# LTD v. STATE OF KARNATAKA AND OTHERS

- **Citation:** [2012] 3 S.C.R. 295
- **Court:** Supreme Court of India
- **Decided:** 2012-02-02
- **Case number:** Civil Appeal Nos. 7425-7426 of 2002
- **Bench:** G.S. Singhvi, Asok Kumar Ganguly
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/ltd-v-state-of-karnataka-and-others-28254
- **Pages:** 93

## Headnote

Land Acquisition Act, 1894:
c
ss. 4, 6 and 3(f)(vi) - Acquisition of land for public purpose
......
for appellant-Co-operative Housing Society - Agreement
entered into between the Housing Society and the State
Government - Issuance of notification u/s. 4(1) and 6 -
Passing of award - Quashing of acquisition of land by the
D
High Court on the ground that it was vitiated due to violation
of the provisions of the Act and the manipulation done by
Housing Society through Estate Agent while acquiring the
land - On appeal, held: Agreement entered into between the
Housing Society and the State Government did not contain
E
any inkling about the housing scheme framed by the Housing
Society - It merely mentioned about the proposed formation
of sites and construction of houses for the members of the
Housing Society and payment of cost for the acquired land -
Housing Society did not frame any housing scheme and did
F
not obtain approval by the State Government before the
issuance of notification uls. 4(1) - No material produced
before the High Court or Supreme Court to show that a
scheme had been framed and approved by the State
Government - Thus, the High Court rightly held that in the
absence of housing scheme framed by the housing society,
G
acquisition of land belonging to the land owner was not for
public purpose as defined in s. 3(f)(vi) - Housing society
executed agreement with the Estate Agent for facilitating the
acquisition of land in lieu of payment of more than rupees five
295
H
296
SUPREME COURT REPORTS
[2012] 3 S.C.R.
A crores - Said amount was charged by Estate Agent.for
manipulating the State Apparatus for facilitating the
acquisition of land and sanction of layout etc. without any
obstruction - Thus, such agreement is violative of s. 23 of the
1872 Act - However, the member of the society who had
B already constructed their houses on the land allotted to them
allowed to negotiate with. the State for purchase of their land
at the prevailing market price to the rightful land owners -
Contract Act, 1872.
C
ss. 3(f), 3(f)(vi) - Expression 'public purpose' - Meaning
and scope of - Held: Expression 'public purpose' contained
in s. 3(f) is inclusive - Acquisition of land for carrying out any
education, housing, health or slum clearance scheme by a
..
registered society or a Co-operative society can be regarded
as an acquisition for public purpose only if the Scheme has
D been approved by the appropriate Government before
initiation of the acquisition proceedings - In case acquisition
of land is for any purpose other than public purpose as
defined in s. 3(f), then provisions of Part VII would be attracted
E
and mandate thereof would have to be complied with.
ss. 3(f)(vi), 41 - Acquisition of land for public purpose -
Housing scheme of Co-operative housing society -
Agreement signed by the State Government with the cooperative society - Nominal contribution of Rs. 1001- by the
F Special Deputy Commissioner -
Held: The nominal
contribution cannot be construed as State Government's
implicit approval of the housing scheme which had never
been prepared.
s. 5A - Opportunity of hearing under - Finding by
G Division Bench of High Court that land owner not given
opportunity of hearing - Correctness of - Held: Land owner
was given opportunity of hearing as her son appeared before
the Special Land Acquisition Officer along with his· advocate
- Said error not sufficient to nullify the conclusion by the
H Division Bench of the High Court that land acquisition was not
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 297
v. STATE OF KARNATAKA
for a public purpose and the exercise undertaken by the State
A
Government was vitiated due to the influence of the
extraneous considerations.
Mysore High Court Act, 1884 - ss. 17, 18 and 19 -
Karnataka High Court Act, 1961 - ss. 4, 9 and 10 - Writ 8
appeal -
Jurisdiction of High Court -
Division Bench
sustaining the order of Single Judge on a new ground by
relying upon the Supreme Court's decision - Challenge to

## Text

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[2012) 3 S.C.R. 295
BANGALORE CITY COOPERATIVE HOUSING SOCIETY
A
LTD.
v.
STATE OF KARNATAKA AND OTHERS
(Civil Appeal Nos. 7425-7426 of 2002)
FEBRUARY 02, 2012
B
[G.S. SINGHVI AND ASOK KUMAR GANGULY, JJ.]
Land Acquisition Act, 1894:
c
ss. 4, 6 and 3(f)(vi) - Acquisition of land for public purpose
......
for appellant-Co-operative Housing Society - Agreement
entered into between the Housing Society and the State
Government - Issuance of notification u/s. 4(1) and 6 -
Passing of award - Quashing of acquisition of land by the
D
High Court on the ground that it was vitiated due to violation
of the provisions of the Act and the manipulation done by
Housing Society through Estate Agent while acquiring the
land - On appeal, held: Agreement entered into between the
Housing Society and the State Government did not contain
E
any inkling about the housing scheme framed by the Housing
Society - It merely mentioned about the proposed formation
of sites and construction of houses for the members of the
Housing Society and payment of cost for the acquired land -
Housing Society did not frame any housing scheme and did
F
not obtain approval by the State Government before the
issuance of notification uls. 4(1) - No material produced
before the High Court or Supreme Court to show that a
scheme had been framed and approved by the State
Government - Thus, the High Court rightly held that in the
absence of housing scheme framed by the housing society,
G
acquisition of land belonging to the land owner was not for
public purpose as defined in s. 3(f)(vi) - Housing society
executed agreement with the Estate Agent for facilitating the
acquisition of land in lieu of payment of more than rupees five
295
H
296
SUPREME COURT REPORTS
[2012] 3 S.C.R.
