# R. RAJASHEKAR AND ORS v. TRINITY HOUSE BUILDING CO-OPERATIVE SOCIETY AND ORS

- **Citation:** [2016] 4 S.C.R. 763
- **Court:** Supreme Court of India
- **Decided:** 2016-09-15
- **Case number:** Civil Appeal Nos. 9091-9119of2016
- **Bench:** V. Gopala Gowda, Adarsh Kumar Goel
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/r-rajashekar-and-ors-v-trinity-house-building-co-operative-society-and-ors-31230
- **Pages:** 36

## Headnote

Land Acquisition Act, 1894:
ss.3(j)(vi),4(1),5-A,6(1), 39 r/w. s.41 - Hiring iniddleman for
acquisition of lands from State Government - Respondentcooperative society entered into agreement with agency to get lands
acquired in its favour from State Government for formation of house
sites - Proprietor of agency was required to act as a middle man
between the State Government and respondent-cooperative society
- State Government issued impugned notification ulss. 4(1) and 6(1)
for acquisition of lands for formation of house sites by respondentcooperative society. stating it to be for 'public purpose' uls.3(j)(vi)
- Held: Acquisition proceedings in the instant case cannot be said
to be one for 'public purpose' as defined uls.3(j)(vi), especially in
light of the fact that not only was there no scheme formulated by the
respondent-cooperative society and approved by the State
Government for the said purpose before initiating the acquisition
proceedings, but evidence clearly indicated that the respondentcooperative society paid consideration to agency to act as the agent
between it and the State Government, to ensure that the lands of the
original land owners are acquired in its favour - Hiring middlemen
to get lands of poor agricultural workers acquired by the State
Government in favour of Cooperative Society is abhorrent and
cannot be granted the sanction of law - Thus, impugned notifications
issued u/s.4(1) and s.6(1) suffer from not only legal mala tides but
also legal malice, which amounts to colourable exercise of power
by the State Government and therefore, the same are liable to be
quashed - Right to Fair Compensation and Transparency in Land
Acquisition, Rehabilitation and re-settlement Act, 2013 - s.24(l){a}
- General Clauses Act, 1897-s.6.
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Transfer of property -During pendency of court proceedings
-Notification issued by State Government u/s. 4(1) and 6(1) of the
Act for acquisition of lands for formation of house sites by
respondent-cooperative society - Challenged by some land owners
by filing writ petition - Meanwhile, land in question transferred by
land owners - Propriety - Held: Lands in question having been
transferred by the land owners during pendency of the writ
proceedings, they were wholly illegal and void ab initio in law - Land
Acquisition Act, 1894 - ss.4(1) & 6(1).
Transfer of property - Fraudulent transfer - Hiring middleman
for acquisition of lands from State Government - Notification issued
by State Government uls. 4(1) and 6(1) of the Act for acquisition of
lands for formation of house sites by respondent-cooperative society
- Challenged by some land owners by filing writ petition which was
allowed - Within a span of few days thereafter from date of passing
the judgment, the middleman executed sale deeds in respect of the
lands in question in favour of his son, daughter and son-in-law -
Held: Middleman played fraud on the land owners and the
respondent-cooperative society by executing the sale deeds -
Execution of the sale deeds was void ab initio in law - Land
Acquisition Act, 1894 - ss.4(1) & 6(1).
Administrative Law:
Eminent domain power of the State - Malafide exercise of power
- Violation of provisions of the Land Acquisition Act by the State -
Held: The State exercised its eminent domain power of acquisition
by acquiring lands of poor agricultural workers at the instance of
a middleman, which amounted to malafide exercise of power - State
has blatantly violated the provisions of the Act and law laid down
by the Supreme Court.
Disposing of the appeals, the Court
HELD: 1. On perusal of the conditions incorporated in the
agreement it was clear that agency, Mis Srinivasa Enterprises,
represented by its proprietor Mr. S. Rangarajan, had agreed to
undertake the responsibility to get the lands mentioned therein
acquired in favour of the respondent-society from the State
Government and prepare a Layout Plan as per the regulatio

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[2016] 4 S.C.R. 763
R. RAJASHEKAR AND ORS.
v.
TRINITY HOUSE BUILDING CO-OPERATIVE SOCIETY AND
ORS.
(Civil Appeal Nos. 9091-9119of2016)
·SEPTEMBER 15, 2016
[V. GOPALA GOWDA AND ADARSH KUMAR GOEL, JJ.)
