# 11 S.C.R. 701 M/S. ROYAL ORCHID HOTELS LIMITED AND ANOTHER v. G. JAYARAM REDDY AND ORS - **Citation:** [2011] 11 S.C.R. 701 - **Court:** Supreme Court of India - **Decided:** 2011-09-29 - **Case number:** Civil Appeal No. 7588 of 2005 - **Bench:** G.S. Singhvi, Sudhansu Jyoti Mukhopadhaya - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/11-s-c-r-701-m-s-royal-orchid-hotels-limited-and-another-v-g-jayaram-reddy-and-27190 - **Pages:** 43 ## Headnote CONSTITUTION OF IND/A, 1950: A B c Article 226 read with Article 136 - Limitation for filing of writ petition - Held: Though no period of limitation has been provided for filing a petition under Article 226, but one of the several rules of self-imposed restraint is that the High Court may not enquire into a belated or stale claim and may deny D relief to the petitioner if he is found guilty of /aches - Further, during the intervening period, rights of third parties may have crystallized - Interference by Supreme Court in such matters would be warranted only if it is found that the exercise of discretion by High Court was totally arbitrary or was based on E irrelevant consideration - In the instant case, the High Court in earlier writ petitions had nullified the acquisition on the ground of fraud and misuse of the provisions of the Act as instead of using the acquired land for the public purpose specified in the notifications u/ss 4 and 6 of Land Acquisition Act, it was transferred to private persons - When the writ F petitioner-respondent came to know that his land has a/so been transferred to a private entity, he made a grievance and finally approached the High Court - During the intervening period, he pursued his claim for higher compensation - Therefore, it cannot be said that he was sleeping over his right G and was guilty of /aches - Therefore, the discretion exercised by the High Court to entertain and decide the writ petition filed by the respondent on merits and allowing his claim cannot 701 H 9'02 SUPREME COURT REPORTS (2011] 11 S.C.R. A be said to be vitiated by any patent legal infirmity - Land Acquisition Act, 1894 - ss. 4 and 6. LAND ACQUISITION ACT, 1894: ss. 4 and 6 - Land acquired for public purpose - B Diversified to private persons and entities - Land owners approaching High Court challenging the acquisition proceedings and for restoring the land to them - Held: The power of eminent domain to compulsorily acquire the land of private persons cannot be over-stretched to legitimize a C patently illegal and fraudulent exercise undertaken for depriving the land owners of their constitutional right to property with a view to favour private persons - Therefore, the Corporation did not have the jurisdiction to transfer the land acquired for a public purpose to the companies and thereby D allow them to bypass the provisions of Part VII of the Act - The diversification of the purpose for which the land was acquired u/s 4(1) read withs. 6, clearly amounted to fraud on the power of eminent domain - High Court, therefore, quashed the notifications u/ss 4(1) and 6 in their entirety and E that judgment has become final - In the instant case, the land owner has succeeded in convincing the Division Bench of the High Court that the action taken by the Corporation to transfer his land to the private entity was wholly illegal, arbitrary and unjustified and there is no valid ground to interfere with the F impugned judgment - Administrative Law - Power of eminent domain. The State Government, at the instance of the Karnataka State Tourism Development Corporation (Corporation), issued notification dated 29.12.1981 uls G 4(1) and declaration u/s 6 of the Land Acquisition Act, 1894 acquiring the land admeasuring 37 acres 4 guntas of land comprised in various survey numbers including Survey No.122, for public purpose, namely, construction of Golf-cum-Hotel Resort near Bangalore Airport, H Bangalore to be raised by the Corporation. The Special ROYAL ORCHID HOTELS LIMITED AND ANR. v. G. 703 JAYARAM REDDY AND ORS. Land Acquisition Officer passed the award dated A 7.4.1986. However1 in the meeting of senior officers of the Bangalore Development Authority and the Corporation held on 13.1.1987, the Managing Director of the Corporation gave out that the Corporation did not have necessary finances for deposit of cost of the acquisition B and in furtherance of the decision taken in that meeting, agreements were executed by the Corporation con ## Text _Characters 0–39,980 of 84,556. This is a partial read: ask again with offset=39980 for what follows._ (2011) 11 S.C.R. 701 M/S. ROYAL ORCHID HOTELS LIMITED AND ANOTHER v. G. JAYARAM REDDY AND ORS. (Civil Appeal No. 7588 of 2005 SEPTEMBER 29, 2011. · [G.S. SINGHVI AND SUDHANSU JYOTI MUKHOPADHAYA, JJ.] CONSTITUTION OF IND/A, 1950: A B c Article 226 read with Article 136 - Limitation for filing of writ petition - Held: Though no period of limitation has been provided for filing a petition under Article 226, but one of the several rules of self-imposed restraint is that the High Court may not enquire into a belated or stale claim and may deny D relief to the petitioner if he is found guilty of /aches - Further, during the intervening period, rights of third parties may have crystallized - Interference by Supreme Court in such matters would be warranted only