A crores - Said amount was charged by Estate Agent.for
manipulating the State Apparatus for facilitating the
acquisition of land and sanction of layout etc. without any
obstruction - Thus, such agreement is violative of s. 23 of the
1872 Act - However, the member of the society who had
B already constructed their houses on the land allotted to them
allowed to negotiate with. the State for purchase of their land
at the prevailing market price to the rightful land owners -
Contract Act, 1872.
C
ss. 3(f), 3(f)(vi) - Expression 'public purpose' - Meaning
and scope of - Held: Expression 'public purpose' contained
in s. 3(f) is inclusive - Acquisition of land for carrying out any
education, housing, health or slum clearance scheme by a
..
registered society or a Co-operative society can be regarded
as an acquisition for public purpose only if the Scheme has
D been approved by the appropriate Government before
initiation of the acquisition proceedings - In case acquisition
of land is for any purpose other than public purpose as
defined in s. 3(f), then provisions of Part VII would be attracted
E
and mandate thereof would have to be complied with.
ss. 3(f)(vi), 41 - Acquisition of land for public purpose -
Housing scheme of Co-operative housing society -
Agreement signed by the State Government with the cooperative society - Nominal contribution of Rs. 1001- by the
F Special Deputy Commissioner -
Held: The nominal
contribution cannot be construed as State Government's
implicit approval of the housing scheme which had never
been prepared.
s. 5A - Opportunity of hearing under - Finding by
G Division Bench of High Court that land owner not given
opportunity of hearing - Correctness of - Held: Land owner
was given opportunity of hearing as her son appeared before
the Special Land Acquisition Officer along with his· advocate
- Said error not sufficient to nullify the conclusion by the
H Division Bench of the High Court that land acquisition was not
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 297
v. STATE OF KARNATAKA
for a public purpose and the exercise undertaken by the State
A
Government was vitiated due to the influence of the
extraneous considerations.
Mysore High Court Act, 1884 - ss. 17, 18 and 19 -
Karnataka High Court Act, 1961 - ss. 4, 9 and 10 - Writ 8
appeal -
Jurisdiction of High Court -
Division Bench
sustaining the order of Single Judge on a new ground by
relying upon the Supreme Court's decision - Challenge to,
on the ground that the Division Bench did not have the
jurisdiction to decide the appeal relying upon the Supreme C
Court's judgment because that ground was not taken by the
Single Judge and should have remitted the matter - Held:
The ground is not sustainable since parties agreed for that
course - Thus, the Division Bench not acted in violation of
the provisions of the 1884 and 1961 Act.
Constitution of India, 1950 - Article 226 -
Land
acquisition - Challenge to, by filing writ petition after a Jong
delay - Explanation by land owner that she was hopeful that
after having withdrawn the acquisition in respect of one parcel
D
of land, the State Government would accept her prayer for
E
withdrawal of the acquisition in respect of adjoining land - Writ
petition dismissed by the High Court on the ground of delay
- Division Bench holding that land owner not guilty of /aches
- On appeal, held: Non-consideration of the vital facts and
documents by the Single Judge resulted in miscarriage of F
justice - Division Bench did not commit any error by holding
that the land owner was not guilty of /aches - Delay!Jaches.
Doctrines -
Doctrine of prospective overruling -
Invocation of - Acquisition of land by State Government for
the benefit of appellant-Cooperative Housing Society G
quashed by the High Court on the ground of violaUon of the
provisions of the Land Acquisition Act and the manipulations
made for the acquisition of land - Plea of the appellant that
the doctrine of prospective overruling be invoked since crores
of rupees spent for formation of layouts, 17191 plots allotted
H
298
SUPREME COURT REPORTS
[2012] 3 S.C.R.
A
to members and 200 already constructed, 50% land given to
Development Authority and some land given to Power
Transmission Corporation, such that people who have
already constructed houses would not suffer incalculable
harm - Held: Doctrine of prospective overruling cannot be
B invoked since it would result in conferring legitimacy to the
influence of money power over the rule of law, which is edifice
of the Constitution.
There was unprecedented increase in the population
of Bangalore City. Since it was not possible for the
C Bangalore Development Authority to meet the demand of
developed residential sites, the State Government
decided to encourage formation of private layouts by the
house building co-operative societies. The guidelines for
the approval of private layouts were revised. The
D appellant-Co-operative Housing Societies filed
representation to the State Government for the
acquisition of land for formation of a layout for its
members. The appellant entered into an agreement with
the Estate Agent 'RE' who promised to secure the
E acquisition of land on payment of the specific amount.