Land Acquisition Act, 1894:
ss.3(j)(vi),4(1),5-A,6(1), 39 r/w. s.41 - Hiring iniddleman for
acquisition of lands from State Government - Respondentcooperative society entered into agreement with agency to get lands
acquired in its favour from State Government for formation of house
sites - Proprietor of agency was required to act as a middle man
between the State Government and respondent-cooperative society
- State Government issued impugned notification ulss. 4(1) and 6(1)
for acquisition of lands for formation of house sites by respondentcooperative society. stating it to be for 'public purpose' uls.3(j)(vi)
- Held: Acquisition proceedings in the instant case cannot be said
to be one for 'public purpose' as defined uls.3(j)(vi), especially in
light of the fact that not only was there no scheme formulated by the
respondent-cooperative society and approved by the State
Government for the said purpose before initiating the acquisition
proceedings, but evidence clearly indicated that the respondentcooperative society paid consideration to agency to act as the agent
between it and the State Government, to ensure that the lands of the
original land owners are acquired in its favour - Hiring middlemen
to get lands of poor agricultural workers acquired by the State
Government in favour of Cooperative Society is abhorrent and
cannot be granted the sanction of law - Thus, impugned notifications
issued u/s.4(1) and s.6(1) suffer from not only legal mala tides but
also legal malice, which amounts to colourable exercise of power
by the State Government and therefore, the same are liable to be
quashed - Right to Fair Compensation and Transparency in Land
Acquisition, Rehabilitation and re-settlement Act, 2013 - s.24(l){a}
- General Clauses Act, 1897-s.6.
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Transfer of property -During pendency of court proceedings
-Notification issued by State Government u/s. 4(1) and 6(1) of the
Act for acquisition of lands for formation of house sites by
respondent-cooperative society - Challenged by some land owners
by filing writ petition - Meanwhile, land in question transferred by
land owners - Propriety - Held: Lands in question having been
transferred by the land owners during pendency of the writ
proceedings, they were wholly illegal and void ab initio in law - Land
Acquisition Act, 1894 - ss.4(1) & 6(1).
Transfer of property - Fraudulent transfer - Hiring middleman
for acquisition of lands from State Government - Notification issued
by State Government uls. 4(1) and 6(1) of the Act for acquisition of
lands for formation of house sites by respondent-cooperative society
- Challenged by some land owners by filing writ petition which was
allowed - Within a span of few days thereafter from date of passing
the judgment, the middleman executed sale deeds in respect of the
lands in question in favour of his son, daughter and son-in-law -
Held: Middleman played fraud on the land owners and the
respondent-cooperative society by executing the sale deeds -
Execution of the sale deeds was void ab initio in law - Land
Acquisition Act, 1894 - ss.4(1) & 6(1).
Administrative Law:
Eminent domain power of the State - Malafide exercise of power
- Violation of provisions of the Land Acquisition Act by the State -
Held: The State exercised its eminent domain power of acquisition
by acquiring lands of poor agricultural workers at the instance of
a middleman, which amounted to malafide exercise of power - State
has blatantly violated the provisions of the Act and law laid down
by the Supreme Court.
Disposing of the appeals, the Court
HELD: 1. On perusal of the conditions incorporated in the
agreement it was clear that agency, Mis Srinivasa Enterprises,
represented by its proprietor Mr. S. Rangarajan, had agreed to
undertake the responsibility to get the lands mentioned therein
acquired in favour of the respondent-society from the State
Government and prepare a Layout Plan as per the regulations of
the Bangalore Development Authority ("BDA") and Town
R. RAJASHEKAR AND ORS. v. TRINITY HOUSE BUILDING
CO-OPERATIVE SOCIETY AND ORS.
Planning Authority, and to get the plan sanctioned by BDA in
favour of the respondent-society. In addition to the aforesaid
responsibility, he had also undertaken to execute the layout work
in accordance with the sanctioned layout plan unde·r the
supervision of the BDA and get the sites released from the said
authority in favour of the respondent-society. Mr. S. Rangarajan
was essentially required to act as a middleman between the
respondent-Society and the state government to ensure that lands
were acquired in favour of the respondent-society for the purpose
of its housing project. Further, between the years 1985 and 1987,
the respondent land owners had executed power of attorney(s)
of the lands in favour of Mr. S. Rangarajan. [Paras 28, 29 and
30) [782-C-D; 783-B]
2. The stand of the respondent-Society was that the
acquisition of lands by the State Government was u/s.3(t)(vi) of
the Land Acquisition Act, 1894 and that a scheme had been
submitted and the same had been approved. But from a perusal
of the original acquisition file of the State Government, it was
clear that there was no such scheme and no prior approval of the
same by the State Government as required u/s.3(t)(vi) of the L.A.
