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2017 DIGILAW 746 (KAR)

SEETHARAM S/O LATE BACHAPPA v. STATE OF KARNATAKA

2017-04-13

BUDIHAL R.B., MUKHERJEE

body2017
JUDGMENT : The Hon’ble Single Judge dismissed a batch of writ petitions by a common judgment and order dated February 25, 2014, primarily, on the ground of delay and laches. In all those writ petitions, the writ petitioners claimed themselves to be the owners of various pieces of land, which had been the subject matter of acquisition by the State Government for the benefit of the Bengaluru City Cooperative Housing Society Limited (hereinafter referred to as “the Society” in short). 2. The writ petitioners challenged the acquisition proceedings, inter alia, on the grounds that the said acquisition was not for the public purpose, but was initiated in violation of the provisions of the Land Acquisition Act, 1894 (“the said Act” in short) inasmuch the society did not prepare any housing scheme nor there was any prior approval by the State Government to any housing scheme as mandatorily required by Section 3(f)(vi) of the said Act. It was contended that the acquisition was at the instance of a middleman engaged by the said society for influencing the Government to acquire those lands, by using his influence and monetary power, although no public purpose was involved. The writ petitioners contended that, while considering challenge to the very same acquisition, relying upon the decision of the Supreme Court of India in the case of HMT House Building Cooperative Society Vs. Syed Khader and others, reported in 1995(2) SCC 677 , wherein it was held that the acquisition was vitiated by fraud and was not for public purpose, on account of non-framing of any scheme by the society and in the absence of prior approval of the scheme as contemplated under Section 3(f)(vi) of the said Act, and on account of involvement of a middlemen, the entire acquisition was quashed by this Court and, therefore, the writ petitioners prayed for the similar reliefs. 3. Admittedly, the very same acquisition proceedings were challenged in various writ petitions by the interested owners. One Shrimati Geetha Devi Shah filed a writ petition assailing the notification of acquisition, which was registered as Writ Petition No. 16419 of 1992. P.Ramaiah and others filed yet another Writ Petition challenging the acquisition being No. 10406 of 1991. 4. 3. Admittedly, the very same acquisition proceedings were challenged in various writ petitions by the interested owners. One Shrimati Geetha Devi Shah filed a writ petition assailing the notification of acquisition, which was registered as Writ Petition No. 16419 of 1992. P.Ramaiah and others filed yet another Writ Petition challenging the acquisition being No. 10406 of 1991. 4. During pendency of the aforementioned writ petitions, the State Government issued a notification under Section 48(1) of the said Act of 1894 for de-notification of some of the lands owned by said Shrimati Geetha Devi Shah. The said notification was challenged by the society by filing an application under Article 226 of the Constitution of India, which was registered as Writ Petition No. 29603 of 1994. 5. The Hon’ble Single Judge, by judgment and order dated November 18, 1996, dismissed Writ Petition No. 16419 of 1992 filed by said Shrimati Geetha Devi Shah on the grounds of delay and laches. Simultaneously, Writ Petition No. 29603 of 1994 filed by the society, challenging the aforesaid de-notification, was, also, dismissed. 6. The said judgment and order of the Hon’ble Single Judge in Writ Petition No. 16419 of 1992 was challenged by said Shrimati Geetha Devi Shah by filing an appeal before the Division Bench, which was registered as Writ Appeal No. 9913 of 1996. 7. The appeal Bench held that the Hon’ble Single Judge was not justified in dismissing the writ petition on the grounds of delay and laches and, relying upon the decision of the Supreme Court of India in the case of HMT House Building Cooperative Society (supra), inter alia, held that there was no housing scheme approved by the State Government and there was no compliance with the mandatory requirement as contemplated in Section 3(f)(vi) of the said Act. It was, further, held that the Special Land Acquisition Officer submitted his report without giving an opportunity of hearing to the said Shrimati Geetha Devi Shah and this was sufficient to nullify the acquisition of her lands. Accordingly, the appeal Bench set aside the order of the Hon’ble Single Judge and quashed the acquisition proceedings. 8. The appeal filed by the society, challenging the judgment and order passed in Writ Petition No. 29603 of 1994, was, also, dismissed by judgment and order dated March 12, 1998. 9. Accordingly, the appeal Bench set aside the order of the Hon’ble Single Judge and quashed the acquisition proceedings. 8. The appeal filed by the society, challenging the judgment and order passed in Writ Petition No. 29603 of 1994, was, also, dismissed by judgment and order dated March 12, 1998. 9. The society filed an application for review being Civil Petition No. 366 of 1998, which was, also, dismissed, clarifying that the orders in the writ petitions and the writ appeals would remain confined in relation to the lands of the writ petitioners in those writ petitions. 