N.Arasappa vs State Of Karnataka .

2026 INSC 1151
Reportable


IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION

Civil Appeal Nos.13744-13747 of 2015


N. Arasappa
…. Appellant
Versus
State of Karnataka & Ors.
…. Respondents

W I T H

Civil Appeal Nos.13749-13752 of 2015

Civil Appeal Nos.13759-13762 of 2015

Civil Appeal Nos.13754-13757 of 2015

Civil Appeal No.13753 of 2015

J U D G M E N T

K. VINOD CHANDRAN, J.
“The power of eminent domain, next to that of
conscription of manpower for war, is the most awesome
grant of power under the law of the land.”
Winger v. Aires (371 Pa. 242 (1952)

What the Supreme Court of Pennsylvania observed applies
Signature Not Verified
Digitally signed by
VISHAL ANAND
Date: 2026.10.26
14:09:35 IST
Reason:
equally in our shores too. Condemnation of privately owned
land for public purpose can only be with authority of law and
C.A. Nos.13744-13747 of 2015 etc. Page 1 of 71

with just compensation being paid. That, such authority of law
can be exercised only for public purpose, is without cavil; with
just compensation being an ancillary right, which does not by
itself justify an acquisition. However just the compensation be, if
the authority of law is lacking or the public purpose is absent,
there can be no eminent domain exercised. The appellants
herein allege lack of authority in law; complete absence of
public purpose and fraud having vitiated the instant acquisition.

Arguments of the Appellants: -
2. Ms. Kiran Suri, learned Senior Counsel and Mr. Basava
Prabhu S. Patil, learned Senior Counsel appeared for the
appellants. Mr. Vikas Singh, learned Senior Counsel appeared
th
for the 4 respondent/Society and Mr. Sanjay Hegde, learned
Senior Counsel appeared for the State assisted by learned
Additional Advocate General, Mr. Omar Hoda.
3. On behalf of the appellants, it was pointed out that housing
schemes sponsored by a Cooperative Society were treated as
‘public purpose’ only by Land Acquisition (Amendment) Act,
1
1984 (w.e.f. 24.09.1984) by introduction of clause (f) with sub-

1
Hereinafter referred to as ‘the LA Act’

C.A. Nos.13744-13747 of 2015 etc. Page 2 of 71

clause (vi) under Section 3. However, to enable a valid
requisition, there should be a housing scheme; the layout and
the blueprint drawn up, which has to be approved by the
appropriate Government. In fact, even before the Amendment
Act came into force, the respondent Society entered into an
agreement with a third party, one Bhagya Enterprises who in
turn undertook to acquire land for implementing a housing
scheme, which in itself is an indication of the colourable exercise
of power by the authorities under the Government. The learned
Single Judge found that there was no approval of the housing
scheme and the acquisition was approved only on the basis of
the area-wise extent. Even with respect to the extent, there was
gross discrepancy, in the extent cleared by the State Level
Committee, that approved and later notified for acquisition.
4. The appellant relied on H.M.T. House Building
2
Cooperative Society v. Syed Khader & Ors. , Bangalore City
3
Cooperative Hosing Society Ltd. v. State of Karnataka & Ors. ,
B. Anjanappa & Ors. v. Vyalikaval House Building Cooperative
4
Society Ltd. & Ors. and Rajashekar & Ors. v. Trinity House

2
(1995) 2 SCC 677
3
(2012) 3 SCC 727
4
(2012) 10 SCC 184
C.A. Nos.13744-13747 of 2015 etc. Page 3 of 71

5
Building Cooperative Society & Ors. , wherein similar
acquisitions were set aside by this Court. The Registrar of
Cooperative Societies, on allegations of several irregularities,
illegalities and fraud committed by the mushrooming societies,
who attempted to grab land under the pretext of implementation
of housing schemes, appointed the G.V.K. Rao Committee to
th
inquire into the allegations. The 4 respondent was one of the
Societies whose activities were questioned before the
Committee. Very serious and grave irregularities were noticed
in its functioning and the Committee Report specifically
disclosed the agreement between the Society and the third
party, M/s Bhagya Enterprises, which had undertaken the
acquisition, which could only have been carried out by
employing State machinery under the garb of a public purpose
being effectuated.
5. The learned Single Judge categorically found fraud in the
acquisition carried out. The Division Bench, whose order is
impugned herein, though highlighted the well-settled principle
that fraud vitiates the most solemn proceedings, chose to