if it is found that the exercise of discretion by High Court was totally arbitrary or was based on E irrelevant consideration - In the instant case, the High Court in earlier writ petitions had nullified the acquisition on the ground of fraud and misuse of the provisions of the Act as instead of using the acquired land for the public purpose specified in the notifications u/ss 4 and 6 of Land Acquisition Act, it was transferred to private persons - When the writ F petitioner-respondent came to know that his land has a/so been transferred to a private entity, he made a grievance and finally approached the High Court - During the intervening period, he pursued his claim for higher compensation - Therefore, it cannot be said that he was sleeping over his right G and was guilty of /aches - Therefore, the discretion exercised by the High Court to entertain and decide the writ petition filed by the respondent on merits and allowing his claim cannot 701 H 9'02 SUPREME COURT REPORTS (2011] 11 S.C.R. A be said to be vitiated by any patent legal infirmity - Land Acquisition Act, 1894 - ss. 4 and 6. LAND ACQUISITION ACT, 1894: ss. 4 and 6 - Land acquired for public purpose - B Diversified to private persons and entities - Land owners approaching High Court challenging the acquisition proceedings and for restoring the land to them - Held: The power of eminent domain to compulsorily acquire the land of private persons cannot be over-stretched to legitimize a C patently illegal and fraudulent exercise undertaken for depriving the land owners of their constitutional right to property with a view to favour private persons - Therefore, the Corporation did not have the jurisdiction to transfer the land acquired for a public purpose to the companies and thereby D allow them to bypass the provisions of Part VII of the Act - The diversification of the purpose for which the land was acquired u/s 4(1) read withs. 6, clearly amounted to fraud on the power of eminent domain - High Court, therefore, quashed the notifications u/ss 4(1) and 6 in their entirety and E that judgment has become final - In the instant case, the land owner has succeeded in convincing the Division Bench of the High Court that the action taken by the Corporation to transfer his land to the private entity was wholly illegal, arbitrary and unjustified and there is no valid ground to interfere with the F impugned judgment - Administrative Law - Power of eminent domain. The State Government, at the instance of the Karnataka State Tourism Development Corporation (Corporation), issued notification dated 29.12.1981 uls G 4(1) and declaration u/s 6 of the Land Acquisition Act, 1894 acquiring the land admeasuring 37 acres 4 guntas of land comprised in various survey numbers including Survey No.122, for public purpose, namely, construction of Golf-cum-Hotel Resort near Bangalore Airport, H Bangalore to be raised by the Corporation. The Special ROYAL ORCHID HOTELS LIMITED AND ANR. v. G. 703 JAYARAM REDDY AND ORS. Land Acquisition Officer passed the award dated A 7.4.1986. However1 in the meeting of senior officers of the Bangalore Development Authority and the Corporation held on 13.1.1987, the Managing Director of the Corporation gave out that the Corporation did not have necessary finances for deposit of cost of the acquisition B and in furtherance of the decision taken in that meeting, agreements were executed by the Corporation conveying the land to private entities. This was challenged by the land owners, namely, Mrs. Behroze Ramyar Batha, Annaiah and Smt. H.N. Lakshmamma, before the High c Court in writ petitions which were dismissed by the Single Judge of the High Court on the ground of delay. However, on appeal, the Division Bench of the High Court, allowed the claim of the land-owners and directed their lands to be returned to them subject to certain D conditions. As regards the land admeasuring 2 acres 30 guntas comprised in Survey No.122, respondent No.1 and his brothers filed applications u/s 18 of the Act for making reference to the court for enhancement of the E compensation. During the pendency of reference, the Corporation invited bids for allotment of 5 acres of land including 2 acres 30 guntas belonging to respondent No.1 and his brothers for putting up a tourist resort and executed a registered lease deed dated 9.1.1992 in favour F of Mis. 'URL' (predecessor of appellant no.1 in C.A. No. 7588 of 2005) purporting to lease out 5 acres of land for a period of 30 years on an annual rent of Rs.1, 11,111/- per acre for the first .10 years. The brothers of respondent No.1 filed Writ Petition Nos.2379 and 2380 of 1993 G seeking to quash the acquisition of land measuring 0.29 guntas and 0.38 guntas respectively, which came to their share in the family partition effected in 1968. They relied upon the judgmenp of the Division Bench in the cases of ·Mrs. Behroze Ramyar Bath a and Smt. H. N. H 704 SUPREME COURT REPORTS [2011] 11 S.C.R. A Lakshmamma and pleaded that once the acquisition had been quashed at the instance of other landowners, the acquisition of their land was also liable to be annulled. The Single Judge distinguished the cited cases and dismissed the writ petitions holding that the petitioners B did not question the acquisition for a period of almost two years and approached the