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Saturday, September 17, 2016

sales made during the pendency of the proceedings are wholly illegal and void ab initio in law= the sale in favour of the appellants in the appeals arising out of SLP (c) Nos. 18090-18118 of 2004 is concerned during the pendency of the writ petitions, the same is also void ab initio in law as the same happened during the pendency of the Writ Petition before the learned single Judge of the High Court. A Division Bench of this Court in the case of Uddar Gagan Properties Ltd. v. Sant Singh & Ors.[12] held that the sale transactions of a similar nature is void ab initio in law. Thus, the transactions of the alleged sales made during the pendency of the proceedings are wholly illegal and void ab initio in law and therefore the same cannot be allowed to sustain in law. The said sale transactions are also contrary to law which is in operation in respect of agricultural lands. - The Impleadment Application - neither the agreements of sale nor the power of attorney(s) confer any right upon him at this time, as the same is barred by the provisions of the Land Reforms Act, 1952, provisions of the Specific Relief Act as well as the Limitation Act, the applicant has no legal right to come on record to challenge the impugned judgment and therefore the Impleadment Applications are rejected, as the same are wholly unsustainable in law.- We also hold that the transfer of the acquired lands by way of the alleged sale deeds executed by Mr. S. Rangarajan in favour of the appellants in the appeals arising out of SLP (C) Nos. 13656-13684 of 2004, as well as the transfer of lands by way of alleged sale deeds in favour of some of the appellant-purchasers in the appeals arising out of SLP (C) Nos. 18090-18118 of 2004 are illegal and void ab initio in law.



                         IN THE SUPREME COURT OF INDIA
                          CIVIL APPELLATE JURISDICTION

                     CIVIL APPEAL NOS.9091-9119 OF 2016
              (Arising Out of SLP (C) Nos. 13656-13684 of 2004)

R. RAJASHEKAR AND ORS.                   …APPELLANTS
                                     Vs.
TRINITY HOUSE BUILDING CO-OPERATIVE
SOCIETY AND ORS.                         …RESPONDENTS
                         WITH
                     CIVIL APPEAL NOS.9120-9148 OF 2016
              (Arising Out of SLP (C) Nos.18090-18118 of 2004)
                                     AND
                     CIVIL APPEAL NOS.9149-9152 OF 2016
              (Arising Out of SLP (C) Nos.23336-23339 of 2004)



                               J U D G M E N T

V. GOPALA GOWDA, J.

Leave granted in all the Special Leave Petitions.

The present appeals arise out of the  common  impugned  judgment  and  order
dated 06.05.2004 in  Writ  Appeal  Nos.  7543-7557  of  1996  and  connected
matters passed by the  Division  Bench  of  the  High  Court  of  Karnataka,
wherein the judgment and order  dated  12.07.1996,  passed  by  the  learned
Single Judge of the High Court in Writ Petition Nos. 8188-8201 of  1989  and
other connected petitions  quashing  the  acquisition  notifications  issued
under Sections 4(1) and 6(1) of the Land Acquisition Act, 1894  (hereinafter
referred to as the “L.A. Act”) was set aside.

The relevant facts which are required for us to appreciate the  rival  legal
contentions  advanced  on  behalf  of  the  parties  are  stated  in   brief
hereunder:

      The  lands  involved  in  all  these   acquisition   proceedings   are
agricultural  lands  belonging  to  poor  agriculturalists.  On  09.01.1984,
Trinity House Building Co-Operative Society (hereinafter referred to as  the
“respondent-Society”) was registered with the object of providing sites  for
building residential houses  for  its  members.   On  12.03.1985,  the  said
society, represented by its President and Vice  President  entered  into  an
agreement with M/S Srinivasa Enterprises,  represented  by  its  proprietor,
Mr. S. Rangarajan. The said agreement was entered into between  the  parties
essentially for getting the lands acquired  in  favour  of  the  respondent-
Society. The relevant clauses of the agreement  will  be  extracted  in  the
reasoning portion of the judgment. As  per  the  agreement,  a  contract  of
agency was created in favour of Mr. S. Rangarajan  to  act  as  a  middleman
between the respondent-Society and the State Government  to  get  the  lands
mentioned therein acquired in favour of the respondent-Society.

It is also an undisputed fact that between 06.05.1987  and  12.06.1989,  the
land owners of the lands mentioned in the agreement  dated  12.03.1985  have
also executed power of attorney(s) in favour  of  Mr.  S.  Rangarajan.   The
state government of Karnataka by its order dated 23.06.1986, fixed the  last
date as 30.06.1984 for the registration of the  societies.  The  respondent-
Society finds a place at Serial No. 43  in  the  annexure  attached  to  the
above government order.

By way  of  order  dated  30.04.1987,  the  state  government  of  Karnataka
constituted a ‘Three Men Committee’  to  verify   the  claims  of  land  for
acquisition being made by the various  societies,  and  a  State  level  Co-
ordination Committee also was constituted by the Government to inquire  into
the affairs of the society before recommending their claim for acquisition.

The case of the respondent-Society came  up  for  consideration  before  the
State  Level  Coordination  Committee  on  25.09.1987.   The   State   Level
Coordination Committee, without application of mind  to  the  facts  of  the
case, cleared the case of the respondent-Society for  acquisition  of  lands
in its favour. The relevant portion pertaining to the Society reads thus:

“14.  Trinity  HBSC:  Avalahalli  and  Herohalli  (correct  name  Harohalli)
villages, cleared for acquisition of 94-18 acres, Avalahalli  (73-33  Acres)
and Herohalli  (22-25  acres)(both  in  Yelahanka  Bobli)  (Action:  Revenue
Department)”


On  10.03.1988,  the  Additional  Registrar   of   Co-Operative   Societies,
Bangalore passed an order under Section 64  of  the  Karnataka  Co-operative
Societies Act, 1959, to inquire into certain  allegations  made  against  98
House Building Co-Operative  Societies  of  Bangalore  City,  including  the
respondent-Society, and appointed Sri G.V.K. Rao,  the  then  Controller  of
Weights and Measures to investigate into the allegations  of  irregularities
and malpractices against the concerned societies.

In the meanwhile, on 15.04.1988, an agreement was entered into  between  the
state government of Karnataka and the respondent-Society as  required  under
Section 39 read with Section 41 of Part VII of the L.A.  Act.  The  relevant
portions of the Agreement are extracted hereunder:
“AND WHEREAS  THE  SOCIETY  has  applied  to  the  Government  of  Karnataka
(hereinafter  referred  to  as  “THE  GOVERNMENT”  that  certain  land  more
particularly described  in  the  schedule  hereto  annexed  and  hereinafter
referred to as “THE SAID LAND” should be acquired under  the  provisions  of
the Land Acquisition Act, 1894 (I of 1894) hereinafter referred to  as  “the
said Act” for the following purpose namely:
Formation of sites and construction of houses to the members of the  trinity
House Building  Co-Operative  Society  Ltd.  at  Avalahalli  and  Herohalli,
Yelahanka hobli, Bangalore North Taluk, Bangalore District.
AND  WHEREAS  the  Government  having  caused  an  inquiry  to  be  made  in
conformity with the provisions of the said Act  and  being  satisfied  as  a
result of such inquiry that the acquisition of the said land is  needed  for
the purpose.”

Subsequently, on 09.05.1988, the report of  the  G.V.K.  Rao  Committee  was
submitted to the Government for its action. The Report found  irregularities
in the manner in which the respondent-Society has granted membership to  its
members. It was stated  in  the  report  that  the  Vice  President  of  the
respondent-Society accepted these lapses and even attempted to  justify  the
same.

Even after  the  G.V.K.  Rao  Committee  submitted  its  report,  the  state
government of Karnataka proceeded  to  issue  the  preliminary  notification
under Section 4(1) of the L.A. Act, which  was  published  in  the  official
gazette dated 09.06.1988, proposing to acquire the lands in question to  the
extent of 92 acres  38  guntas  in  Avalahalli  and  Herohalli  villages  of
Yelahanka Hobli, Bangalore North Taluk, Bangalore District in favour of  the
respondent-Society.

Subsequently, around 33 Objection  Petitions  were  filed  before  the  Land
Acquisition Officer by the landowners, which were  all  rejected  under  the
inquiry conducted  by  him  under  Section  5-A(2)  of  the  L.A.  Act.  The
objections  filed  by  some  of  the  landowners  were  rejected   by   land
acquisition officer primarily on the ground  that  the  objections  are  not
valid, and that the concerned lands come in the middle  of  the  layout  and
that the lands are being acquired for the formation of house  sites  by  the
respondent society, which is a public  purpose  as  per  the  definition  of
Section 3 (f) (vi) of the L.A. Act.  On  18.03.1999,  the  state  government
issued the final notification under Section 6(1) of the L.A.  Act  declaring
that the lands were required for public purpose without  proper  application
of mind to the report  received  from  the  Land  Acquisition  Officer.  The
relevant portion of the notification is extracted hereunder:

“And whereas the Government of Karnataka is satisfied after considering  the
report of the special Deputy  Commissioner,  Bangalore  District,  Bangalore
under sub-section (2) of  Section  5A  and  section  6(1)  of  special  Land
Acquisition Act (Central Act 1 of 1894) as amended by Karnataka Act  No.  17
of 1961 and Land Acquisition (Amendment Act 1984) that the  said  lands  are
needed to be acquired for the purpose specified above.”