5
(2016) 16 SCC 46
C.A. Nos.13744-13747 of 2015 etc. Page 4 of 71

overturn the well-considered judgment of the learned Single
Judge on the ground of delay. The trite principle that delay
condonation should yield to a categoric finding of fraud was not
appreciated by the Division Bench. The appellants also relied on
the comparable instances, wherein this Court interfered with the
colourable exercise of power in Uddar Gagan Properties Ltd. v.
6
Sand Singh & Ors. , Royal Orchid Hotels & Anr. v. G. Jayarama
7
Reddy & Ors. , Rattan Chand Hira Chand v. Askar Nawaz Jung
8
(Dead) by LRs. & Ors. . The Division Bench also erred
egregiously in finding proof of possession based only on the
notification issued under Section 16(2) of the LA Act, applicable
in the State of Karnataka, when the appellants were never
physically divested of their possession by the State Authorities.
The learned Single Judge had categorically found that there is
no mahazar prepared; which is incumbent, when actual physical
possession is taken, of the acquired lands. The Division Bench
ought not to have disturbed the well-considered findings of the
learned Single Judge in the absence of any perversity or

6
( 2016) 11 SCC 378
7
(2011) 10 SCC 608
8
(1991) 3 SCC 67
C.A. Nos.13744-13747 of 2015 etc. Page 5 of 71

arbitrary exercise of jurisdiction, which grounds in fact applied
more aptly to the subject acquisition.
Arguments for the Society: -
th
6. Arguing for the 4 respondent-Society, it is pointed out that
the case set up by the appellant rests on four propositions: bogus
membership, engagement of middlemen, fraud and absence of
prior government approval under Section 3(f)(vi) of the LA Act,
all of which are unsubstantiated and frivolous. On government
approval, it is pointed out that the Society’s proposal was
scrutinised by a Three-Men Committee and cleared by the State-
Level Coordination Committee (SLCC) and subsequently
approved by the Government before issuance of Section 4(1)
notification. The acquisition commenced with notification dated
22.11.1988 and after consideration of the objections, the
declaration under Section 6(1) was issued on 04.12.1989
restricted to 59 acres, 6 guntas. Awards followed in the year
1990 with possession taken evidenced unequivocally by the
notification under Section 16(1), raising a statutory presumption
under sub-section (2) of Section 16 and the entire land was duly
handed over to the Society. The present Writ Petition is filed
after about 19 years, in 2007. Earlier a Division Bench of the
C.A. Nos.13744-13747 of 2015 etc. Page 6 of 71

Karnataka High Court ruled in favour of the Society and the
specific notification was upheld as occasioned by a public
purpose, in Karnataka Gruha Nirmana Sahakara Sangha
9
Limited, Peenya, Bangalore v. Karithimmaiah and Others .
7. The contemporaneous records indicate a housing scheme
having been approved by the Government which was the
proposal made by the Society before the Revenue
Commissioner. The Society itself was registered on 14.03.1974
and consisted of members who were employees of the Small-
Scale Industries in Peenya, Bangalore and other landless
residents of that area. The application in the form of a proposal
submitted before the Revenue Commissioner contained the
ownership particulars of the land, the extent required, the
financial capacity of the Society, the proposed plot dimensions,
approximate price and the broad map of the layout plan for
development, as produced along with I.A. No.161082 of 2018 in
C.A Nos. 13744-13747 of 2015 as Annexure R4. This proposal,
was recommended by the Three-Men Committee and the SLCC,

9
2002 (1) Kar.L.J. 469 (DB)
C.A. Nos.13744-13747 of 2015 etc. Page 7 of 71

as also approved by the Government by order dated 13.11.1987
and directed initiation of acquisition proceedings.
8. The allegation of bogus membership is frivolous, insofar as
the same was considered at the level of the SLCC and confirmed
through the machinery of the State; the Registrar of Cooperative
Societies. There is no proof offered of fictitious membership and
there is no annulment of the Society’s registration or cancellation
of the approval of the verified memberships. The GVK Rao
Committee only made a preliminary scrutiny and there were no
th
serious irregularities that were highlighted as against the 4
respondent Society. The report also does not record any
membership conferred as fictitious or its memberships being
fabricated without any basis. There is no substantiation as to the
allegation of colourable devices having been employed for
acquisition or that the beneficiaries were bogus. The agreement
produced as Annexure P1 along with the Civil Appeal does not
confer any statutory power on the service provider who was
merely employed to identify the land and obtain documents
from the owners, as also propose a layout and carry out liaison
work. There was never any intention or authorisation to the
service provider to indulge in any unlawful activity for the
C.A. Nos.13744-13747 of 2015 etc. Page 8 of 71