High Court after long lapse of time c-ounted from the date of acquisition. The writ appeals filed by the brothers of respondent no. 1 were summarily dismissed by the Division Bench of the High c Court and their special leave petitions were also dismissed by Supreme Court. Respondent no. 1 filed a separate writ petition seeking to quash the notifications dated 29.12.1981 and 16.4.1983 insofar as the same related to the land D admeasuring 1 acre 3 guntas comprised in Survey No.122 and for issue of a mandamus to the appellants to redeliver possession of the said land to him. The Single Judge, ultimately, dismissed the writ petition holding that respondent no.1 approached the court after a long lapse E of time. The Division Bench of the High Court allowed the writ appeal of respondent no. 1 and quashed the acquisition of land measuring 1 acre 3 guntas comprised in Survey No.122. F In the instant appeals the questions for consideration before the Court were: (i) whether the land acquired by the State Government at the instance of the Karnataka State Tourism Development Corporation (Corporation) for the specified purpose i.e. Golf-cumG Hotel Resort near Bangalore Airport, Bangalore could be transferred by the Corporation to a private individual and corporate entities (ii) whether the Division Bench of the High Court committed an error by granting relief to respondent No.1 despite the fact that he filed writ petition after long lapse of time and the explanation given by him H ROYAL ORCHID HOTELS LIMITED AND ANR. v. G. 705 JAYARAM REDDY AND ORS. was found unsatisfactory by the Single Judge, who A decided the writ petition after remand by the Division Bench; (iii) whether the discretion exercised by the Division Bench of the High Court to ignore the delay in filing of writ petition is vitiated by any patent error or the reasons assigned for rejecting the appellants' objection B of delay are irrelevant and extraneous; and (iv) whether the High Court was justified in directing restoration of land to respondent No.1. Dismissing .the appeals, the Court HELD: 1.1. Although, framers of the Constitution have not prescribed any period .of limitation for filing a petition under Article 226 of the Constitution of India and c the power conferred upon the High Court to issue to any person or authority including any Government, 0 directions, orders or writs is not hedged with any condition or constraint, the superior Courts have evolved several rules of self-imposed restraint including the one that the High Court may not enquire into belated or stale claim and may deny relief to the petitioner if he is found E guilty of laches. The principle underlying this rule is that the one who is not vigilant and does not seek intervention of the High Court within reasonable time from the date of accrual of cause of action or alleged violation of constitutional, legal or other right is not F entitled to relief under Article 226 of the Constitution. Another reason for the High Court's refusal to entertain belated claim is that during the intervening period rights of third parties may have crystallized and it will be inequitable to disturb those rights at the instance of a G person who has approached the court after long lapse of time and there is no cogent explanation for the delay. However, no hard and fast rule can be laid down and no straigl1tjacket formula can be evolved for deciding the question of delay/laches and each case has to be decided H on its own facts. [para 17) [734-B-F] 706 SUPREME COURT REPORTS [2011] 11 $.C.R. A Dehri Rohtas Light Railway Company Limited v. District Board, Bhojpur 1992 (2) SCR 155 = (1992) 2 SCC 598; Ramchandra Shankar Deodhar v. State of Maharashtra 197 4 (2) SCR 216 = (1974) 1 SCC 317; and Shan.kara· Cooperative Housing Society Lim.ited v. M. Prabhakar and B others (2011) 5 sec 607 - relied on. Industrial Development & Investment Company Private Limited v. State of Maharashtra AIR 1989 Bombay 156 - referred to. C Administrative Law by WH.R. Wade and De Smith and Ker - referred to 1.2. Another principle of law is that in exercise of power under Article 136 of the Constitution, this Court 0 would be extremely slow to interfere with the discretion exercised by the High Court to entertain a belated petition under Article 226 of the Constitution of India. Interference in such matters would be warranted only if it is found that the exercise of discretion by the High E Court was totally arbitrary or was based on irrelevant consideration. [para 21) [737-H; 738-A] F Smt. Narayani Debi Khaitan v. State of Bihar (C.A. No.140 of 1964 decided on 22.9.1964) - 1964 SCJ (Blue Print) September 283 - relied on. 1.3. In the instant case, in the writ petition filed by respondent No.1, he had not only prayed for quashing of the acquisition proceedings, but also prayed for restoration of the acquired land on the ground that G instead of using the same for the public purpose specified in the notifications issued ulss 4(1) and 6 of the Land Acquisition Act, 1894 the Corporation had transferred the same to private persons. Respondent No.1 and other landowners may not be having any H serious objection to the acquisition of their land for a ROYAL ORCHID HOTELS LIMITED AND ANR. v. G. 707 JAYARAM REDDY AND ORS. public purpose and, therefore, some of them not only