Source: https://indiancaselaw.com/r-rajashekar-vs-trinity-house-building-co-operative-society-supreme-court-of-india-15-09-2016/
Timestamp: 2019-04-20 12:38:34+00:00

Document:
[V.GOPALA GOWDA]AND[ADARSH KUMAR GOEL] JJ.
For Petitioner(s) Mr. R.S. Hegde, Adv. Mrs. Farhat Jahan Rehmani, Adv. Mr. Shanti Prakash, Adv. Mr. Rajeev Singh,Adv. Mr. Basava Prabhu Patil, Sr. Adv. Mr. Anirudh Sanganeria, Adv. Mr. Chinmay Deshpande, Adv. Mr. Amjid Maqbool, Adv. Mr. A. S. Bhasme,Adv. For Respondent(s) Mr. E. C. Vidya Sagar,Adv. Mr. Kartik Seth, Adv. Mr. Subhash Chandra Sagar, Adv. Ms. Jennifer John, Adv. Mr. Irshad Ahmad,Adv. Mr. V. N. Raghupathy,Adv. Mr. Kunal Verma,Adv. Ms. Yugandhara P. Jha, Adv. Mr. Prasanna Mohan, Adv. Mr. Pulkit Tare, Adv. Ms. Ruchi Sahay, Adv.
(hereinafter referred to as the âL.A. Actâ) was set aside.
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 ârespondent-Societyâ) was registered with the object of providing sites for building residential houses for its members. On 12.03.1985, the said society, represented 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 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 âThree Men Committeeâ to verify the claims 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.
On 10.03.1988, the Additional Registrar of Co-Operative Societies, Bangalore passed an order under Section 64 of the Karnataka Co-operative 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.
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 of 92 acres 38 guntas in Avalahalli and Herohalli villages of Yelahanka Hobli, Bangalore North Taluk, Bangalore District in favour of the respondent-Society.
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 challenging the correctness of the same urging certain legal grounds. The Division Bench of the High Court held that there was no evidence on record to suggest that the âoutside agencyâ (M/s Srinivasa Enterprises) had influenced the acquisition proceedings. On the other hand, it is clear from the material placed on record that the case of the respondent-Society was considered by the State Level Co-ordination Committee on 25.09.1987, and on the basis of the clearance granted by the Committee the state government 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 behalf of the respondent-Society and Mr. H.N. Nagamohan Das, the learned senior counsel appearing on behalf of the respondent-original landowners in the first two appeals filed by the so-called purchasers.
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 ofSumitramma v. State of Karnataka, SLP (C) No. 10270 of 1996, decided on 04.10.1996andMuniyappa v. State of Karnataka, SLP (C) No. 14681 of 1995 decided on 04.10.1996. 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.
â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 Courtâ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.
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.
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.
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 of lands in the instant case is violative of both 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 Gruha (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 of lands in question in favour of the 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 of Writ Petitions before the High Court of Karnataka, 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 contended that the purported sale transactions in respect of lands 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 respondent-Society. It is thus, contended that since the alleged sale of lands in favour of some of the appellants by Mr. Rangarajan on the basis of the power 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 behalf of the 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(f) (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 of livelihood for more than 28 years by preventing them from cultivating the said lands and earning their livelihood.
25. We are unable to agree with the contention advanced on behalf of the learned senior counsel appearing on behalf of the appellants. Once the land is sought to be acquired in favour of the respondent-society and notifications issued under Sections 4(1) and 6(1) of the L.A. Act regarding the same, the respondent-Society acquires the right to challenge the quashing of the acquisition proceedings by a court of law. The contention advanced by Mr. Shanti Bhushan, the learned senior counsel appearing on behalf of the respondent-Society that the appellant-purchasers have no locus standi to file these special leave petitions cannot be accepted by us for the reason that they had been impleaded as respondents in the Writ Appeals before the High Court.