10. Writ Petition No. 10406 of 1991 filed by the said P.Ramaiah and others was allowed by the Hon’ble Single Judge and the acquisition proceedings were quashed. The decision of the Hon’ble Single Judge was challenged by the society in an appeal, which was registered as Writ Appeal No. 4246 of 1998. The State of Karnataka and the Special Land Acquisition Officer, also, filed Writ Appeal No. 6039 of 1998 against the selfsame order. The Division Bench, by a common judgment and order dated February 6, 2004, held, relying upon the decision of the Supreme Court of India in the case of HMT House Building Cooperative Society (supra), that, as the society engaged an agent for ensuring acquisition of the lands and as much amount of money had changed hands in the process, the entire acquisition was total fraud inasmuch as the modus operandi and the pattern to acquire the lands was identical to the case of HMT House Building Cooperative Society (supra). Therefore, ultimately, the entire acquisition was quashed and set aside on the ground of fraud. 11. The decisions of the Division Bench in both the cases of Shrimat Geetha Devi Shah and P.Ramaiah and others were challenged before the Supreme Court of India. By a common judgment and order dated February 9, 2012, the Supreme Court of India affirmed the decision of the Division Bench of this Court in the aforesaid two matters. The decision of the Supreme Court of India has since been reported in 2012(3) SCC 727 in the case of Bangalore City Cooperative Housing Society Limited Vs. State of Karnataka and others. 12. On behalf of the appellants, Mr. Udaya Holla, learned senior advocate, and Mr. The decision of the Supreme Court of India has since been reported in 2012(3) SCC 727 in the case of Bangalore City Cooperative Housing Society Limited Vs. State of Karnataka and others. 12. On behalf of the appellants, Mr. Udaya Holla, learned senior advocate, and Mr. Radhakrishna S.Hegde, learned advocate, submit that, since the Supreme Court of India had quashed the entire acquisition in the case of Bengaluru City Cooperative Society (supra), the acquisition in relation to the lands of these writ petitioners ought to be quashed as the Supreme Court of India held that the acquisition proceedings was fraudulent and illegal. It is submitted that the acquisition was vitiated by fraud because of the involvement of a middleman, namely, M.Krishnappa, who influenced the State authorities to initiate the acquisition proceedings and the State authorities, in colourable exercise of powers, proposed to acquire the lands of the writ petitioners. 13. It was strenuously argued that there has been no delay in filing the writ petition. The writ petitioners were compelled to file the writ petitions, in terms of the aforementioned decisions of the Supreme Court of India, where the entire acquisition proceeding was quashed, but the relief was not extended to them by the authorities. The writ petitions were filed based on the findings recorded in Shrimati Geetha Devi Shah’s case and the decision of the Supreme Court of India in the case of HMT House Building Cooperative Society (supra). The writ petitions were filed immediately on noticing the fraud practiced for acquiring the lands. Moreover, it is submitted that the pleas of delay and laches, the consent award, the acquiescence to acquisition and the alleged receipt of the compensation are not available to the other side as the entire acquisition was vitiated by fraud and mala fide, involvement of middlemen and colourable exercise of power. As the fraud vitiates everything, the delay could not be a ground for denying the relief. Heavy reliance was placed on the decision in the case of Vyalikaval House Building Cooperative Society and others Vs. Chandrappa and others, reported in 2007(9) SCC 304 . It was submitted that once it was held that the notification for acquisition was vitiated by fraud, the pleas of acquiescence, the consent award and the alleged receipt of compensation amount could not have any bearing and the acquisition should be quashed. 14. Mr. Nanjunda Reddy, Mr. Jayakumar S.Patil, Mr. Chandrappa and others, reported in 2007(9) SCC 304 . It was submitted that once it was held that the notification for acquisition was vitiated by fraud, the pleas of acquiescence, the consent award and the alleged receipt of compensation amount could not have any bearing and the acquisition should be quashed. 14. Mr. Nanjunda Reddy, Mr. Jayakumar S.Patil, Mr. Ashok Haranhalli and Mr. Shashikiran Shetty, senior advocates representing the respondents and the allottees from the society, urged that, consent award has been passed and compensation was received by the land owners through their constituted attorneys. They pointed out to the affidavits stated to have been filed by the land owners agreeing to the acquisition. It is submitted that the writ petitioners are not entitled to the relief claimed in terms of the decision in the case of Shrimati Geetha Devi Shah. In the review application, it was clarified that the decision in the said case would confine only to the writ petitioners of those cases. It was submitted that another writ petition relating to the very acquisition in question was dismissed on the ground of delay and laches. The Special Leave Petition against such decision was, also, dismissed. Reliance was placed upon the decision in the case of B.Anjanappa and others Vs. Vyalikaval House Building Cooperative Society Limited and others, reported in 2012(10) SCC 184, and submitted that, as there has been inordinate delay, the writ petition was rightly dismissed by the Hon’ble Single Judge. They submit that as a consent award was passed, the challenge to the acquisition was not maintainable. 