The State Level Co-ordination Committee (SLCC)
considered the case of the appellant and declared that it
was eligible for the acquisition of 208 acres 18 guntas
land.- The State Government directed the Deputy
F Commissioner, Bangalore to initiate acquisition
proceedings of 207 acres 29 guntas land at place 'V' and
'R' for the appellant by issuing notification under Section
4(1) of the 1894 Act. Thereafter, the appellant entered into
an agreement with the State Government. The Deputy
G Commissioner, Bangalore issued notification under
Section· 4(1) of the Land Acquisition Act, 1894 for the
acquisition of the land including the land comprised in
Survey Nos. 49 and 50/1 belonging to respondent No. 3
and Survey Nos. 7/1 and 8/1 belonging to the
H prede.cessor of 'PR' and others. The land owners-
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 299
v. STATE OF KARNATAKA
respondent No. 3 and 'PR' and others filed objections A
against the proposed acquisition of their land. Thereafter,
the Special Land Acquisition Officer issued declaration
under Section 6(1) and the same was published. During
the currency of the acquisition proceedings, an inquiry
was conducted into the membership of the appellant and s
other societies and it was found that they had admitted
ineligible persons as their members. Subsequently, the
Special Land Acquisition Officer, Bangalore passed an
award and determined market value of the acquired land.
The award was approved by the State Government. c
However, before the possession of the acquired land
could be taken, the State Government withdrew the
acquisition proceedings in respect of land comprised in
Survey No. 50/2. Respondent No. 3 made a representation
for withdrawal of the acquisition of Survey No. 49 but no 0
final decision was taken. After eighteen months of the
passing of the award, the State Government issued
Notification under Section 16(2) in respect of various
parcels of lands including Survey No. 49. The Special
Land Acquisition Officer handed over the possession of
150 acres 9% guntas of land at place 'V' and 'R' to the
E
appellant-Society. However, the entire exercise showing
taking over of possession of the respondents' land and
transfer thereof to the appellant was only on papers and
physical possession continued with them. Respondent
No. 3 challenged the acquisition of her land comprised
F
in Survey No. 49 by filing a writ petition. Appellant also
filed a writ petition questioning the legality of notification
issued under Section 48(1 ). The Single Judge of the High
Court dismissed the writ petition filed by respondent No.
3 on the ground of 2% years' delay between the issue of G
the declaration under Section 6(1) of the 1894 Act and
filing of the writ petition. The writ petition of the appellant
was dismissed holding that the State Government has
absolute power to withdraw the acquisition before the
possession of the acquired land can be taken. 'PR" and
H
300
SUPREME COURT REPORTS
(2012] 3 S.C.R.
A others also filed challenged the acquisition proceedings
but the same was allowed. Respondent No. 3 challenged
the order of the Single Judge in Writ Appeal. The
appellant, the State Government and the Special Land
Acquisition Officer also filed writ appeal. The Division
8 Benches of the High Court quashed the acquisition of
lands by the State Government for the benefit of the
appellant on the grounds of violation of the provisions of
the Land Acquisition Act, 1894 and the manipulations
made by the appellant through the Estate Agent for
C acquiring the land. Therefore, the appellants filed the
instant appeals.
Dis~issing the appeals, the Court·
HElD: 1.1 The framers of the Constitution have not
D prescribed any period of limitation for filing a petition
under Article 226 of the Constitution and it is only one of
the several rules of self-imposed restraint evolved by the
superior Courts that the jurisdiction of the High Court
under Article 226 of the Constitution, which is essentially
E an equity jurisdiction, should not be exercised in favour
of a person who approaches the Court after long lapse
of time and no cogent explanation is given for the delay.
[Para 8) [346-E-F]
1 :2 In the writ petition respondent no. 3 spell out the
F reasons for her seeking interventi.on of the High Court.
The said averments were not controverted by respondent
Nos. 1 and 2. Notwithstanding this, the Single Judge
refused to accept the explanation given by respondent
No. 3 that she was hopeful that after having withdrawn
G the acquisition in respect of one parcel of land, i.e., Survey
No. 50/2, the State Government would accept her prayer
for withdrawal of the acquisition in respect of Survey No.
49 as well. Unfortunately, the Single Judge altogether
ignored the fact that soon after the issue of the
H
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 301
v. STATE OF KARNATAKA
declaration under Section 6(1) of the 1894 Act and
A
notices under Sections 9 and 10 of the said Act, the writ
petitioner received letter that she should make herself
available for inspection of the land and the then Land
Acquisition Officer in_spected the site and felt satisfied
that the same could be deleted because it was an orchard
B
and was at the end of the area proposed to be acquired.
The Single Judge also omitted to consider that the
notices were issued to respondent No.3 informing her
about the proposed inspection of the site; that she made
a complaint to the Revenue Secretary that no one had
C
come for inspection; that yet another notice was received
by respondent No.3 for inspection would be held on
14.5.1990 but the concerned officer did not turn up; that
letters were sent by the Revenue Department to Special
Deputy Commissioner, Ban'galore requiring him to
submit report in the matter of withdrawal of acquisition;
D
and in writ petition, she had disclosed the cause for her
filing the writ petition after the long delay. Nonconsideration of these vital tac.ts and documents by the
Single Judge resulted in miscarriage of justice. The
Division Bench did not commit any error by holding that
E
respondent No.3 was not guilty of laches. [Para 12] [347H; 348-A-H]
Tilokchand Motichand v. H.B. Munshi (1969) 1 SCC 110
- relied on.
F
Ajodhya Bhagat v. State of Bihar (1974) 2 SCC 501;
State of Mysore v. V.K. Kangan (1976) 2 SCC 895: 1976 (1)
SCR 369; Pt. Girdharan Prasad Missir v. State of Bihar (1980)
2 sec 83; Hari Singh v. state of U.P. (1984) 2 sec 624:
G
1984 (3) SCR 417; Municipal Corpn. of Greater Bombay v.