1. Whether the acquisition of lands in favour of the respondent-society in the impugned acquisition proceedings is covered under the definition of the term public purpose, as defined under Section 3(f)(vi) of the L.A. Act?
2. Whether the sale transactions in favour of the appellants in the first and second batch of appeals during the pendency of the proceedings by the Power of Attorney(s) holder Mr. S. Rangarajan, on behalf of some of the land owners and sale of lands by some of the other landowners during the pendency of the Writ Petitions in favour of the appellant-purchasers in connected second appeals is legal and valid?
3. Whether the appellant-purchasers are entitled for the reliefs as prayed by them?
â(f) the expression âpublic purposeâ includes- â¦..
The aforementioned amount was enhanced to Rs. 170 per acre by way of supplementary agreement dated 05.03.1992.
AND WHEREAS we have received the full consideration for the said schedule property as per Agreement under separate document and receipt.
A perusal of the agreement executed between the respondent-Society and Mr. Rangarajan, as well as the power of attorney(s) executed by the landowners in favour of Mr. Rangarajan would clearly show that the ultimate intent of the parties was to get the lands of the landowners acquired in favour of the respondent-Society.
20. Now the question which is to be answered is as to whether in view of the definition of âpublic purposeâ introduced by the aforesaid amending Act 68 of 1984 in Section 3(f)(vi), is it open to the appropriate Government to acquire land for cooperative society for housing scheme without making proper enquiry about the members of the Society and without putting such housing co-operative society to term in respect of nature of construction, the area to be alloted to the members and restrictions on transfer thereof?
110. In our view, none of the orders and judgments referred to hereinabove can 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) 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 will be used for providing sites to poor and people belonging to Backward Class and on receipt of the recommendations of SLCC the State Government had directed the 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 the three-Judge Benches in 1st H.M.T. and 2nd H.M.T. cases and the judgment of the two-Judge Bench in Vyalikaval House Building Coop. Society case.
111. In majority of the cases decided by the High Court to which reference has been made hereinabove, the petitioners were non-suited on the ground of delay and laches or participation in the award proceedings.In Muniyappa case, the judgment in 1st H.M.T. case was distinguished on the premise that a scheme had been framed and the same had been approved by the State Government and further that the petitioner had failed to show that the approval was vitiated due to intervention of the extraneous consideration. In Sumitramma case this Court noted that in 1st H.M.T. case, no separate order was made by the Government for grant of approval whereas in Sumitramma case an order has been passed on 14-10-1985 conveying the Governmentâs approval for the issuance of Notification dated 21-1-1986 under Section 4(1) of the 1894 Act. In Kanaka Gruha case also, this Court treated the direction contained in letter dated 14-11-1985 of the Revenue Commissioner and Secretary to the Government to the Special Deputy Commissioner, Bangalore to initiate the acquisition proceedings by issuing notification under Section 4(1) as an approval within the meaning of Section 3(f)(vi).
33. The stand of the respondent-Society is that the acquisition of lands by the State Government is under Section 3 (f) (vi) of the L.A. Act and that a scheme has been submitted and the same has been approved. But from a perusal of the original acquisition file of the state government, it is clear that there is no such scheme and no prior approval of the same by the State Government as required under Section 3 (f) (vi) of the L.A. Act.
34. Thus, in the light of the judgments of this Court referred to supra, and in the absence of framing of scheme by the respondent-Society and approval of the same by the State Government as required under Section 3 (f)(vi) of the L.A. Act, the Division Bench, holding that the letter dated 26.11.1987 referred to supra amounts to approval of the scheme, is 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 are forthcoming from the original file regarding the details of the scheme, and the application of mind by the state government to approve the same. In the light of the decisions of this Court, as well as the wording of Section 3(f) (vi) of the L.A. Act, we are constrained to hold that the acquisition proceedings in the instant case cannot be said to be one for âpublic purposeâ as defined under Section 3 (f) (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 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 are acquired in its favour. Upholding such an acquisition would be akin to approving to such type of agreements which are opposed to public policy and the same cannot be allowed by this Court 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 is abhorrent and cannot be granted the sanction of law.