Act. Thus, in the light of the Supreme Court judgments· referred
and in the absence of framing of scheme by the respondent-Society
and approval of the same by the State Government as required u/
s.3(t)(vi) of the L.A. Act, the Division Bench, holding that
communication referred amounts to approval of the scheme, was
wholly erroneous in law for the reason that neither the Three
Men Committee, nor the State Level Co-ordination Committee
even adverted to the said letter in their proceedings. Further, no
details were forthcoming from the original file regarding the
details of the scheme, and the application of mind by the State
Government to approve the same. The principle of law that 'an
agreement under which a party to an agreement is required to
influence a statutory authority and to procure a decision favourable
to the other party, is certainly opposed to public policy'. In the
light of the decisions of this Court, as well as the wording of
s.3(t)(vi) of the L.A. Act, the acquisition proceedings in the instant
case cannot be said to be one for 'public purpose' as defined u/
s.3(t)(vi) of the L.A. Act, especially in the light of the fact that not
only was there no scheme formulated by the respondent-society
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and approved by the State Government for the said purpose before
initiating the acquisition proceedings, but that the evidence on
record clearly indicates that the respondent-society paid
consideration to Mr. S. Rangarajan to act as the agent-between it
and the State Government, to ensure that the lands of the original
land owners were acquired in its favour. Upholding such an
acquisition would be akin to approving to such type of agreements
which were opposed to public policy and the same cannot be
allowed under any circumstances, as the concept of hiring
middlemen to get lands of the poor agricultural workers acquired
by the State Government in favour of a Cooperative Society was
abhorrent and cannot be granted the sanction of law. Thus, the
impugned notifications issued under ss.4(1), 6(1) of the L.A. Act
are bad in law as the same suffers from not only legal mala tides
but also legal malice, which amounts to colourable exercise of
power by the State Government and therefore, the same are liable
to be quashed. [Paras 29, 33, 34 and 37] [791-E-G, H; 792-A-C;
793-D]
3. The State Government did not even take into
consideration the finding of the Committee report, which found
that the respondent-Society was issuing membership to persons
fraudulently, including to those persons who were not even
residing within the area of operation of the jurisdiction of the
society. Further, the acquisition of lands of two different villages
by issuing the impugned notifications by the State Government
in exercise of its eminent domain power at the instance of a
middleman amounts to a mala fide exercise of power by the State
Government. This is further made clear from the stand of the
State Government reflected throughout the proceedings, not just
before this Court, but also before the High Court, where it
remained a silent spectator to the proceedings, and neither
actively d~fended the acquisition of lands nor opposed it. This
stand by the State Government clearly goes to show the
seriousness in which it has exercised its eminent domain power
in such important case of acquisition of lands of poor agricultural
workers in blatant violation of the provisions of the L.A. Act and
law laid down by the Supreme Court. [Para 36] [792-G-H; 793-AC]
4. The respondent-original landowners in the first appeal.
R. RAJASHEKAR AND ORS. v. TRINITY HOUSE BUILDING
CO-OPERATIVE SOCIETY AND ORS.
had executed power of attorney(s) in favour of Mr. S. Rangarajan
to facilitate him to get the lands acquired in favour of the
respondent-Society. The acquisition proceedings were initiated
and the notifications u/ss. 4(1) and 6(1) of the L.A. Act were
issued. Some of the respondent-original landowners objected to
the same by submitting their objections to the proposed
acquisition of their lands before the Land Acquisition Officer after
s.4(1) notification was published. Objections filed by land owners
had been mechanically overruled by the Land Acquisition Officer
and the State Government without application of mind to the facts
of the case and the provisions of the L.A. Act. After the Writ
Petitions were allowed by the Single Judge of the High Court,
the middleman, Mr. S. Rangarajan played fraud on the land owners
and the society by making use of said Power of Attorney(s) and
executed the sale deeds in favour of his son, daughter and sonin-Iaw who are the appellants in the appeals arising out of first
batch of appeals, within a span of a few days from the date of
passing the judgment by the Single Judge in the writ petitions.
The said action of Mr. S. Rangarajan tantamounts to fraud played
by him upon the respondent-original landowners and therefore,
the said transaction of executing the sale deeds in favour of his
son, daughter and son in law is void ab initio in law. Insofar the
sale in favour of the appellants in the second batch of appeals is
concerned during the pendency of the writ petitions, the same is
also void ab initio in law as the same happened during the pendency
of the Writ Petition before the Single Judge of the High
Court.[Paras 43 and 44) [796-D-H; 797-A]
H.M T. House Building Co-Operative Society v. Syed
Khader (1995) 2 SCC 677: 1995 (2)
SCR 200 -
relied on.
H.M.T. House Building Cooperative Society v. M.
Venkataswamappa (1995) 3 SCC 128; Bangalore City
Cooperative Housing Society Ltd. v. State of Karnataka
(2012) 3 SCC 727: 2012 (3) SCR 295; B. Anjanappa
and Ors. v. Vyalikaval House Building Cooperative
Society Limited and Ors. (2012) 10 SCC 184; Kanaka
Gruha Nirmana Sahakara Sangha v. Narayanamma
(2003) 1 sec 228 : 2002 (3) Suppl. scR 97;
Sumitramma v. State of Karnataka SLP (C) No. 10270
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of 1996, decided on 04.10.1996; Muniyappa v. State
of Karnataka SLP (C) No. 14681 of 1995 decided on
04.10.1996; V.P. Awas Evam Vikas Parishad v.
GyanDevi (D) by LRS. & Ors. (1995) 2 SCC 326: 1994
(4) Suppl. SCR 646; Narayana Reddy v. State of
Karnataka ILR 1991 Kar 2248; Rattan Chand Hira
Chand v. Askar Nawaz Jung (1991) 3 SCC 67: 1991
(1)
SCR
327; Vyalikaval House Building Coop.