Industrial Development Investment Co. (P) Ltd. (1996) 11
SCC 501 1996 (5) Suppl. SCR 551; Urban Improvement
Trust, Udaipur v. Bheru Lal (2002) 7 SCC 712: 2002 (2)
Suppl. SCR 512; Swaika Properties (P) Ltd. v. State of
H
302
SUPREME COURT REPORTS
[2012] 3 S.C.R.
A Rajasthan (2008) 4 SCC 695: 2008 (2 ) SCR 521;
Sheikhupura Transport Co. Ltd. v. Northern India Transport
Insurance Company (1971) 1 SCC 785; C.K. Prahalada v.
State of Karnataka (2008) 15 SCC 577: 2008 (7) SCR 852 - .
referred to.
B
2.1 All the co-operative societies have been classified
into two categories. The first category consists of the cooperative societies in which not less than 51% of the
paid-up share capital is held by the Central Government
or any State Government or partly by the Central
C Government and partly by one or more _State
Governments. The second category consists of the cooperative societies other than those falling within the
definiti.on of the expression 'corporation owned or
controlled by the State' [Section 3(cc)]. The definition of
D the term 'company' contained in Section 3(e) takes within
its fold a company as defined in Section 3 of the
Companies Act, 1956 other than a government company
referred to in clause (cc), a society registered under the
Societies Registration Act or under any corresponding
E law framed by the State legislature, other than a society
referred to in clause (cc) and a co-operative society
defined as such in any law relating to co-operative
societies for the time being in force in any State, other
than a co-operative society referred to in clause (cc). The
F definition of the expression 'public purpose' contained in
Section 3(f) is inclusive. As per clause (vi) of the
definition, the expression 'public purpose' includes the
provision of land for carrying out any educational,
housing health or slum clearance scheme sponsored by
G Government or by any authority established by
Government for carrying out any such scheme, or, with
the prior approval of the appropriate Government, by a
Local Authority, or a society registered under the
Societies Registration Act, 1860 or any corresponding
H law in force in a State or a co-operative society as defined
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 303
v. STATE OF KARNATAKA
in any law. relating to co-operative societies for the time
A
being in force in any State. To put it differently, the
acquisition of land for carrying out any education,
housing, health or slum clearance scheme by a registered
society or a co-operative society can be regarded as an
acquisition for public purpose only if the scheme has
B
been approved by the appropriate Government before
initiation of the acquisition proceedings. If the acquisition .
of land for a co-operative society, which is covered by the
definition of the term 'company' is for any purppse other
than public purpose as defined in· Section 3(f), then the c
provisions of Part VII would be attracted and mandate
thereof would have to be complied with. [Para 19] [357C-H; 358-A-C]
2.2 In the writ petition, respondent no. 3 averred that
"the acquisition of any land under the Act for the benefit D
of the 2nd respondent would not be for a public purpose
and would have to be in accordance with the provisions
contained in Part VII .of the Act. In any case, even if the
acquisition is for carrying out any educational, housing,
health or slum clearance scheme of the 2nd respondent,
E
the same shall be with the prior approval of the
appropriate Government. The appellant neither
controverted the said averments nor produced any
document before the High Court to show that it had
prepared a housing scheme and the same had been
F
approved by the State Government before the issue of
notification under Section 4(1) of the 1894 Act. Therefore,
the Division Bench of the High Court rightly held that the
acquisition was not for a public purpose as defined in
Section 3(f)(vi) of the 1894 Act. The submission that the
G
Division Bench of the High Court committed an error by
recording a finding on the issue of violation of Section
3(f)(vi) of the 1894 Act because respondent No. 3 had not
raised any such pl.ea in the writ petition, cannot be
accepted. [Para 20] [358-C-G]
H
304
SUPREME COURT REPORTS
[2012] 3 S.C.R.
A
2.3 A close and careful reading of the documentsrepresentation dated 7.12.1984 made by the Executive
Director of the appellant to the Minister of Revenue,
Government of Karnataka, letter dated 21.5.1988 sent by
the State Government to Deputy Commissioner,
B Bangalore to issue notification under Section 4(1) of the
1894 Act and agreement dated 7 .8.1988 entered into
between the Executive Director of the appellant and. the
State Government, reveals that altho.ugh, in the
representation made by him to the Revenue Minister, the
c Executive Director of the appellant did make a mention
that the object of the society is to provide house sites to
its members who belong to working class and other
backward. class people belonging to weaker class of
society and the members are poor and siteless people,
0 there was not even a whisper about any housing scheme.
The direction issued by the State Government to Deputy
Commissioner, Bangalore to issue the preliminary
notification for an extent of 207 acres 29 guntas land also
does not speak of any housing scheme. The agreement··
E entered into between the appellant through its Executive
Director and the State Government does not contain any·
inkling about the housing scheme framed by the
appellant. It merely mentions about the proposed
formation of sites and construction of houses for the
members of the appellant and payment of cost for the
F acquired land. The agreement also speaks of an inquiry
having been got made by the State Government in
conformity with the provisions of the 1894 Act and the
grant of consent for the acquisition of land for the benefit
of society's members. The agreement then goes on to
G say that the appellant shall pay to the Government the
entire costs of the acquisition of land and expenses.