â7. All Acts, Deeds and things connected with the Acquisition of lands as aforesaid shall be got completed by the Second Party with a view to facilitate Acquisition of lands within a period of 18 months or any period to be extended in writing by the First Party.
It is clear that the parties to the said agreement were not even able to honour the terms of the same. Thus, the acquisition of the lands cannot be allowed to sustain for that reason as well.
(hereinafter referred to as the âNew L.A. Act, 2013â), if the validity of the acquisition of the lands in question is upheld. This stand of 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 this Court.
37. Thus, the impugned notifications issued under Sections 4(1) and Section 6(1) of the L.A. Act are bad in law as the same suffer from not only legal mala fides but also legal malice, which amounts to colourable exercise of power by the state government and therefore, the same are liable to be quashed and accordingly quashed.
38. At this stage, it is also important to reflect on another argument advanced by the learned senior counsel appearing on behalf of the appellants, that since till date no award has been passed in favour of the landowners by the Land Acquisition Officer and therefore, the land acquisition proceedings are lapsed on that count also by virtue of Section 11A of the L.A. Act.
â114. Repeal and saving.â(1) The Land Acquisition Act, 1894 (1 of 1894) is hereby repealed.
40. On the other hand, Mr. Shanti Bhushan, the learned senior counsel appearing on behalf of the respondent-Society very strongly opposed the said contention placing reliance upon Section 24(1)(a) of the New L.A. Act, 2013 and Section 11A of the L.A. Act that an Award could not be passed because of the status quo order passed by way of an interim order that had been passed during the pendency of the writ petitions, writ appeals and as well as the proceedings before this Court. Therefore, the acquisition proceedings cannot be said to have lapsed on that ground alone.
41. In view of the fact that for the reasons stated supra, we have already come to the conclusion that the acquisition proceedings in respect of the acquired lands are liable to be quashed and there is no need for us to render an opinion on this question of law in these cases, as interesting as it is.
42. Having arrived at the conclusion on the points framed in these appeals for the reasons stated supra, the acquisition proceedings in the instant case are liable to be quashed, we now turn our attention to answer the question of the relief required to be granted by this Court in favour of the appellants in the appeals arising out of SLP (C) Nos. 13656-13684 of 2004 and the appeals arising out of SLP (C) Nos. 18090-18118 of 2004. The appellants in the connected third appeals arising out of SLP (C) No. 23336-23339 of 2004 are the original owners of lands who had approached the High Court after a long lapse of time. Therefore, Mr. Shanti Bhushan learned senior counsel appearing on behalf of the respondent-Society submits the appeals arising out of SLP (C) Nos. 23336-23339 of 2004 are liable to be dismissed on account of delay and laches as they have approached the High Court after long lapse of time without proper and sufficient explanation in approaching belatedly to the High Court by filing writ petitions. Mr. Shekhar Naphade, the learned senior counsel appearing on behalf of the said appellants-landowners has seriously opposed the above contention by contending that the said question has already been answered by this Court in H.M.T. House Building Coop. Society (supra) wherein it was held that once the proceedings are void ab initio in law for non-compliance with mandatory statutory requirement of prior approval of the Scheme, the original owners cannot be shut out from the Court in challenging the acquisition proceedings and therefore, they are entitled to challenge the same at any point of time even in the collateral proceedings. We have accepted the above contention as the same is well founded and tenable in law.
The respondent-original landowners in the first appeal 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 relevant terms of which have been extracted supra to show that they have not executed the power of attorney in his favour to sell their lands other than the respondent-Society. On the basis of the same the acquisition proceedings were initiated and the notifications under Section 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 Section 4(1) notification was published. No doubt their objections have 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. The fact that the report submitted by the Special Deputy Commissioner under Section 5A(2) of the L.A. Act has not been even considered by the State Government properly and objectively is evident from the original file produced in these cases. After the Writ Petitions were allowed by the learned 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 son-in-law who are the appellants in the appeals arising out of SLP (C) Nos. 13656-13684 of 2004, within a span of a few days from the date of passing the judgment by the learned 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.
