NOTE : In the matter of Mr. K.M.Rangadhama Setty, Founder President of Amar Jyothi HBCS and also builder & Estate Agent appearing as the land owner & bequeathing the rights of the lands to SLAO during Award proceedings; SAME YARD STICK SHOULD BE APPLIED TO THIS CASE " JUDICIAL LAY-OUT"
ALSO or not ?

Amar Jyothi HBCS Vis--vis Challaghatta lands Award proceedings:-

The Division Bench of High Court speaking through Mr.R.P.Sethi, CJ & Mr.K.R.Prasada Rao, J while disposing WA Nos 6017-18/97, on 18th Sept 1998 held thus:-

1) These appeals are filed against the order dated 18-3-1996 passed by the learned Single Judge in Writ petition No.27983/95 and W.P No.15085/95 and as confirmed in C.P.Nos.297 and 298/96 Dated 25-7-1997. The appellant Society had acquired the lands measuring 2 Acres 11 Guntas, 1 Acre 12 Guntas and 2 Acres 09 Guntas situate in Sy. Nos. 2/2, 2/3 and 2/4 of Challagatta village, Varthur Hobli, Bangalore South Taluk, belonging to respondents- 4 to 7 herein in Writ Appeal No. 6017/97, who are the petitioners in W.P.No. 27983/95 and they also acquired land measuring 1 Acre 8 Guntas in Sy. No. 4 of the same village belonging to the respondents4 to 8 in W.A. No. 6018 of 1997, who are the petitioners in W. P. No. 15085/95 under Preliminary Notification dated 9-12-1986 published in Karnataka Gazette dated 18-12-1986 and final notification dated 21-2-1989, published in Karnataka Gazette dated 22-2-1989, for the benefit of its members for the formation of the layout and for allotment of sites to its members. The appellant Society had deposited the compensation amount which was said to have been drawn by the land owners. It is also the case of the appellant that the land Acquisition Officer has taken possession of the land and also published notification as required under Section 16(2) of the Land Acquisition Act, 1894 ( in short the Act) on 27-6-1991 which was published on 11-7-1991 and thereafter he has delivered physical possession of the acquired land in favour of the appellant-Society on 8-3-1995. Thereafter the Society has obtained approval of plan from Bangalore Development Authority (in short BDA) and started developmental works in the entire land. After Acquisition Officer, the appellant-Society got changed the mutation and other revenue records in its favour. The said Acquisition proceedings were challenged by the land owners in the above said writ petitions before the learned Single Judge and the said writ petitions were allowed quashing the Acquisition proceedings by the learned Single Judge by an order dated 18-3-1996 holding that the directions issued by the Honble Supreme Court in H.M.T. HOUSE BUILDING CO-OPERATIVE SOCIETY V/s. SYED KHADER reported in ILR 1995 Karnataka Page 1962 confirming the decision of the Division Bench of this Court in NARAYANARADDY Vs. STATE OF KARNATAKA reported in ILR 1991 Karnataka Page 2248 are applicable even in respect of the lands pertaining to the above writ petitions and directed the appellant and respondents 1 to 3 herein to hand over possession of the acquired lands to the petitioners in the above writ petitions, on depositing the amount of compensation received by them with the respective and Acquisition Officers. Subsequently, the appellar filed review petitions- C.P. Nos. 326/96, 297/96 and 298/96 before the same learned Single Judge for review of the above impugned order dated 27-5-1997 and the said review petitions came to be dismissed by the learned Single Judge by order dated 25-7-1997. In the said review petitions, the appellant contended that the directions given by the Apex Court in HMT., House Building Co-operative Society vs. Syed Khader ( ILR 1995 Karnataka 1962) are not applicable to the lands pertaining to the above writ petitions since the notifications under which they were acquired were different and since there was prior approval of the Housing Scheme by the appropriate Government under Section 3(f) (vi) of the Act and that the acquisition is for Public Purpose". But the said contentions were rejected by the learned Single Judge holding that there is no order of the State Government granting prior approval for acquisition of lands in question as required under Section 3(f)(vi) of the Act and that the acquisition of lands pertaining to these cases are also covered by the directions issued by the Apex Court in the above said ruling, as they were acquired for the benefit of the appellant-Society was found to be a Society formed with 4050 bogus members for conferring benefits to the builders and middlemen and the acquisition of the lands for the said Society was not for a public purpose and it is an instance of colourable exercise of power.