Paragraph 2 of the conditions incorporated in the
agreement speaks of transfer of land to the society as to
vest in the company. Clause 9(a) of the agreement did
H provide for token contribution of Rs.100 by the Deputy
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 305
v. STATE OF KARNATAKA
Commissioner/Special Deputy Commissioner towards
A
the compensation to be determined by the Assistant
Commissioner/Special Land Acquisition Officer, but that
is not relatable to any housing scheme framed by the
appellant. It is, thus, evident that the appellant had not
framed any housing scheme and obtained its approval
B
before the issue of notification under Section 4(1) of the·
Act. [Para 21] [359-A-H; 360-A]
2.4 Although, the appellant may not have been
required to frame a scheme in strict conformity with the
provisions of the 1976 Act and the Karnataka Housing
C
Board Act, but it was bound to frame scheme disclosing
the total number of members eligible for allotment of sites,
the requirement of land including the size of the plots and
broad indication of the mode and manner of development
of the land as a layout. The State Government could then
D
apply mind whether or not the housing scheme framed
by the appellant should be approved. However, the
appellant did not produce any evidence before the High
Court to show that it had framed a housing scheme and
the same was approved by the State Government before
E
the issue of notification under Section 4(1) of the 1894
Act. Even before this Court, no material was produced to
show that, in fact, such a scheme had been framed and
approved by the State Government. Therefore, the
Division Bench of the High Court rightly referred to
F
Section 3(f)(vi) and held that in the absence of a housing
scheme having been framed by the appellant, the
acquisition of land belonging to respondent No. 3 was
not for a public purpose as defined in Section 3(f)(vi).
[Para 23] [361-8-E]
G
2.5 In the instant case, no housing scheme was
framed by the appellant which is sine qua non for treating
the acquisition of land for a co-operative society as an
acquisition for public purpose within the meaning of
H
306
SUPREME COURT REPORTS
[2012] 3 S.C.R.
A Section 3(f). Not only this, the appellant executed
agreement dated 21.2.1988 for facilitating the acquisition
of land in lieu of payment of a sum of rupees more than
5 crores. The Estate Agent engaged by the appellant had
promised that it would get the notifications issued under
B Sections 4(1) and 6(1) within four months and three
months respectively. The huge amount which the
appellant had agreed to pay to the Estate Agent had no
co-relation with the services provided by it. Rather, the
amount· was charged by the Estate Agent for
C manipulating the State apparatus and facilitating the
acquisition of land and sanction of layout etc. without
any obstruction. Such an agreement is clearly violative
of Section 23 of the Contract Act. [Para 29] [371-G-H; 371-
·B]
D
2.6 None of the orders and judgments referred to,
could be relied upon for holding that even though the
appellant had not framed any housing scheme, the
acquisition in question should be deemed to have been
made for a public purpose as defined in Section 3(f)(vi)
E simply because in the representation made by him to the
Revenue Minister of the State, the Executive Director of
the appellant had indicated that the land would be used
for providing sites to poor and people belonging to
backward class and on receipt of the recommendations
F of SLCC the State Ciovernment had directed Special
Deputy Commissioner to issue notification under Section
4(1) of the 1894 Act and that too by ignoring the ratio of
the judgments of three Judge Benches in *1st and **2nd
H.M. T. cases and the judgment of two Judge Bench in
G *** Vyalikawa/ House Building Cooperative Society's case.
In the instant case,. whereby the Estate Agent agreed to
ensure the acquisition of land within a specified time
frame subject to payment of huge money and the fact that
agreement entered into between the society and the
H Government was in the nature of an agreement
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 307
v. STATE OF KARNATAKA
contemplated by Part VII. While in *1st H:M. T. 's case, the
A
amount paid to 'SR' Constructions was rupees one crore,
in the instant case, the appellant had agreed to pay more
than rupees five crores for facilitating issue of
Notifications under Sections 4(1) and 6(1) and sanction
of the layouts and plans by the BOA within a period of
B
less than one year. The High Court did not commit any
error by relying upon the judgment in *1st H.M. T case for
declaring that the acquisition was not for a public
purpose. [Para 32] [378-F-H; 379-G-H; 380-A]
*H. M. T. House Building Cooperative Society v. Syed C
Khader and Ors. (1995) 2 SCC 677: 1995 (2) SCR 200;
**H.M. T.House Building Co-operative Society v. M.
Venkataswamappa (1995) 3 SCC 128; ***Vyalikawal House
Building. Co-operative Society v. V. Chandrappa (2007) 9
sec 304 - relied on.
D
Mis. Tulasidas Khimji v. Their Workmen (1963) 1 SCR
675; Third Income-tax Officer, Mangalore v. M. Damodar Bhat
(1969) 2 SCR 29; Ram Sarup v. Land Acquisition Officer
(1973) 2 SCC 56; Sockieting Tea Co. (P) Ltd. v. Under Secy.
to the Govt. of Assam (1973) 3 SCC 729; Bharat Singh v.
State of Haryana (1988) 4 SCC 534: 1988 (2) Suppl. SCR
10; Umashanker Pandey v. B.K. Uppal (1991) 2 SCC 408;
Mis. Jindal Industries Ltd. v. State of Haryana 1991 Supp (2)
SCC 587; D.S. Parvathamma v. A. Srinivasan (2003) 4 SCC
. 705: 2003 (3) SCR 197; Shipping Corpn. of India Ltd. v.
Machado Bros. (2004) 11 SCC 168: 2004 (3) SCR 584; J.P.