A accepted the compensation, butalso filed applications u/ s 18 of the Act for determination of market value by the court. However, when it was discovered that the acquired land has been transferred to private persons, they sought intervention of the court and in the three cases, the B Division Bench of the High Court nullified the acquisition on the ground of fraud and misuse of the provisions of the Act. [para 22) [739-B-D] 1.4. Insofar as the land of respondent No.1 is C concerned, the same was advertised in 1987 along with other parcels of land (total measuring 5 acres) and the Corporation executed lease in favour of the predecessor of appellant No.1 in 1992. However, no material has been placed on record to show that the said exercise was undertaken after issuing notice to the landowners. When D respondent No.1 discovered that his land has bt;!en transferred to private entity, he made grievance and finally approached the High Court. During the intervening period, he pursued his claim for higher compensation. Therefore, it cannot be said that he was sleeping over his E right and was guilty of laches. [para 23) [739-F-G] 1.5. A reading of the impugned judgment shows that the Division Bench of the High Court adverted to all the facts, which had bearing on the issue of delay including F the one that on· the advice given by an advocate, respondent No.1 had availed other remedies; and opined that the delay had been adequately explained. Thus, it cannot be said that the discretion exercised by the High Court to entertain and decide the writ petition filed by G respondent No.1 on merits is vitiated by any patent legal infirmity. [para 24] [739-H; 740-A-B] 1.6. It is true that the writ petitions filed by the brothers of respondent l\lo.1 had been dismissed by the H 708 SUPREME COURT REPORTS [2011) 11 S.C.R. A Single Judge on the ground of delay and the writ appeals and the special leave petitions filed against the order of the Single Judge were dismissed by the Division Bench of the High Court and this Court respectively, but that could not be made the basis for denying relief to B respondent No.1 because his brothers had neither questioned the diversification of land to private persons nor did they pray for restoration of their respective shares. Besides, summary dismissal of special leave petitions did not amount to this Court's approval of the c view taken by the High Court on the legality of the acquisition and transfer of land to private persons. [para 24] [740-C-D; 741-A] D Kunhayammed v. State of Kera/a 2000 ( 1 ) Suppl. SCR · 538 = (2000) 6 sec 359 - relied on. 2.1. It is pertinent to mention that the Committee of the Karnataka Legislature on Public Undertakings had in its Fifty-Second Report severely criticized the exercise undertaken by the Corporati-:>n in the matter of E acquisition of 39 acres 27 guntas land. [Para 15] [731-B] Fifty-Second report of Committee of the Karnataka Legislature on Public Undertaking - referred to. 2.2. In Mrs. Behroze Ramyar Batha's case, the Division F Bench of the High Court categorically held that the exercise undertaken for the acquisition of land was vitiated due to fraud. The Division Bench was also of the view that the acquisition could not be valid in part and invalid in other parts, but did not nullify all the transfers G on the premise that other writ petitions and a writ appeal involving challenge to the acquisition proceedings were pending. In Annaiah's case the same Division Bench specifically adverted to the issue of diversification of purpose and held that where the landowners are H ROYAL ORCHID HOTELS LIMITED AND ANR. v. G. 709 JAYARAM REDDY AND ORS. deprived of their land under the cover of public purpose A and there is diversification of land for a private purpose, it amounts to fraudulent exercise of the power of eminent domain. [para 25) [741-C-E] 2.3. The pleadings and documents filed by the parties 8 clearly show that the Corporation had made a false projection to the State Government that the land was needed for execution of tourism related projects. In the meeting of officers held on 13.1.1987, i.e. after almost four years of the issue of declaration u/s 6, the Managing Director of the Corporation candidly admitted that the C Corporation did not have the requisite finances to pay for the acquisition of land and that a developer who had already entered into agreements with some of the landowners for purchase of land, was prepared to provide funds subject to certain conditions including D transfer of 12 acres 34 guntas land to him for house building project. After 8 months, the Corporation passed resolution for transfer of over 12 acres land to the said developer. The Corporation also transferred two other parcels of land in favour of Bangalore International Centre E and the predecessor of appellant No.1. These transactions reveal the true design of the officers of the Corporation, who first succeeded in persuading the State Government to acquire huge chunk of land for a public purpose and then transferred major portion of the F acquired land to private individual and corporate entities by citing poor financial health of the Corporation as the cause for doing so. [para 26) [741-F-H; 742-A-8] 2.4. The Courts have repeatedly held that in exercise G of its power of eminent domain, the