Aggrieved  of  the  impugned  acquisition  notifications,   the   landowners
challenged the validity of the same by way of filing Writ  Petitions  before
the High Court of Karnataka urging various  legal  grounds  and  prayed  for
quashing the same. The  learned  single  Judge  of  the  High  Court,  after
hearing the parties arrived at the conclusion that the  facts  of  the  case
were similar to those in the decision of this Court in the  case  of  H.M.T.
House Building Co-Operative Society v. Syed Khader[1]. On the facts  of  the
case, the learned single Judge, by way of common judgment  and  order  dated
12.07.1996 held as under:
“In the instant case,  the  4th  respondent  along  with  the  statement  of
objections has produced Audit Report  as  Annexure-I.  In  the  said  report
there is reference that the landowners have been paid the consideration  for
their lands  through  M/S  Sree  Srinivasa  Enterprises.  There  is  also  a
reference that the society entered into an agreement dated  13.03.1985  with
that of M/S Sree Srinivasa Enterprises and as per  the  said  agreement  the
society  has  to  pay  Rs.  160/-  per  sq.  yard  to  M/S  Sree   Srinivasa
Enterprises......
In the statement of objections it is stated that  the  society  through  the
agency of M/S Srinivasa Enterprises, represented by its proprietor has  made
payments to the landowners. This fact  shows  that  the  facts  involved  in
these petitions are  identical  with  that  of  the  case  involved  in  the
decision of HMT House Building Co-Operative  Society  (supra).  The  Supreme
Court in the said decision has held that the power u/s 4(1) and 6(1) of  the
Act has been exercised for extraneous consideration at the instance  of  the
persons who have no role in the decision making process. In  the  said  view
of the matter, I hold that the decision rendered by  the  Supreme  Court  is
applicable in all fours and therefore the impugned notifications are  liable
to be quashed. In view of the decision of  the  Supreme  Court  referred  to
above, I hold that the petitioners are entitled to  challenge  the  impugned
acquisition since  the  land  acquisition  proceedings  is  the  product  of
colourable exercise of power at the instance of the third parties.”

      The learned single Judge has further held that  the  lands  could  not
have been acquired by the state government in favour of a  society  for  the
purpose of providing residential sites to its members without following  the
procedure provided under Part VII of the L.A. Act. The learned single  Judge
accordingly, quashed the impugned notifications  and  also  the  acquisition
proceedings in exercise of the extraordinary and discretionary  power  under
Article 226 of the Constitution of India.

Aggrieved of the common judgment and order  passed  by  the  learned  Single
Judge, the respondent-Society filed Writ Appeals before the  Division  Bench
of the High Court challenging the correctness of  the  same  urging  certain
legal grounds. The Division Bench of the High Court held that there  was  no
evidence on record to suggest  that  the  “outside  agency”  (M/s  Srinivasa
Enterprises) had influenced the acquisition proceedings. On the other  hand,
it is clear from the  material  placed  on  record  that  the  case  of  the
respondent-Society  was  considered  by  the   State   Level   Co-ordination
Committee on 25.09.1987, and on the basis of the clearance  granted  by  the
Committee the state government granted approval  to  acquire  the  lands  in
question. Accordingly, the Division Bench, by way of common  final  impugned
judgment and order dated 06.05.2004 allowed the appeals and  set  aside  the
judgment and order passed by the  learned  single  judge  and  restored  the
acquisition proceedings. Hence, the present appeals.

We have heard Mr. Shekhar Naphade, Mr. V. Giri  and  Mr.  Basava  Prabhu  S.
Patil, the learned senior counsel appearing on behalf of the appellants  and
Mr. Shanti Bhushan, learned  senior  counsel  appearing  on  behalf  of  the
respondent-Society and Mr. H.N. Nagamohan Das, the  learned  senior  counsel
appearing on behalf of the respondent-original landowners in the  first  two
appeals filed by the so-called purchasers.

The learned senior counsel appearing on behalf of the appellants  vehemently
question the correctness  of  the  findings  and  reasons  recorded  by  the
Division Bench of the High Court in the impugned judgment and order.  It  is
contended that the findings and reasons recorded on the  contentious  points
are not only erroneous in law but also suffer from error in law. They  place
strong reliance on the three judge bench decision of this Court in the  case
of HMT House Building Cooperative Society (supra), which has  been  followed
in the subsequent decisions of this Court  in  the  cases  of  H.M.T.  House
Building  Cooperative  Society  v.  M.  Venkataswamappa[2],  Bangalore  City
Cooperative Housing Society Ltd. v. State of Karnataka[3], B. Anjanappa  and
Ors. v. Vyalikaval House Building Cooperative Society Limited  and  Ors.[4].
The learned senior counsel further sought to  distinguish  the  decision  of
this  Court  in  the  case  of  Kanaka  Gruha  Nirmana  Sahakara  Sangha  v.
Narayanamma[5], upon which strong reliance has been placed by  the  Division
Bench of the High Court, which has been followed by this Court in the  cases
of  Sumitramma  v.  State  of  Karnataka[6]  and  Muniyappa  v.   State   of
Karnataka[7]. It is  submitted  that  the  reliance  placed  upon  the  said
judgments by the Division Bench of the High  Court,  in  the  absence  of  a
scheme framed and approved by the government as  required  under  Section  3
(f)(vi) of the L.A. Act in favour of the respondent-Society, is held  to  be
violative of not  only  the  statutory  provisions  of  law,  but  also  the
decisions of this Court referred to supra.

It is further contended by the learned senior counsel  appearing  on  behalf
of the appellants that the framing of a scheme and  its  prior  approval  by
the state government is sine qua non for initiating acquisition  proceedings
for the purpose of Section 3(f)(vi) of the L.A. Act. It  is  submitted  that
in the instant case,  neither  any  such  scheme  has  been  framed  by  the
respondent-Society nor has there been any approval  accorded  by  the  state
government before initiating land acquisition proceedings in its favour  and
therefore, they submit that the entire proceedings are vitiated in law.

It is further submitted by the learned senior counsel  that  this  Court  in
the case of HMT House Building Co-Operative Society (supra) elaborated  upon
the scope of the term housing for the purpose of  Section  3(f)(vi)  of  the
L.A. Act. It was held therein as under:
“19. According to us, in Section 3(f)(vi) the expression "housing" has  been
used along with educational and health schemes. As such the  housing  scheme
contemplated by Section 3(f)(vi) shall be such housing  scheme  which  shall
serve the maximum number of members of  the  society.  Such  housing  scheme
should prove to be useful to the public. That is why  the  Parliament  while
introducing a new definition of  "public  purpose",  said  that  any  scheme
submitted by any co-operative society  relating  to  housing,  must  receive
prior approval of the appropriate Government and then only  the  acquisition
of the land for such scheme can  be  held  to  be  for  public  purpose.  If
requirement of Section 3(f)(vi) is not strictly enforced, every housing  co-
operative society shall approach the appropriate Government for  acquisition
by applying Section 3(f)(vi) instead of pursuing the acquisition under  Part
VII of the Act which has become  more  rigorous  and  restrictive.  In  this
background, it has to be held that the prior approval, required  by  Section
3(f)(vi), of the appropriate Government is not just a  formality;  it  is  a
condition precedent to the exercise of  the  power  of  acquisition  by  the
appropriate Government for a housing scheme of a co-operative society.”
           (emphasis laid by this Court)


It is further submitted that a perusal of the  above  extracted  portion  of
the judgment would show  that  prior  approval  of  the  government  to  the
Housing Scheme, as contemplated under Section 3(f) (vi) of the L.A.  Act  is
a condition precedent for the exercise of eminent domain power by the  state
government for acquisition of lands for the purpose of  the  housing  scheme
of a Co-operative society. Consequently, the  existence  of  Housing  Scheme
framed by the respondent-Society is a pre-condition for  grant  of  approval
of the same by the State Government.


Further reliance is placed on the decision of this Court in the case  of  B.
Anjanappa (supra), wherein it was held as under:
“20. We then enquired from  Shri  Bhat  whether  his  client  had  submitted
housing  scheme  for  the  approval  of  the  State  Government.  Shri  Bhat
responded to the Court's query by relying upon the recommendations  made  by
the State Leval Coordination Committee for the  acquisition  of  179  acres,
one  and  half  guntas  land.   We   have   carefully   gone   through   the
recommendations of the State Level Coordination Committee but  do  not  find
any trace of housing  scheme  which  was  under  the  consideration  of  the
Committee.