Society v. V. Chandrappa (2007) 9 SCC 304 : 2007 (2)
SCR 277; Uddar Gagan Properties Ltd. v. Sam Singh
& Ors. 2016 AIR 2526 - referred to.
Case Law Reference
1995 (2) SCR 200
relied on
Para 11
(1995) 3 sec 128
referred to
Para 14
2012 (3) SCR 295
referred to
Para 14
(2012) 10 sec 184
referred to
Para 14
2002 (3) Suppl. SCR 97
referred to
Para 14
1994 (4) Suppl. SCR 646 referred to
Para 25
ILR 1991 Kar 2248
referred to
Para30
1991 (1) SCR 327
referred to
Para30
2007 (2) SCR 277
referred to
Para32
2016 AIR 2526
referred to
Para 44
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 90919119of2016.
From the Judgment and Order dated 06.05.2004 of the Division
Bench of the High Court ofKarnataka, Bangalore in Writ Appeal Nos.
7543-7557 and 7558-7571 of 1996
WITH
C.A. No. 9120-9148 of2016
G
C.A. No. 9149-9152 of2016.
V. Giri, Basava Prabhu S. Patil, Shanti Bhushan, H. N. Nagamohan
Das, Ravindra Shrivastava, Sr. Advs., R. S. Hegde, Chandra Prakash,
B. N. Prakash, K. R. Krishnamurthy, Mrs. FarhatJahan Rehmani, Shanti
Prakash, Rajeev Singh, Anirudh Sanganeria, Chinmay Deshpande, Amj id
H
Maqbool, A. S. Bhasme, Kartik Seth, Subhash Chandra Sagar, Ms.
R. RAJASHEKAR AND ORS. v. TRINITY HOUSE BUILDING
CO-OPERATIVE SOCIETY AND ORS.
-Jennifer John, E. C. Vidya Sagar, C. M. Angadi, lrshad Ahmad, V. N.
Raghupathy, Parikshit P. Angadi, Adv. Ms. Yugandhara Pawar Jha,
Prassana Mohan, Pulkit Tare, Kuna) Verma, Ashok K. Mahajan, Advs.
for the appearing parties.
The Judgment of the Court was delivered by
V. GOPALA GOWDA, J. I. Leave granted in all the Special
Leave Petitions.
2. The present appeals arise out of the common impugned judgment
and order dated 06.05.2004 in Writ Appeal Nos. 7543-7557of1996 and
connected matters passed by the Division Bench of the High Court of
Karnataka, wherein the judgment and order dated 12.07 .1996, passed
by the learned Single Judge of the High Court in Writ Petition Nos.
8188-8201 of 1989 and other connected petitions quashing the acquisition
notifications issued under Sections 4( I) and 6( 1) of the Land Acquisition
Act, 1894 (hereinafter referred to as the "L.A. Act") was set aside.
3. The relevant facts which are required for us to appreciate the
rival legal contentions advanced on behalf of the parties are stated in
brief hereunder:
The lands involved in all these acquisition proceedings are agricultural
lands belonging to poor agriculturalists. On 09.01.1984, Trinity House
Building Co-Operative Society (hereinafter referred to as the
"respondent-Society") was registered with the object of providing sites
for building residential houses for its members. On 12.03.1985, the said
society, repre:'i_ented by its President and Vice President entered into an
agreement with M/S Srinivasa Enterprises, represented by its proprietor,
Mr. S. Rangarajan. The said agreement was entered into between the
parties essentially for getting the lands acquired in favour of the
respondent-Society. The relevant clauses of the agreement will be
extracted in the reasoning portion of the judgment. As per the agreement,
a contract of agency was created in favour of Mr. S. Rangarajan to act
as a middleman between the respondent-Society and the State
Government to get the lands mentioned therein acquired in favour of the
respondent-Society.
4. It is also an undisputed fact that between 06.05.1987 and
12.06.1989, the land owners of the lands mentioned in the agreement
dated 12.03.1985 have also executed power of attorney(s) in favour of
Mr. S. Rangarajan. The state government of Karnataka by its order
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A
dated 23.06.1986, fixed the last date as 30.06.1984 for the registration
of the societies. The respondent-Society finds a place at Serial No. 43 in
the annexure attached to the above government order.
5. By way of order dated 30.04.1987, the state government of
Karnataka constituted a 'Three Men Committee' to verify the claims
B
of land for acquisition being made by the various societies, and a State
level Co-ordination Committee also was constituted by the Government
to inquire into the affairs of the society before recommending their claim
for acquisition.
6. The case of the respondent-Society came up for consideration
c
beforethe State Level Coordination Committee on 25.09.1987. The State
Level Coordination Committee, without application of mind to the facts
of the case, cleared the case of the respondent-Society for acquisition
oflands in its favour. The relevant portion pertaining to the Society reads
thus:
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"14. Trinity HBSC: Avalahalli and Herohalli (correct name
Harohalli) villages, cleared for acquisition of94-l 8 acres,
Avalahalli (73-33 Acres) and Herohalli (22-25 acres)(both
in Yelahanka Bobli) (Action: Revenue Department)"
On l 0.03 .1988, theAdditional Registrar of Co-Operative Societies,
Bangalore passed an order under Section 64 of the Karnataka Cooperative Societies Act, 1959, to inquire into certain allegations made
against 98 House Building Co-Operative Societies of Bangalore City,
including the respondent-Society, and appointed Sri G.V.K. Rao, the then
Controller of Weights and Measures to investigate into the allegations of
irregularities and malpractices against the concerned societies.