State can compulsorily acquire land of the private persons but this proposition cannot be over-stretched to legitimize a patently illegal and fraudulent exercise undertaken for depriving the landowners of their constitutional right to I-' 710 SUPREME COURT REPORTS [2011] 11 S.C.R. A property with a view to favour private persons. It needs no emphasis that if land is to be acquired for a company, the State Government and the company is bound. to comply with the mandate of the provisions contained in Part VII of the Act. [para 26) [742-C-D) B 2.5. Therefore, the Corporation. did not have the jurisdiction to transfer the land acquired for a public purpose to the companies and thereby allow them to bypass the provisions of Part VII. The diversification of C the purpose for which the land was acquired u/s 4(1) read with s. 6 clearly amounted to fraud on the power of eminent domain. This is precisely what the High Court has held in the judgment under appeal and this Court does not find any valid ground to interfere with the same more so because in Annaiah's case the High Court had D quashed the notifications issued u/ss 4(1) and 6 in their entirety and that judgment has become final. [para 26) [742-E-F] 2.6. In the instant case, respondent No.1 E independently questioned the acquisition proceedings and transfer of the acquired land to the predecessor of appellant No.1. He approached the High Court for vindication of his right and succeeded in convincing the Division Bench that the action taken by the Corporation F to transfer his land to the private entity was wholly illegal, arbitrary and unjustified. [para 27) [743-A-B] Om Parka sh v. Union of India 2010 (2 ) SCR 447 = (2010) 4 sec 17 - distinguished. G Case Law Reference: AIR 1989 Bombay 156 referred to para 4 1992 (2) SCR 155 relied ort para 18 H 1974 (2) SCR 216 relied on para 19 ROYAL ORCHID HOTELS LIMITED AND ANR. v. G. 711 JAYARAM REDDY AND ORS. (2011) 5 SCC 607 relied on para 19 A 1964 SCJ (Blue Print) September 283 relied on para 21 2000 (1) Suppl. SCR 538 relied on para 24 2010 (2) SCR447 distinguished para 27 CIVIL APPELLATE JURISDICTION : Civil Appeal No. 7588 of 2005. B From the Judgment & Order dated 13.4.2005 of the High c Court of Karnataka at Bangalore in W.A. No. 7772 of 1999 (LARES}. WITH Civil Appeal No. 7589 of 2005 D S.S. Naganand, Basava Prabhu S. Patil, Mahendra Anand, Rajesh Mahale, Raghavendra S. Srivastava, B. Subramonium Prasad, Anirudh Panganeria (for A.S. Bhasme}, G.V. Chandrashekar, N.K. Verma and T.N. Vishwanatha (for P.P. E Singh} for the appearing parties. The Judgment of the Court was delivered by G.S. SINGHVI, J. 1. Whether land acquired by the State Government at the instance of the Karnataka State Tourism F Development Corporation (for short, 'the Corporation') for the specified purpose i.e. Golf-cum-Hotel Resort near Bangalore Airport, Bangalore could be transferred by the Corporation to a private individual and corporate entities is the question which arises for determination in these appeals filed against the G judgment of the Karnataka Higb Court whereby the acquisition of land measuring 1 acre 3 guntas comprised in Survey No.122 of Kodihalli village, Bangalore South Taluk was quashed. H 712 SUPREME COURT REPORTS (2011] 11 S.C.R. A The facts relating to the acquisition of land and details of the 3 cases decided by the High Court in 1991: 2. On a requisition sent by the Corporation, the State Government issued notification dated 29.12.1981 under B Section 4(1) of the Land Acquisition Act, 1894 (for short, 'the Act') for the acquisition of 39 acres 27 guntc;s land comprised in various survey numbers including Survey No.122 of Kodihalli and Challaghatta villages, Bangalore South Taluk. After considering the reports submitted by the Special Deputy C Commissioner, Bangalore under Section 5A(2) and Section 6(1 A) (added by the Karnataka Act No.17 of 1961 ), the State Government issued declaration under Section 6 in respect of 37 acres 4 guntas land. A combined reading of the two notifications makes it clear that the public purpose for which land was sought to be acquired was to establish Golf-cum-Hotel D Resort near Bangalore Airport, Bangalore by the Corporation. The Special Land Acquisition Officer passed award dated 7.4.1986. However, as will be seen hereinafter, instead of utilizing the acquired land for the purpose specified in the notifications or for any other public purpose, the Corporation E transferred the same to private parties. 3. One Dayananda Pai, a real estate developer, who is said to have entered into agreements with the landowners for purchase of land comprised in Survey Nos.160/1, 160/2, 160/ F 3, 160/4, 163/1, 163/2, 164/1, 164/2, 165/1, 165/2, 165/3, 165/ 4, 165/6, 166/1, 166/2, 166/3, 166/4, 153, 159, 167 for putting up a group housing scheme and obtained approval from the Bangalore Development Authority appears to be the person behind the move made by the Corporation for the acquisition G of land for execution of tourism related projects including Golfcum-Hotel Resort. This is the reason why his role prominently figured in the meeting of senior officers of the Bangalore Development Authority and the Corporation held on 13.1.1987 to discuss the steps to be taken for securing possession of the H acquired land. In that meeting, Managing