned

Additional Advocate General, Mr. Omar Hoda.

3. On behalf of the appellants, it was pointed out that housing

schemes sponsored by a Cooperative Society were treated as

‘public purpose’ only by Land Acquisition (Amendment) Act,

19841 (w.e.f. 24.09.1984) by introduction of clause (f) with sub-

1 Hereinafter referred to as ‘the LA Act’

C.A. Nos.13744-13747 of 2015 etc. Page 2 of 71

clause (vi) under Section 3. However, to enable a valid

requisition, there should be a housing scheme; the layout and

the blueprint drawn up, which has to be approved by the

appropriate Government. In fact, even before the Amendment

Act came into force, the respondent Society entered into an

agreement with a third party, one Bhagya Enterprises who in

turn undertook to acquire land for implementing a housing

scheme, which in itself is an indication of the colourable exercise

of power by the authorities under the Government. The learned

Single Judge found that there was no approval of the housing

scheme and the acquisition was approved only on the basis of

the area-wise extent. Even with respect to the extent, there was

gross discrepancy, in the extent cleared by the State Level

Committee, that approved and later notified for acquisition.

4. The appellant relied on H.M.T. House Building

Cooperative Society v. Syed Khader & Ors.2, Bangalore City

Cooperative Hosing Society Ltd. v. State of Karnataka & Ors.3,

B. Anjanappa & Ors. v. Vyalikaval House Building Cooperative

Society Ltd. & Ors.4 and Rajashekar & Ors. v. Trinity House

2 (1995) 2 SCC 677 3 (2012) 3 SCC 727 4 (2012) 10 SCC 184

C.A. Nos.13744-13747 of 2015 etc. Page 3 of 71

Building Cooperative Society & Ors.5, wherein similar

acquisitions were set aside by this Court. The Registrar of

Cooperative Societies, on allegations of several irregularities,

illegalities and fraud committed by the mushrooming societies,

who attempted to grab land under the pretext of implementation

of housing schemes, appointed the G.V.K. Rao Committee to

inquire into the allegations. The 4th respondent was one of the

Societies whose activities were questioned before the

Committee. Very serious and grave irregularities were noticed

in its functioning and the Committee Report specifically

disclosed the agreement between the Society and the third

party, M/s Bhagya Enterprises, which had undertaken the

acquisition, which could only have been carried out by

employing State machinery under the garb of a public purpose

being effectuated.

5. The learned Single Judge categorically found fraud in the

acquisition carried out. The Division Bench, whose order is

impugned herein, though highlighted the well-settled principle

that fraud vitiates the most solemn proceedings, chose to

C.A. Nos.13744-13747 of 2015 etc. Page 4 of 71

overturn the well-considered judgment of the learned Single

Judge on the ground of delay. The trite principle that delay

condonation should yield to a categoric finding of fraud was not

appreciated by the Division Bench. The appellants also relied on

the comparable instances, wherein this Court interfered with the

colourable exercise of power in Uddar Gagan Properties Ltd. v.

Sand Singh & Ors.6, Royal Orchid Hotels & Anr. v. G. Jayarama

Reddy & Ors.7, Rattan Chand Hira Chand v. Askar Nawaz Jung

(Dead) by LRs. & Ors.8. The Division Bench also erred

egregiously in finding proof of possession based only on the

notification issued under Section 16(2) of the LA Act, applicable

in the State of Karnataka, when the appellants were never

physically divested of their possession by the State Authorities.

The learned Single Judge had categorically found that there is

no mahazar prepared; which is incumbent, when actual physical

possession is taken, of the acquired lands. The Division Bench

ought not to have disturbed the well-considered findings of the

learned Single Judge in the absence of any perversity or

6 (2016) 11 SCC 378 7 (2011) 10 SCC 608 8 (1991) 3 SCC 67

C.A. Nos.13744-13747 of 2015 etc. Page 5 of 71

arbitrary exercise of jurisdiction, which grounds in fact applied

more aptly to the subject acquisition.

Arguments for the Society: -

6. Arguing for the 4th respondent-Society, it is pointed out that

the case set up by the appellant rests on four propositions: bogus

membership, engagement of middlemen, fraud and absence of

prior government approval under Section 3(f)(vi) of the LA Act,

all of which are unsubstantiated and frivolous. On government

approval, it is pointed out that the Society’s proposal was

scrutinised by a Three-Men Committee and cleared by the State-

Level Coordination Committee (SLCC) and subsequently

approved by the Government before issuance of Section 4(1)

notification. The acquisition commenced with notification dated

22.11.1988 and after consideration of the objections, the

declaration under Section 6(1) was issued on 04.12.1989

restricted to 59 acres, 6 guntas. Awards followed in the year

1990 with possession taken evidenced unequivocally by the

notification under Section 16(1), raising a statutory presumption

under sub-section (2) of Section 16 and the entire land was duly

handed over to the Society. The present Writ Petition is filed

after about 19 years, in 2007. Earlier a Division Bench of the C.A. Nos.13744-13747 of 2015 etc. Page 6 of 71

Karnataka High Court ruled in favour of the Society and the

specific notification was upheld as occasioned by a public

purpose, in Karnataka Gruha Nirmana Sahakara Sangha

Limited, Peenya, Bangalore v. Karithimmaiah and Others9.

7. The contemporaneous records indicate a housing scheme

having been approved by the Government which was the

proposal made by the Society before the Revenue

Commissioner. The Society itself was registered on 14.03.1974

and consisted of members who were employees of the Small-

Scale Industries in Peenya, Bangalore and other landless

residents of that area. The application in the form of a proposal

submitted before the Revenue Commissioner contained the

ownership particulars of the land, the extent required, the

financial capacity of the Society, the proposed plot dimensions,

approximate price and the broad map of the layout plan for

development, as produced along with I.A. No.161082 of 2018 in

C.A Nos. 13744-13747 of 2015 as Annexure R4. This proposal,

was recommended by the Three-Men Committee and the SLCC,

9 2002 (1) Kar.L.J. 469 (DB)

C.A. Nos.13744-13747 of 2015 etc. Page 7 of 71

as also approved by the Government by order dated 13.11.1987

and directed initiation of acquisition proceedings.

8. The allegation of bogus membership is frivolous, insofar as

the same was considered at the level of the SLCC and confirmed

through the machinery of the State; the Registrar of Cooperative

Societies. There is no proof offered of fictitious membership and

there is no annulment of the Society’s registration or cancellation

of the approval of the verified memberships. The GVK Rao

Committee only made a preliminary scrutiny and there were no

serious irregularities that were highlighted as against the 4th

respondent Society. The report also does not record any

membership conferred as fictitious or its memberships being

fabricated without any basis. There is no substantiation as to the

allegation of colourable devices having been employed for

acquisition or that the beneficiaries were bogus. The agreement

produced as Annexure P1 along with the Civil Appeal does not

confer any statutory power on the service provider who was

merely employed to identify the land and obtain documents

from the owners, as also propose a layout and carry out liaison

work. There was never any intention or authorisation to the

service provider to indulge in any unlawful activity for the C.A. Nos.13744-13747 of 2015 etc. Page 8 of 71

acquisition. The acquisition as such was not under any contract

and it was a separate proposal made, which was verified by the

Committees at the government level and approved by the

Government itself. The agreement with a service provider, for

obtaining documents from owners and layout related work, does

not vitiate the acquisition which was carried out legally.

9. It is also urged that the authorities relied upon by the

appellants are distinguishable. H.M.T. House Building

Cooperative Society v. M. Venkataswamappa10 was a case in

which there was no prior approval of a housing scheme and the

record contained findings of a large-scale inclusion of ineligible

and bogus members, collection of huge amounts and

agreements with agents, to use undue influence on the

Government to issue notification to acquire lands for

H.M.T.H.B.C Society. The Vyalikaval House Building Co-Op.

Society by its Secretary v. V. Chandrappa & Ors.11 was

concerned with a clear fraud employed and abuse of State

machinery, on which finding the acquisition was set aside. In the

instant case, fraud is inferred from a ‘general committee report’

10 (1995) 3 SCC 128 11 (2007) 9 SCC 304

C.A. Nos.13744-13747 of 2015 etc. Page 9 of 71

and a private service agreement despite the project specific

scrutiny and approval being on record. Bangalore City

Cooperative Housing Society Ltd.3 is in favour of the 4th

respondent Society, specifically applying paragraph 78 to 79,

wherein disclosure of total eligible members, land requirement,

specific identification of land, plot dimensions and broad mode

of development were the aspects on which the Committees of

the Government applied its mind before acquisition. Therein

the land owners challenged the notification of 1988-1989 in 1992

and 1998 and the delay had been condoned. In the present case

despite the GVK Rao Committee Report being on the public

domain, no challenge was made within a reasonable time. The

notifications were of the period 1998-99, awards were made in

1990, possession commenced in 1992-93 and the writ petitions

were filed only in the year 2007. Karithimmaiah9 with respect

to the very same acquisition is a binding precedent. Insofar as

Writ Petition No’s.22979-85 of 1989 and Civil Appeal No’s.13754-

57 of 2015, it is pointed out that the parties in the writ petitions

and one of the parties in the Civil Appeals had challenged the

notification in an earlier proceeding, ending with the dismissal

of Special Leave Petition (C) No.1727-1732 of 2002. In C.A. Nos.13744-13747 of 2015 etc. Page 10 of 71

conclusion, it is the argument that the four propositions urged

does not merit consideration and are liable to be negated and

the acquisition is to be upheld.