7. In the meanwhile, on l 5.04.1988, an agreement was entered
into between the state government of Karnataka and the respondentSociety as required under Section 39 read with Section 41 of Part VII of
the L.A. Act. The relevant portions of the Agreement are extracted
hereunder:
"AND WHEREAS THE SOCIETY has applied to the
Government of Karnataka (hereinafter referred to as "THE
GOVERNMENT" that certain land more particularly described
in the schedule hereto annexed and hereinafter referred to as
"THE SAID LAND" should be acquired under the provisions of
the Land Acquisition Act, 1894(Iof1894) hereinafter referred to
R. RAJASHEKAR AND ORS. v. TRINITY HOUSE BUILDING
CO-OPERATIVE SOCIETY AND ORS.[V. GOPALA GOWDA, J.]
as "the said Act" for the following purpose namely:
Formation of sites and construction of houses to the members of
the trinity House Building Co-Operative Society Ltd. atAvalahalli
and Herohalli, Yelahanka hobli, Bangalore North Taluk, Bangalore
District.
AND WHEREAS the Government having caused an inquiry to
be made in conformity with the provisions of the said Act and
being satisfied as a result of such inquiry that the acquisition of
the said land is needed for the purpose."
8. Subsequently, on 09.05.1988, the report of the G.V.K. Rao
Committee was submitted to the Government for its action. The Report
found irregularities in the manner in which the 'respondent-Society has
granted membership to its members. It was stated in the report that the
Vice President of the respondent-Society accepted these lapses and
even attempted to justify the same.
9. Even after the G.V.K. Rao Committee submitted its report, the
state government of Karnataka proceeded to issue the preliminary
notification under Section 4(1) of the L.A. Act, which was published in
the official gazette dated 09.06.1988, proposing to acquire the lands in
question to the extent of92 acres 38 guntas in Avalahalli and Herohalli
villages ofYelahanka Hob Ii, Bangalore North Taluk, Bangalore District
in favour of the respondent-Society.
10. Subsequently, around 33 Objection Petitions were filed before
the Land Acquisition Officer by the landowners, which were all rejected
under the inquiry conducted by him under Section 5-A(2) of the L.A.
Act. The objections filed by some of the landowners were rejected by
land acquisition officer primarily on the ground that the objections are
not valid, and that the concerned lands come in the middle of the layout
and that the lands are being acquired for the formation of house sites by
the respondent society, which is a public purpose as per the definition of
Section 3 (t) (vi) of the L.A. Act. On 18.03.1999, the state government
issued the final notification under Section 6(1) of the L.A. Act declaring
that the lands were required for public purpose without proper application
of mind to the report received from the Land Acquisition Officer. The
relevant portion of the notification is extracted hereunder:
"And whereas the Government of Karnataka is satisfied after
considering the report of the special Deputy Commissioner,
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Bangalore District, Bangalore under sub-section (2) of Section
SA and section 6( I) of special Land Acquisition Act (Central Act
1 of 1894) as amended by Karnataka Act No. 17 of 1961 and
Land Acquisition (Amendment Act 1984) that the said lands are
needed to be acquired for the purpose specified above."
11. Aggrieved of the impugned acquisition notifications, the
landowners challenged the validity of the same by way of filing Writ
Petitions before the High Court ofKamataka urging various legal grounds
and prayed for quashing the same. The learned single Judge of the High
Court, after hearing the parties arrived at the conclusion that the facts of
the case were similar to those in the decision of this Court in the case of
H.M.T. House Building Co-Operative Society 1~ Syed K'1ader
1
• On
the facts of the case, the learned single Judge, by way of common
judgment and order dated 12.07.1996 held as under:
"Jn the instant case, the 4th respondent along with the statement
of objections has produced Audit Report as Annexure-1. In the
said report there is reference that the landowners have been paid
the consideration for their lands through MIS Sree Srinivasa
Enterprises. There is also a reference that the society entered
into an agreement dated 13.03.1985 with that of MIS Sree
Srinivasa Enterprises and as per the said agreement the society
has to pay Rs. 1601- per sq. yard to MIS Sree Srinivasa
Enterprises ......
In the statement of objections it is stated that the society through
the agency of MIS Srinivasa Enterprises, represented by its
proprietor has made payments to the landowners. This fact shows
that the facts involved in these petitions are identical with that of
the case involved in the decision of HMT House Building CoOperative Society (supra). The Supreme Court in the said decision
has held that the power uls 4( 1) and 6( I) of the Act has been
exercised for extraneous consideration at the instance of the
persons who have no role in the decision making process. In the
said view of the matter, I hold that the decision rendered by the
Supreme Court is applicable in all fours and therefore the impugned
notifications are liable to be quashed. In view of the decision of
the Supreme Court referred to above, I hold that the petitioners
are entitled to challenge the impugned acquisition since the land
1 (1995) 2 sec 677
R. RAJASHEKAR AND ORS. v. TRINITY HOUSE BUILDING
CO-OPERATIVE SOCIETY AND ORS.[V. GOPALA GOWDA, J.]
acquisition proceedings is the p1 oduct of colourable exercise of
power at the instance of the third parties."