Director of the ROYAL ORCHID HOTELS LIMITED AND ANR. v. G. 713 JAYARAM REDDY AND ORS. [G.S. SINGHVI, J.] Corporation gave out that the Corporation does not have A necessary finances for deposit of cost of the acquisition and Dayananda Pai had agreed to provide funds subject to the furnishing of bank guarantee by the Deputy Commissioner on behalf of the Corporation and release of 12 acres 34 guntas in his favour for the purpose of implementing the group housing scheme. In furtherance of the decision taken in that meeting, B an agreement dated 8.5.1987 was executed by the Corporation in favour of Dayananda Pai conveying him 12 acres 34 guntas of the acquired land. Likewise, 6 acres 8 guntas land was transferred to Bangalore International Centre c and 5 acres including 2 acres 30 guntas land belonging to respondent No.1 and his brothers, G. Ramaiah Reddy and G. Nagaraja Reddy, was leased out to M/s. Universal Resorts Limited (predecessor of appellant No.1 in Civil Appeal No. 7588 of 2005). 4. Mrs. Behroze Ramyar Batha and others, who owned different parcels of land which were transferred by the Corporation to Dayananda Pai filed writ petitions questioning D the acquisition proceedings. The learned Single Judge dismissed the writ petitions on the ground of delay. The Division E Bench of the High Court reversed the order of the learned Single Judge and quashed the acquisition proceedings qua land of the appellants in those cases. The Division Bench referred to the minutes of the meeting held on 13.1.1987, resolution dated 10.9.1987 passed by the Corporation and F observed: " ........... We have made our comments then and there. Nevertheless we cannot refrain our feelings in commenting upon the same once over again. We cannot think of G anything more despicable than the candid admission by the Tourism Development Corporation that they did not have the necessary funds required to meet .the cost of acquisition. If really there was no amount available, how the acquisition was embarked upon, we are left to the H A B c D E F G H 714 SUPREME COURT REPORTS (2011] 11 S.C.R. realm of guess. Not only that, this particular resolution makes it appear that respondent-5 Dayanand Pai was the only saviour of the Karnataka State Tourism Development Corporation from the difficult situation. For our part we do not know what exactly was the difficulty then, Land acquisition proceedings were complete in all material respects. All that required was possession to be taken. Merely because there are Writ Petitions or some cases pending, does it mean that the Tourism Development Corporation must plead helplessness? Does not it have the wherewithal to contest these litigations? Is it not a part of the Government although it be a Corporation? What is it that it wants to do? In consideration of the withdrawal of the cases which were thorns in the flesh of the Tourist Development Corporation, he is giXten of a silver salver an extent of 12 acres 31 guntas of land. To say the least, it appears right from the beginning respondent-5 Dayananda Pai had an eye on these lands. That would be evident because though he entered into an agreement on 30-9-1981 with the land-owners it never occurred to him to put forth any objection during Section 5A Enquiry, nor again at any point of time did he take any interest. He was patiently waiting for somebody to take chestnut out of the fire so that he could have the fruits thereof That is also evident from the Resolution dated 13-1-1987 wherein it is stated as under: "Sri Dayananda Pai was very particular that the block of land comprising of 12 acres 34 guntas comprising the following Sy.Nos. 16011, 16012, 16013, 16014, 16311, 16312, 16411, 16412, 16511, 16512, 16513, 16514, 16516, 16611, 16612, 16613, 16614, 153, 159, 167 should be released to him as he has got a firm commitment for putting up a Group Housing Scheme on this land." Yes. He might have had a commitment. What then is the ROYAL ORCHID HOTELS LIMITED AND ANR. v. G. 715 JAYARAM REDDY AND ORS. [G.S. SINGHVI, J.] purpose of eminent domain? Eminent domain, as we A consider and as it is settled law as was said by Nichols, is an attribute of sovereignty. Where the Deputy Commissioner is convinced that the lands are to be acquired for a public purpose notwithstanding the fact that the rig!1ts of the private parties might be interfered with, B the acquisition will have to be gone through. In other words, the private purpose must be subservient to public purpose. Forget all that. In order to enable Dayananda Pai to fulfil his commitment if valuable portion of the lands acquired viz., 12 acres 31 guntas is transferred in his favour we c cannot find a more vivid case of fraud on power than this. We hold so because the apparent object as evidenced by Section 4(1) Notification is a public purpose. If really as was sought to be made out by the Resolution dated 13-1-1987 the Tourism Development Corporation was 0 anxious to have these lands and the delay was telling upon it, certainly selling away the lands is not the solution as we could see. Therefore, there has been a clear diversification of purpose. Not only an extent of 12 acres 31 guntas have been sold away in favour of respondentE 5 Dayanand Pai as has been !loted in the narration of facts, 8 acres had come to be leased for Bangalore