Arguments of the State: -

10. The Government, to the specific query raised, as regards

the documents in I.A. No.161082 of 2018 asserted a proper

procedure having been followed as provided in the Karnataka

Government (Transaction of Business) Rules, 1977. The extracts

under Part III, Sub-heading ‘E’ with reference to Land

Acquisition is pointed out, indicating that the acquisition of land

under the LA Act for any Department of Government shall be

dealt within the Revenue Department; but all administrative

decisions connected with the acquisition shall be taken in the

Administrative Department concerned in the Secretariat under

order of the Minister-in-Charge. On our specific directions, an

Officer of the State Government was present who also produced

the extracts of the relevant records with respect to the 4th

respondent Society which is Government File No.RD 242 AQB

11. The State also relies on Karithimmaiah9 to urge the

ground of res judicata. Insofar as the GVK Rao Committee being C.A. Nos.13744-13747 of 2015 etc. Page 11 of 71

in public domain it is urged that the inquiry report being one

prepared by an Inquiry Officer appointed under a statute, any

person could have obtained a certified copy of the same. The

Committee’s report was also looked into by the High Court and

this Court in the various decisions cited, which was a raging

controversy during that time and the land owners were quite

aware of the report. Insofar as the extent of land acquired, the

Three-Men Committee and the SLCC had recommended

allocation of additional 97 acres of land to the 4th respondent

Society, comprising of 11 acres in Laggere village, 8 acres and

23 guntas in J.B. Kaval village, 12 acres and 17 guntas in

Nelakedaranahalli village and 65 acres in Jakkur village. The

SLCC excluded 65 acres from Jakkur village since it was falling

under the regional park zone. The Commissioner Revenue

adjudicated the compensation and acquired the land by

communication dated 07.11.1988 which proposed the

acquisition of 59 acres and 39 guntas from Nelakadirenahalli

Village. Mr. Sanjay R. Hegde, learned Senior Counsel also points

out that these acquisitions for the housing societies were at the

time of the initial development of Bangaluru which was

necessary and expedient. C.A. Nos.13744-13747 of 2015 etc. Page 12 of 71

The Single Bench Findings: -

12. We have to take note of the judgment of the learned Single

Judge which led to Civil Appeal No’s. 13744 to 13747 of 2015;

taken as the lead case, in a little detail. There were originally 16

petitioners, all of whom had lands in Nelakadiranahalli Village,

but by the time the writ petition was heard, only four remained;

the 2nd, 10th, 13th and 16th petitioners, who are respectively

Kempaiah, Nanjundaiah, Hanumaiah and Chandra, whose legal

representatives are the appellants before us; the writ petitioners

in WP No.9412 of 2007. They assert their possession over the

lands alleged to have been acquired, even now. Only when

interference to their possession was attempted in 2007, they

approached the High Court with a challenge, specifically

asserting fraud. In total, they claimed 4 acres and 12 guntas; their

separate holdings being 27 guntas, 1 acre and 32 guntas, 30

guntas and 38 guntas respectively. They sought for a writ of

certiorari quashing the notification dated 22.11.1988 under

Section 4 and the declaration dated 04.12.1989 under Section 6

of the LA Act. Their prayer was also to quash the notification

issued under Section 16(2) of the LA Act; a provision brought in

by an amendment, by the State of Karnataka. They further C.A. Nos.13744-13747 of 2015 etc. Page 13 of 71

challenged Annexure Q dated 19.01.1993, Annexure R dated

01.03.2005 and Annexures S1 to S3 communications dated

13.11.1992, 20.01.1993 and 26.07.2004, which directed handing

over of possession to the 4th respondent-Society. In the

alternative, they prayed for a writ of mandamus directing de-

notification of the land acquisition proceedings in the specified

survey numbers of Nelakadiranahalli Village, Yeshwanthpur-

Hobli, Bangalore North Taluk, Bangalore.

13. The learned Single Judge first looked at Annexure P1

agreement entered into with two persons, representing one

Bhagya Enterprises, who acted as middlemen for the purpose of

acquisition of the land. It was observed that on instigation of the

middlemen, the Government employed its machinery to acquire

the land for the purpose of the Society; which is evident from how

it was proceeded with. The acquisition commenced with a letter

dated 13.11.1987, issued by the Revenue Commissioner and

Secretary to Government to the Special Deputy Commissioner,

Bangalore, conveying the approval for acquisition of an extent of

97 acres of land in favour of the 4th respondent Society. Later by

the notification under Section 4(1) the extent was reduced to 79

C.A. Nos.13744-13747 of 2015 etc. Page 14 of 71

acres 25 guntas while the declaration under Section 6 indicated

59 acres 6 guntas.

14. Some other landowners had challenged the acquisition in

a writ petition which was allowed by the learned Single Judge,

overturned by a Division Bench in Karithimmaiah9 While the

learned Single Judge quashed the acquisition proceedings on

several grounds; viz; the 4th respondent being not a bona fide

society, absence of public purpose, invalid declaration under

Section 6 and the State Government not being a contributory; the

Division Bench found that the condemnation of privately owned

properties for the purpose of providing housing, as provided

under Section 3(f)(vi) of the LA Act, was perfectly in order and

the omission to specify ‘public purpose’ in the notification would

not vitiate it. The respondent State and the Society vehemently

relied upon the aforesaid decision to seek for a dismissal of the

instant writ petition too.

15. The learned Single Judge found that the contention of the

writ petitioners that the Society itself was dubiously constituted

without any details of the membership and the involvement of

middlemen to facilitate acquisition of land by the State, was

justified and it clearly indicated a fraud played on the citizens C.A. Nos.13744-13747 of 2015 etc. Page 15 of 71

and the colourable exercise of power by the State authorities.

The respondents, on the other hand, asserted that they had

followed the legal rigmarole and requisitioned a specified

extent of property for the purpose of laying out a housing

scheme, which is included as a public purpose in the LA Act. The

respondents also asserted possession on the basis of a

notification issued under Section 16(2) of the LA Act, which was

urged as conclusive evidence of the State having taken

possession of the said land. The specific contentions raised

before the learned Single Judge by the respondents, State and

the Society, were of res judicata, estoppel as also delay & laches.

On possession, the learned Single Judge found categorically

that, but for the notification under Section 16(2), there was

nothing available in the records to indicate physical possession

having been taken over by the State authorities, usually

acknowledged by mahazars in which the independent persons

are also made witnesses.

16. The technical plea of res judicata, estoppel and delay &

laches were rejected by the learned Single Judge, primarily

finding fraud played on the landowners for reasons of : (i) the

agreement with middlemen, who undertook to facilitate C.A. Nos.13744-13747 of 2015 etc. Page 16 of 71

acquisition through the State for a consideration; (ii) payment to

landowners having not been substantiated; and (iii) the G.V.K.

Rao Committee Report, which had specifically dealt with land

acquisitions made in the garb of establishing housing schemes

on the requisition of Cooperative Housing Societies, the benefit

of which lands actually inured to real estate operators. None of

these aspects were addressed in Karithimmaiah9. The learned

Single Judge noticed the G.V.K. Rao Report in detail, with

reference to the 4th respondent-Society, in its order and

extracted the same. The conclusions indicate that the 4th

respondent-Society did not have any details of its members and

that huge amounts were paid by them to middlemen and

landlords directly. It was shockingly noticed that the

representatives of the 4th respondent-Society before the

Committee had spoken of bribe to the Land Acquisition Officers

(LAO). The observations made in the G.V.K. Rao Report,

specifically with respect to the 4th respondent-Society and the

conclusions arrived at by the said Committee, clearly indicated

the fraudulent manner in which the Society was functioned,

attempting to appropriate lands privately owned, for dubious

purposes under the guise of implementation of housing C.A. Nos.13744-13747 of 2015 etc. Page 17 of 71

schemes, the like of which, was interfered with by another

Division Bench; approved in H.M.T. HBCS [M.

Venkataswamappa]10 and a batch of cases. The facts and the law

delineated are strikingly similar and identical, held the learned

Single Judge, which persuaded the learned Single Judge to

quash the acquisition proceedings on the ground of fraud and

colourable exercise of power, on finding also that the possession

had not been taken over by the State or the property handed

over to the 4th respondent-Society till date. Learned Single Judge

after quashing the notifications issued under Section 4 and the

declaration under Section 6, proceeded to consider the

irresponsible and illegal manner in which the officers of the State

acted mala fide in condemning privately owned properties

exercising powers of eminent domain and thus perpetrating

injustice on the citizens through the fraudulent measure of land

acquisition, not intended for public purposes. The learned

Single Judge came down heavily on the false affidavit filed

before the Court and directed contempt notice to be issued

against the Under Secretary, who was the deponent in the

affidavit. Costs of Rs.10,000/- in favour of each of the four

petitioners were also ordered. C.A. Nos.13744-13747 of 2015 etc. Page 18 of 71

The Impugned Judgment: -

17. In fact, we are concerned with another set of appeals in

which the writ petition was dismissed on the ground of delay,

which the landowners had challenged in writ appeal. Both the

appeals, from the decision, quashing the notification, and the

other rejecting the challenge on delay, were considered

together. While affirming the dismissal on the ground of delay,

the judgment of the learned Single Judge in WP No.9412 of 2007;

which we are looking at presently, was reversed and the writ

petition itself got dismissed on the ground of delay and res

judicata.