Srivastava & Sons (P) Ltd. v. Gwalior Sugar Co. Ltd.;
(2005) 1 SCC 172: 2004 (5) Suppl. SCR 648; Shakti Tubes
E
F
Ltd. v. State of Bihar (2009) 7 SCC 673: 2009 (10) SCR 739;
G
Kanaka Gruha Nirmana Sahakara Sangha v. Narayanamma
(2003) 1 SCC 228: 2002 (3) Suppl. SCR 97; The State of
Punjab and Ors. (1963) 2 SCR 774; Pratibha Nema v. State
of M.P. (2003) 10 SCC 626; Narayana Reddy v. State of
Karnataka ILR 1991 (3) KAR 2248; Narayana Raju v. State
of Karnataka ILR 1989 KAR 376; Narayana Raju v. State of H
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[2012] 3 S.C.R.
A Karnataka ILR 1989 KAR 406; State of Gujarat v. Chaturbhai
Narsibhai AIR 1975 SC 629: 1975 (3) SCR 284; General
Government Servants Co-operative Housing Society Limited
v. Kedar Nath (1981) 2 SCC 352 :1981 (3) SCR 46; Mis.
Fomento Resorts and Hotels Limited v. Gustavo Ranato Da
B . Cruz Pinto AIR 1985 SC 736: 1985 (2) SCR 937; Rattan
Chand Hira Chand v. Askar Nawaz Jung JT 1991 (1) SC 433:
1991 (1) SCR 327; Kanaka Gruha Nirmana Sahakara
Sangha v. Narayanamma (2003) 1 SCC 228: 2002 (3)
Suppl. SCR 97; Subramani v Union of India ILR 1995 Kar
C 3139 - referred to.
3. The appellant's challenge to the judgment in the
case of respondent No. 3 that even if there was no
express approval by the State Government to the
acquisition of land, the approval would be deemed to
D have been granted because the State Government had
contributed Rs.100 towards the acquisition of land; and
that the decision of the State Government to execute an
agreement with the appellant should be construed as its
approval of the proposal made for the acquisition of land,
E lacks merit. The agreement was signed by the Executive
Director of the appellant and the State Government in
compliance of Section 41, which finds place in Part VII of
the 1894 Act. Therefore, a nominal contribution of Rs.100
by the Special Deputy Commissioner cannot be
F construed as the State Government's implicit approval of
the housing scheme which had never been prepared.
[Para 33] [381-8-E]
Smt. Somavanti and Ors. v. The State of Punjab and Ors.
G (1963) 2 SCR 774; Pratibha Nema v. State of M.P. (2003)
10 SCC 626: 2003 (1) Suppl. SCR 890 - Distinguished.
4. The ground of challenge that in view of the
provisions contained in Sections 17, 18 and 19 of the
Mysore High Court Act, 1884 and Sections 4, 9 and 10 of
H the Karnataka High Court Act, 1961, the Division Bench
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 309
v. STATE OF KARNATAKA
did not have the jurisdiction to decide the appeal by A
relying upon the judgment in *1st H.M. T. case because
that was not the ground on which the Single Judge had
quashed the acquisition proceedings; that if the Division
Bench was of the view that the order of the Single Judge
should be sustained on a new ground by relying upon
B
the judgment of this Court in *1st H.M. T. case, then it
should have remitted the matter to the Single Judge for
fresh disposal of the writ petition, is rejected since the
Division Bench had decided the writ appeal preferred by
the appellant by relying upon the judgment in *1st H.M. T. c
case because the counsel appearing for the parties had
agreed for that course. It is nobody's case that the
advocate who appeared on behalf of the appellant had
not made a request that instead of remanding the case
to the Single Bench, the Division Bench should hear the 0
parties on merits and dispose of the matter. Therefore, it
is not open for the appellant to make a grievance that the
Division Bench had acted in violation of the provisions
of the Mysore High Court Act, 1884 and the Karnataka
High Court Act, 1961. [Paras 35, 36, 37) [382-F-H; 383-CE
G-H]
5.1 The appellant's challenge to the finding recorded
by the Division Bench that respondent No. 3 had not
been given opportunity of hearing under Section 5A is
well-founded. From the proceedings of the Special Land
F
Acquisition Officer it is found that son of respondent no.
3 had appeared along with his Advocate and after hearing
him along with other objectors, the concerned officers
submitted report to the State Government. However, this
error in the impugned judgment of the Division Bench is G
not sufficient for nullifying the conclusion that the
acquisition of land was not for a public purpose and that
the exercise undertaken by the State Government was
vitiated due to the influence of the extraneous
considerations. The appellant's challenge to the judgment H
I
~
310
SUPREME COURT REPORTS
[2012] 3 S.C.R.
A in 'PR's case on the ground that no evidence had been
produced by the writ petitioner to show that the Estate
Agent had indulged in malpractices is rejected in view of
the conclusion recorded in relation to the case of
respondent No.3. [Para 38) [384-A-D]
8
5.2 The appellant criticized the decision of the State
Government to entertain the representation made by
respondent No. 3 for withdrawal of the notification, and
submitted that notification under Section 48 could not
C have been issued without hearing t'1e beneficiary, i.e., the
appellant. This argument appears to have substance, but
it is not necessary to examine the same in detail because
the appellant's challenge to notification dated 3.9.1991,
vide which the acquisition of land comprised in Survey
No. 50/2 was withdrawn, was negatived by the Single
D Judge and the Division Bench of the High Court and the
appellant is not shown to have challenged the judgment
of the Division Bench and insofar as notification dated
25.6'.1999 is concerned, the State Government had
withdrawn the same on 15.11.1999. [Para 39] [384-E-H]
E
F
Larsen & Toubro Ltd. v. State of Gujarat (1998) 4 SCC
387; State Government House/ess Harijan Employees'
Association v. State of Karnataka (2001) 1 SCC 610 -
referred to.