International Centre and another 5 acres had come to be leased for the amusement park. Why all these if the Tourism Development Corporation does not have funds to meet the cost of acquisition? Therefore it appears to F us this is nothing more than a conspiracy to deprive the owners of the lands by use of the power of the eminent domain which is to be used for an avowedly public purpose and for strong compelling reasons and not whimsically or to satisfy the private needs of an G individual." (emR~sis supplied) ' ' The Division Bench then referred to some judicial H 716 SUPREME COURT REPORTS [2011) 11 S.C.R. A precedents including the judgment in Industrial Development & Investment Company Private Limited v. State of Maharashtra AIR 1989 Bombay 156 and observed: B \C D E F G H " ........... But, in the case on hand what is most striking is negotiations took place even before taking possession of lands. On 8-5-1987 agreement was entered into and in the wake of taking possession on 12-11-1987, transfers are made on 23-3-1988 and 24-3-1988. This is where we consider that with the motive of securing lands to respondent-5 Dayanand Pai, acquisition had come to be embarked upon. This was the reason why we conclude that this is a case of fraudulent exercise of power. It is no consolation to say that the owners of lands have accepted the compensation because in Industrial Development & Investment Co. Pvt. Ltd. v. State of Maharashtra it is stated thus: · " ... The State itself which has acted illegally and without jurisdiction cannot plead that it should be allowed to retain the sum awarded in its favour by the Land Acquisition Officer. Respondent 5 who is described as the owner of the land has conveyed to us that it would submit to the order of the Court. We also record the submission of Mr. Dhanuka, learned Counsel for the appellants, that in the event the other awardees who were awarded paltry sums by the award under Section 11 Land Acquisition Act, do not refund sums withdrawn, the appellants are prepared to refund and/or deposit the said sums. Therefore, we conclude that on the ground of delay the appellants could not be deprived of the relief to which they were otherwise entitled." The ratio of this case squarely applies here. Nor again, in our considared opinion, the previous Decisions upholding the validity of the acquisitions would be of any value because as we have observed earlier the causes of action ROYAL ORCHID HOTELS LIMITED AND ANR. v. G. 717 JAYARAM REDDY AND ORS. [G.S. SINGHVI, J.) arose only on 23-3-1988 and 24-3-1988 when the A transfers came to be effected, or on subsequent days when-leases had come to be effected. Therefore, where in ignorance of these transactions if compensation had come to be accepted we should not put that against such of those land owners. But that question does not arise in B this case. Therefore, we shall relegate the same to the other cases. Lastly, what remains to be seen is what is the effect of fraud. Does it render the entire acquisition bad or is it to C be held to be bad only in so far as these appellants are concerned? We are of the view that if fraud unravels everything, it cannot be valid in part and invalid in other parts. But, we need not go to that extent because there are other Writ Petitions including a Writ Appeal in which this question may arise direct. We do not want to prejudice D those petitioners/appellants. Therefore, this question we relegate to those cases. n (emphasis supplied) 5. Annaiah and others, who owned land comprised in Survey Nos.146/1, 156/1, 147/1, 147/2 and 158, filed Writ Petition Nos.9032 to 9041 of 1988 questioning the acquisition E F of their land. The same were dismissed by the learned Single Judge on the ground of delay. Thereafter, they filed Writ Petition Nos.19812 to 19816 of 1990 for issue of a mandamus to the State Government and the Corporation to return the land by asserting that the same had been illegally transferred to private persons. They pleaded that the acquisition proceedings were vitiated due to mala tides and misuse of power for oblique and collateral purpose. Those petitions were allowed by the Division G Bench of the High Court vide order dated 18.9.1991, the relevant portions of which are extracted below: "In our considered view, it is one thing to say that acquisition is actuated by legal malafides, but it is totally H 718 A B c D E F G H SUPREME COURT REPORTS [2011] 11 S.C.R. different thing to say that acquisition for all intents and purposes is embarked on an apparent public purpose and ultimately that purpose is not served. In other words, what we mean is their where the lands have been acquired, undoubtedly for public purpose for the benefit of the Karnataka ·State Tourism Development Corporation and after acquisition, even before taking possession, if agreements were entered into on the ground that the Karnataka State Tourism Development Corporation did not have enough money to meet the cost of acquisition and that it would be better to get rid of the litigation by selling away the same or leasing away the properties and thereby give it to private individuals. We are of the view that it is a clear case of diversification of purpose. It requires to be carefully noted that it is not for any public purpose. But it is a diversification