18. The Division Bench judgment, which is impugned herein,

passed a common judgment in the two appeals; one, from the

dismissal of Writ Petition No.10843 of 2008 on the ground of

delay and latches, and the other, from Writ Petition No.9412 of

2007 which quashed the entire acquisition. The Division Bench

first noticed the decision in Karithimmaiah9 in which the very

same acquisition was under challenge, which challenge stood

negated. The impugned judgment relied on the

recommendations of the Three Men Committee as also the SLCC

and subsequent approval of the Government, which stood C.A. Nos.13744-13747 of 2015 etc. Page 19 of 71

upheld in Karithimmaiah9, the SLP against which was also

dismissed by this Court. On considering whether the very same

issues could be reagitated by the writ petitioners on the ground

of fraud, reference was made to the decision of this Court in

Meghmala & Ors. v. G. Narasimha Reddy & Ors.12. In that

case, the issue relating to fraud was held to be concluded by

reason of the principles of res judicata for reason of the very

same issue having been agitated in the earlier proceedings. The

discovery or detection of fraud at a belated stage would not be

sufficient to set aside the same, even if it has been procured

fraudulently, held the Supreme Court. The Division Bench also

dilated upon various legal aspects, specifically; propositions of

law regarding, finality of litigation and constructive res judicata

to reiterate that the decision in Karithimmaiah9 had brought in

finality to the acquisition proceedings for the 4th respondent

Society.

19. A.C. Ananthaswamy and Ors. v. Boraiah (dead) by LRs.13

was also relied on. The decision of the learned Single Judge,

which set aside the acquisition, had considered the plea of res

12 (2010) 8 SCC 383 13 (2004) 8 SCC 588

C.A. Nos.13744-13747 of 2015 etc. Page 20 of 71

judicata based on Karithimmaiah9. It was negatived on the

ground that it was just a ruse to get the writ petition dismissed

on technical pleas, without allowing the Court to embark on a

scrutiny into the records of the State Government as maintained

by the Special LAO. The Division Bench faulted this finding on

the ground that the acquisition commenced with the notifications

issued in the year 1988-89 the passing of the award in the year

1990 and the possession taken over in the year 1993. We

immediately notice that this is far from the reality as we see from

the records, which we referred to a little later. Continuing the

narration, the reliance on GVK Rao Report was also criticized on

the ground that it was available in the year 1989 and there was

no explanation why the writ petitioners did not assail the

acquisition proceedings at any earlier point of time. The

presumption arising out of sub-section (2) of Section 16 of the LA

Act by a notification issued on 18.11.1992, proclaiming

possession having been taken over, was specifically noticed.

The Division Bench also observed that a mahazar for taking over

possession would be drawn up only if Section 47 of the LA Act is

invoked, when there is an obstruction to the taking over of

possession, pursuant to a notice issued under Section 12(2) of the C.A. Nos.13744-13747 of 2015 etc. Page 21 of 71

LA Act. There being no obstruction caused, there was no

requirement to invoke Section 47 was the finding; which again is

far from the facts as disclosed from the documents produced by

the 4th respondent Society in IA No.161082 of 2018; which we

would notice a little later. The decisions of this Court in which

the acquisition proceedings were interfered with were noticed

and distinguished.

20. Finding that the instant acquisition proceedings were

upheld by the Division Bench in the year 2001 in

Karithimmaiah9, the allegation of fraud having vitiated

acquisition proceedings was rejected; especially since the said

ground having not been taken up in the earlier round of

litigation. On the ground of delay, the writ appeal against the

judgment interfering with the acquisition, was allowed and the

other impugned order rejecting the writ petition on the ground

of delay was affirmed. The Division Bench declined to look into

the facts as noticed by the learned Single Judge; while causing

interference to the acquisition proceedings, all relatable to the

fraud, colourable exercise of power and collusion, as coming out

from the records produced and the documents perused; which

we are unable to appreciate. On the ground of delay, we cannot C.A. Nos.13744-13747 of 2015 etc. Page 22 of 71

but notice immediately that there was no proper housing

scheme with a layout plan of the sites, the roads, the common

area etc. approved by the State Government; which itself vitiates

the acquisition under Section 3(f)(vi) of the LA Act.

Fraud vs. Delay vis-à-vis Res judicata: -

21. Meghmala12 observed that judicial pronouncements,

unlike sand dunes, are known for their stability and finality,

while rejecting the claim made by a Society who had failed in

their earlier attempts to hold on to a property based on an

agreement to sell. The facts indicate that the appellants therein

asserted title over a property based on a sale deed, while the

respondent Society claimed possession based on an agreement

for sale. The Special Court for Land Grabbing Cases found the

purchaser to have title, which was unsuccessfully challenged in

a Writ Petition and a Special Leave Petition. The SLP was

withdrawn with liberty to file a review, which too stood rejected.

The appellants; while the review was pending before the High

Court, moved for execution, while the respondent moved an

application before the Executing Court to summon the records

of the Revenue Divisional Officer, Secunderabad, pertaining to

the survey of the suit land. The Special Court allowed the C.A. Nos.13744-13747 of 2015 etc. Page 23 of 71

Execution Petition and rejected the application filed by the

respondent-Society. The order of the Executing Court was

challenged unsuccessfully in a writ petition and a review too

failed. Having failed at every point, the respondents filed a

Review Application from the original decree in the land

grabbing case before the Special Court and filed a fresh

application before the Special Court for declaration; that, they

were the owners, alleging that, in fact the appellants were the

land grabbers. The respondents also impleaded the

Government Officers and the vendors of the appellants in the

fresh application, which application was rejected by the Special

Court. On a challenge before the High Court, the High Court

directed a de novo consideration of the merits, which was

challenged before this Court. This Court reversed the order of

the High Court specifically finding that the respondents were

unable to show any suppression of material information from the

Special Court, at the earlier instance, wherein the contention of

a proper identification of the suit land was taken and negatived.

The respondents were unable to prove their interest in the suit

land and they completely failed to show any document

transferring the land to the Society, but for the agreement of sale, C.A. Nos.13744-13747 of 2015 etc. Page 24 of 71

on which there was no suit for specific performance initiated.

The questions attempted to be agitated on the ground of fraud

and misrepresentation, were already agitated unsuccessfully in

the earlier round of litigation, was the specific finding.

22. We are unable to find any application of Meghmala12 in

considering Karithimmaiah9 on the ground of res judicata.

Karithimmaiah9 only based itself on the approval of the

Government communicated by the Under Secretary, and held it

a valid approval of the housing scheme, without verifying the

records to understand whether actually there was a housing

scheme, with the proper lay out approved by the Government,

prior to initiation of acquisition proceedings. As we noticed, the

Division Bench, at the earlier instance, had cursorily looked at

the files to find a public purpose, while in the present

proceedings, the learned Single Judge had dealt with the issues

raised on fraud, colourable exercise of power and collusion.

Pertinent also is the singular factum of an agreement entered

into with a so-called service provider to facilitate acquisition of

lands, already agreed to be purchased by the service provider,

for a commission; which aspect was not before the Court at the

earlier instance. C.A. Nos.13744-13747 of 2015 etc. Page 25 of 71

23. A.C. Ananthaswamy13 was also in a totally different

circumstance. Therein, an ex-parte decree was sought to be set

aside under Order IX Rule 13 of the Code of Civil Procedure,

1908, and a First Appeal was also filed against it. The First

Appeal was dismissed as time barred and when the plaintiff

moved for execution of the decree when the defendant filed a

separate suit seeking setting aside of the ex-parte decree on the

allegation of fraud and misrepresentation; which allegation was

specifically raised on the ground of incorrect details of the

defendant having been shown in the plaint. This Court found not

only that bare non-service of summons cannot lead to an

allegation of fraud, but also that the specific contention raised in

the second suit regarding fraud and misrepresentation, was

never raised in the application to set aside the ex-parte decree

or the appeal filed from that decree; at which stage the details of

the defendants shown in the plaint was very much within their

knowledge. Annexure P1 agreement produced in the writ

petition is the distinctive aspect on which, in this case the ground

of res judicata and delay are liable to be rejected.

24. In Karithimmaiah9, the learned Single Judge quashed the

acquisition proceedings on multiple grounds i.e. the 4th C.A. Nos.13744-13747 of 2015 etc. Page 26 of 71

respondent being not a bona fide society, absence of public

purpose, invalid declaration under Section 6, and the State

Government not being a contributory. The Division Bench

noticed that the learned Judge merely observed that the

Government did not produce any record to show that there was

a scheme submitted by the appellant-society and the same was

approved by the Government. Section 3(f)(vi) was noticed along

with the communication of 13.11.1987 signed by the Under

Secretary to Government, Revenue Department to find that there

was a prior approval. The application of the 4th respondent

Society was perused to find that the communication more than

satisfies the Court, to find a proper approval from the

Government having been obtained.

25. Be that as it may, we cannot but observe that a more

detailed examination has brought out facts, which clearly

indicate collusion and colourable exercise of power, leading to

a fraud played on the landowners, which according to us cannot

be ignored, merely on the ground of res judicata. In this context

we also have to notice that G. Jayarama Reddy7 was a decision

of another Division Bench, which interfered with the similar

acquisition proceedings, upheld in a Civil Appeal, by this Court. C.A. Nos.13744-13747 of 2015 etc. Page 27 of 71

The precedential value of the judgments of this Court assumes

relevance while the mere dismissal of an SLP approving the

judgment in Karithimmaiah9 does not have the sheen of a

precedent of this Court, under Article 141 of the Constitution of

India, on application of the principles of merger.