44. As far as the sale in favour of the appellants in the appeals arising out of SLP (c) Nos. 18090-18118 of 2004 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 learned single Judge of the High Court. A Division Bench of this Court in the case of Uddar Gagan Properties Ltd. v. Sant Singh & Ors.12 held that the sale transactions of a similar nature is void ab initio in law. Thus, the transactions of the alleged sales made during the pendency of the proceedings are 12 C.A. No. 5072 of 2016, decided on 13.05.2016 wholly illegal and void ab initio in law and therefore the same cannot be allowed to sustain in law. The said sale transactions are also contrary to law which is in operation in respect of agricultural lands.
45. The Impleadment Application Nos. 74-102 of 2010 filed in the appeals arising out of the SLP (C) Nos. 13656-13684 of 2004 are also liable to be rejected, as the applicant therein claims to be the Power of Attorney(s) holder of some of the lands in question and agreements of sale. Since he neither approached the High Court, nor this Court by way of filing SLPs and neither the agreements of sale nor the power of attorney(s) confer any right upon him at this time, as the same is barred by the provisions of the Land Reforms Act, 1952, provisions of the Specific Relief Act as well as the Limitation Act, the applicant has no legal right to come on record to challenge the impugned judgment and therefore the Impleadment Applications are rejected, as the same are wholly unsustainable in law.
(a) The appeals filed by the so-called purchasers and some of the landowners seeking to set aside the common impugned judgment and order dated 06.05.2004 passed by the Division Bench of the High Court of Karnataka in Writ Appeal Nos. 7543-7557 of 1996 and other connected appeals are allowed to the extent as indicated below and the impugned judgment and order is hereby set aside. The common judgment and order dated 12.07.1996 passed by the learned single Judge of the High Court in Writ Petition No. 8188-8201 of 1989 and other connected writ petitions in quashing the acquisition notifications and proceedings are restored.
(b) We also hold that the transfer of the acquired lands by way of the alleged sale deeds executed by Mr. S. Rangarajan in favour of the appellants in the appeals arising out of SLP (C) Nos. 13656-13684 of 2004, as well as the transfer of lands by way of alleged sale deeds in favour of some of the appellant-purchasers in the appeals arising out of SLP (C) Nos. 18090-18118 of 2004 are illegal and void ab initio in law.
(c) Since the learned single Judge of the High Court quashed the acquisition notifications and proceedings at the instance of the original landowners, which common judgment and order has been restored by this Court by setting aside the impugned judgment and order passed by the Division Bench of the High Court in the Writ Appeals filed by the respondent-Society, we grant the relief as has been granted by the learned single Judge in favour of the said original landowners, who are the respondents in the first two appeals before us and also allow the appeals filed by some of the landowners in the civil appeals arising out of SLP (C) No. 23336-23339 of 2004.
(d) Since we have set aside the common impugned judgment and order of the Division Bench of the High Court of Karnataka, we consequently restore the common judgment and order of the learned single Judge passed in the Writ Petitions, wherein the acquisition notifications and proceedings in respect of the lands of some of original landowners have been quashed at their instance. The same shall now be enjoyed by them. So also the appellants in the appeals arising out of SLP (C) Nos. 23336-23339 of 2004 are entitled for the same relief as we quashed the acquisition notifications and proceedings. For this purpose, we direct the Deputy Commissioner of Bangalore, Urban District and also the Commissioner of Police/DGP to extend all such protection and assistance to the landowners to ensure that this judgment and order is implemented properly.

References: V. 
 V. 
 v. 
 v. 
 v. 
 v.