The learned single Judge has furt'·er held that the la11ds could not
have been acquired by the state gover1lment in favour of a society for
the purpose of providing residential sites to its members with )Ut following
the procedure provided under Part VII of the L.A. Act. The learned
single Judge accordingly, quashed the impugned notifications and also
the acquisition proceedings in exercise of the extracrdinary and
discretionary power under Article 226 of the Constitution oflndia.
12. Aggrieved of the common judgment and order passed by the
learned Single Judge, the respondent-Society filed Writ Appeals before
the Division Bench of the High Court cpallenging the correctness of the
same urging certain legal grounds. The Qivision Bench of the High Court
held that there was no evidence on record to suggest that the "outside
agency" (M/s Srinivasa Enterprises) 1had influenced thie acquisition
proceedings. On the other hand, it is clear from the material placed on
record that the case of the respondent-Society was conshlered by the
State Level Co-ordination Committee on 25.09.1987, and on the basis of
the clearance granted by the Committee the state governfuent granted
approval to acquire the lands in question. Accordingly, the Division Bench,
by way of common final impugned judgment and order dated 06.05.2004
allowed the appeals and set aside the judgment and order passed by the
learned single judge and restored the acquisition proceedings. Hence,
the present appeals.
13. We have heard Mr. Shekhar Naphade, Mr. V. Giri and Mr.
Basava Prabhu S. Patil, the learned senior counsel appearing on behalf
of the appellants and Mr. Shanti Bhushan, learned senior counsel
appearing on behalfofthe respondent-Society and Mr. H.N. Nagamohan
Das, the learned senior counsel appearing on behalf of the respondentoriginal landowners in the first two appeals filed by the so-called
purchasers.
14. The learned senior counsel appearing on behalfofthe appellants
vehemently question the correctness of the findings and reasons recorded
by the Division Bench of the High Court in the impugned judgment and
order. It is contended that the findings and reasons recorded on the
contentious points are not only erroneous in law but also suffer from
error in law. They place strong reliance on the three judge bench decision
of this Court in the case of HMT House Building Cooperative Society
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(supra), which has been followed in the subsequent decisions of this
Court in the cases of H.MT. House Building Cooperative Society v.
M. Venkataswamappa 2, Bangalore City Cooperative Housing
Society Ltd. v. State of Karnataka', B. Anjanappa and Ors. v.
Vya/ikaval House Building Cooperative Society Limited and Ors;'.
The learned senior counsel further sought to distinguish the decision of
this Court in the case of Kanaka Grulia Nirmana Salmkara Sang/ta
v. Narayanamma5, upon which strong reliance has been placed by the
Division Bench of the High Court, which has been followed by this Court
in the cases of Sumitramma v. State ofKarnataka6 and Muniyappa
v. State of Karnataka7• It is submitted that the reliance placed upon the
said judgments by the Division Bench of the High Court, in the absence
of a scheme framed and approved by the government as required under
Section 3 (f)(vi) of the L.A. Act in favour of the respondent-Society, is
held to be violative of not only the statutory provisions of law, but also
the decisions of this Court referred to supra.
15. It is further contended by the learned senior counsel appearing
on behalf of the appellants that the framing of a scheme and its prior
approval by the state government is sine qua non for initiating acquisition
proceedings for the purpose of Section 3(f)(vi) of the L.A. Act. It is
submitted that in the instant case, neither any such scheme has been
framed by the respondent-Society nor has there been any approval
accorded by the state government before initiating land acquisition
proceedings in its favour and therefore, they submit that the entire
proceedings are vitiated in law.
16. It is further submitted by the learned senior counsel that this
Court in the case of HMT House Building Co-Operative Society
(supra) elaborated upon the scope of the term housing for the purpose
of Section 3(f)(vi) of the L.A. Act. It was held therein as under:
"19. According to us, in Section 3(f)(vi) the expression "housing"
has been used along with educational and health schemes. As
such the housing scheme contemplated by Section 3(f)(vi) shall
2 (1995) 3 sec 128
'(2012) 3 sec 121
• (2012) 10 sec 184
'(2003) 1 sec 228
6 SLP (C) No. I 0270 of 1996. decided on 04.10.1996
7 SLP (C) No. 14681 of 1995 decided on 04. I 0.1996
R. RAJASHEKAR AND ORS. v. TRINITY HOUSE BUILDING
775
CO-OPERATIVE SOCIETY AND ORS.[V. GOPALA GOWDA, J.]
be such housing scheme which shall serve the maximum number
of members of the society. Such housing scheme should prove to
be useful to the public. That is why the Parliament while
introducing a new definition of "public purpose", said that any
scheme submitted by any co-operative society relating to housing,
must receive prior approval of the appropriate Government and
then only the acquisition of the land for such scheme can be held
to be for public purpose. If requirement of Section 3(f)(vi) is not
strictly enforced, every housing co-operative society shall approach
the appropriate Government for acquisition by applying Section
3(f)(vi) instead of pursuing the acquisition under Part VII of the
Act which has become more rigorous and restrictive. In this
background, it has to be held that the prior approval, required by
Section 3(f)(vi), of the appropriate Government is not just a
formality; it is a condition precedent to the exercise of the power
of acquisition by the appropriate Government for a housing scheme
of a co-operative society."