The Precedents: -

26. H.M.T. HBSC [M. Venkataswamappa]10 upheld the

decision of the Division Bench of the High Court of Karnataka in

G. Jayarama Reddy7 and followed H.M.T. HSBC [Syed

Khader]2. The facts of the said cases are strikingly similar to the

instant case and hence we need to dwell on those for a better

understanding.

27. In G. Jayarama Reddy7, the challenge was against the

acquisition under the LA Act in favour of certain House Building

Cooperative Societies inter alia on the ground that, though,

apparently the acquisition was in implementation of housing

schemes, in truth, the Society joined hands with builders and

contractors to do real estate business, making enormous profit

taking advantage of the huge demand for building sites in the

growing city. The Division Bench found that the acquisition of

land in favour of the six respondent-Societies, though stated to C.A. Nos.13744-13747 of 2015 etc. Page 28 of 71

be in implementation of housing schemes, the materials placed

clearly established that, in fact and truth, the acquisition was not

for any bona fide housing scheme for the benefit of bona fide

members but was substantially for the purpose of indulging in

real estate business under the guise of allotment, to either bogus

members or in favour of intending purchasers by enrolling them

as associate members. The Societies and the middlemen with

whom the societies had entered into agreements, were reaping

profits by exploiting the existence of the great demand for

residential sites, arising in the nascent stages of Bangalore City’s

development.

28. The agents of the Societies had paid huge amounts to

influence the Government officers, to get the preliminary and

final notifications published acquiring large extent of lands from

private land owners. It was held that the decision of the

Government to acquire lands brought about by the influence of

such agents appointed as ‘go-betweens’ and ‘carriers’ between

the Government and the Society concerned, warranted the

acquisition notifications to be set aside on the ground that it is a

colourable exercise of power and it suffers from legal mala fides.

It was also held in Paragraph 49(7) as a general observation: - C.A. Nos.13744-13747 of 2015 etc. Page 29 of 71

’49.7 There is considerable force in the contention of the petitioners that acquiring large extent of lands for formation of large number of Societies in the area for which the Bangalore Development Authority is constituted under an Act of Legislature and on whom the obligatory function of formation of layouts and distribution of sites to citizens is vested, has the effect of circumventing the provisions of the B.D.A. Act and rendering the Bangalore Development Authority workless and purposeless and therefore as a rule, the formation of layouts in the City should ordinarily be undertaken by the Bangalore Development Authority and only as an exception the work may be permitted to be undertaken by any Housing Co-operative Society after satisfying its suitability, merit and bona fides and therefore requires serious consideration by the Government.’

29. In the course of the judgment, it was found that a detailed

investigation by the Court in respect of the serious allegations

made by the landowners was unnecessary, due to the G.V.K Rao

Report. The widespread acquisition of lands in favour of

Cooperative Housing Societies, which had sprung up within the

Bangalore Metropolitan Planning Area, had become a matter of

public debate and criticism, as a result of which, a statutory

inquiry was directed by the Registrar of Cooperative Societies

under Section 64 of the Karnataka Cooperative Societies Act,

1959, by Sri G.V.K. Rao, the Controller of Weights and Measures,

who had submitted his report. The Division Bench noted the

C.A. Nos.13744-13747 of 2015 etc. Page 30 of 71

contention of the petitioner that the report fully establishes the

allegations made by the petitioner and copiously extracted the

same in its judgment.

30. The illegalities pointed out in the report were highlighted

in the decision, which are as follows; which we summarize for

brevity: -

(i) There were gross irregularities in admission of members and the Registers maintained are haphazard and incapable of pinpointing the resolutions, admitting the members or the date on which such admissions were carried out. (ii) Persons who were residing outside the jurisdiction of the Society had been admitted and despite no provision for admission of associate members or allotment of sites to such members, such privileges of allotment were conferred on associate members despite absence of a specific provision to benefit the associate members with such allotments. (iii) Many of the societies had acquired lands outside the jurisdiction which the Government has approved in a lackadaisical manner. (iv) Most of the Societies had entered first, into agreements with agents, who undertook acquisition through the Government machinery for payment of a consideration. There were also instances of repeated advances having been paid to middlemen, often resulting in the Societies, facing the problem of overlapping claims. The agreements with the agents alone warrant treatment of such acquisitions to be bogus and

C.A. Nos.13744-13747 of 2015 etc. Page 31 of 71

illegal, especially since it reveals the vested interest of the Management of the Societies. (v) There were also specific irregularities and illegalities found with reference to the named societies, who were the respondents therein.

[underlining by us for emphasis]

31. After copious reference to the report of Sri G.V.K. Rao, it

was found that the State Government had given approval for

acquisition for more than 100 societies within the area of the

BDA. The submission of the Government, noticed in Paragraph

26, was also with reference to a Cabinet Sub-Committee having

been constituted by the Government to take a final decision in

the matter and in view of the change of the Government, the

Cabinet Sub-Committee having been reconstituted. A copy of

the order dated 14.01.1991 reconstituting the Cabinet Sub-

Committee was also produced, which was extracted, which

specifically dealt with the mushrooming growth of House

Building Cooperative Societies and the unregulated purchase

and allotment of large extents of land.

32. Immediately, we have to notice that there are a number of

similarities with respect to the irregularities and illegalities

highlighted in the judgment of the learned Single Judge, subject

C.A. Nos.13744-13747 of 2015 etc. Page 32 of 71

matter of this appeal, which we will deal with a little later. We

also have to notice that when the Cabinet Sub-Committee was

appointed on 14.01.1991 seeking review of the purchase and

allotments of land to Cooperative Housing Societies, a specific

contention raised in the present case by the Government was

that possession was taken over of the lands decided to be

acquired on 23.10.1992. The decision of the Cabinet Sub-

Committee, unfortunately, is not forthcoming nor does the

notification speak of the constitution of the Cabinet Sub-

Committee on 14.01.1991.

33. It was categorically found in Paragraph 33 after referring

to the conclusions in the G.V.K. Rao Report, that the agreement

entered into by the Societies with the agents and the huge

amounts advanced by the agents in order to procure the

preliminary and final notifications under the LA Act, are

agreements opposed to public policy and totally expose the

want of bona fides on the part of the housing scheme, sponsored

by the Societies. This very fact was found to be injurious to public

interest and detrimental to purity of administration in Paragraph

40, which led to quashing of the notifications, insofar as the five

respondent-Societies, based on G.V.K. Rao Committee Report C.A. Nos.13744-13747 of 2015 etc. Page 33 of 71

and relating to one other Society, based on the report of the Joint

Registrar.

34. It was held so in Paragraph 40, which is extracted

hereinbelow:

’40.………The irresistible inference flowing from the facts and circumstances of these cases is, whereas the power conferred under the Land Acquisition Act is for acquiring lands for carrying out housing scheme by a housing society, in each of the cases the acquisition of lands is not for a bona fide Housing Scheme but is substantially for the purpose of enabling the concerned office bearers of respondent-Societies and their agents to indulge in sale of sites in the guise of allotment of sites to the Members/Associate Members of the Society and to make money as alleged by the petitioners and therefore it is a clear case of colourable exercise of power. Thus, the decision of the Government to acquire the lands suffers from legal mala fides and therefore the impugned Notifications are liable to be struck down.’

35. H.M.T. HBCS [Syed Khader]2 dealt with the acquisition of

lands in two villages and the challenge made to the Section 4(1)

Notification dated 12.07.1988 and the Section 6(1) declaration

made in respect of 99.01 acres of land. The High Court quashed

the steps taken in connection with the acquisition thereof, which

was challenged before this Court. Therein also the High Court

held that the acquisition was not for allotment to bona fide

members and the Society had indulged in a commercial venture C.A. Nos.13744-13747 of 2015 etc. Page 34 of 71

for sale of lands acquired under the provisions of the LA Act,

which was a colourable exercise of power. The High Court also

opined that the procedure adopted there, by the State

Government for acquisition of lands for the Society, was likely to

defeat the schemes under the BDA Act. Therein also, far earlier

to the Section 4(1) Notification of 12.07.1988, the appellant

Society had entered into an agreement with M/s SR

Constructions on 19.09.1984, wherein the latter undertook to

secure lands in the two villages, as specified in the annexure to

the agreement. It was held so in Paragraphs 21 and 22 as

under:

‘21. Mr G. Ramaswamy, learned Senior Counsel appearing on behalf of the appellant, submitted that merely because the appellant-Society had entered into an agreement with Respondent 11, M/s S.R. Constructions, in which the latter for the consideration paid to it had assured that the lands in question shall be acquired by the State Government, no adverse inference should be drawn because that may amount to a tall claim made on behalf of M/s S.R. Constructions in the agreement. He pointed out that the notifications under Sections 4(1) and 6(1) have been issued beyond the time stipulated in the agreement and as such, it should be held that the State Government has exercised its statutory power for acquisition of the lands in normal course, only after taking all facts and circumstances into consideration. There is no dispute that in terms of agreement dated 1-2-1985 payments have been made by the appellant-Society to M/s S.R. Constructions. This circumstance alone goes a long way to support the contention of the writ petitioners that their C.A. Nos.13744-13747 of 2015 etc. Page 35 of 71

lands have not been acquired in the normal course or for any public purpose. In spite of the repeated query, the learned counsel appearing for the appellant-Society could not point out or produce any order of the State Government under Section 3(f)(vi) of the Act granting prior approval and prescribing conditions and restrictions in respect of the use of the lands which were to be acquired for a public purpose. There is no restriction or bar on the part of the appellant-Society on carving out the size of the plots or the manner of allotment or in respect of construction over the same. That is why the framers of the Act have required the appropriate Government to grant prior approval of any housing scheme presented by any cooperative society before the lands are acquired treating such requirement and acquisition for public purpose. It is incumbent on the part of the appropriate Government while granting approval to examine different aspects of the matter so that it may serve the public interest and not the interest of few who can as well afford to acquire such lands by negotiation in open market. According to us, the State Government has not granted the prior approval in terms of Section 3(1)(vi) of the Act to the housing scheme a in question. The power under Sections 4(1) and 6(1) of the Act has been whether the acquisition of the exercised for extraneous consideration and at the instance of the persons who had no role in the decision making process lands in question shall be for a public purpose. This itself is enough to vitiate the whole acquisition proceeding and render the same invalid.