2. Aggrieved by the impugned orders passed by the learned Single Judge in the above writ petitions and review petitions the present appeals are filed by the appellant Society.

3. We have heard the arguments advanced by the learned Counsel appearing on both sides.

4. The learned Counselor the appellant has challenged the impugned order passed by the learned Single Judge mainly on four ground........

Since the preliminary and final notifications under which the lands pertaining these cases were acquired were issued on different dates on which the preliminary and final notifications were issued in Narayan Reddys case, which was confirmed by the Supreme Court in HMT. House Building Co-operative Society Vs Syed Khader, the directions given by the Supreme Court that possession of the lands shall be restored to the fact whether they had challenged the acquisition of lands ore not, are not applicable to the cases.

The Learned Single Judge ought to his dismissed the petitions as not maintainable on the ground of laches and delay since the petitioners approached the Court nearly after a lapse of more than 10 years after the acquisition proceedings were completed.

Since the consent awards were passed in the said acquisition proceedings, the petitioners who consented for passing the awards are not entitled to question the validity of the acquisition proceedings and this aspect of the case has not been considered by the learned Single Judge in the impugned order.

The finding given by the learned Single Judge that there is no prior approval of the Housing Scheme by the appropriate Government under Section 3(f) (vi) of the Act and that the acquisition is not for Public Purpose in the present acquisition proceedings is erroneous.

On the other hand, the learned Counsel for the respondents submitted that there are no merits in any of the above grounds urged and that the learned Single Judge was justified in quashing the acquisition proceedings in the present proceedings also on account of the fact that the appellant-Society which acquired the above land is found to be a bogus Society and the acquisition proceedings are not found to be for a public purpose. It is further contended that the directions given by the Supreme Court in HMT. House Building co-operative Societys case are equally applicable to the acquisition proceedings in the present cases and that the learned Single Judge was justified in holding that the said directions are equally applicable to the present acquisition proceedings and that the question of delay and laches on the part of the petitioners in approaching the Court does not arise for consideration in view of the specific directions given by the Supreme Court.

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We shall now proceed to examine the merits of the above contention / with reference to the material placed on record by both the parties.

It is an undisputed fact that in NARAYANA REDDYs case reported in ILR 1991 Kar. 2248, a Division Bench of this Court has quashed the acquisition of lands made in favour of some of the House Building Societies including the appellant- Amar Jyothi Co-operative Society Limited, which is the appellant in these appeals on consideration of the report of the Joint Registrar of Co-operative Societies holding that all the Societies are bogus Societies formed for the purpose of making huge profits by the Middlemen and Builders. This Court concluded in that as under:

" As seen from the findings of G.V.K. Rao Inquiry Report, in respect of five respondents- Societies and the report of the Joint Registrar in respect of Vyali Kaval House Building Co-operative Society, these Societies had indulged in enrolling large number of members illegally inclusive of ineligible members and had also indulged in enrolling number of bogus members. The only inference that is possible from this is that Office Bearers of the societies had entered into unholy alliance with the respective agents for the purpose of making money, as submitted for the petitioner. Otherwise, there is no reason as to why such an agreement should have been brought about by the office bearers of the Society and the agents. Unless those persons had the intention of making huge profits as alleged by the Petitioners, they would not have indulged in enrolment of ineligible and bogus members. The circumstance that without considering all these relevant materials the Government had accorded its approval, is sufficient to hold that the agents had prevailed upon the Government to take a decision to acquire the lands without going into all those relevant facts. The irresistible inference flowing from the facts and circumstances of these cases is, whereas the power conferred under the Land Acquisition Act is for acquiring lands for carrying out housing scheme by a housing society, in each of the cases the acquisition of lands is not for a bona-fide housing scheme but is substantially for the purpose of enabling the concerned office bearers of respondent-societies and their agents to indulge in sale of sites in the guise of allotment of sites to the Members /Associate members of the Society and to make money as alleged by the petitioners and therefore it is a clear case of colourable exercise of power. Thus, the decision of the Government to acquire the lands suffers from legal main fides and therefore the impinged notifications are liable to be struck down."