acquisition. The acquisition as such was not under any contract
and it was a separate proposal made, which was verified by the
Committees at the government level and approved by the
Government itself. The agreement with a service provider, for
obtaining documents from owners and layout related work, does
not vitiate the acquisition which was carried out legally.
9. It is also urged that the authorities relied upon by the
appellants are distinguishable. H.M.T. House Building
10
Cooperative Society v. M. Venkataswamappa was a case in
which there was no prior approval of a housing scheme and the
record contained findings of a large-scale inclusion of ineligible
and bogus members, collection of huge amounts and
agreements with agents, to use undue influence on the
Government to issue notification to acquire lands for
H.M.T.H.B.C Society. The Vyalikaval House Building Co-Op.
11
Society by its Secretary v. V. Chandrappa & Ors. was
concerned with a clear fraud employed and abuse of State
machinery, on which finding the acquisition was set aside. In the
instant case, fraud is inferred from a ‘general committee report’

10
(1995) 3 SCC 128
11
(2007) 9 SCC 304
C.A. Nos.13744-13747 of 2015 etc. Page 9 of 71

and a private service agreement despite the project specific
scrutiny and approval being on record. Bangalore City
3 th
Cooperative Housing Society Ltd. is in favour of the 4
respondent Society, specifically applying paragraph 78 to 79,
wherein disclosure of total eligible members, land requirement,
specific identification of land, plot dimensions and broad mode
of development were the aspects on which the Committees of
the Government applied its mind before acquisition. Therein
the land owners challenged the notification of 1988-1989 in 1992
and 1998 and the delay had been condoned. In the present case
despite the GVK Rao Committee Report being on the public
domain, no challenge was made within a reasonable time. The
notifications were of the period 1998-99, awards were made in
1990, possession commenced in 1992-93 and the writ petitions
9
were filed only in the year 2007. Karithimmaiah with respect
to the very same acquisition is a binding precedent. Insofar as
Writ Petition No’s.22979-85 of 1989 and Civil Appeal No’s.13754-
57 of 2015, it is pointed out that the parties in the writ petitions
and one of the parties in the Civil Appeals had challenged the
notification in an earlier proceeding, ending with the dismissal
of Special Leave Petition (C) No.1727-1732 of 2002. In
C.A. Nos.13744-13747 of 2015 etc. Page 10 of 71

conclusion, it is the argument that the four propositions urged
does not merit consideration and are liable to be negated and
the acquisition is to be upheld.
Arguments of the State: -
10. The Government, to the specific query raised, as regards
the documents in I.A. No.161082 of 2018 asserted a proper
procedure having been followed as provided in the Karnataka
Government (Transaction of Business) Rules, 1977. The extracts
under Part III, Sub-heading ‘E’ with reference to Land
Acquisition is pointed out, indicating that the acquisition of land
under the LA Act for any Department of Government shall be
dealt within the Revenue Department; but all administrative
decisions connected with the acquisition shall be taken in the
Administrative Department concerned in the Secretariat under
order of the Minister-in-Charge. On our specific directions, an
Officer of the State Government was present who also produced
th
the extracts of the relevant records with respect to the 4
respondent Society which is Government File No.RD 242 AQB
84.
9
11. The State also relies on Karithimmaiah to urge the
ground of res judicata. Insofar as the GVK Rao Committee being
C.A. Nos.13744-13747 of 2015 etc. Page 11 of 71

in public domain it is urged that the inquiry report being one
prepared by an Inquiry Officer appointed under a statute, any
person could have obtained a certified copy of the same. The
Committee’s report was also looked into by the High Court and
this Court in the various decisions cited, which was a raging
controversy during that time and the land owners were quite
aware of the report. Insofar as the extent of land acquired, the
Three-Men Committee and the SLCC had recommended
th
allocation of additional 97 acres of land to the 4 respondent
Society, comprising of 11 acres in Laggere village, 8 acres and
23 guntas in J.B. Kaval village, 12 acres and 17 guntas in
Nelakedaranahalli village and 65 acres in Jakkur village. The
SLCC excluded 65 acres from Jakkur village since it was falling
under the regional park zone. The Commissioner Revenue
adjudicated the compensation and acquired the land by
communication dated 07.11.1988 which proposed the
acquisition of 59 acres and 39 guntas from Nelakadirenahalli
Village. Mr. Sanjay R. Hegde, learned Senior Counsel also points
out that these acquisitions for the housing societies were at the
time of the initial development of Bangaluru which was
necessary and expedient.
C.A. Nos.13744-13747 of 2015 etc. Page 12 of 71