22. In the present case there has been contravention of Section 3(f)(vi) of the Act inasmuch as there was no prior approval of the State Government as required by the said section before steps for acquisition of the lands were taken. The report of Shri G.K.V. Rao points out as to how the appellant-Society admitted large number of persons as members who cannot be held to be genuine members, the sole object being to transfer the lands acquired for "public purpose", to outsiders as part of commercial venture, undertaken by the office-bearer of the appellant- Society. We are in agreement with the finding of the High C.A. Nos.13744-13747 of 2015 etc. Page 36 of 71

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 11. On the materials on record, the 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.

[underlining by us for emphasis]

36. The aforesaid decision was followed in H.M.T. HBCS [M.

Venkataswamappa]10, which common judgment affirmed G.

Jayarama Reddy7 and the other cases, as referred to by the

learned Senior Counsel for the appellants.

The Instant Acquisition: -

37. We commence with the agreement produced as Annexure

P1 which is dated 21.09.1984. Pertinently, we have to observe

that the agreement was executed before sub-clause (f) to Section

3 was incorporated by way of a substitution in the LA Act by Act

68/1984 with effect from 24.09.1984. The 4th respondent Society

admits the execution of the agreement and the contention is that

there was no intention to appoint middlemen or to confer them

with statutory powers or authorise them to indulge in any illegal

activities. Definitely, there can be no conferment of statutory C.A. Nos.13744-13747 of 2015 etc. Page 37 of 71

authority on the second party to the agreement, by the first party

who is only a Cooperative Society. We are also unable to accept

the contention that the second party to the agreement was a

mere service provider, especially going by the recitals in the

document.

38. Annexure P1 produced along with the Civil Appeals

categorically states that the second party had entered into an

agreement to purchase lands having an extent of 11 acres and

16 guntas in Nelakadirenahalli village and was in the process of

purchasing a further extent of 61 acres and 38 guntas in the very

same village. The second party assured that the landlords would

execute necessary documents and effectuate conveyance of the

said lands. Clause 2 of the agreement clearly indicates that the

second party agreed to ensure acquisition of the land as

government land in favour of the Society as also prepare and get

sanctioned all the plans through the Bangalore Development

Authority (BDA). Clause 3 was an undertaking that the second

party would do and carry out all acts, things and deeds as may

be necessary to facilitate the sale or acquisition by the

Government and the sanction of layout plan by the BDA, with

possession handed over to the 4th respondent Society. The C.A. Nos.13744-13747 of 2015 etc. Page 38 of 71

Society had also agreed to make payment of amounts to the

second party per square feet acquired; a portion, after the

notification under Section 4(1), then, after the objections are

heard and before the Section 6 declaration and the balance, after

the issuance of the declaration. The agreement so executed was

in furtherance of the scheme to divest the lands from the owners,

through acquisition by the Government, for eventual handover

of such lands to the 4th respondent Society; even prior to the

statutory regime, incorporating housing schemes promoted by

Cooperative Societies with the prior approval of the

Government defining it as a public purpose.

39. The agreement entered into by the 4th respondent Society

with the third party was akin to those referred to in the cited

decisions; which practice was deprecated by this Court and was

also one of the grounds; nay, the major ground on which the

acquisitions were struck down. We fail to comprehend as to how

a third party could undertake invocation of the provisions of the

LA Act by the Government for allotment of land, purportedly for

the purpose of allotment to the members of a Society, which by

itself was not a public purpose at that juncture. Here we have to

reiterate that acquisition for the purpose of carrying out a C.A. Nos.13744-13747 of 2015 etc. Page 39 of 71

housing scheme by a Cooperative Society, with the prior

approval of the appropriate Government, was introduced for the

first time by the Act 68 of 1984 by substituting sub-clause (f) of

Section 3 of the LA Act; which also included sub-clause (vi).

Section 3(f)(vi) of the LA Act reads as under:

‘(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 law relating to co-operative societies for the time being in force in any State;’

40. It is crystal clear that the acquisition for a public purpose

for implementation of a housing scheme by a Cooperative

Society, can be only carried out with the prior approval of the

appropriate Government. The approval of the appropriate

Government is not of the mere requisition made, by a

Cooperative Society. It should be for the scheme; not one in

contemplation but, forma et descriptio (the layout and the

blueprint), placed before the appropriate authority.

Immediately, we also have to observe that there is no such

C.A. Nos.13744-13747 of 2015 etc. Page 40 of 71

scheme or a layout plan as contemplated in the LA Act, placed

before or approved by the Government.

41. The 4th respondent Society has produced additional

documents from Annexures R1 to R33 to substantiate a valid

acquisition having been taken out and the possession also

delivered to the 4th respondent Society. We have to consider

these documents with reference to the statutory provisions and

the Karnataka Government (Transactions of Business) Rules and

the copy of the Government File No. RD 242 AQB 84 produced

by the State. But, before that, we would briefly refer to the

provisions under the LA Act and the timelines provided therein.

The preliminary notification under Section 4 has to be published

in the official gazette in two daily newspapers with circulation in

the locality, one of which should be in the regional language.

The Collector shall also cause public notice of the substance of

such notification to be given at convenient places in the said

locality and the last of the dates of such publication and public

notice given, is referred as the date of publication of the

notification. Section 6 (1) refers to the declaration that the land

is required for a public purpose, which has to be made after

considering the report, if any, made under Section 5A, after C.A. Nos.13744-13747 of 2015 etc. Page 41 of 71

hearing of the objections. The proviso inter alia prohibits, any

declaration in respect of any particular land covered by a

notification under Section 4(1), published after the

commencement of the Land Acquisition (Amendment), Act 1894,

to be made after the expiry of one year from the date of

publication of Section 4(1) notification. Sub-section (2) provides

that such declaration shall be published in the official gazette

and in two daily newspapers, as provided under Section 4(1).

Herein too, the last of the date of such publication or giving of

such public notice, is referred to as the date of publication of the

declaration. We pause here only to observe that these timelines

are reflected in Annexure P1 agreement for payment of

commission to the service provider, a sure manifestation of the

attempted fraud.

42. The application dated 08.10.1984 for acquisition of land

submitted by the 4th respondent Society to the Revenue

Commissioner is produced as Annexure R1. Annexure R1 itself

indicates that the Society has entered into agreements with the

landlords for the under mentioned lands, after paying heavy

advances. We are unable to understand if private agreements

were entered into, why the government machinery was utilised C.A. Nos.13744-13747 of 2015 etc. Page 42 of 71

to acquire the said lands; which was the recital in Annexure P1

agreement also. The lands covered by the said agreements with

the extent and the survey numbers, as also the village, has been

merely specified in the said application, without any detailed

plan. The proposal in the form of a ‘checklist’ is produced at

Annexure R4 which is said to have been considered and

approved by the Committee. It speaks inter alia of the number

of members; total of 1774 out of which 1442 members are found

eligible for allotment, the total fund of the Society was declared

as Rs.6,16,000.70/- and the sites proposed to be acquired,

mentioned with the specific extent. There is no layout plan seen

produced along with the application.

43. We reckon that the extract of the files produced indicate

the proposed area to be acquired in Nelkadaranahalli Village in

favour of the 4th respondent Society. This only indicates a sketch

of land without any layout plan, without housing sites, roads of

access, common area and so on and so forth. Here we have to

again refer to sub-clause (vi) of Section 3(f) of the LA Act which

includes in the definition of ‘public purpose’, inter alia housing

schemes of a Cooperative Society; but only with prior approval

of the appropriate government. What is required is not just an C.A. Nos.13744-13747 of 2015 etc. Page 43 of 71

approval of the extent and the mere expression of a laudable

housing scheme, but housing sites demarcated for allotment to

landless members with the detailed descriptive lay-out plan laid

before the Government. We find no such scheme having been

laid out before the Government.

44. The Three-Men Committee, which examined the scheme

and filed a report, as Annexure R7 specifically speaks of the

Assistant Registrar of the Cooperative Societies having not

verified the membership with reference to the bye laws and

provisions, and that he has merely done a verification based on

the records made available by the Society. Juxtaposed with this,

we have to specifically notice the finding of the learned Single

Judge, from the G.V.K. Rao Committee Report that the

membership register of the 4th respondent Society was not

available, the same having been removed by the erstwhile

employee. The SLCC considered very many proposals, almost

120 cases referred by the Government and approved by the

Three Men Committee, out of which, the 4th respondent Society’s

case was considered as No.7. Again, no reference to the

detailed scheme was made, but on the mere expression of a

proposed housing scheme the issue was considered and C.A. Nos.13744-13747 of 2015 etc. Page 44 of 71

approved. We find from a reading of the two paragraphs, in

three quarters of a page, to be lackadaisical and without any

application of mind.