(emphasis laid by this Court)
17. It is further submitted that a perusal of the above extracted
portion of the judgment would show that prior approval of the government
to the Housing Scheme, as contemplated under Section 3(t) (vi) of the
L.A. Act is a condition precedent for the exercise of eminent domain
power by the state government for acquisition of lands for the purpose
of the housing scheme of a Co-operative society. Consequently, the
existence of Housing Scheme framed by the respondent-Society is a
pre-condition for grant ofapproval of the same by the State Government.
Further reliance is placed on the decision of this Court in the case
of B. A11jmmppa (supra), wherein it was held as under:
"20. We then enquired from Shri Bhat whether his client had
submitted housing scheme for the approval of the State
Government. Shri Bhat responded to the Court's query by relying
upon the recommendations made by the State Leval Coordination
Committee for the acquisition of 179 acres, one and half guntas
land. We have carefully gone through the recommendations of
the State Level Coordination Committee but do not find any trace
of housing scheme which was under the consideration of the
Committee.
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21. Shri Bhat then relied upon the approval accorded by the State
Government for the acquisition of land and the directions issued
to Deputy Commissioner, Bangalore to issue notification under
Section 4( I) of the 1894 Act. He also relied upon the judgment in
Kanaka Gruha Nirmana Sahakara Sangha v. Narayanamma.
22. In Bangalore City Cooperative Housing Society Limited v.
State of Karnataka and Ors. decided on 2.2.2012, this Court
considered the question whether the approval granted by the State
Government for the acquisition of land can be considered as an
approval of the housing scheme within the meaning of Section
3(f)(vi) of the Act and answered the same in negative.
23. The judgment in Kanak Gruha Nirmana Sahakara Sangha v.
Narayanamma (supra), ifread in the light of the 1st and 2nd HMT
judgments and the finding recorded by us that Respondent No. 1
had not framed any housing scheme and secured its approval
from the State Government, the direction given to the Deputy
Commissioner to issue notification under Section 4( I) cannot be
treated as the State Government's approval of the housing scheme
framed by Respondent No. I. It is also apposite to note that in
Kanak Gruha's case, this Court was not called upon to consider a
case in which the State Government had come out with a specific
stand that the housing society had not framed any scheme."
18. In the instant case there was no scheme framed by the
respondent-Society for the purpose of providing housing sites to its
members and therefore, no prior approval could have been accorded to
it by the State Government. It is submitted that the cut-off date for
registration of societies and enrolment of members being 30.06.1984,
and the respondent-Society having been registered just before the said
cut-off date, i.e. on 01.02.1984, and there being no Board of Directors
constituted prior to December 1984, and therefore, it could not have
enrolled any members before the cut off date. As such, there was no
scheme framed before the cut off date. In the absence of the same,
there could not have been any government approval of the scheme for
initiating acquisition proceedings, so as to justify the acquisition of lands
under Section 3(f) (vi) of the L.A. Act. It is further submitted by the
learned senior counsel thatthe letter dated 26.11.1987; on which reliance
has been placed by the division bench of the High Court in the impugned
judgment also does not amount to an "approval" of a scheme in law. The
R. RAJASHEKAR AND ORS. v. TRINITY HOUSE BUILDING
777
CO-OPERATIVE SOCIETY AND ORS.[V. GOPALA GOWDA, J.]
letter reads as under:
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"Government of Karnataka
Karnataka Government Secretariat,
Vidhana Soudha,
Bangalore, dated 26.11.1987
No.RD 77 AQB 86
From:
The Revenue Commissioner and
Secretary to Government,
Revenue Department,
Bangalore.
To
The Special Deputy Commissioner,
Bangalore.
Sir,
Sub : Acquisition ofland in favour of Trinity House Building
Co-op. Society
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I am directed to convey the approval of Government for initiating
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the acquisition proceedings for an extent of94-18 acres ofland in
Avalahalli and Harohalli village in favour ofTrinity House Building
Co-Op. Society as recommended by the 3 men Committee and
the State Level Co-Ordination Committee.
The extent ofland to be notified under Section 4( 1) may be-selected
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out of the list of Sy. No. Furnished by the 3 men committee ..... "
19. It is submitted that the above communication does not reflect
the existence of any Housing Scheme and the application of mind by the
state Government for according approval thereto. It mechanically directs
for publication of the notification under Section 4(1) of the L.A. Act.