21.  Shri  Bhat  then  relied  upon  the  approval  accorded  by  the  State
Government for the acquisition of land and the directions issued  to  Deputy
Commissioner, Bangalore to issue notification  under  Section  4(1)  of  the
1894 Act. He also relied upon the judgment in Kanaka Gruha Nirmana  Sahakara
Sangha v. Narayanamma.

22. In Bangalore City  Cooperative  Housing  Society  Limited  v.  State  of
Karnataka and Ors. decided on 2.2.2012, this Court considered  the  question
whether the approval granted by the State Government for the acquisition  of
land can be considered as an approval  of  the  housing  scheme  within  the
meaning of Section 3(f)(vi) of the Act and answered the same in negative.

23. The judgment in Kanak  Gruha  Nirmana  Sahakara  Sangha  v.  Narayanamma
(supra), if read in the light of the 1st  and  2nd  HMT  judgments  and  the
finding recorded by us that Respondent No. 1  had  not  framed  any  housing
scheme and secured its approval from the  State  Government,  the  direction
given to the Deputy Commissioner to issue notification  under  Section  4(1)
cannot be treated as the State Government's approval of the  housing  scheme
framed by Respondent No. 1. It is  also  apposite  to  note  that  in  Kanak
Gruha's case, this Court was not called upon to consider  a  case  in  which
the State Government had come out with a specific  stand  that  the  housing
society had not framed any scheme.”


In the instant case there was no scheme  framed  by  the  respondent-Society
for the purpose of providing housing sites to its members and therefore,  no
prior approval could have been accorded to it by the  State  Government.  It
is submitted that  the  cut-off  date  for  registration  of  societies  and
enrolment of members being 30.06.1984,  and  the  respondent-Society  having
been registered just before the said cut-off date, i.e. on  01.02.1984,  and
there being no Board of Directors constituted prior to  December  1984,  and
therefore, it could not have enrolled any members before the cut  off  date.
As such, there was no scheme framed before the cut off date. In the  absence
of the same, there could not  have  been  any  government  approval  of  the
scheme  for  initiating  acquisition  proceedings,  so  as  to  justify  the
acquisition of lands under Section 3(f) (vi) of the L.A. Act. It is  further
submitted by the learned senior counsel that the  letter  dated  26.11.1987;
on which reliance has been placed by the division bench of  the  High  Court
in the impugned judgment also does not amount to an “approval” of  a  scheme
in law. The letter reads as under:
“Government of Karnataka
Karnataka Government Secretariat,
Vidhana Soudha,
Bangalore, dated 26.11.1987

No.RD 77 AQB 86

From :

The Revenue Commissioner and
Secretary to Government,
Revenue Department,
Bangalore.

To
The Special Deputy Commissioner,
Bangalore.

Sir,

Sub : Acquisition of land in favour of Trinity House Building Co-op.
Society
                    ****
I am directed to convey  the  approval  of  Government  for  initiating  the
acquisition proceedings for an extent of 94-18 acres of land  in  Avalahalli
and Harohalli village in favour of Trinity House Building Co-Op. Society  as
recommended by the  3  men  Committee  and  the  State  Level  Co-Ordination
Committee.
The extent of land to be notified under Section 4(1) may be selected out  of
the list of Sy. No. Furnished by the 3 men committee.....”

It is submitted that the above communication does not reflect the  existence
of any Housing Scheme and the application of mind by  the  state  Government
for according approval thereto. It mechanically directs for  publication  of
the notification under Section 4(1) of the L.A. Act.

The learned senior counsel appearing on behalf  of  the  appellants  contend
that the lands in the instant case could not have been  acquired  in  favour
of the respondent-Society in the absence of there being  an  housing  scheme
framed by  it  and  approval  of  the  same.  It  is  thus,  contended  that
acquisition of lands in the instant case is violative of both the  statutory
provisions of law as well as the law laid down by this Court.

On the other hand, Mr. Shanti Bhushan, the learned senior counsel  appearing
on  behalf  of  the  respondent-Society   vehemently   opposes   the   legal
contentions advanced on behalf of the learned senior  counsel  appearing  on
behalf of the appellants and sought to justify  the  impugned  judgment  and
order by placing strong reliance on the decision of this Court in  the  case
of Kanaka Gruha (supra). The learned senior  counsel  further  submits  that
the state government after accepting the report of Three Men  Committee  and
State High Level  Co-ordination  Committee,  by  way  of  its  letter  dated
26.11.1987, granted approval  for   acquisition  of  lands  in  question  in
favour of the respondent-Society, the relevant portion  of  which  has  been
extracted supra.

The learned senior  counsel  further  questions  the  locus  standi  of  the
appellants in filing the first batch and second  batch  of  appeals.  It  is
submitted that the agreement  dated  12.05.1985  entered  into  between  the
respondent-Society and M/s. Srinivasa Enterprises stipulates the respondent-
Society to pay consideration to Mr. S. Rangarajan  for  getting  the  layout
plan approved, costs of the entire  lands  purchased,  execution  of  layout
work etc. It is submitted that the original landowners in the  instant  case
executed the general power of attorney   in favour of Mr. S.  Rangarajan  to
get the lands in  question  acquired.  It  is  further  submitted  that  the
preliminary notification was issued under  Section  4(1)  of  the  L.A.  Act
dated 09.06.1988, and the final notification issued under  Section  6(1)  of
the L.A. Act dated 18.03.1989 were  challenged  by  the  respondent-original
landowners by way of Writ Petitions before  the  High  Court  of  Karnataka,
wherein the learned single judge, by way of common judgment and order  dated
12.07.1996 quashed the land acquisition proceedings. It  is  submitted  that
within a few days, Mr. S. Rangarajan sold the lands in  question  in  favour
of his daughter, son and son in law, who are the appellants in  first  batch
of appeals. It is contended that the purported sale transactions in  respect
of lands covered in the acquisition notifications is illegal as the same  is
nothing but fraud played by the said middleman on the original  land  owners
and the society with a mala fide intention  to  deprive  the  landowners  of
their  constitutional  rights,  thereby  deceiving  not  only  the  original
landowners, but also the respondent-Society.  It  is  thus,  contended  that
since the alleged sale of lands in favour of some of the appellants  by  Mr.
Rangarajan on the basis of the power of attorney executed by the  landowners
is void ab initio in law,  they  have  no  locus  standi  to  challenge  the
legality of the impugned judgment and acquisition proceedings in respect  of
the lands involved in these proceedings before this Court.


Mr. H.N. Nagamohan Das, the learned senior counsel appearing  on  behalf  of
the respondent original landowners-farmers sought to  justify  the  impugned
judgment and order passed by the Division Bench of the  High  Court.  It  is
further submitted by the learned senior counsel that during the pendency  of
the Writ Appeals before the High  Court,  there  came  to  be  a  compromise
between the farmers and the society. The compromise is immensely  beneficial
to farmers as for the acquisition of  every  acre,  each  one  of  them  are
entitled for allotment of one site and the society  has  agreed  to  deposit
the award amount as determined by the Land Acquisition Officer. The  learned
senior counsel submits that if the acquisition proceedings are  not  upheld,
the farmers will be deprived of both the award amount as well as a site  for
every acre of land. In such a scenario, the only party which stands to  gain
is the fraudulent purchasers of the lands. Alternatively,  he  submits  that
even if the acquisition proceedings are quashed on  the  basis  of  the  non
compliance with Section 3(f)(vi) of the  L.A.  Act  and  decisions  of  this
Court referred to supra and the sale transactions between Mr. S.  Rangarajan
and some of the appellants are held void, then also the landowners will  get
justice for depriving them and their family members of livelihood  for  more
than 28 years by  preventing  them  from  cultivating  the  said  lands  and
earning their livelihood.

We have heard  the  learned  senior  counsel  appearing  on  behalf  of  the
parties. Before we turn our attention to  the  essential  questions  of  law
that arise for our consideration in the present case,  it  is  important  to
advert to a submission made on behalf of the appellants. The learned  senior
counsel appearing on behalf of the appellants have also  sought  to  contend
that the respondent-Society had no locus standi to file the Writ  Appeal  as
it did not have any right over the said lands in the  instant  case.  It  is
submitted that a right would vest in the society  only  once  possession  of
the land was taken by the state government and award  passed  in  favour  of
the landowners, and thus, it did not have the locus standi to challenge  the
quashing of the  acquisition  proceedings.  The  said  submission  has  been
sought to be rebutted by Mr. Shanti  Bhushan,  the  learned  senior  counsel
appearing on behalf of the respondent-Society,  by  placing  reliance  on  a
constitution bench decision of this Court in the  case  of  U.P.  Awas  Evam
Vikas Parishad v. Gyan Devi (D) by LRS. & Ors.[8].