6.1 The submission of the appellant that they have
already spent Rs. 18. 73 crores for formation of the
layouts and 1791 plots were allotted to the members, out
of which, 200 have already constructed their houses;
they pointed out that 50% of the land was given to the
G BOA for providing civil amenities and 16154 sq. ft. was
given to Karnataka Power Transmission Corporation, and
as such it is a fit case for invoking the doctrine of
prospective overruling so that those who have already
constructed houses may not suffer incalculable harm,
H can·not be accepted. [Paras 40 and 41] [385-A-C]
BANGALORE CITY COOP. HOUSING SOCIETY LTD.
311
v. STATE OF KARNATAKA
6.2 The instant case is not a fit case for invoking the
A
doctrine of prospective overruling because that would
result in conferring legitimacy to the influence of money
power over the rule of law, which is the edifice of our
Constitution. The Estate Agent, namely, 'RE' with whom
the appellant had entered into an agreement dated
B
21.2.1988 had played crucial role in the acquisition of
land. The tenor of that agreement does not leave any
manner of doubt that the Estate Agent has charged huge
money from the appellant for getting the notifications
issued under Sections 4(1) a1_1d 6(1) of the 1894 Act and c
sanction of layout plan by the BOA. The respondents
could not have produced any direct evidence that the
Estate Agent had paid money for facilitating the
acquisition of land but it is not too difficult for any person
of reasonable prudence to presume that the appellant D
had parted with crores of rupees knowing fully well that
a substantial portion thereof would be used by the Estate
Agent for manipuJating the State apparatus. Therefore,
there is no any justification to invoke the doctrine of
prospective overruling and legitimize what was found by
E
the Division Bench of the High Court to be ex-facie illegal.
[Paras 40, 41] [385-G-H; 386-B-E]
ECIL v. B. Karunakar (1993) 4 SCC 727: 1993 (2)
Suppl. SCR 576; Abhey Ram v. Union of India (1997) 5 SCC
421: 1997 (3) SCR 931; Baburam v. C.C. Jacob (1999) 3
F
SCC 362; Somaiya Organics (India) Ltd. v. State of U.P.
(2001) 5 SCC 519: 2001 (3) SCR 33; Padma Sundara Rao
v. State of T.N. (2002) 3 SCC 533: 2002 (2) SCR 383; Sarwan
Kumar v. Madan Lal Aggarwal (~003) 4 SCC 147: 2003 (1)
SCR 918; Girias Investment Private Limited v. State of G
Karnataka (2008) 7 SCC 53; G. Mal/ikarjunappa v. Shamanur
Shivashankarappa; (2001) 4 SCC 428; Uday Shankar Triyar
v. Ram Kalewar Prasad Singh (2006) 1 SCC 75: 2005 (5)
Suppl. SCR 157; /. C. Golak Nath v. State of Punjab AIR 1967
SC 1643: (1967) 2 SCR 762 - referred to.
H
312
SUPREME COURT REPORTS
[2012] 3 S.C.R.
A
7. Keeping in view the fact that some of the members
of the appellant may have built their houses on the sites
allotted to them, liberty is given to the appellant to
negotiate with the respondents for purchase of their land
at the. prevailing market price and hope that the
B landowners would, notwithstanding the judgments of the
High Court and this Court, agree to accept the market
price so that those who have built the houses may not
suffer. At the same time, it is made clear that the appellant
must return the vacant land to the respondents
c irrespective of the fact that it may have carved out the
sites and allotted the same to its members. This must be
done within the stipulated period and during that period
the appellant shall not change the present status of the
vacant area/sites. The members of the appellant who may
have been allotted the. sites shall also not change the
D present status/character of the land. [Para 43] [387-B-D]
Case Law Reference:
ILR 1995 KAR 3139
Referred to
Para 5.4
E
(1971) 1 sec 785
Referred to
Para 7.2
2008 (7) SCR 852
Referred to
Para 7.2
(1969) 1 sec 110
Relied on
Paras
F
(1974) 2 sec 501
Referred to
Para 13
1976 (1) SCR 369
Referred to
Para 13
(1980) 2 sec 83
Referred to
Para 13
G
1984 (3) SCR 417
Referred to
Para 13
1996 (5) Suppl. SCR 551 Referred to
Para 13
2002 (2) Suppl. SCR 512 Referred to
Para 13
2008 (2) SCR 521
Referred to
Para13
H
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 313
v. STATE OF KARNATAKA
(1963) 1 SCR 675
Referred to
Para 14
A
(1969) 2 SCR 29
Referred to
Para 14
(1973) 2 sec 56
Referred to
Para 14
(1973) 3 sec 129
Referred to
Para 14
B
1988 (2) Suppl. SCR 10
Referred to
Para 14
(1991) 2 sec 408 ·
Referred to
Para 14
1991 Supp (2) sec 587
Referred to
Para 14
2003 (3) SCR 197
Referred to
Para 14
c
2004 (3) SCR 584
Referred to
Para 14
2004 (5) Suppl. SCR 648 Referred to
Para 14
2009 (10) SCR 739
Referred to
Para 14
D
2002 (3) Suppl. SCR 97
Referred to
Para 15
ILR 1991 (3) KAR 2248
Referred to
Para 24
ILR 1989 KAR 376
Referred to
Para 24
E
ILR 1989 KAR 406
Referred to
Para 21
1975 (3) SCR 284
Referred to
Para 24
1981 (3) SCR 46
Referred to
Para 24
F
1985 (2) SCR 937
Referred to
Para 24
1991 (1) SCR 327
Referred to
Para 25
2002 (3) Suppl. SCR 97
Referred to
Para 30
1995 (2) SCR 200
Relied on
Para 32
G
(1995) 3 sec 128
Relied o·n
Para 32
(2001) 9 sec 304
Referred to
Para32
(1963) 2 SCR 774
Distinguished
Para 33
H
314
SUPREME COURT REPORTS
[2012] 3 S.C.R.
