Writ Petition No: 2382 of 1990
THE HIGH COURT OF KARNATAKA
Karnataka State Judicial Emplyees House Building Co-operative Society Ltd.,
S/o, Lingaiah, Aged 38 Years, High Court Building,
State of Karnataka by the Secretary to Government,
special Land Acquisition Officer, Third Floor, T.V. Tower,
PETITION UNDER ARTICLES 226 AND 227 OF THE CONSTIUCTION OF INDIA
The petitioner in the above writ petition states as follows:-
 The Petitioner made an application before the Government for Acquiring certain lands in Allalasandra, Chikkabommasandra and Jakkur Plantation Villages for providing House sites to its members. After making necessary enquiries through a three-member Committee constituted by the Government and also other agencies, the Government decided to acquire the lands for the petitioner and accordingly a preliminary notification was published in the Karnataka Gazette dated 18-02-1988. The Special Land Acquisition Officer there after held an enquiry and after over-ruling the objections of the land owners submitted a report to the Government to acquire these lands for the society. The Government had also examined the claim of the society and made a declaration on 24-02-1989 which was published in the Karnataka Gazette dated 27-02-1989.whenever an acquisition is made by the Government for a society for a public purpose. It is in on the part of the society to deposit the acquisition cost together with certain other demands, like, establishment charges, audit charges etc. all these lands are earmarked in the comprehensive Development Plan which came into force with effect from
12-10-1984 for residential purposes. A comprehensive development plan is prepared for a local planning area.
 Under Section 95 of the Karnataka Land Revenue Act, the Deputy Commissioner is competent to scored permission for diversion of land from agriculture to any other purpose. However, he has no such power in regard to lands situated within the Planning Area and the authority to grant permission for changes of land use is the Town Planning Authority under the Karnataka Town and Country Planning Act. Under Section 14 of the said Act, permission for changes of land use can be granted by the Town Planning Authority where the owner of the land intends to make use of the land for a purpose other than that for which the land has been earmarked in the comprehensive, development plan. Where lands are earmarked is the comprehensive development plan for residential purposes, no permission even under Section 14 of the Town and Country Planning Act is necessary though in the revenue records, the lands are shown as agricultural lands. The clear effect of the comprehensive development plan coming into force is to regulate the use of land coming within the Planning Area and therefore there is an automation statutory conversion from agriculture to non-agriculture for which the lands are earmarked in the comprehensive development plan. Under the Town and Country Planning Act, an owner of the land cannot make use of his land for a purpose other than that for which the lands are earmarked for use in the comprehensive development plan. In other words, there is a statutory compulsion to make use of the land only for the purpose for which it is reserved and for no other purpose. Under Section 95 of the Land Revenue Act, the Deputy Commissioner is competent to levy a conversion fine at the rate prescribed by the Government under the Rules. The question of paying conversion fine would therefore arise only where the Deputy Commissioner makes an order under Section 95 of the Land Revenue Act. The payment of conversion fine is therefore dependent upon an order being passed by the Deputy Commissioner granting permission for using the land for a non-agricultural purpose. By reason of the provisions of the Town and Country Planning Act, the power exercisable by the Deputy Commissioner under Section 95 of the Land Revenue Act is ousted and he is not at all competent to grant an order of conversion. No conversion fine can therefore be demanded from a person who is not required to obtain an order of conversion at the hands of the Deputy Commissioner. Further, the lands acquired by the Government for the society all fail within the urban Agglomeration of the City of Bangalore. They have ceased to be agricultural lands on account of their situation within the limits of urban agglomeration and referred to as lands reserved for residential purposes in the comprehensive development plan. Since all these lands are specified in the comprehensive development plan which is designated as a master plan under the Urban Land [ Ceiling and Regulation] Act, 1976 for a purpose other the an agriculture, they have lost the characteristic of an agriculture land and are deemed to be an urban land as defined by Section 2 of the Urban Land [Ceiling and Regulation] Act. The said Act does not require an owner to apply for any change in land use. All such lands which are specified in the master plan for residential purposes ceased to be agricultural lands by force of statute and no conversion order under Section 95 of the Land Revenue Act is necessary to be obtained for using the land for residential purpose. Therefore, by reason of the combined effect of the provisions of the Karnataka Town and country Planning Act and the Urban Land [Ceiling and Regulation] Act, 1976, the hitherto agricultural lands assume the character of non-agricultural lands.