We are unable to agree  with  the  contention  advanced  on  behalf  of  the
learned senior counsel appearing on behalf of the appellants. Once the  land
is  sought  to  be  acquired  in  favour  of  the   respondent-society   and
notifications issued under Sections 4(1) and 6(1) of the L.A. Act  regarding
the same,  the  respondent-Society  acquires  the  right  to  challenge  the
quashing of the acquisition proceedings by a court of  law.  The  contention
advanced by Mr. Shanti Bhushan, the  learned  senior  counsel  appearing  on
behalf of the  respondent-Society  that  the  appellant-purchasers  have  no
locus standi to file these special leave petitions cannot be accepted by  us
for the reason that they had been  impleaded  as  respondents  in  the  Writ
Appeals before the High Court.

The essential questions of law that would arise  for  our  consideration  in
the instant case are:
Whether the acquisition of lands in favour of the respondent-society in  the
impugned acquisition proceedings is covered  under  the  definition  of  the
term public purpose, as defined under Section 3(f)(vi) of the L.A. Act?
Whether the sale transactions in favour of the appellants in the  first  and
second batch of appeals during the pendency of the proceedings by the  Power
of Attorney(s) holder Mr. S. Rangarajan, on  behalf  of  some  of  the  land
owners and sale of  lands  by  some  of  the  other  landowners  during  the
pendency of the Writ Petitions in  favour  of  the  appellant-purchasers  in
connected second appeals is legal and valid?
Whether the appellant-purchasers are entitled for the reliefs as  prayed  by
them?
What order?

      Answer to Point Nos. 1 and 2:

Point nos. 1 and 2 are interrelated and are answered together as under:

Section 3(f)(vi) of the L.A. Act reads as under:

“(f) the expression “public purpose” includes-
.....
(vi) the provision of  land  for  carrying  out  any  educational,  housing,
health or slum clearance scheme sponsored by Government or by any  authority
established by Government for carrying out any  such  scheme,  or  with  the
prior approval of the appropriate Government, by a  local  authority,  or  a
society registered under the Societies Registration Act, 1860 (21 of  1860),
or under any corresponding law for the time being in force in a state, or  a
co-operative society within the meaning of any law relating to  co-operative
societies for the time being in force in any State......”

The respondent-Society and M/s Srinivasa Enterprises by its  proprietor  Mr.
S. Rangarajan, entered into an  agreement  dated  13.03.1985.  The  relevant
clauses from the said agreement are extracted hereunder:
“2. WHEREAS the second party is  the  contractors,  Representatives,  Estate
agents and Builders, acting as agents for providing  lands  to  Co-operative
societies, has entered into sale agreements with owners of the lands in  Sy.
Nos. 64, 66/5, 66/7, 66/11, 66/13 and Sy. Nos. 50,53, 57/3, 57/4B, 57,  57/7
57/6, 90/1, 60/2, 60/5, 61/2, 61/3, 62, 63/2,  63/3,  64,  64/2,  65/1,  67,
67/4, 67/2,  3,  64/1,  67/3A,  68/I,  68/3   of  Herohalli  and  Avalahally
villages of Yelahanka Hobli, Bangalore North Taluk respectively and  WHEREAS
the second party has offered the first  party its services in the matter  of
securing sale of the above said lands in the First  Party  from  the  owners
thereof, free from encumbrances....”

5.  The Second Party shall secure in the name of the First Party by  way  of
acquisition to the First Party lands in Sy.  Nos.  64,  66/5,  66/7,  66/11,
66/13 and Sy. Nos. 50, 53, 57/3, 57/4B, 57, 57/7  57/6,  60/1,  60/3,  60/2,
60/5, 61/2, 61/3, 62, 63/2, 63/3, 64, 64/2, 65/1, 67, 67/4, 67/2,  3,  64/1,
67/3A, 68/I, 68/3 measuring about 180  acres  at  Harohally  and  Avalahally
villages of Yelahanka Hobli,  Bangalore  North  Taluk  respectively  in  one
continguous plot from the respective owners thereof…”

6.The Second Party shall arrange to initiate  land  Acquisition  Proceedings
as  per  the  Karnataka  Land  Acquisition  Act  under  Clause  4(1),   6(1)
Notifications issued in the name of the First Party.”

7. All Acts, Deeds and things connected with the  Acquisition  of  lands  as
aforesaid shall be got  completed  by  the  Second  Party  with  a  view  to
facilitate Acquisition of lands within a period of 18 months or  any  period
to be extended in writing by the First Party.

8. The Second Party shall  take  necessary  steps  to  get  the  said  lands
Acquired in the name of the First  Party  through  the  Government  for  the
formation of residential sites and handover the possession of said lands  in
favour of the First Party within a period of 18  months  from  the  date  of
this Agreement.”

 It becomes clear from a perusal of the  aforesaid  conditions  incorporated
in  the  agreement  that  M/S  Srinivasa  Enterprises,  represented  by  its
proprietor Mr. S. Rangarajan, had agreed to undertake the responsibility  to
get the lands mentioned  therein  acquired  in  favour  of  the  respondent-
Society from the state government and prepare  a  Layout  Plan  as  per  the
regulations of the Bangalore Development Authority (hereinafter referred  to
as “BDA”) and Town Planning Authority, and to get  the  plan  sanctioned  by
BDA in favour of  the  respondent-Society.  In  addition  to  the  aforesaid
responsibility, he had  also  undertaken  to  execute  the  layout  work  in
accordance with the sanctioned layout plan under the supervision of the  BDA
and get the sites  released  from  the  said  authority  in  favour  of  the
respondent-Society. In terms of the agreement, Mr. S. Rangarajan was  to  be
paid Rs. 160/- per square yard by the  respondent-Society,  the  calculation
of which was to be done at Rs. 100 per sq. yard and calculation of  cost  of
land at Rs. 60 per sq. yard for the  layout  charges.  The  details  of  the
payment plan are outlined as under:
   “
|Initial advance at the time of signing this agreement         |Rs. 50,000/-        |
|On production of document of Title relating to the lands      |25%                 |
|forming Subject matter of this agreement And after            |                    |
|verification by the lawyers Of the society and at the time of |                    |
|Submission of Application for Acquisition.                    |                    |
|Upon section 4(1) notification is published in the official   |30%                 |
|gazette                                                       |                    |
|Upon section 6 (1) notification is published in official      |30%                 |
|gazette                                                       |                    |
|Upon approval of the plan of the Bangalore Development        |15%                 |
|Authority                                                     |                    |


                                                             ”

The aforementioned amount was enhanced  to  Rs.  170  per  acre  by  way  of
supplementary agreement dated 05.03.1992.

Thus, Mr. Rangarajan was essentially required to act as a middleman  between
the respondent-Society and the state government to  ensure  that  lands  are
acquired in favour of the respondent-Society for the purpose of its  housing
project.  Further,  between  the  years  1985  and  1987,   the   respondent
landowners had executed power of attorney(s) of the lands in favour  of  Mr.
Rangarajan. A sample clause from these Power of Attorney(s) reads as under:

“WHEREAS the schedule property has been sold by us under agreement to  sell:
AND we have also agreed and declared to relinquish our rights for  acquiring
the schedule property in favour of the Trinity House  Building  Co-Operative
Society Ltd., Bangalore AND WHEREAS we have received the full  consideration
for the said schedule property as per Agreement under separate document  and
receipt.

AND WHEREAS the registration formalities or the acquisition  proceedings  is
yet to be completed AND  WHEREAS  the  entire  consideration/  compensation/
award has been received by us under separate  documents  as  said  above  we
hereby give this Power of Attorney in favour of SRI S. RANGARAJAN, S/o  Late
K.S.S. Naidu, as desired by the Trinity House Building Co-Operative  Society
Ltd., Bangalore.”


      A perusal of the agreement  executed  between  the  respondent-Society
and Mr. Rangarajan, as well as the power  of  attorney(s)  executed  by  the
landowners in favour of Mr. Rangarajan would clearly show that the  ultimate
intent of the parties was to get the lands of  the  landowners  acquired  in
favour of the respondent-Society.

It was  also  brought  to  our  attention  by  the  learned  senior  counsel
appearing on behalf of  the  appellants  that  the  fact  that  co-operative
societies were indulging in malpractices had also come to the notice of  the
state  government.  Accordingly,  the  state  government  of  Karnataka,  on
23.06.1986 issued an order stating:
“A large number of House Building Co-operative Societies in  Bangalore  were
purchasing lands directly from the landlords or under Land  Acquisition  Act
for formation of layout. This has resulted in  uncontrolled,  un-planed  and
haphazard growth of city of Bangalore. It  also  created  acute  problem  of
order to regulate the orderly development of the city, it was felt  hat  the
activities  of  such  societies  should  be  restricted.....However  it  was
proposed to  continue  acquisition  of  lands  for  70  House  Building  Co-
Operative Society subject to the clearance  from  the  Three  Men  Committee
appointed for scrutiny of such proposal. Additional 49 societies  listed  in
the schedule to this order could not come within the  purview  of  the  said
Government Order....The cut-off date was fixed as 30-6-1984 for the  purpose
of  Registration  of  societies  and  enrolment  of  members  for  the  said
purpose.....
It has been considered necessary to reconstitute  the  THREE  MEN  COMMITTEE
for Verification and for reporting to the revenue Department  regarding  the
extent of lands to be acquired for each society and for relaxation  of  cut-
off date for registration of certain societies and for enrolment of  members
even beyond 30.06.1984.”