15. In all the cases where acquisitions have been found to be tainted on account of involvement of middleman, who, by using his financial power, had influenced the Government in the decision making process for acquiring the land, and where the mandatory requirements of Section 3(f) (vi) of the said Act, requiring framing of scheme and prior approval by the Government were absent, the entire acquisition had been quashed. In the cases in hand, M.Krishnappa has been the Managing Partner of Rajendra Enterprises, and he acted as the middleman. He was engaged for influencing the Government for the purpose of acquiring the lands in question. A general power of attorney and affidavits were executed in favour of said M.Krishnappa. In the cases in hand, M.Krishnappa has been the Managing Partner of Rajendra Enterprises, and he acted as the middleman. He was engaged for influencing the Government for the purpose of acquiring the lands in question. A general power of attorney and affidavits were executed in favour of said M.Krishnappa. A bare perusal of the affidavits and the general power of attorney indicates that the land owners were virtually illiterate people; many of them had put their left thumb impressions in both the general power of attorney and the affidavits. Some of them had signed. However, on perusal of the signatures and their style of subscribing the signatures clearly indicate that the land owners were virtually illiterate and rustic village people. It is apparent, therefore, that fraud has been perpetrated upon the land owners. An indemnity bond was executed by the said M.Krishnappa in favour of the State. In the indemnity bond, the said Krishnappa claimed himself that he had been the owner of the lands and the society permitted him to execute the indemnity and to collect the compensation from the Government. It is, thus, clear that the middleman, namely, the said M.Krishnappa, entered into a purported agreement with the society, influenced the Government and received the compensation. The land owners did not receive the compensation and the consent given by the said M.Krishnappa, by virtue of his power of attorney and the affidavits, has been a product of fraud. 16. In these cases, the lands of various land owners had been acquired under the same notification, at the instance of the same middleman and without the society framing any scheme and obtaining prior approval of the Government. Mr. Nanjunda Reddy, learned senior advocate appearing for the said society, contended that, though this Court and the Supreme Court of India have found that the acquisition was vitiated by fraud and for noncompliance of the mandatory requirement of Section 3(f)(vi) of the said Act, the same could not be applied in respect of the lands of these appellants as, in the said review petition being Civil Petition No.366 of 1998, this Court confined the order only to the lands of the petitioners in those writ petitions. It is true that, in the review petition, it was observed that the decision would confine to the petitioners in those writ petitions. It is true that, in the review petition, it was observed that the decision would confine to the petitioners in those writ petitions. However, the Supreme Court of India in Bangalore City Housing Cooperative Housing Society (supra) considered the entire matter and held that the approval of the housing scheme, as mandatorily required under Section 3(f)(vi) of the said Act, was absent; therefore, the entire acquisition was vitiated. It was found that a middleman was employed for influencing the Government to acquire the property and that tantamounts to fraud. It was specifically held by the Apex Court that the entire acquisition was bad. 17. In Bangalore City Cooperative Housing Society Limited (supra) the Apex Court refused to confer legitimacy to the influence of money power over the rule of law, as the rule of law had been the edifice of our Constitution. Money played the important role in facilitating acquisition of land. It shows how an unscrupulous element in the society uses money and extraneous consideration for influencing the decision making process. 18. In this case M.Krishnappa, with whom the society had entered into an agreement, had played a crucial role in persuading the Government to acquire the land for the benefit of the said society. The tenor of the agreement does not leave any manner of doubt that the said M.Krishnappa played a pivotal role in persuading the Government to acquire the property. Of course, there is no definite and clear evidence that M.Krishnappa paid money for facilitating acquisition of the land, but, it is not too difficult, looking at the tenor of the agreement, the general power of attorney, and the affidavits, for any person of reasonable prudence, to decipher that the society parted with substantial money for manipulating the State authorities. Merely because the layout was formed and certain plots were allotted to the alleged members of the society and that some of the members had constructed their houses, that itself is not sufficient to apply the doctrine of prospective overruling resulting in conferring legitimacy to the influence of money power. 19. In the case of Byanna Vs. State of Karnataka (Writ Petition Nos. 19. In the case of Byanna Vs. State of Karnataka (Writ Petition Nos. 2857786 of 1995), this Court dismissed the writ petitions by order dated April 12, 1996 holding, inter alia, that there was no middleman and the general power of attorneys were given only after issuance of the notification under Section 6(1) of the said Act and, thus, no fraud was played at any stage. This court dismissed those writ petitions not only on the ground of delay and laches, but holding that no fraud was played. 