to a private purpose. Therefore, to the extent the acquisition proceeded with even up to the stage of declaration under Section 6 or to certain point beyond that, it could not be validly challenged on the ground that it is not for public purpose. But where under the cover of public purpose, the owners are dispossessed and there is diversifications, we hold that it is fraudulent exercise of the power of eminent domain. This is exactly • the view we have taken in W.A. Nos.1094 to 1097of1987. This aspect of the matter was not before our learned brother Justice Bopanna. All that was stated was the acquisition, namely, Notification under Section 4(1) culminating in Declaration under Section 6 of the Act was not actuated by legal malafides. That is far different from diversification for public purpose. It might be that agreements dated 23.03.1988 and 24.03.1988 might have been buttressed in respect of legal malafides. On that score we cannot conclude that the issue as dealt with by us in W.A. Nos. 1094 to 1097 of 1987 was ever before Justice· Bopanna. Therefore, we are unable to agree with Mr. Datar that the earlier ruling of Justice Bopanna in W.P. Nos.9032 to 9041 of 1988 dated 8th July 1988 would ROYAL ORCHID HOTELS LIMITED AND ANR. v. G. 719 JAYARAM REDDY AND ORS. [G.S. SINGHVI, J.] constitute res judicata so as to deprive the Petitioners of A the benefit of the Judgment. The cause of action challenging the validity of acquisition arose not after issue of final notification under section 6 but after the alienation of lands in favour of third parties B and thus the Corporation in whose favour the lands have been acquired have been deviated. In my opinion the decision rendered in Mrs. Behroze Ramyar Batha is fully applicable to the facts of this case. It is true that acquisition is challenged after quite a long time to final notification. But C challenge is not made to the legality of the acquisition. The challenge is to deviation of the purpose for which the land was acquired. That then is the eminent domain was the question posed by the Division Bench and answered in the words of Nichols as an attribute of sovereignty. Acquisition in this case is actuated by malafides. Though lands were D acquired for public purpose as declared in 6(1) notification and possession was taken for the said public purpose, agreements were entered into even before possession was taken to part with substantial portion of the land. Where object of providing lands to a private . E individuals, if acquisition proceedings are reported to or power of eminent domain comes to be exercised, it would nothing more than fraud on power. There it is a case of fraud it would unrevea/ everything. It cannot be valid in part and invalid in other parts (See Lazarus Estates Ltd. F VS. Gurdial Singh - AIR 1980 SC 319: Pratap Singh v. State of Punjab - AIR 1964 SC 73: Narayana Reddy v. State of Karnataka- ILR 1991 KAR. 2248.) Therefore the question of limitation does not arise in such cases. Where the actions are found to be ma/a fide, courts haye G not failed to strive down those actions as laid down by the. Supreme Court in Pratap Singh v. State of Punjab's case cited supra." (emphasis supplied) H A B 720 SUPREME COURT REPORTS [2011] 11 S.C.R. The operative portion of the order passed in that case is extracted below: "In the result, we allow these writ petitions quash the notification issued under Section 4(1) and the declaration under Section 6 of the Act and all subsequent proceedings." 6. Smt. H.N. Lakshmamma and others also questioned the acquisition of their land comprised in Survey Nos.165/3 and 166/4 of Kodihalli village. The writ petition filed by them was C dismissed. On appeal, the Division Bench of the High Court D E framed the following question: "Whether in view of the judgment cited above, namely, W.A. Nos.1094 & 1095/87 and W.P. 19812 to 19816/90 wherein we have held that the land acquisition proceedings concerning the very same notification and declaration are liable to be set aside on the ground of fraudulent exercise of power, could be extended in favour of the appellants?" The Division Bench relied upon the passages from Administrative Law by W.H.R. Wade and De Smith and Ker on Fraud and rejected the plea of the respondents (appellants herein) that by having accepted the amount of compensation, F the writ petitioners will be deemed to have acquiesced in the acquisition proceedings. The Division Bench then referred to the judgment of the Bombay High Court in Industrial Development & Investment Company Private Limited v. State of Maharashtra (supra) and the order passed in Writ Petition G Nos. 19812 - 19816 of 1990 and held that the appellants are entitled to return of land subject to the condition of deposit of the amount of compensation together with interest at the rate of 12% per annum. H ROYAL ORCHID HOTELS LIMITED AND ANR. v. G. 721 JAYARAM REDDY AND"ORS. [G.S. SINGHVI, J.] Facts relating to transfer of land owned by respondent A No.1 and his brothers and details of the cases filed by them: 7. After receiving compensation in respect of 2 acres 30 guntas land comprised in Survey No.122 of Kodihalli village, 8 respondent No.1 and his brothers filed applications under Section 18 of the Act for making reference to the Court for determination of the compensati