The G.V.K. Rao Committee report also  mentions  the  irregularities  in  the
functioning of the respondent-Society. The relevant portions of  the  report
are extracted as under:

 “…it appears that the society had entered into  an  agreement  with  Estate
Agents for acquisition of  land  under  Land  Acquisition  Act  and  in  the
process, the amount being paid to the  Estate  Agents  towards  his  service
charges itself is more than the costs of the land  under  land  acquisition.
This is a clear case of the Society frittering away the  advances  collected
from the members and the site deposit collected from  the  members  are  not
employed in a prudent manner.
........
The society had admitted 18 members without applications for  membership,  3
members with incomplete applications, at least 21 members from out-side  the
jurisdiction of the society (all are from outside Bangalore) and  8  members
without resolution of the committee.....At one  stage  he  has  also  stated
that  many  of  their  members  are  Senior  Government  Officers  and  this
demolishes the contention  of  the  Vice-president  that  because  of  their
inexperience and ignorance,  they  have  committed  the  mistakes.  The  way
society  is  admitting  members  from  Bombay,  Mangalore,  Kolar,  Andaman,
Secunderabad etc, makes it clear that they have absolutely no  intention  of
following their byelaws.
...........


When these lapses were brought to the notice of the  Vice-President  of  the
society he has explained that, in the initial stages,  since  they  did  not
get the prescribed application  forms  printed,  they  had  admitted  a  few
members without applications and thereafter when they had asked the  members
to fill in the prescribed applications they have  not  filled  in....Further
he has stated that since there is a lot of  pressure  from  the  members  of
their community, they have admitted members from  outside  the  jurisdiction
(mostly outside the state) and subsequently, they made efforts to amend  the
Byelaws, the same has not been  approved  by  the  Department,  and  he  has
pleaded that because of the inexperience of  the  committee,  some  mistakes
have been committed by the society while  admitting  the  members  and  they
will take steps to ensure that the same mistakes are not repeated.”

      The G.V.K. Committee Report was considered by a Division Bench of  the
Karnataka  High  Court  in  the  case  of  Narayana  Reddy   v.   State   of
Karnataka[9], wherein it was held as under:
“39. As regards the Agreements entered  into  between  the  six  respondent-
Societies and their agents, inter alia, for the purpose of  influencing  the
Government and to procure the preliminary and the final notifications  under
Section 4 and 6 of the Land Acquisition Act,  which  they  did  procure  and
which are subject matter of challenge  in  these  Petitions,  the  questions
which arises for consideration is, if the agreements are hit by  Section  23
of the Contract Act on the ground that they were opposed  to  public  policy
whether the impugned notifications are liable to be quashed on  the  grounds
that they were the result of exercise of influence  by  the  agents  on  the
Government which submission of the petitioners stand  substantiated  by  the
approval given for  acquisition  is  all  such  cases  which  has  made  the
Government itself to realise that it has totally bungled in  the  matter  as
is evident from the G.V.K. Rao Committee.....As far  as  the  question  that
the agreements in question are opposed to public policy is concerned, it  is
seen that the real  purpose  of  the  Agreement  entered  into  between  the
respondent-Societies and their agents was that  the  agent  should  get  the
preliminary and the final notifications from the  Government  and  for  that
purpose huge amounts were paid or agreed to be paid. Any power conferred  on
the Government under a statute like the power conferred under Section 4  and
6 of the Act has to be exercised bona fide and for the purpose for which  it
is conferred, therefore an agreement under which a party  to  the  agreement
is required to influence the statutory authority and to procure  a  decision
favourable to the other party, is certainly opposed to public policy.”
              (emphasis laid by this Court)

The principle of law that an agreement under which a party to  an  agreement
is required to influence a statutory authority and  to  procure  a  decision
favourable to the other party, is certainly opposed to  public  policy,  has
been elaborated by this Court in the case of  Rattan  Chand  Hira  Chand  v.
Askar Nawaz Jung[10], wherein it was held as under:
“The contract such as the present one which  is  found  by  the  City  Civil
Court as well as the High Court to have been entered into with  the  obvious
purpose of influencing the authorities to procure a  verdict  in  favour  of
the late Nawab was  obviously  a  "carrier"  contract.  To  enforce  such  a
contract although its tendencies to injure public wealth is manifest is  not
only to abdicate one's public duty but to  assist  in  the  promotion  of  a
pernicious practice of procuring decisions by influencing  authorities  when
they should abide by the law. To  strike  down  such  contracts  is  not  to
invent a new  head  of  public  policy  but  to  give  effect  to  its  true
implications. A democratic society is founded on the rule  of  law  and  any
practice which seeks to subvert or circumvent the law strikes  at  its  very
root. When the Court discountenances such practice, it only  safeguards  the
foundation of the society. Even assuming, therefore, that the Court finds  a
new head of public policy to strike down such practice, its activism is  not
only warranted but desired.”

Further, in the first HMT case (supra), this Court has held as under:

“We are in agreement with the finding of the High Court that  the  statutory
notifications issued under Sections  4(1)  and 6(1) of  the  Act  have  been
issued due to the role played by M/s S.R. Constructions, respondent No.  11.
On the materials on record, High  Court  was  justified  in  coming  to  the
conclusion that the proceedings for acquisition of the lands  had  not  been
initiated because the State Government was satisfied about the existence  of
the public purpose but at the instance of agent who had collected more  than
a crore of rupees for getting the lands acquired by the State Government.”


In the instant case, the learned single Judge  of  the  High  Court  rightly
placed strong reliance upon the judgment in the first H.M.T. House  Building
Co-operative Society case  (supra)  and  held  that  the  said  decision  is
applicable on all fours to the facts of  the  case  on  hand,  holding  that
neither was a scheme framed by the  respondent-Society  nor  prior  approval
granted by the state government. The said finding was  erroneously  reversed
by the Division Bench of the High Court,  which  placed  reliance  upon  the
letter dated 26.11.1987 of the State Government  addressed  to  the  Special
Deputy Commissioner, Bangalore District and held that facts of  the  instant
case were similar to those of the decision of this  Court  in  the  case  of
Kanaka Gruha (supra), wherein it was held as under:
“For emphasizing that prior approval of the appropriate  Government  in  the
present case was not just an empty formality, we would refer to Annexure  R-
1, which  is  as  under:  "Dated:  14.11.85  The  Revenue  Commissioner  and
Secretary to Government, Bangalore.

The Special Deputy Commissioner, Bangalore.

Sir,
Sub: Acquisition of Land in Sy. Nos.19/2, 26, 29  of  Kadirenahalli  village
and Sy. No.29/3 of Konanakunt village Bangalore South  Taluk  in  favour  of
Kanaka Gruhaniramana Sahakara Sangha, Bangalore.

I am directed to convey the approval of Government to  initiate  acquisition
proceedings by issuing 4(1) notification in respect  of  lands  measuring  8
acres 03 guntas as recommended by the Official Committee  in  Sy.  Nos.19/2,
26, 29 of Kadirenehalli village and  Sy.  No.29/3  of  Kenanakunte  village,
Bangalore South Taluk in favour of  Kanaka  Gruha  Nirmana  Sahakara  Sangha
Bangalore.
Yours faithfully, Sd/-
(Mandi Hussain)
Under Secretary to Government Revenue Department.
Copy to the President, Kanaka Gruha Nirmana Sahakara  No.435  Middle  School
Road, V.V. Puram, Bangalore-4."

Considering the fact that State Government directed the Assistant  Registrar
of Co-operative Societies of Bangalore to  verify  the  requirement  of  the
members of the Society and also the fact that the matter was  placed  before
the Committee of  three  Members  for  scrutiny  and  thereafter  the  State
Government has conveyed its approval  for  initiating  the  proceedings  for
acquisition of the land in question by letter dated  14.11.1985,  it  cannot
be said that there is lapse in  observing  the  procedure  prescribed  under
Section 3(f)(vi). Prior approval  is  granted  after  due  verification  and
scrutiny.”