The above decision as has been confirmed by the Honble Supreme Court in HMT. HOUSE BUILDING CO-OPERATIVE SOCIETY vs. SYED KHADER (ILR 1995 Kar. 1962), accepting the findings recorded by the Division Bench of this Court. After the dismissal of the above appeals, a direction has been given that as a result of the quashing of the land acquisition proceedings including the Notifications in question in those cases, possession of the lands shall be restored to the respective land-owners irrespective of the fact whether they had challenged the acquisition of their lands or not. A further direction has been given that on restoration of possession of the land owners, they shall refund the amounts received by them as compensations or otherwise in respect of their lands. It is further directed that the petitioner / respondents and the State Government including all concerned authorities/persons shall implement the aforesaid directions at an early date. It is seen from the above decision that even the appellant M/s. Amar Jyothi House Building Co-operative Society Ltd. Is held to be a bogus society which has registered 4050 bogus members and the acquisition of lands for this society is not for a bona-fide-Housing Scheme but is substantially for the purpose of enabling the concerned Office bearers of the Society and their agents to indulge in sale of sites in the guise of allotment of sites to the Members/ Associate members of the Society and to make money and therefore it is a clear case of colourable exercise of power.

8)It is vehemently contended by the learned Counsel for the appellant, Sri G.V. Shantharaju, that the above directions given by the Apex Court are not applicable to the lands acquired in the present proceedings since these lands were acquired under a preliminary notification dated 9-12-1986, which was published in Karnataka Gazette dated 18-12-1986, and under a final notification dated 21-2-1989, which was published in Karnataka Gazette dated 22-2-1989, whereas the preliminary and final notifications which were quashed in the above decisions bears different dates as 3-12-1986 which is the date of preliminary notification and 8-12-1988, which is the date of the final notification. But, we find that there is no substance in this contention for the simple reason that the impugned preliminary notification pertaining to the acquisition of lands in these cases was issued only about 6 days after the date of issue of preliminary notification for the acquisition of the lands pertaining to the above decisions and the final notification pertaining to the lands in question was issued only about 2 months after the date of final notification which was quashed in the above decisions. Thus, having regard to the proximity of the said dates of the preliminary and final notifications pertaining to the lands in the present cases and the land involved in NARAYANA REDDY case, it cannot be said that the acquisitions made in favour of the appellant-Society, which is found to be a bogus Society formed with bogus Members, in the present acquisition proceedings are for a Public Purpose i.e., for a bona-fide Housing Scheme, when a finding has already been recorded by this Court in NARAYANA REDDY s case that the object with which the appellant-society was formed is only to indulge in sale of sites in the guise of allotment of sites to its members and to make money. The said finding, in our opinion, recorded in Narayana Reddys case that the power exercised is a clear case of colourable exercise of power and that the decision of the Government to acquire the land suffers from legal malafides holds good even in respect of the acquisition of lands pertaining to these cases for the benefit of the same appellants society. It is not the case of the appellant that its members are not the same members who were there at the time when other lands pertaining to the above decisions under earlier notifications were acquired and that at the time of acquisition of the lands pertaining to these cases under different notifications, altogether different set of members were taken in their society. So, it must be taken that for the same appellant Society which has labeled as a bogus Society the Acquisition of lands pertaining to these cases have been made and this circumstances leads to an inescapable conclusion that even these Acquisitions were not made for a public purpose though the dates of the notifications under which the lands acquired are different. Further, it is pointed out by the land owners in these proceedings that the entire acquisition proceedings were for the benefit of a middleman, one K.M. Rangadhama Setty s/o K.L. Munikrishna Setty, who was a builder and land developer and it was he who participated in the Acquisition proceedings and who received the compensation amount and it was he, in fact, had entered into an agreement with the Government and received the compensation. This contention of the land owners is supported by the documentary evidence placed on record, in the consent award passed in respect of the lands acquired in this case. which is produced as Annexure-D, it is disclosed that the said K.M. Rangadhama Setty appeared on behalf of the land owners and produced G.P.A Agreement and requested to pass the consent award and he also stated that the compensation amount in respect of the lands acquired has been paid to the land owners. It is also mentioned in the said award that the appellant-Society has also given a letter on 10-12-1990stating that the entire amount has been paid to the land owners through G.P.A. holder and the G.P.A holder stated that the compensation amount of Rs.1,99,000/- was received by him. Thus, we find that there is sufficient material on record to draw an inference that the entire Acquisition proceedings in the present proceedings were for the benefit of Sri Rangadhama Setty, who was a builder and land developer as contended by the land owners and that the appellant Society was bogus entity. We have, therefore, no hesitation to hold that the acquisition proceedings were not for a public purpose for carrying out a bona fide housing scheme and that it is a clear case of colourable exercise of power and the decision of the Government to acquire the lands pertaining to these proceedings suffers from legal malafides. We, therefore, agree with the finding given by the learned Single Judge that the directions given by the Apex Court in the above decisions are equally applicable to the Acquisition proceedings challenged in these writ petitions.