45. The approval of the Government evidenced at Annexure

R10 dated 13.11.1987, is a cryptic order conveying approval

without any specific mention of the order by which such

approval was made. The Officer of the Government who was

present before us referred to the Minutes from the extract of the

documents to contend that the Minister In-charge had approved

the same with his initials. We are unable to find any such formal

order having been issued by the Minister In-charge, even going

by the Transaction of Business Rules. Rule 66 under the heading

‘E. Land Acquisition’, relates to acquisition of land under the LA

Act for any Department of Government, which has to be dealt

with by the revenue department and all administrative decisions

connected with it being taken by the administrative department

under orders of the Minister-in-charge. We cannot but observe

that the said rule does not apply to the instant acquisition, which

is with respect to a housing scheme being brought in as a public

purpose under the LA Act by an amendment to the Act, far later

C.A. Nos.13744-13747 of 2015 etc. Page 45 of 71

to the Rules of 1977. Rule 18 of the Rules of 1977 assumes

relevance, which reads as under:

‘18. All orders or instruments made or executed by or on behalf of Government shall be expressed to be made or executed in the name of the Governor of Karnataka.’

46. Hence, any approval of the Government, for a housing

scheme to be carried on as a public purpose and to facilitate

acquisition under the LA Act, it should be expressed to be

approved in the name of the Governor of Karnataka.

47. More pertinently, we notice Section 11A of the LA Act

which speaks of the period within which an award shall be made.

The provision mandates that the Collector shall make an award

under Section 11 within a period of two years from the date of

publication of the notification and if no such award is made

within that period, the entire proceedings for acquisition shall

elapse. In computation of the period of two years referred to in

this Section, as per the Explanation, excludes any period in

which there is a stay order of a Court from pursuing with the

proceedings under the LA Act.

C.A. Nos.13744-13747 of 2015 etc. Page 46 of 71

48. We have not been apprised of any stay order having been

passed and we pertinently notice from the records, the following

handwritten note in the file: -

118) In this case 6(1) Notification was issued pending payment of balance amount. The balance amount to be paid was Rs.27,77,226=20. The Spl D.C. has now reported that the Society has deposited Rs.12,45,226=20 and a sum of Rs.19,60,00=00 has been paid directly to the land owners. From this, it is seen that the Society has actually paid Rs.32,05,226=20 which is more than the stipulated due. 119) In view of the above position, we may perhaps accept the conclusion of the Spl D.C. regarding the payments made and close the matter. For orders. Sd 31/5

120) D.S. We can assent to further proposals like passing of awards, handover possession etc. Sd. 8.6.90

49. Two aspects assume significance, from the above extract.

The proviso to Section 6(1), require the compensation to be

awarded to be paid by a Company wholly or partly out of public

revenues or some fund controlled or managed by a local

C.A. Nos.13744-13747 of 2015 etc. Page 47 of 71

authority. If there was a proper approval under Section 3(f)(vi)

for a public purpose, then the money would have to be paid by

the Cooperative Society, after the award of the Collector. The

files indicate that the Government reckoned an amount of

Rs.19,60,000.00 which had been paid directly to the land owners

while the total assets of the Cooperative Society as declared in

the proposal submitted was Rs.6,16,021.70. In this context, we

also have to come back to Annexure P1 agreement produced

along with Civil Appeal which spoke of a third party having

entered into agreements with the land owners which was

reiterated in the first proposal of acquisition submitted by the 4th

respondent Society before the Government as per Annexure R1.

The Society has thus paid Rs.32,05,226.20, some privately

disbursed and the other deposited before the Government for

disbursal, clearly in violation of the LA Act.

50. We are unable to find a proper acquisition proceeding

under the LA Act having been pursued by the Government. It is

also pertinent that the order passed on 08.06.1999, included in

the above extract, also indicates no award having been passed

till then, since the order specifically directs the passing of

awards. This is contrary to the timelines provided under Section C.A. Nos.13744-13747 of 2015 etc. Page 48 of 71

11A of two years from the date of the notification. We would not

stress unduly on the aspect of delayed awards since there was

no challenge raised against the notification, on the grounds of

the timelines having been not adhered to; thus, the State being

offered no opportunity to respond.

Karithimmaiah’s Precedential Value: -

51. We have already found that the delay or the ground of

res judicata on the basis of Karithimmaiah9 does not enable

outright dismissal of the writ petition filed by the writ petitioners.

Here we would look at Bangalore CCHS3, which is relied upon

by the respondents as supporting their contentions, specifically

paragraphs 78 and 79. On a reading of the decision, we are not

impressed by the said argument and paragraph 78 is with

respect to Section 32 of the Bangalore Development Authority

Act, 1976, which permits formation of new extensions or layouts

by private persons with the written sanction of the BDA. The

instant case is not projected as a privately administered

extension or layout, especially since, it is styled as a housing

society formed for the purpose of development of a housing

scheme under the nomenclature of a public purpose. Paragraph

79, in fact, fortifies our finding that there should be approval of a C.A. Nos.13744-13747 of 2015 etc. Page 49 of 71

housing scheme forma et descriptio and we hence extract the

same hereunder:

79. Although, the appellant may not have been required to frame a scheme in strict conformity with the provisions of the 1976 Act and the Housing Board Act, but it was bound to frame a scheme disclosing the total number of members eligible for allotment of sites, the requirement of land including the size of the plots and broad indication of the mode and manner of development of the land as a layout. The State Government could then apply mind whether or not the housing scheme framed by the appellant should be approved.

52. Bangalore CCHS3 needs to be noticed in detail for it lays

out the history of the development of Bangalore City. After the

BDA Act came into force, there was unprecedented increase in

the population of the city by 1981, which made the Government

realize that BDA may not be able to meet the demand for

developed residential sites. Hence, it was decided to encourage

formation of private layouts, as permissible under Section 32 of

the BDA Act, and for this purpose, the guidelines for approval of

private layouts were revised by Circular No. HUD 260 MNX 82

dated 03.03.1983. However, finding gross misuse of the

guidelines by the housing societies who resorted to

uncontrolled purchase of lands with haphazard layouts, resulted C.A. Nos.13744-13747 of 2015 etc. Page 50 of 71

in the policy being abandoned. It was then that a Three-Men

committee consisting of the Registrar of the Co-operative

Societies, the Secretary, BDA and the Special Deputy

Development Commissioner, was constituted to scrutinize the

land requirements of housing societies, fixing 30.06.1984 as the

cut-off date for consideration of the applications made, by the

housing societies. The cut-off date was then extended to

30.06.1987. We have to pertinently notice that the Three-Men

Committee, hence, was not intended to look at the land

acquisitions under the LA Act as such.

53. Dealing with the acquisition, which was the subject of the

cited decision, it was categorically held in paragraph 68 that,

carrying out any scheme inter alia of housing by a Co-operative

Society, can be regarded as public purpose, only if the

appropriate Government, before initiation of the acquisition

proceedings, grants approval. Answering the contention that

violation of Section 3(f)(vi) of the LA Act was not raised, the

averment from the writ petition was categorically noticed in

paragraph 70. It was found that the Society, which was the

appellant therein, neither controverted the averments

specifically raised on this count in paragraph 2 of the writ C.A. Nos.13744-13747 of 2015 etc. Page 51 of 71

petition, resulting in the Division Bench holding the acquisition

to be not for a public purpose as defined under Section 3(f)(vi).

This Court in Bangalore CCHS3 specifically referred to the

decision of a Division Bench of the High Court in G. Jayarama

Reddy7, which differed from a co-ordinate Bench in Narayana

Raju v. State of Karnataka14. The Division Bench in G. Jayarama

Reddy7 (mistakenly referred to a Narayana Raju in the report of

Bangalore CCHS at para 83 to 85) while holding that the

acquisition was vitiated due to mala fides and manipulations

done by the house building societies through an agent, relied on

Rattan Chand Hira Chand8. It applied the ratio of the said

decision to find that the agreements entered into between the 6th

respondent Society, which indicated a condition of payment of

huge sums of money by the Society to an agent, in consideration

of the agent facilitating the preliminary and final notifications by

the Government, clearly indicated the purpose of influencing

the Government to secure approval for acquisition of lands,

which is opposed to public policy. Dealing with the subject

acquisition, Bangalore CCHS3 held so in paragraph 89 as under:

14 1988 SCC OnLine Kar 161

C.A. Nos.13744-13747 of 2015 etc. Page 52 of 71

‘89. As noticed earlier, in this case also no housing scheme was framed by the appellant which is sine qua non for treating the acquisition of land for a cooperative society as an acquisition for public purpose within the meaning of Section 3(f). Not only this, the appellant executed agreement dated 21-2- 1988 for facilitating the acquisition of land in lieu of payment of a sum of more than rupees 5 crores. This agreement was similar to the agreement executed by H.M.T. Employees' House Building Society with M/s S.R. Constructions. The Estate Agent engaged by the appellant had promised that it will get the notifications issued under Sections 4(1) and 6(1) within four months and three months respectively. The huge amount which the appellant had agreed to pay to the Estate Agent had no co-relation with the services provided by it. Rather, the amount was charged by the Estate Agent for manipulating the State apparatus and facilitating the acquisition of land and sanction of layout, etc. without any obstruction. Such an agreement is clearly violative of Section 23 of the Contract Act.’