The Division Bench of the High Court in the instant case, accordingly,  held
that the approval granted in the case on  hand  sufficiently  satisfied  the
requirements of Section 3(f)(vi) of the L.A. Act. The Division Bench of  the
High Court, however, crucially fails to appreciate the fact  that  the  said
letter issued by the state Government to the Deputy  Commissioner  does  not
speak of either framing of a Housing Scheme as  contemplated  under  Section
3(f)(vi) of the L.A. Act or approval of the same as has been interpreted  by
the three judge bench decision of this Court in the  case  of  H.M.T.  House
Building Co-operative Society (supra), which has  been  reiterated  by  this
Court in subsequent judgments on the similar set of facts including that  of
Bangalore City Coop. Housing Society Ltd.(supra),  the  relevant  paragraphs
of which are extracted hereunder:

20. Now the question which is to be answered is as to  whether  in  view  of
the definition of "public purpose" introduced by the aforesaid amending  Act
68 of 1984 in Section 3(f)(vi), is it open to the appropriate Government  to
acquire land for cooperative  society  for  housing  scheme  without  making
proper enquiry about the members of the Society  and  without  putting  such
housing co-operative society to term in respect of nature  of  construction,
the area to be alloted to the members and restrictions on transfer thereof?


       xxxxxxxxxxxxxxxxxxxxx


22. In the present case, a hybrid procedure appears to have  been  followed.
Initially, the appellant society through M/s. S.R.  Constructions  purported
to acquire the lands by negotiation and sale by the land holders. Then  from
terms of the agreement  dated  17.3.1988,  it  appears  that  the  procedure
prescribed in Part - VII was to  be  followed  and  the  lands  were  to  be
acquired at  the  cost  of  the  appellant  society  treating  it  to  be  a
"company". The allegation made on behalf of the appellant society  that  the
housing scheme had been approved by the appropriate Government on  7.11.1984
shall not be deemed to be a prior approval  within  the  meaning  of Section
3(f)(vi) but an order giving previous consent as required by Section  39  of
Part VII  of  the  Act.  In  the  agreement  dated  17.3.1988  it  has  been
specifically stated "And whereas the Government having caused inquiry to  be
made in conformity .with the provisions of the said Act and being  satisfied
as a result of such inquiry that the acquisition of the said land is  needed
for the purpose referred to above has consented to  the  provisions  of  the
said Act being in force in order to acquire the said land  for  the  benefit
of the society members to enter in the agreement hereinafter contained  with
the Government". [emphasis supplied] But, ultimately, the  lands  have  been
acquired on behalf of the appropriate Government  treating  the  requirement
of the appellant  society  as  for  a  public  purpose  within  the  meaning
of Section 3(f)(vi),  It  is  surprising  as  to  how  respondent  M/s  S.R.
Constructions entered into agreement with the appellant society assuring  it
that the lands, details of which were given in the agreement  itself,  shall
be acquired by the State Government by following the  procedure  of Sections
4(1) and 6(1) and for this, more than one crore of rupees was paid  to  M/s.
S.R. Constructions (respondent No. 11)”

     Further, in the case of Vyalikaval House Building Coop. Society  v.  V.
Chandrappa[11], this Court held as under:

“109. The Court in Kanaka Gruha case noted that the Assistant  Registrar  of
Cooperative Societies, Three-Man Committee and  the  State  Level  Committee
had recommended the acquisition of land on behalf of the appellant  and  the
Government had  directed  the  Special  Deputy  Commissioner,  Bangalore  to
initiate acquisition proceedings by issuing Section  4(1)  notification  and
proceeded to observe:

‘17. Considering the fact that the State Government directed  the  Assistant
Registrar of Cooperative Societies of Bangalore to  verify  the  requirement
of the members of the Society and also the fact that the matter  was  placed
before the Committee of three members for scrutiny and thereafter the  State
Government has conveyed its approval  for  initiating  the  proceedings  for
acquisition of the land in question by Letter dated  14-11-1985,  it  cannot
be said that there is lapse in  observing  the  procedure  prescribed  under
Section 3(f)(vi). Prior approval  is  granted  after  due  verification  and
scrutiny.’

110. In our view, none of the orders and judgments referred  to  hereinabove
can be relied upon for holding  that  even  though  the  appellant  had  not
framed any housing scheme, the acquisition in question should be  deemed  to
have been made for a public purpose as defined in  Section  3(f)(vi)  simply
because in the representation made by him to the  Revenue  Minister  of  the
State, the Executive Director of the appellant had indicated that  the  land
will be used for providing sites to poor and people  belonging  to  Backward
Class and on receipt of the recommendations of  SLCC  the  State  Government
had directed the Special Deputy Commissioner  to  issue  notification  under
Section 4(1) of the 1894 Act and that too  by  ignoring  the  ratio  of  the
judgments of the three-Judge Benches in 1st H.M.T. and 2nd H.M.T. cases  and
the judgment of the two-Judge  Bench  in  Vyalikaval  House  Building  Coop.
Society case.

111. In majority of the cases decided by the High Court to  which  reference
has been made hereinabove, the petitioners were non-suited on the ground  of
delay and laches or participation in the  award  proceedings.  In  Muniyappa
case, the judgment in 1st H.M.T. case was distinguished on the premise  that
a scheme had been framed and  the  same  had  been  approved  by  the  State
Government and further that the petitioner  had  failed  to  show  that  the
approval was vitiated due to intervention of the  extraneous  consideration.
In Sumitramma case this Court noted that in 1st  H.M.T.  case,  no  separate
order  was  made  by  the  Government  for  grant  of  approval  whereas  in
Sumitramma case an  order  has  been  passed  on  14-10-1985  conveying  the
Government’s approval for  the  issuance  of  Notification  dated  21-1-1986
under Section 4(1) of the 1894 Act. In Kanaka Gruha case  also,  this  Court
treated the direction contained in letter dated 14-11-1985  of  the  Revenue
Commissioner  and  Secretary  to  the  Government  to  the  Special   Deputy
Commissioner, Bangalore to initiate the acquisition proceedings  by  issuing
notification under Section  4(1)  as  an  approval  within  the  meaning  of
Section 3(f)(vi).

112. In none of the three cases, this Court  was  called  upon  to  consider
whether the decision taken by the Government to sanction the acquisition  of
land in the backdrop of an agreement executed by the society  with  a  third
party, as had happened in 1st H.M.T. and 2nd H.M.T. cases  and  the  present
case whereby the Estate Agent agreed  to  ensure  the  acquisition  of  land
within a specified time-frame subject to payment of  huge  amount  of  money
and the fact that the agreement entered into between  the  society  and  the
Government was in the nature of an agreement contemplated  by  Part  VII  of
the Act.”

113. While in 1st H.M.T. case the amount paid to M/s S.R. Constructions  was
rupees one crore, in the present case, the appellant had agreed to pay  more
than rupees five  crores  for  facilitating  issue  of  notifications  under
Sections 4(1) and 6(1) and sanction of the layouts and plans by  BDA  within
a period of less than one year. Therefore, we have  no  hesitation  to  hold
that the appellant’s case is squarely covered by the  ratio  of  1st  H.M.T.
and 2nd H.M.T. cases and the High Court did not commit any error by  relying
upon the judgment in 1st H.M.T. case for declaring that the acquisition  was
not for a public purpose.”
          (emphasis laid by this Court)


The stand of the respondent-Society is that the acquisition of lands by  the
State Government is under Section 3 (f) (vi) of the  L.A.  Act  and  that  a
scheme has been submitted and the  same  has  been  approved.   But  from  a
perusal of the original acquisition file of  the  state  government,  it  is
clear that there is no such scheme and no prior approval of the same by  the
State Government as required under Section 3 (f)(vi) of the L.A. Act.

Thus, in the light of the judgments of this Court referred to supra, and  in
the absence of framing of scheme by the respondent-Society and  approval  of
the same by the State Government as required under Section 3 (f)(vi) of  the
L.A. Act, the Division Bench,  holding  that  the  letter  dated  26.11.1987
referred to supra amounts to approval of the scheme, is wholly erroneous  in
law for the reason that neither the  Three  Men  Committee,  nor  the  State
Level Co-ordination Committee even adverted to  the  said  letter  in  their
proceedings. Further, no details are  forthcoming  from  the  original  file
regarding the details of the scheme, and the  application  of  mind  by  the
state government to approve the same. In the light of the decisions of  this
Court, as well as the wording of Section 3(f)(vi) of the L.A.  Act,  we  are
constrained to hold that the acquisition proceedings  in  the  instant  case
cannot be said to be one for ‘public purpose’ as  defined  under  Section  3
(f) (vi) of the L.A. Act, especially in the light of the fact that not  only
was there no scheme formulated by the  respondent-Society  and  approved  by
the State Government for the said purpose before initiating the  acquisition
proceedings, but that the evidence on  record  clearly  indicates  that  the
respondent-Society paid consideration to Mr. S. Rangarajan  to  act  as  the
agent between it and the state government, to ensure that the lands  of  the
original  land  owners  are  acquired  in  its  favour.  Upholding  such  an
acquisition would be akin to approving to such type of agreements which  are
opposed to public policy and the same cannot be allowed by this Court  under
any circumstances, as the concept of hiring middlemen to get  lands  of  the
poor agricultural workers acquired by the state government in  favour  of  a
Cooperative Society is abhorrent and cannot be granted the sanction of law.

Even as far as the terms of  the  so-called  agreement  are  concerned,  the
parties failed to meet those as well. The relevant clause of  the  agreement
is extracted as under:
“7. All Acts, Deeds and things connected with the Acquisition  of  lands  as
aforesaid shall be got  completed  by  the  Second  Party  with  a  view  to
facilitate Acquisition of lands within a period of 18 months or  any  period
to be extended in writing by the First Party.
8. The Second Party shall  take  necessary  steps  to  get  the  said  lands
Acquired in the name of the First  Party  through  the  Government  for  the
formation of residential sites and handover the possession of said lands  in
favour of the First Party within a period of 18  months  from  the  date  of
this Agreement.”