9) We shall now consider the merits of the next ground urged by the learned Counsel for the appellant that the writ petitions should have been dismissed by the learned Single Judge on the ground of delay and laches in approaching the Court. This question considered by the learned Single Judge in the common orders passed on 25-7-1997 in C.P. Nos. 326 / 1996 c/w. 297/96 and 298 of 96 observing as follows:-

"Another important question raised is delay and laches in filing the writ petitions after a period of nine years. Since the connected writ petitions challenging the very same notifications have been allowed and the acquisition of land for this society has been quashed in view for this society has been quashed in view of the observations of the Supreme Court in the operative portion of the Judgement, the question of delay or laches does not arise for consideration in so far as the societies referred to therein are concerned"

It is no doubt pointed out by the learned Counsel for the appellant that the learned Single Judge was under a mistaken impression that the lands pertaining to these cases were also acquired under the same notifications challenged in the above decision of the Supreme Court, though the notifications under which the lands pertaining to these cases have been acquired are of different dates. But even then, as it is found that the lands pertaining to these cases have been acquired for the same Society of the appellant, which is found to be a bogus society formed with bogus members, under preliminary notification issued just 6 days after the date of issue of preliminary notification challenged in the above decision of the Supreme Court, it is not possible to come to any other than the one arrived at in the above decision of the Supreme Court that the acquisition of lands in these cases is not for any public purpose and the real object with which these lands have been acquired is to help the middleman and builders to make huge profits by the sale of the sites. So, there is no scope for taking a view contrary to the one which the Supreme Court has taken in the above decision of H.M.T. HOUSE BUILDING CO-OPERATIVE SOCIETY. Since it is found that the acquisition proceeding in the present cases were also the result of the fraud more delay on the part of the land owners is approaching the Court could not be the basis for rejection of their claim and for denial of granting the similar reliefs to them which were granted in the above decision of the Supreme Court. It is in this context, we hold that the observations made by the Supreme Court in the operative portion of the decision are equally applicable to the present proceedings also and we agree with the above said reasons given by the Learned Single Judge for not rejecting the claim of the land owners in these proceedings on the ground of delay and laches on their part in approaching the Court. In fact, all the land owners respondents 4 to 7 in W.A. Col7/97 and respondents- 4 to 8 in W.A.1618/97 have explained the reasons for the delay in approaching the Court in their writ petitions by stating that they came to know the appellant is a bogus society when some of the owners of lands which have been acquired for the purposes of the society challenged the acquisition proceedings and after they were disposed of by the Supreme Court ordering for restoration of the acquired lands to them, on refund of the compensation received by them. Thereafter, they gave a representation to re-deliver possession of the lands to them in terms of the directions given by the Supreme Court since their lands were also acquired for the same bogus society of the appellant. They have also produced the copies of the representations sent by them to the State Government to show this fact. They further alleged that the entire acquisition proceedings were not for the benefit of the Society but they were for the benefit of Sri K.M.Rangadhama Setty, who is a Builder and Land Developer. Taking into consideration the above facts urged by the said Land-Owners and the directions given by the Supreme Court in the above decision, the learned Single Judge has come to the conclusion that their claims cannot be rejected and relief prayed for by them cannot be denied merely on account of delay and laches in approaching the Court. A similar question came up for consideration before the Division Bench of this Court in Writ Appeal Nos.506 of 1996 and connected appeals, which was decided on 16th January 1998, which also related to the challenge of acquisition proceedings in favour of House Building Co-operative Society, speaking for the Bench Honble the Chief Justice observed as follows:

" It is settled position of law that the delay by itself is not an absolute bar in exercise of the writ jurisdiction under Article 226 of the Constitution. The Court may refuse to exercise the Writ Jurisdiction where the petitioner is found guilty of unexplained delay and laches. In a petition for certiorari where the allegation may show that the impugned action is manifestly erroneous and without jurisdiction or the result of colourable exercise of jurisdiction, the Court would be loath to reject the petition simply on the ground of delay. Once the jurisdiction is exercised under Art.226 of the Constitution of India, the Appellate Court may not be justified to reject the claim of the petitioner in exercise of the Appellate powers on the ground of delay alone in approaching the Court. It is true that normally the Court would not intervene when the delay is not properly explained. But, if the delay is condoned specifically or impliedly, the exercise of such a discretion may not normally be interfered with in Appeal unless cogent reasons and specified prejudice is shown so have been ensued by exercise of such a jurisdiction"

In the instant case also, who is the relief of writ of certiorari is claimed and the allegations show that the impugned action is a result of colourable exercise of jurisdiction and is vitiated by legal mala fides, which allegations are supported by the findings already given in the earlier writ proceedings in the above decision of the Supreme Court, we feel that the Learned Single Judge was justified in refusing to reject the writ petitions merely on the ground of delay and paches. Further as reasons given by the Land-Owners for the delay in approaching the Court are found to reasonable, the Learned Single Judge exercised the discretion and we do not find any sufficient grounds to interfere with the exercise of such a discretion.

10) The next contention urged by the Learned Counsel for the appellant that the WP's ought to have been dismissed by Learned Single Judge as not maintainable on account of the fact that the land owners in the present proceedings have consented for passing of the Award by the Land Acquisition Officer & have received the compensation amount for their lands acquired cannot be accepted, as it is found that in the entire proceedings as well as in the Award it was the Middleman Sri. K. M. Rangadhama Setty, who participated in the proceedings & received the compensation by giving his consent on behalf of the land owners for passing the consent Award on taking a General Power of Attorney from them. When it is found that the Acquisition of the

Lands is not for any "Public Purpose" and the members of the appellant Society for whose favour the lands have been acquired are bogus members, the validity of the Acquisition proceedings cannot be upheld merely because the land owners have given their consent for passing the Award and received the compensation amount without the knowledge of the fact that the appellant Society was a bogus Society at that time. On the other hand the directions given by the Supreme Court in the earlier decision to the Housing Societies and the concerned Authorities of the Government to restore possession of the acquired lands to the land owners subject to the refund of the compensation amount received by them to the SLAO... are to be extended in the present cases also, as the appellant Society is also found to be one of the bogus Housing Societies to which the directions were given by the Supreme Court quashing the acquisition proceedings. So, we do not find any meritin the above contention of the counsel for the appellant.

11) It is vehemently argued by the learned Counsel for the appellant that the finding given by the learned Single Judge that there is no prior approval of the scheme of the appellant by the Government as prescribed by Section 3(f) (vi) of the Land Acquisition Act, 1894 and on that ground also the acquisitions are liable to be quashed, is erroneous. In support of this contention that there is prior approval of the scheme of the Government, he relied upon the letter dated 10-10-1986(Annexure-A) produced by the appellant as an additional document on 07-01-1998. It is seen from the said letter that it is addressed by the Revenue Commissioner and secretary to Government. Revenue Department, Bangalore, to the Special Deputy Commissioner, Bangalore, and it reads as follows:-

"Sub: Acquisition of 122 acres 20 Guntas of land in Kempapura Agrahara, Challaghatta villages, Bangalore North Taluk in favour of Amarajyothi House Building Co-operative Society Ltd., Bangalore,

With reference to the above subject, I am directed to convey the approval of Government for acquisition of 122 acres 20 Guntas of lands in Kempapura Arganara and Challaghatta villages, Bangalore North Taluk, in favour of the said society as recommended by the three men committee.