A
2003 (1) Suppl. SCR 890 Distinguished
Para 33
1993 (2) Suppl. SCR 576 Referred to
Para 40
1997 (3) SCR 931
Referred to
Para 40
B
(1999) 3 sec 362
Referred to
Para 40
2001 (3) SCR 33
Referred to
Para 40
2002 (2) SCR 383
Referred to
Para 40
2003 (1) SCR 918
Referred to
Para 40
c
(2008) 1 sec 53
Referred to
Para 40
(2001) 4 sec 428
Referred to
Para 40
2005 (5) Suppl. SCR 157 Referred to
Para 40
D
(1967) 2 SCR 762
Referred to
Para 41
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.
7245-7426 of 2002.
From the Judgment & Order dated 16.3.1998 & 9. 7.1999
E of the High Court of Karnataka at Bangalore in Writ Appeal No.
9913 of 1996 & Civil Petition No. 366 of 1998.
WITH
F C.A. No. 774-778 of 2005
G
H
Dushyant Dave, P. Vishwanatha Shetty, Shashi Kiran
Shetty, M. Sreenivasa, Bramjeet Mishra, Yatish Mohan,
Haripriya Padmanabhan, E.G. Vidya Sagar, V. Mohana for the
Appellant.
P.P. Rao; R.S. Hegde, Chandra Prakash, Amit Wadhwa,
AS. Bhasme, P.P .. Singh, Sanjay R. Hegde, A. Rohen Singh,
Ramesh K. Mishra, Ramesh S. Jadhav, Vikrant Yadav for the
Respondent.
BANGALORE CITY COOP. HOUSING SOCIETY LTD. 315
v. STATE OF KARNATAKA
The Judgment of the Court was delivered by
G.S. SINGHVI, J. 1. These appeals are directed against
two sets of judgments and orders passed by the Division
Benches of the Karnataka High Court whereby the acquisition
A
of lands by the State Government for the benefit of the appellant
B
was quashed. Civil Appeal Nos. 7425-26/2002 are directed
against judgment dated 16.03.1998 passed by the High Court
in Writ Appeal No. 9913/1996 and order dated 09.07.1999
passed in Civil Petition No. 366/1998. Civil Appeal Nos. 77478/2005 are directed against judgment dated 06.02.2004
C
passed in Writ Appeal No. 4246/1998, C/W W.A. No. 6039/
1998 and orders dated 11.02.2004 and 15.09.2004 passed
in. I.A. No. 1 for rectification in Writ Appeal No. 4246/1998, Cl
WW.A. No. 6039/1998 and Review Petition Nos. 166 and 170
of 2004, respectively.
2. Although, the High Court quashed the acquisition
proceedings mainly on the grounds of violation of the provisions
of the Land Acquisition Act, 1894 (for short, 'the 1894 Act') and
D
the manipulations made by the appellant through the Estate
Agent for acquiring the land, during the pendency of these
E
appeals the parties filed voluminous papers and arguments
were advanced by both the sides by relying upon those
documents as also the records summoned by the Court from
the State Government.
3. For appreciating the contentions of the parties in a
correct perspective, it will be useful to notice the events which
culminated in the acquisition of the lands belor1ging to the
private respondents and others.
F
3.1 Bangalore Development Authority (BOA) was
G
constituted by the State Government under Section 3 of the
Bangalore Development Authority Act, 1976, (for short, 'the
1976 Act'), which was enacted by the State legislature for
ensuring planned development of the City of Bangalore and
H
316
SUPREME COURT REPORTS
[2012] 3 S.C.R.
A areas adjacent thereto. In terms of Section 15 of the 1976 Act,
the BOA is empowered to draw up detailed schemes for the
development of the Bangalore Metropolitan Area and with the
previous approval of the Government, undertake works for the
development of the Bangalore Metropolitan Area and incur
B expenditure therefor. Under Section 15(2), the BOA can take
up new or additional development schemes either on its own
or on the recommendations of the Local Authority or as per the
directions of the State Government. Section 16 lays down that
e'lery development scheme shall, within the limits of the area
c comprised in the scheme, provide among other things for the
acquisition of. any land necessary for or affected by the
execution of the scheme. Section 16(3) lays down that the
scheme may provide for construction of houses. Sections 17
and 18 contain the procedure for finalization and sanction of
0 the scheme.