It is clear that the parties to the said agreement were  not  even  able  to
honour the terms of the same. Thus, the acquisition of the lands  cannot  be
allowed to sustain for that reason as well.


Further, the state government did  not  even  take  into  consideration  the
finding of the G.V.K. Rao Committee report, which found that the respondent-
Society was issuing membership to persons fraudulently, including  to  those
persons who were not even residing within  the  area  of  operation  of  the
jurisdiction of the society.  Further,  the  acquisition  of  lands  of  two
different villages by  issuing  the  impugned  notifications  by  the  State
Government in exercise of its eminent domain power  at  the  instance  of  a
middleman amounts to a mala fide exercise of power by the state  government.
This is further made clear from the stand of the state government  reflected
throughout the proceedings, not just before this Court, but also before  the
High Court, where it remained a silent spectator  to  the  proceedings,  and
neither actively defended the acquisition of lands nor opposed it.  Even  in
the  affidavit  dated  03.08.2016  submitted  before  this  Court  in  these
proceedings, the stand of the  state  government  is  merely  that  it  will
proceed to make an award  under  Section  24(1)(a)  of  the  Right  to  Fair
Compensation  and  Transparency  in  Land  Acquisition,  Rehabilitation  and
Resettlement Act, 2013 (hereinafter  referred  to  as  the  “New  L.A.  Act,
2013”), if the validity of the acquisition  of  the  lands  in  question  is
upheld. This stand  of  the  state  government  clearly  goes  to  show  the
seriousness in which it has exercised  its  eminent  domain  power  in  such
important case of acquisition of  lands  of  poor  agricultural  workers  in
blatant violation of the provisions of the L.A. Act and  law  laid  down  by
this Court.

Thus, the impugned notifications issued  under  Sections  4(1)  and  Section
6(1) of the L.A. Act are bad in law as the same suffer from not  only  legal
mala fides but also legal malice, which amounts to  colourable  exercise  of
power by the state government and therefore,  the  same  are  liable  to  be
quashed and accordingly quashed.

At this stage, it is also important to reflect on another argument  advanced
by the learned senior counsel appearing on behalf of  the  appellants,  that
since till date no award has been passed in favour of the landowners by  the
Land Acquisition Officer and therefore,  the  land  acquisition  proceedings
are lapsed on that count also by virtue of Section 11A of the L.A. Act.

The learned senior counsel appearing on  behalf  of  the  appellants  submit
that since no award has been passed within two years from the  date  of  the
acquisition of the lands, which got over in April 1991, thus, by  virtue  of
Section 11A of the L.A. Act,  the  acquisition  proceedings  are  lapsed.  A
question which was sought to be examined was  whether  Section  24(1)(a)  of
the New L.A. Act, 2013, which came into force  from  01.01.2014  would  save
the proceedings in the instant case, even if the award has not  been  passed
within two years from the date of the acquisition of the  lands.  Before  we
deal with the argument advanced by the learned senior counsel  appearing  on
behalf of the appellants, it would be  useful  to  advert  to  the  relevant
statutory provisions.

Section 11A of the L.A. Act reads as under:
“11A. Period shall be which an award within  made.  -  The  Collector  shall
make an award under section 11 within a period of two years  from  the  date
of the publication of the declaration and if no award is  made  within  that
period, the  entire  proceeding  for  the  acquisition  of  the  land  shall
lapse....”


The relevant provisions of the New L.A. Act, 2013 read as under:
“24. Land acquisition process under Act No. 1 of 1894  shall  be  deemed  to
have lapsed in certain  cases.–(1)  Notwithstanding  anything  contained  in
this Act, in any case of land acquisition proceedings  initiated  under  the
Land Acquisition Act, 1894,—
 where no award under section 11 of the said Land Acquisition Act  has  been
made, then, all provisions of this Act  relating  to  the  determination  of
compensation shall apply; or
............                                       ”

“114. Repeal and saving.–(1) The Land Acquisition Act, 1894 (1 of  1894)  is
hereby repealed.
(2) Save as otherwise provided in this Act the repeal under sub-section  (1)
shall not be held to
prejudice or affect the general application of  section  6  of  the  General
Clauses Act, 1897 (10 of 1897) with regard to the effect of repeals.
.........                               ”


Section 6 of the General Clauses Act reads as under:

“6. Effect of repeal- Where this Act, or any or Regulation  made  after  the
commencement of this Act, repeals any enactment hitherto made  or  hereafter
to be made, then, unless a different intention  appears,  the  repeal  shall
not-—
(a) revive anything not in force or  existing  at  the  time  at  which  the
repeal takes effect;
(b) affect the previous operation of any enactment so repealed  or  anything
duly done or suffered thereunder; or
(c) affect any right, privilege, obligation or liability  acquired,  accrued
or incurred under any enactment so repealed;
.....”

      It was contended that when the New L.A. Act,  2013  came  into  force,
the acquisition proceedings had already lapsed by virtue of Section  11A  of
the L.A. Act. Section 6 of the General Clauses Act clearly  lays  down  that
the repeal of the L.A.  Act  does  not  revive  anything  not  in  force  or
existing at the time the repeal takes  effect.  It  is  submitted  that  the
repeal took effect on 01.01.2014  and  as  on  that  date,  the  acquisition
proceedings were no longer alive. Thus, Section 24(1)(a)  of  the  New  L.A.
Act,2013 read with Section 6 of the General Clauses Act does not revive  the
acquisition proceedings which were dead long before  coming  into  force  of
the New L.A. Act, 2013.

On the other hand, Mr. Shanti Bhushan, the learned senior counsel  appearing
on  behalf  of  the  respondent-Society  very  strongly  opposed  the   said
contention placing reliance upon Section 24(1)(a) of the New L.A. Act,  2013
and Section 11A of the L.A. Act that an Award could not  be  passed  because
of the status quo order passed by way of an  interim  order  that  had  been
passed during the pendency of the writ petitions, writ appeals and  as  well
as  the  proceedings  before  this   Court.   Therefore,   the   acquisition
proceedings cannot be said to have lapsed on that ground alone.

In view of the fact that for the reasons stated supra, we have already  come
to the conclusion  that  the  acquisition  proceedings  in  respect  of  the
acquired lands are liable to be quashed and there  is  no  need  for  us  to
render an opinion on this question of law in these cases, as interesting  as
it is.

      Answer to Point nos. 3 and 4:


Having arrived at the conclusion on the points framed in these  appeals  for
the reasons stated supra, the acquisition proceedings in  the  instant  case
are liable to be quashed, we now turn our attention to answer  the  question
of the relief required to  be  granted  by  this  Court  in  favour  of  the
appellants in the appeals arising out of SLP (C) Nos.  13656-13684  of  2004
and the appeals arising out  of  SLP  (C)  Nos.  18090-18118  of  2004.  The
appellants in the connected third appeals arising out of SLP (C) No.  23336-
23339 of 2004 are the original owners of lands who had approached  the  High
Court after a long lapse of time.  Therefore,  Mr.  Shanti  Bhushan  learned
senior counsel appearing on behalf of  the  respondent-Society  submits  the
appeals arising out of SLP (C) Nos. 23336-23339 of 2004  are  liable  to  be
dismissed on account of delay and laches as they have  approached  the  High
Court after long lapse of time without proper and sufficient explanation  in
approaching belatedly to the  High  Court  by  filing  writ  petitions.  Mr.
Shekhar Naphade, the learned senior counsel appearing on behalf of the  said
appellants-landowners  has  seriously  opposed  the  above   contention   by
contending that the said question has already been answered  by  this  Court
in H.M.T. House Building Coop. Society (supra)  wherein  it  was  held  that
once the proceedings are void ab  initio  in  law  for  non-compliance  with
mandatory statutory  requirement  of  prior  approval  of  the  Scheme,  the
original owners cannot be  shut  out  from  the  Court  in  challenging  the
acquisition proceedings and therefore, they are entitled  to  challenge  the
same at any point of time  even  in  the  collateral  proceedings.  We  have
accepted the above contention as the same is well  founded  and  tenable  in
law.

