2026 INSC 1151C.A. Nos.13744-13747 of 2015 etc. Page 1 of 71 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 W I T H 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 J U D G M E N T 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) What the Supreme Court of Pennsylvania observed applies equally in our shores too. Condemnation of privately owned land for public purpose can only be with authority of law and C.A. Nos.13744-13747 of 2015 etc.
Page 2 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 3 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 4 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 5 (2016) 16 SCC 46 C.A. Nos.13744-13747 of 2015 etc. Page 5 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 6 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 7 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 8 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 9 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 10 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 11 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 84.
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 12 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 13 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 14 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 15 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 16 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 17 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 18 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 19 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 20 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 21 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 22 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 23 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 24 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 25 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 26 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 27 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 28 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 29 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 30 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 31 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 32 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