54. This Court also from paragraph 90 to paragraph 109

referred to various decisions of the High Court of Karnataka,

finding in favour of the Societies, the challenge to some of which

were also rejected in the Special Leave Petitions filed before this

Court. The reliance on these decisions, which obtained approval

of this Court, was to buttress the contention that, though, a

housing scheme with a layout plan is not submitted, the

C.A. Nos.13744-13747 of 2015 etc. Page 53 of 71

representation made to the Government, clearly indicating that

the land would be used for developing a housing scheme and

providing sites to land-less people, would be due compliance of

Section 3 (f)(vi); deeming it to be a public purpose. It was held

that the findings recorded by the Division Bench of the High

Court in G. Jayarama Reddy7 case clearly indicated money

having played an important role in facilitating acquisition, which

was substantially approved by this Court in three cases

(specified in the extract below), illustrating how unscrupulous

elements in the society use money and other extraneous factors

for influencing the decision-making process by the executive

(sic. para 130). It was held so in paragraph 132:

High Court in Narayana Raju case1988 SCC OnLine Kar 161 that the framing of scheme and approval thereof can be presumed from the direction given by the State Government to the Special Deputy Commissioner to take steps for issue of notification under Section 4(1) cannot be treated as good law and the mere fact that this Court had revoked the certificate granted by the High Court cannot be interpreted as this Court's approval of the view expressed by the High Court on the validity of the acquisition.’

C.A. Nos.13744-13747 of 2015 etc. Page 54 of 71

55. This fortifies our finding that Karithimmaiah9 is not a

reliable precedent to reject the writ petitions on the ground of

res judicata; despite the 4th respondent Society being the

appellant therein. The Division Bench of the High Court in

Karithimmaiah9 just as in Narayana Raju14 case presumed that

the framing of a scheme and approval thereof can be inferred,

on the direction given by the State Government to the Special

Deputy Commissioner to take steps to issue notification under

Section 4(1). Karithimmaiah9 was approved by this Court by

declining special leave, akin to the revocation of the leave

granted by the High Court in Narayana Raju14. Bangalore

CCHS3 and the extract above applies on all fours in the instant

case.

Fraud; it’s ominous resonance, restated: -

56. ‘Fraud vitiates all solemn acts’ is a principle which cannot

be reduced to providing a mere lip service. We notice two

classic decisions of this Court on the overwhelming effect of

fraud, even when there are binding decisions between the very

same parties bringing in a valid ground of res judicata. S.P.

Chengalvaraya Naidu (Dead) by LRs. v. Jagannath (Dead) by C.A. Nos.13744-13747 of 2015 etc. Page 55 of 71

LRs.15, and A.V. Papayya Sastry & Ors. v. Government of A.P.

& Ors.16 resonate still despite the passage of time.

57. The facts in S.P. Chengalvaraya Naidu15 indicate that the

Clerk of a Decree Holder (DH) purchased a land in a court

auction, on behalf of the DH, but in his own name, the rights to

which was relinquished in favour of the DH by a registered

document. In the meanwhile, the Judgement Debtors (JD) had

paid the decretal amounts to the DH and the same having been

accepted without demur, the DH was no longer entitled to the

property which he had purchased through his Clerk.

Suppressing the execution of a release deed in favour of the DH,

the Clerk filed a suit for partition of the property and obtained a

preliminary decree. The defendants were unaware of the lack of

locus standi of the Clerk since the registered release deed

executed by him was not within their knowledge. The same

having been brought to their notice, the preliminary decree was

challenged in the application for final decree. The trial Judge

accepted the contention and dismissed the application for final

decree while the High Court reversed it on the finding that, at

15 (1994) 1 SCC 1 16 (2007) 4 SCC 221

C.A. Nos.13744-13747 of 2015 etc. Page 56 of 71

the most, the plaintiff can only be found to have falsely asserted

title and it was for the defendants to plead and establish by way

of oral and documentary evidence that, the plaintiff had no title

to the suit property. The defendants ought to have obtained an

encumbrance certificate to find out whether the plaintiff had still

a subsisting title at the time of the suit and there was no trick or

deceit employed by the plaintiff, who merely made a false

assertion and did not, in any event, prevent the defendants, in

any manner, from raising proper pleas and adducing necessary

evidence, held the High Court.

58. This Court found the High Court to have fell into a patent

error since the facts and circumstances of the case clearly

indicated the Clerk to have obtained a preliminary decree, by

playing a fraud on the Court. The High Court was found to have

gone haywire and made observations, which were termed

perverse. It was categorically held that the principle of ‘finality

of litigation’ cannot be pressed to the extent of such an

absurdity, that it becomes an engine of fraud in the hands of

dishonest litigants. Unequivocally, it was held that when the case

of a person is based on falsehood, he has no right to approach

the Court and can be summarily thrown out at any stage of the C.A. Nos.13744-13747 of 2015 etc. Page 57 of 71

litigation. A litigant who approaches the Court, is bound to

produce all documents executed by him which are relevant to

the litigation. If he withholds a vital document in order to gain

advantage, then he would be guilty of playing fraud on the Court

as well as on the opposite party (sic paragraph 6). The

proposition applies squarely not only to the party who initiates

the litigation, but also to the party who defends it.

59. A.V. Papayya Sastry16 was again a case of land acquisition

in which, based on an acquisition initiated by the Port Trust,

which never fructified by reason of no award having been

passed, the parties sought avoidance of the proceedings

initiated under the Urban Land Ceiling and Regulation Act, 1976.

In fact, repeated attempts for acquisition were made by the

Government on the request of the Port Trust, none of which

culminated with an award. On the Ceiling Act coming into force,

the appellants on the strength of the acquisition proceedings

sought to be absolved from the ceiling proceedings. The finding

of the Authority under the Ceiling Act that they were ‘non-

surplus land holders’ were taken up in a suo motu revision. This

led to a Writ Petition being filed by the landowners before the

High Court which was heard with another Writ Petition filed by C.A. Nos.13744-13747 of 2015 etc. Page 58 of 71

the very same landowners to complete the acquisition

proceedings. The Writ Petitions were disposed of with a

direction to complete the land acquisition proceedings which

were originally initiated, and the order passed exercising

revisional jurisdiction under the Ceiling Act after thirteen years

was set aside.

60. The State filed a recall application, alleging fraud and

suppression of material facts by the landowners as also by the

Port Trust and the Government, especially since the land was

never handed over to the Port Trust and the possession was

always with the tenants and not the landowners, subject also to

pending disputes inter se. The High Court, in review found the

earlier proceedings to be vitiated by fraud and suppression of

material facts and recalled its earlier order which was

challenged before this Court. This Court heavily relied on the

decision in S.P. Chengalvaraya Naidu15, and a host of other

decisions of this Court as also that of other jurisdictions.

61. We would specifically extract paragraphs 24 and 25 from

the aforesaid decision which reads as under: -

24. In Duchess of Kingstone, Smith's Leading Cases, 13th Edn., p. 644, explaining the nature of fraud, de

C.A. Nos.13744-13747 of 2015 etc. Page 59 of 71

Grey, C.J. stated that though a judgment would be res judicata and not impeachable from within, it might be impeachable from without. In other words, though it is not permissible to show that the court was “mistaken”, it might be shown that it was “misled”. There is an essential distinction between mistake and trickery. The clear implication of the distinction is that an action to set aside a judgment cannot be brought on the ground that it has been decided wrongly, namely, that on the merits, the decision was one which should not have been rendered, but it can be set aside, if the court was imposed upon or tricked into giving the judgment.

25. It has been said: fraud and justice never dwell together (fraus et jus nunquam cohabitant); or fraud and deceit ought to benefit none (fraus et dolus nemini patrocinari debent).

(underlining supplied by us for emphasis)

62. Hence, the clear distinction is between mistake and

trickery; the former leading to a wrong decision but the later

resulting in a decision which would not at all have been

rendered, if the Court was not misled and was made conscious

of the entire facts and circumstances. Just as the Port Trust and

the Government officials had misled the High Court as alleged

in A.V. Papayya Sastry16 which upheld the decision of the High

Court in recalling its earlier order; here the 4th respondent

C.A. Nos.13744-13747 of 2015 etc. Page 60 of 71

Society and the Government had consciously suppressed

material facts from the notice of the Court which resulted in the

decisions in Narayana Raju14 and Kartihimmai9.

63. In A.V. Papayya Sastry16, a contention was also taken that

the order sought to be recalled was challenged in a Special

Leave Petition which was rejected and hence it was not open to

the High Court to thereafter entertain the application and grant

the relief of recalling of the earlier order, affirmed by this Court.

This Court placed reliance on Kunhayammed & Ors. v. State of

Kerala & Anr.17, and found the rejection of SLP to be

inconsequential since there was no merger of the decisions of

the High Court with that of this Court. In fact, this Court

contemplated an extreme situation where this Court does not

merely dismiss an SLP but after grant of leave decides an appeal

by recording reasons which clearly is a binding precedent,

under Article 141 of the Constitution, disabling any party to the

judgment from approaching any Court or authority to review,

recall or reconsider the matter. However, a caveat was made in

17 (2000) 6 SCC 359

C.A. Nos.13744-13747 of 2015 etc. Page 61 of 71

paragraph 39 in A.V. Papayya Sastry16 which we extract

hereunder: -

39. The above principle, however, is subject to exception of fraud. Once it is established that the order was obtained by a successful party by practising or playing fraud, it is vitiated. Such order cannot be held legal, valid or in consonance with law. It is non-existent and non est and cannot be allowed to stand. This is the fundamental principle of law and needs no further elaboration. Therefore, it has been said that a judgment, decree or order obtained by fraud has to be treated as a nullity, whether by the court of first instance or by the final court. And it has to be treated as non est by every court, superior or inferior.