You are requested to initiate acquisition proceedings as per Rules to acquire the land. A copy of the notification my be sent to Government for reference."

It is significant to note that it is nowhere mentioned in the above letter that the appropriate Government mentioned is satisfied that the land intended to be acquired is needed for public purpose in terms of Section 3 (f) (vi) of the Act. So, the above communication cannot be termed to be the approval or satisfaction of the Government regarding the need of the land sought to be acquired for public purpose within the meaning of Section 3 (f) (vi) of the Act. The validity of a similar approval given by the Government came-up for consideration in the earlier decision in the case of H.M.T., HOUSEBUIDING CO-OPERATIVE SOCIETY vs. SYED KHADER and while dealing with the scope of Section 3 (f) (vi) of the Act, the Court emphasized that:-

"..in the absence of the scheme submitted by the Society for its approval, the Government could not have approved of the scheme under Sec.3 (f) (vi) of the Act. Therefore, in the absence of the approval of the scheme, the acquisition is bad. It is held by the Supreme Court that prior approval is not formal, but it is a condition precedent for acquisition of Government. For housing scheme of Co-operative Society."

In the above decision, it was held that no scheme was filed by the Society and that there was no approval of the scheme and in the absence of the scheme submitted by the society for its approval the Government could not have approved the scheme under section 3 (f) (vi) of the Act and in the absence of the approval of the scheme the acquisition is bad. In the instant case also, the above communication does not indicate that the appellant-society filed scheme before the Government and that the Government has given approval tot hat scheme. Therefore, in the absence of the approval of the scheme by the Government, it must be held that the acquisition proceedings pertaining to these cases are not valid and are liable to the quashed. This aspect of the matter has been considered by the learned Single Judge in the review petitions and held that the above said letter Annexure-A does not indicate that it is an approval of the Government of the scheme as such. For the reasons given above, we agree with the said conclusion reached by the learned Single Judge. The learned Counsel for the appellant has relied upon a judgment of this Court in the case of VISWAMBER TRUST vs. STATE OF KARNATAKA and others (writ Appeal No.260 of 1995, decided on 31st of March 1997), the certified copy of which is produced as Annexure-c, wherein it was held following the Judgment of the Supreme Court in the case of SUMITRAMMA that the letter conveying approval of the Government is sufficient that there is a prior approval of the separate by the Government and no separate order granting approval is required. He also produced the certified copy of the order dated 08-07-1997 passed by the Honble Supreme Court in S.L.P.No.10787/97 which confirmed the said Judgement of the Division Bench of this Court in VISHAMBER TRUST s case( Annexure-D). Placing reliance on the above decision, it is argued by the learned Counsel for the appellant that the letter Annexure-A dated 10-10-1986 conveying approval of the Government is to be treated as the prior approval given by the Government to the scheme and no separate order granting approval is required. But, as a similar letter Annexure-A came up for consideration before the Supreme Court in H.M.T.HOUSEBUILING CO-OPERATIVE SOCIETY LTDs case and it was interpreted in the context that the acquisitions were not found to be for Public Purpose and were made in favour of bogus house building co-operative societies that the said letter does not indicate that there was prior approval of the scheme by the Government, the same findings holds good even in the present case. Even otherwise, as the acquisition pertaining to these cases are found to be the result of the colourable exercise of power and are vitiated by legal mala-fides on account of the fact that the said acquisitions are not found to be for any public purpose and that they are made in favour of bogus members of the appellant-Society, on this ground itself, the present acquisition proceedings are liable to be quashed in these proceedings.

12) For all the above reasons, we find no merits in these appeals which are accordingly dismissed with costs assessed at Rs.5,000/-.

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