20. On the contrary, in Bangalore City Cooperative Housing Society limited (supra) the Supreme Court of India found that there was a middleman for the purpose of acquisition and, therefore, the entire acquisition was vitiated on the ground of fraud. We hold that Byanna (supra) has no application in these cases. As fraud vitiates everything, delay is inconsequential. In identical circumstances when acquisition was found to be vitiated on the grounds of fraud and malafides, resulting from the use of middleman to influence the Government, the Apex Court held that the delay was of no consequence. It was categorically held that when the acquisition was found to be totally malafide and not for bonafide purpose, the grounds of delay and acquiescence had no substance. All the facets of fraud get attracted to the case at hand. 21. In R.Rajashekar and others Vs. Trinity House Building Cooperative Society and others, reported in AIR 2016 SC 4329 , the Supreme Court of India held that, once the proceedings are void ab initio for noncompliance of the mandatory statutory requirement of prior approval of the scheme, the original owners could not be shut out from the court in challenging the acquisition proceedings and, therefore, they were entitled to challenge the same at any point of time, even in collateral proceedings. In this case the evidence on record clearly indicates that the said society paid money to the middleman to act as the agent between the society and the State Government to ensure acquisition of the lands of these original landowners for the benefit of the said society. Hiring of middleman to get the land of rustic villagers acquired by the State is opposed to public policy. 22. It was urged that there has been a consent award and, thus, the challenge to acquisition must fail. Hiring of middleman to get the land of rustic villagers acquired by the State is opposed to public policy. 22. It was urged that there has been a consent award and, thus, the challenge to acquisition must fail. The consent was given by the middleman, namely, M.Krishnappa, by virtue of the affidavits and the power of attorney executed by virtually illiterate and rustic villagers. Therefore, the compensation was received by the middleman and not by the land owners. The consent award, therefore, is of no consequence. The foundation for acquisition is the approval of the housing scheme under Section 3(f)(vi) of the said Act; such approval is, admittedly, not available. Further, fraud vitiates the whole acquisition. When the very foundation of the acquisition is vitiated, consent or otherwise is of no consequence. In the case of Vyalikaval House Building Cooperative Society (supra) awards were passed and compensation amounts were, also, disbursed in favour of the land owners. Nevertheless, the Apex Court held that the acquisition was vitiated and it could not be saved on the ground of acquiescence. 23. We are of the opinion that the decision in the case of Bangalore City Cooperative Housing Society Limited (supra) has universal application. In these cases, a middleman was engaged to influence the Government and prior approval of the scheme was absent as mandatorily required under Section 3(f)(vi) of the said Act. Hence, we have no hesitation in holding that the Hon’ble Single Judge was not right in dismissing the writ petitions on the grounds of delay and laches. The acquisition is, therefore, liable to be quashed. 24. However, certain members of the cooperative society had acquired the plots of land even prior to passing of an order of injunction against the society by the Hon’ble Single Judge on March 14, 2005 and some of them have even constructed their houses. We feel that they should be permitted to retain their houses on the sites allotted to them, on payment of reasonable compensation to the land owners at the prevailing market price as on the dates of their purchases. Some persons have purchased the property after the order of injunction. They are given liberty to negotiate with the land owners for purchase of the land at an agreed price, preferably the market price prevailing in the year 2005. 25. Therefore, the appeals are allowed. The impugned judgment and order are set aside. Some persons have purchased the property after the order of injunction. They are given liberty to negotiate with the land owners for purchase of the land at an agreed price, preferably the market price prevailing in the year 2005. 25. Therefore, the appeals are allowed. The impugned judgment and order are set aside. The writ petitions are allowed. The entire acquisition is quashed with the rider that the persons, who got sites from the said society prior to the said order of injunction and constructed their houses, would be permitted to retain their houses on payment of compensation to the land owners by offering market price as prevailing on the dates of their purchases. Simultaneously, the persons, who had acquired the plots of land from the said society after the order of injunction and constructed their houses, shall be entitled to negotiate with the land owners to retain their houses on payment of compensation to the land owners at an agreed price, preferably the market price prevailing in the year 2005. We direct the authorities to return vacant lands to the land owners, immediately. 26. We make no order as to costs.