64. That fraud has it is ominous overwhelming resonance is

beyond any cavil and in this case, it assumes undeniable and

unquestionable relevance.

The Conclusion: -

65. The agreement produced at Annexure P1; before sub-

section (f) of Section 3 of the LA Act was substituted, clearly

brings out the fraud employed, which had not been considered

at the earlier point of time. The further revelation from the files,

regarding the manner in which the compensation was paid,

clearly vitiates the acquisition proceedings. Insofar as the GVK

Rao Committee Report, the learned Single Judge had

elaborately considered the same and found that the C.A. Nos.13744-13747 of 2015 etc. Page 62 of 71

membership applications were not produced on the ground that

one M. Lakkappa Gowda, who was previously working in the

Society, had carried away the records. The members were

admitted, in violation of the byelaws and amounts collected from

the members were at different rates; at Nelkadaranahalli, at a far

lower price than those in the other sites. In addition to Annexure

P1, the report found that the Society had entered into

agreements with two other agents for the three layouts at

Jarakabande Kaval, Nelkadaranahalli and Laggere. The records

which were available, were found to be tainted and there was no

proper maintenance of the same. The conclusions with respect

to the 4th respondent Society were that:

(i) The admission that an employee took away the records of the Society, indicates the mismanagement pervading it. (ii) Huge amounts were paid to agents and landlords and the general power of attorneys were obtained in the name of the agents and not in the name of the Society. (iii) The Society also did not exercise necessary care in their final transactions, especially, regarding the agreements and payment of advances. (iv) The Office Bearers submitted to the Committee that they had paid bribes to Government Officials to facilitate acquisition.

66. The G.V.K. Rao Committee report was heavily relied on by

this Court in the three decisions referred to by Bangalore CCHS3

C.A. Nos.13744-13747 of 2015 etc. Page 63 of 71

in its paragraph 132. Narayana Raju14 and Karithimmaiah9,

both of Division Benches of the High Court cannot upset the

precedential value of this Court’s decisions in Civil Appeals as

against the negation of leave in Narayana Raju14 and dismissal

on rejection of leave in Karithimmaiah9. This is so, on the

principle of merger as expounded by this Court in

Kunhayammed17.

67. It is also pertinent that even going by the additional

documents produced by the 4th respondent Society with I.A.

No.161082 of 2018, there is a lack of information regarding the

Society, which has been glossed over by the Government

authorities. Annexure R6, proceedings of the Three-Men

Committee indicate that in the verification carried out, some of

the membership applications were not made available nor were

the receipt books for collection of share amounts, share fee or

entrance fee, available for verification. Despite entries in the

cashbooks as well as the share ledger, the specific submission

of the Society was that the share certificates were kept ready in

the Society, and they were not collected by the members.

Although, 1,499 members had deposited the site amounts partly,

no verification, as such of the members, were carried out and the C.A. Nos.13744-13747 of 2015 etc. Page 64 of 71

affidavits proffered by them were accepted. Annexure R7,

report of the Three-Men Committee also clearly indicated that

the Assistant Registrar of Co-operative Societies could not verify

the membership with reference to the byelaw provisions.

68. Much reliance was placed on Section 16(1) notifications

issued, which as per the State amendment, makes it conclusive

evidence of the fact of taking over of the land. As any statutory

presumption. Section 16(2) of the LA Act, incorporated by a State

Amendment, is only a rebuttable presumption. The complete

absence of mahazars of taking over, was brushed aside by the

Division Bench on the ground that it would be required only if

Section 47 of the LA Act is invoked, which was not required in the

present acquisition. Contrary to the said finding, Annexure R18,

produced as an additional document, clearly indicates the

invocation of Section 47, at least with respect to certain extent of

land in Nelkadaranahalli Village, which document does not

contain the date on which the possession was taken over. The 4th

respondent Society relies on Annexure R25 to fortify its

submission of the defects noticed by the GVK Rao Committee

having been resolved, which we find is only an undertaking to

cure the defects and not resolution as such. C.A. Nos.13744-13747 of 2015 etc. Page 65 of 71

69. We fail to understand why an agreement for developing a

layout has been produced as Annexure R28, which in its

schedule, refers to certain villages in Bangalore South Taluk,

while Nelkadaranahalli Village is in Bangalore North Taluk. In

any event, Annexure R28 of the year 2007 indicates that the 4th

respondent Society engaged the services of the second party

therein, for forming the layout and distributing the sites to its

members on the identified land for developing them into

layouts. This clearly indicates that no lay out was finalized before

the acquisition was made, further fortifying the argument of the

statutory mandate in getting a prior approval of the housing

scheme having not been complied with.

70. We once again refer to Winger v. Aires (supra), which

encapsulates succinctly the raison d’etre for judicial review,

which power we invoke to cause interference to the present

acquisition proceedings, as follows: -

‘There is no authority under our form of government that is unlimited. The genius of our democracy springs from the bedrock foundation on which rests the proposition that office is held by no one whose orders, commands or directives are not subject to review.’

C.A. Nos.13744-13747 of 2015 etc. Page 66 of 71

71. On a conspectus of the above reasoning, we are unable to

sustain the impugned judgment of the Division Bench, and we

set it aside and find vitiated the instant acquisition for the

following reasons:

i. An agreement with a third party to facilitate acquisition

of lands for developing a housing scheme, with an

undertaking to facilitate steps under the LA Act of 1894,

even before such housing schemes were brought

under the nomenclature of public purpose, clearly

exposes the fraud intended to be carried out.

ii. Though, the application was made by the 4th

respondent Society after clause (f) was substituted in

Section 3 of the LA Act, 1894, by the Act 68 of 1984 w.e.f.

24.09.1984, the cryptic consideration of the same and

the absolute absence of a housing scheme with a

proper layout plan placed for the approval of the

Government, vitiates the acquisition and reveals the

colourable exercise of power.

iii. With respect to the 4th respondent Society, the G.V.K.

Rao Committee report clearly found that the

membership details were not fully placed before it. C.A. Nos.13744-13747 of 2015 etc. Page 67 of 71

The allegation of misplacing of registers by an

employee, the verification of memberships not being

possible, puts the very formation and continuation of

the Society under a cloud.

iv. The Three-Men committee and the SLCC had

proceeded in a lackadaisical manner and there is

absolutely no application of mind nor a

recommendation of a properly laid out housing

scheme, for approval by the Government.

v. There is no layout or blueprint of the housing scheme

laid before the two committees or the Government for

its approval.

vi. The notes in the Government file, as extracted

hereinabove, clearly indicates that the amounts to

satisfy the award were not paid by the Society to the

Government for disbursal to the landowners. Private

transactions of payment of money to landowners,

without any substantiation were relied on to absolve

the Society from making full deposit of the award

amounts, again indicating the fraud played on

unsuspecting citizens. C.A. Nos.13744-13747 of 2015 etc. Page 68 of 71

vii. The irregularity and illegality in the management of the

Societies, as pointed by the G.V.K. Rao Committee, as

also the statements made by the office bearers of the

4th respondent Society, that bribes were paid to the

Government Officials, further vitiates the acquisition.

72. We are unable to sustain the decision of the Division Bench

which failed to look into the compelling contentions regarding

fraud and colourable exercise of power and upset a detailed

consideration by the learned Single Judge merely on grounds of

res judicata and delay; which pale into insignificance, especially

in the teeth of the established allegations of illegal acquisitions

through fraud and undue influence, as was categorically found

by various decisions of this Court in the case of similar Societies,

on identical allegations.

73. We, hence, set aside the order of the Division Bench and

restore the order of the learned Single Judge. However, only due

to the passage of time, we delete the direction to take contempt

proceedings against the Government Officers. The costs

imposed by the learned Single Judge shall stand enhanced to

Rs.50,000/- to, each of the petitioners or the combination of the

C.A. Nos.13744-13747 of 2015 etc. Page 69 of 71

legal representatives of the original petitioners in the writ

petitions, who are the appellants in the above Civil Appeals.

74. Insofar as the consequences of the interference caused to

the acquisition, we reiterate the directions in H.M.T. HSBC

[Syed Khader]2. The possession of the land shall be restored to

the respective landowners, irrespective of the fact whether they

had challenged the acquisition of their lands or not. On

restoration of possession, they shall refund the amounts, if any

received by them, as compensation from the Government,

without any interest. We make it clear that this shall not facilitate

any refund of the amounts received by them in any private

transaction. The 4th respondent Society shall not have any claim

over the lands acquired, even if possession handed over or the

money refunded, since they facilitated the fraud and the

colourable exercise of power by the Government Officers. If any

of the plots are not resumed to the original landowners for

reason of their inability or unwillingness to refund the amounts

paid to them by the Government, the Government shall auction

such lands and the proceeds shall be used for the purpose of

victim compensation and remitted to the appropriate Head of

Account at the directions of the Chief Justice of the High Court in C.A. Nos.13744-13747 of 2015 etc. Page 70 of 71

consultation with the Karnataka Legal Services Authority. The

auction shall be conducted by the Revenue Authorities but under

the supervision of a Judicial Officer not below the rank of a

District Judge (Selection Grade) as authorised by the Chief

Justice.

75. The appeals are allowed.

76. Pending application(s), if any, shall stand rejected.

.……………………………... J. (J. B. PARDIWALA)

..………….…………………. J. (K. VINOD CHANDRAN)

NEW DELHI; OCTOBER 26, 2026.

C.A. Nos.13744-13747 of 2015 etc. Page 71 of 71