 When the Government acquires land for a co-operative society which it is entitled to acquire Under Section 3[f] [vi] of the Land Acquisition Act, it involves certain amount of work to be done by various departments of the Government would carry out all these works without levying and demanding establishment charges and audit charges. But the establishment charges collected by the Government from an agency for whose benefit the acquisition is made, must bear a reasonable nexus to the amount of work involved in the acquisition of land. the establishment charges collected by way of reimbursement of the expense involved in the acquisition cannot be made to depend upon the total cost of acquisition as the extent of work involved in acquiring, say 5 lands, is the same as that which the Government incurs while acquiring 10 lands. There is no reasonable nexus between the levy of establishment charges and the total cost of acquisition. The establishment charges will have to be determined at a figure as close as that actually incurred by the Government in acquiring lands for an agency. However, on 19-08-1987 a circular has been issued by the Government fixing the establishment Charges at 10 per cent of the compensation amount as per the award and also on the amount as enhanced by the Courts. The levy of establishment charges at 10 per cent on the compensation amount bears no proportion to the actual expense incurred by the Government in acquiring the land. it is in the nature of a fees for services rendered and will have to be commensurate with the actual expenditure involved. It cannot be said that when the total coat of acquisition is about 10 lakhs of rupees, the Government incurs an expenditure of Rs.1.00 lakh whereas if the total cost of acquisition is a crore of rupees, the establishment charges shoot up to Rs. 10.00 lakhs. The very basis on which the establishment charges are fixed at a fixed sum depending upon the value of the land, is arbitrary and unreasonable and the Government is not competent to collect 10 per cent of the compensation amount towards establishment charges. For the same reason the fixation of 1 per cent towards audit charges is arbitrary. On 18-12-1987, the Land Acquisition Officer addressed a letter to the petitioner stating that a sum of Rs. 2,02,55,734-50 will be the probable cost of acquisition of land and conversion fine of Rs. 21,780/- per acre would be Rs.37,66,851-00 and that the establishment charges at 10 per cent would be Rs. 14,85,485-00 and audit charges Rs. 1,48,548-50. A true copy of the said letter is herewith proceed and marked Annexure-A. A true copy of the circular dated 19-08-1987 is produced herewith and marked Annexure-B. again
On 25-09-1989 another letter was addressed to the petitioner demanding a sum of Rs. 65,25,915-50. The said amount includes the amount demanded towards conversion fine and establishment charges.
On 04-01-1990, the petitioner has been informed by the Special Deputy Commissioner, Bangalore District, that if a sum of Rs. 65,25,915-50 is not paid, action will be taken as per Rules. The said letter is herewith produced and marked Annexure-C.
 A writ as prayed for any be issued on the following :-
G R O U N D S
[i] The lands admittedly fall within the Planning Area and are also urban Lands as defined under the Urban Land [Ceiling and Regulation] Act, 1976. In respect of the lands falling within the planning Area, the Deputy Commissioner has no jurisdiction either to make an order of conversion of lands from agricultural to non-agricultural under Section 96 of the Karnataka Land Revenue Act or to collect any conversion fine under Section 95 of the Land Revenue Act . The jurisdiction to levy conversion fine arises only when permission for such conversion is granted and when the Deputy Commissioner has no competence to make any order under Section 95 of the Land Revenue Act. He has no jurisdiction to levy any conversion as well. These lands are reserved for residential use in the comprehensive development plan and therefore no order of conversion from any authority is required since the lands be cost automatically non-agricultural lands as a result of the comprehensive development plan coming into effect and the person owning the land cannot put the land to any other use than that for which the reservation is made . The nature of the land gets altered as a result of the statute.
[ii] In acquiring the lands for the benefit of a co-operative society, the Government is competent to collect only such amount as is reasonably required for executing the schemas. The amount collected by way of establishment charges will have to be conversion with the service surrendered. The service rendered, when only a few lands are acquired, is the same as when large extents of lands are acquired. There is no proportionate inserts either in the service rendered or in the expenses incurred when more number of lands are acquired by the Government for the benefit of the society. Therefore the establishment charges cannot be fixed with reference to the cost of acquisition of lands and any such method by which the establishment charges is detrained will be arbitrary and will bear no relation to the actual expenses incurred by the Government. it cannot be predicated that the establishment charges will be more only because the lands involved are more. There is thus no reasonable relation between the expenses incurred and the cost of acquisition. In order to fix the establishment charges a more retinal method will have to be evolved by the Government and it cannot levy the establishment charges without any rational basis. The demand relating to establishment charges and audit charges is therefore illegal and without authority of law.
[iii] Grounds in support of the prayer for interim orders: The petitioner has no objection to deposit the cost of acquisition but its demand now made including items of conversion fine, establishment charges and audit charges being without authority of law, the Government has no jurisdiction to require the petitioner to deposit these amounts. In these circumstances, an interim order a prayed for a granted in the interest of justices.
 The petitioner has no other alternative remedy at law than to approach this Hon'ble Court in the exercise of its writ jurisdiction under Articles 226 and 227 of the Constitution of India. The petitioner has not presented any writ petition is this Hon'ble Court or has taken any other proceedings to challenge the order impugned. The petitioner has not filed any proceeding in this Hon'ble Court are in any other court claiming similar relief.
 WHAREFOR, the petitioner prays that this Hon'ble Court any be pleased to.
[i] declare that the demand relating to conversion fine at Rs. 21,780/- per acre is without authority of law and the government has no Jurisdiction to demand the same.
[ii] declare that the levy of establishment charges at 10 per cent of the cost of acquisition and 1 per cent towards audit charges is irrational and arbitrary and therefore without authority of law.
[iii] issue a writ of mandamus to the respondents to desist for collecting any conversion fine or establishment charges at 10 per cent of the cost of acquisition and further direct the respondents to collect only such sums as may be reasonably be required for executing the scheme of acquisition by the Government for the benefit of the society.
[iv] pass such other order or orders as may be just and necessary in the circumstances of the case.
[v] pending disposal of the above writ petition be pleased to stay the recovery of Rs. 37,66,851-00 towards conversion fine at Rs. 21,780/- per acre for 172 acres and 38 guntas of land and establishment charges of Rs. 14,85,485-00 at 10 per cent of the cost of acquisition from the petitioner in the interest of justice.
Dated: January 1990
Advocate for Petitioner.