On the issue of whether the so called purchasers of  the  lands  during  the
pendency of Writ petitions were entitled to relief as prayed for by them  in
the instant cases, our answer must be in  the  negative  for  the  following
reasons:

The respondent-original landowners in the first appeal  had  executed  power
of attorney(s) in favour of Mr. S. Rangarajan to facilitate him to  get  the
lands acquired in favour of the respondent-Society, the  relevant  terms  of
which have been extracted supra to show that  they  have  not  executed  the
power of attorney  in  his  favour  to  sell  their  lands  other  than  the
respondent-Society.  On the basis of the same  the  acquisition  proceedings
were initiated and the notifications under Section  4(1)  and  6(1)  of  the
L.A. Act were issued. Some of the  respondent-original  landowners  objected
to the same by submitting their objections to the  proposed  acquisition  of
their  lands  before  the  Land  Acquisition  Officer  after  Section   4(1)
notification  was  published.  No   doubt   their   objections   have   been
mechanically overruled  by  the  Land  Acquisition  Officer  and  the  State
Government without application of mind to the facts  of  the  case  and  the
provisions of the L.A. Act. The  fact  that  the  report  submitted  by  the
Special Deputy Commissioner under Section 5A(2) of  the  L.A.  Act  has  not
been even considered by the State Government  properly  and  objectively  is
evident from the original file produced  in  these  cases.  After  the  Writ
Petitions were allowed by the learned single Judge of the  High  Court,  the
middleman, Mr. S. Rangarajan  played  fraud  on  the  land  owners  and  the
society by making use of said Power of Attorney(s)  and  executed  the  sale
deeds in favour of his son, daughter and son-in-law who are  the  appellants
in the appeals arising out of SLP (C) Nos. 13656-13684  of  2004,  within  a
span of a few days from the date of passing  the  judgment  by  the  learned
Single Judge in the writ petitions. The said action  of  Mr.  S.  Rangarajan
tantamounts to fraud played by him upon the  respondent-original  landowners
and therefore, the said transaction of executing the sale  deeds  in  favour
of his son, daughter and son in law is void ab initio in law.

As far as the sale in favour of the appellants in the  appeals  arising  out
of SLP (c) Nos. 18090-18118 of 2004 is concerned during the pendency of  the
writ petitions, the same is also void ab initio in law as the same  happened
during the pendency of the Writ Petition before the learned single Judge  of
the High Court. A Division Bench of this Court in the case  of  Uddar  Gagan
Properties Ltd. v. Sant Singh & Ors.[12] held that the sale transactions  of
a similar nature is void ab initio in law. Thus,  the  transactions  of  the
alleged sales made  during  the  pendency  of  the  proceedings  are  wholly
illegal and void ab initio in law and therefore the same cannot  be  allowed
to sustain in law. The said sale  transactions  are  also  contrary  to  law
which is in operation in respect of agricultural lands.

The Impleadment Application  Nos.  74-102  of  2010  filed  in  the  appeals
arising out of the SLP (C) Nos. 13656-13684 of 2004 are also  liable  to  be
rejected, as the applicant therein claims to be  the  Power  of  Attorney(s)
holder of some of the lands in question and agreements  of  sale.  Since  he
neither approached the High Court, nor this Court by way of filing SLPs  and
neither the agreements of sale nor  the  power  of  attorney(s)  confer  any
right upon him at this time, as the same is barred by the provisions of  the
Land Reforms Act, 1952, provisions of the Specific Relief  Act  as  well  as
the Limitation Act, the applicant has no legal right to come  on  record  to
challenge the impugned judgment and therefore the  Impleadment  Applications
are rejected, as the same are wholly unsustainable in law.

For the reasons stated supra, we pass the following orders:

The appeals filed by the so-called purchasers and  some  of  the  landowners
seeking  to  set  aside  the  common  impugned  judgment  and  order   dated
06.05.2004 passed by the Division Bench of the High Court  of  Karnataka  in
Writ Appeal Nos. 7543-7557 of 1996 and other connected appeals  are  allowed
to the extent as indicated below and the  impugned  judgment  and  order  is
hereby set aside. The common judgment and order dated 12.07.1996  passed  by
the learned single Judge of the High Court in Writ  Petition  No.  8188-8201
of 1989 and other connected  writ  petitions  in  quashing  the  acquisition
notifications and proceedings are restored.

We also hold that the transfer of the acquired lands by way of  the  alleged
sale deeds executed by Mr. S. Rangarajan in favour of the appellants in  the
appeals arising out of SLP (C) Nos. 13656-13684 of  2004,  as  well  as  the
transfer of lands by way of alleged sale deeds in  favour  of  some  of  the
appellant-purchasers in the appeals arising out of SLP (C) Nos.  18090-18118
of 2004 are illegal and void ab initio in law.

Since the learned single Judge of the High  Court  quashed  the  acquisition
notifications and proceedings at the instance of  the  original  landowners,
which common judgment and order has been restored by this Court  by  setting
aside the impugned judgment and order passed by the Division  Bench  of  the
High Court in the Writ Appeals filed by  the  respondent-Society,  we  grant
the relief as has been granted by the learned single Judge in favour of  the
said original landowners, who are the respondents in the first  two  appeals
before us and also allow the appeals filed by some of the landowners in  the
civil appeals arising out of SLP (C) No. 23336-23339 of 2004.

Since we have set aside the  common  impugned  judgment  and  order  of  the
Division Bench of the High Court of Karnataka, we consequently  restore  the
common judgment and order of the learned single Judge  passed  in  the  Writ
Petitions, wherein the acquisition notifications and proceedings in  respect
of the lands of some of original  landowners  have  been  quashed  at  their
instance. The same shall now be enjoyed by them. So also the  appellants  in
the appeals arising out of SLP (C) Nos. 23336-23339  of  2004  are  entitled
for the  same  relief  as  we  quashed  the  acquisition  notifications  and
proceedings.  For  this  purpose,  we  direct  the  Deputy  Commissioner  of
Bangalore, Urban District and also the Commissioner of Police/DGP to  extend
all such protection and assistance to the landowners  to  ensure  that  this
judgment and order is implemented properly.

All pending applications are disposed of.


                                                      ……………………………………………………J.
                               [V.GOPALA GOWDA]


                                                      ……………………………………………………J.
                               [ADARSH KUMAR GOEL]


New Delhi,
September 15, 2016

ITEM NO.1A-For JUDGMENT      COURT NO.8               SECTION IVA

               S U P R E M E  C O U R T  O F  I N D I A
                       RECORD OF PROCEEDINGS

C.A. Nos.9091-9119/2016 @ Petition(s) for Special Leave to Appeal (C)
No(s).  13656-13684/2004

R. RAJASHEKAR AND ORS.                             Petitioner(s)

                                VERSUS

TRINITY HOUSE BUILD COOP. SOCIETY & ORS.           Respondent(s)

WITH

C.A. Nos.9120-9148/2016 @ SLP(C) No. 18090-18118/2004

C.A. Nos.9149-9152/2016 @ SLP(C) No. 23336-23339/2004

Date : 15/09/2016 These matters were called on for pronouncement of
JUDGMENT today.

For Petitioner(s)       Mr. R.S. Hegde, Adv.
                        Mrs. Farhat Jahan Rehmani, Adv.
                        Mr. Shanti Prakash, Adv.
                     Mr. Rajeev Singh,Adv.

                        Mr. Basava Prabhu Patil, Sr. Adv.
                        Mr. Anirudh Sanganeria, Adv.
                        Mr. Chinmay Deshpande, Adv.
                        Mr. Amjid Maqbool, Adv.
                     Mr. A. S. Bhasme,Adv.

For Respondent(s)
                     Mr. E. C. Vidya Sagar,Adv.
                        Mr. Kartik Seth, Adv.
                        Mr. Subhash Chandra Sagar, Adv.
                        Ms. Jennifer John, Adv.

                     Mr. Irshad Ahmad,Adv.

                     Mr. V. N. Raghupathy,Adv.

                     Mr. Kunal Verma,Adv.
                        Ms. Yugandhara P. Jha, Adv.
                        Mr. Prasanna Mohan, Adv.
                        Mr. Pulkit Tare, Adv.
                        Ms. Ruchi Sahay, Adv.


      Hon'ble Mr. Justice V.Gopala Gowda  pronounced  the  judgment  of  the
Bench comprising His Lordship and Hon'ble Mr. Justice Adarsh Kumar Goel.
      Leave granted.
      The appeals are allowed in terms of the signed Reportable Judgment.
      I.A. Nos. 74-102/2010, applications for impleadment are rejected.
      Pending application(s), if any, stand(s) disposed of.


|(VINOD KUMAR JHA)                      | |(MALA KUMARI SHARMA)                  |
|AR-CUM-PS                              | |COURT MASTER                          |


 (Signed Reportable Judgment is placed on the file)

|                                       | |                                      |


-----------------------
[1]   [2] (1995) 2 SCC 677
[3]   [4] (1995) 3 SCC 128
[5]   [6] (2012) 3 SCC 727
[7]   [8] (2012) 10 SCC 184
[9]   [10] (2003) 1 SCC 228
[11]  [12] SLP (C) No. 10270 of 1996, decided on 04.10.1996
[13]  [14] SLP (C) No. 14681 of 1995 decided on 04.10.1996
[15]  [16] (1995) 2 SCC 326
[17]  [18]  ILR 1991 Kar 2248
[19]  [20] (1991) 3 SCC 67
[21]  [22]  (2007) 9 SCC 304
[23]  [24] C.A. No. 5072 of 2016, decided on 13.05.2016

-----------------------
|REPORTABLE        |





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