G
20. The learned senior counsel appearing on behalf of the appellants
contend that the lands in the instant case could not have been acquired
in favour of the respondent-Society in the absence of there being an
housing scheme framed by it and approval of the same. It is thus,
contended that acquisition oflands in the instant case is violative of both
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the statutory provisions of law as well as the law laid down by this
Court.
21. On the other hand, Mr. Shanti Bhushan, the learned senior
counsel appearing on behalf of the respondent-Society vehemently
opposes the legal contentions advanced on behalf of the learned senior
counsel appearing on behalf of the appellants and sought to justify the
impugned judgment and order by placing strong reliance on the decision
of this Court in the case of Kanaka Grulw (supra). The learned senior
counsel further submits that the state government after accepting the
report of Three Men Committee and State High Level Co-ordination
Committee, by way of its letter dated 26.11.1987, granted approval for
acquisition~orfands in question in favourofthe respondent-Society, the
relevant portion of which has been extracted supra.
'--...
22.
The learned senior counsel further questions the locus standi of
the appellants in filing the first batch and second batch of appeals. It is
submitted that the agreement dated 12.05.1985 entered into between
the respondent-Society and M/s. Srinivasa Enterprises stipulates the
respondent-Society to pay consideration to Mr. S. Rangarajan for getting
the layout plan approved, costs of the entire lands purchased, execution
of layout work etc. It is submitted that the original landowners in the
instant case executed the general power of attorney
in favour of Mr.
S. Rangarajan to get the lands in question acquired. It is further submitted
that the preliminary notification was issued under Section 4(1) of the
L.A. Act dated 09 .06.1988, and the final notification issued under Section
6(1) of the L.A. Act dated 18.03.1989 were challenged by the
respondent-original landowners by way ofWrit Petitions before the High
'Court ofKamataka, wherein the learned single judge, by way of common
judgment and order dated 12.07.1996 quashed the land acquisition
proceedings. It is submitted that within a few days, Mr. S. Rangarajan
sold the lands in question in favour of his daughter, son and son in law,
who are the appellants in first batch of appeals. It is contenqed that the
purported sale transactions in respect oflands covered in the acquisition
notifications is illegal as the same is nothing but fraud played by the said
middleman on the original land owners and the society with a mala fide
intention to deprive the landowners of their constitutional rights, thereby
deceiving not only the original landowners, but also the respondentSociety. It is thus, contended that since the alleged sale oflands in favour
of some of the appellants by Mr. Rangarajan on the basis of the power
R. RAJASHEKAR AND ORS. v. TRINITY HOUSE BUILDING
CO-OPERATIVE SOCIETY AND ORS.[V. GOPALA GOWDA, J.]
of attorney executed by the landowners is void ab initio in law, they
have no locus standi to challenge the legality of the impugned judgment
and acquisition proceedings in respect of the lands involved in these
proceedings before this Court.
23. Mr. H.N. Nagamohan Das, the learned senior counsel appearing
on behalfofthe respondent original landowners-farmers sought to justify
the impugned judgment and order passed by the Division Bench of the
High Court. It is further submitted by the learned senior counsel that
during the pendency of the Writ Appeals before the High Court, there
came to be a compromise between the farmers and the society. The
compromise is immensely beneficial to farmers as for the acquisition of
every acre, each one of them are entitled for allotment of one site and
the society has agreed to deposit the award amount as determined by
the Land Acquisition Officer. The learned senior counsel submits that if
the acquisition proceedings are not upheld, the farmers will be deprived
of both the award amount as well as a site for every acre of land. In
such a scenario, the only party which stands to gain is the fraudulent
purchasers of the lands. Alternatively, he submits that even if the
acquisition proceedings are quashed on the basis of the non compliance
with Section 3(t)(vi) of the L.A. Act and decisions of this Court referred
to supra and the sale transactions between Mr. S. Rangarajan and some
of the appellants are held void, then also the landowners will get justice
for depriving them and their family members oflivelihood for more than
28 years by preventing them from cultivating the said lands and earning
their livelihood.
24. We have heard the learned senior counsel appearing on behalf
of the parties. Before we turn our attention to the essential questions of
law that arise for our consideration in the present case, it is important to
advert to a submission made on behalf of the appellants. The learned
senior counsel appearing on behalf of the appellants have also sought to
contend that the respondent-Society had no locus standi to file the Writ
Appeal as it did not have any right over the said lands in the instant case.
It is submitted that a right would vest in the society only once possession
of the land was taken by the state government and award passed in
favour of the landowners, and thus, it did not have the locus standi to
challenge the quashing of the acquisition proceedings. The said submission
has been sought to be rebutted by Mr. Shanti Bhushan, the learned senior
counsel appearing on behalf of the respondent-Society, by placing reliance
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on a constitution bench decision of this Court in the case of U.P. Awas
Evam Vikas Parishad v. Gyan Devi (D) by LRS. & Ors.'.
25. We are unable to agree with the contention advanced on behalf
of the learned senior counsel appearing on behalf of the appellants.