The Single Bench Findings: -
12. We have to take note of the judgment of the learned Single
Judge which led to Civil Appeal No’s. 13744 to 13747 of 2015;
taken as the lead case, in a little detail. There were originally 16
petitioners, all of whom had lands in Nelakadiranahalli Village,
but by the time the writ petition was heard, only four remained;
nd th th th
the 2 , 10 , 13 and 16 petitioners, who are respectively
Kempaiah, Nanjundaiah, Hanumaiah and Chandra, whose legal
representatives are the appellants before us; the writ petitioners
in WP No.9412 of 2007. They assert their possession over the
lands alleged to have been acquired, even now. Only when
interference to their possession was attempted in 2007, they
approached the High Court with a challenge, specifically
asserting fraud. In total, they claimed 4 acres and 12 guntas; their
separate holdings being 27 guntas, 1 acre and 32 guntas, 30
guntas and 38 guntas respectively. They sought for a writ of
certiorari quashing the notification dated 22.11.1988 under
Section 4 and the declaration dated 04.12.1989 under Section 6
of the LA Act. Their prayer was also to quash the notification
issued under Section 16(2) of the LA Act; a provision brought in
by an amendment, by the State of Karnataka. They further
C.A. Nos.13744-13747 of 2015 etc. Page 13 of 71

challenged Annexure Q dated 19.01.1993, Annexure R dated
01.03.2005 and Annexures S1 to S3 communications dated
13.11.1992, 20.01.1993 and 26.07.2004, which directed handing
over of possession to the 4th respondent-Society. In the
alternative, they prayed for a writ of mandamus directing de-
notification of the land acquisition proceedings in the specified
survey numbers of Nelakadiranahalli Village, Yeshwanthpur-
Hobli, Bangalore North Taluk, Bangalore.
13. The learned Single Judge first looked at Annexure P1
agreement entered into with two persons, representing one
Bhagya Enterprises, who acted as middlemen for the purpose of
acquisition of the land. It was observed that on instigation of the
middlemen, the Government employed its machinery to acquire
the land for the purpose of the Society; which is evident from how
it was proceeded with. The acquisition commenced with a letter
dated 13.11.1987, issued by the Revenue Commissioner and
Secretary to Government to the Special Deputy Commissioner,
Bangalore, conveying the approval for acquisition of an extent of
th
97 acres of land in favour of the 4 respondent Society. Later by
the notification under Section 4(1) the extent was reduced to 79
C.A. Nos.13744-13747 of 2015 etc. Page 14 of 71

acres 25 guntas while the declaration under Section 6 indicated
59 acres 6 guntas.
14. Some other landowners had challenged the acquisition in
a writ petition which was allowed by the learned Single Judge,
9
overturned by a Division Bench in Karithimmaiah While the
learned Single Judge quashed the acquisition proceedings on
th
several grounds; viz; the 4 respondent being not a bona fide
society, absence of public purpose, invalid declaration under
Section 6 and the State Government not being a contributory; the
Division Bench found that the condemnation of privately owned
properties for the purpose of providing housing, as provided
under Section 3(f)(vi) of the LA Act, was perfectly in order and
the omission to specify ‘public purpose’ in the notification would
not vitiate it. The respondent State and the Society vehemently
relied upon the aforesaid decision to seek for a dismissal of the
instant writ petition too.
15. The learned Single Judge found that the contention of the
writ petitioners that the Society itself was dubiously constituted
without any details of the membership and the involvement of
middlemen to facilitate acquisition of land by the State, was
justified and it clearly indicated a fraud played on the citizens
C.A. Nos.13744-13747 of 2015 etc. Page 15 of 71

and the colourable exercise of power by the State authorities.
The respondents, on the other hand, asserted that they had
followed the legal rigmarole and requisitioned a specified
extent of property for the purpose of laying out a housing
scheme, which is included as a public purpose in the LA Act. The
respondents also asserted possession on the basis of a
notification issued under Section 16(2) of the LA Act, which was
urged as conclusive evidence of the State having taken
possession of the said land. The specific contentions raised
before the learned Single Judge by the respondents, State and
the Society, were of res judicata, estoppel as also delay & laches.
On possession, the learned Single Judge found categorically
that, but for the notification under Section 16(2), there was
nothing available in the records to indicate physical possession
having been taken over by the State authorities, usually
acknowledged by mahazars in which the independent persons
are also made witnesses.
16. The technical plea of res judicata, estoppel and delay &
laches were rejected by the learned Single Judge, primarily
finding fraud played on the landowners for reasons of : (i) the
agreement with middlemen, who undertook to facilitate
C.A. Nos.13744-13747 of 2015 etc. Page 16 of 71

acquisition through the State for a consideration; (ii) payment to
landowners having not been substantiated; and (iii) the G.V.K.
Rao Committee Report, which had specifically dealt with land
acquisitions made in the garb of establishing housing schemes
on the requisition of Cooperative Housing Societies, the benefit
of which lands actually inured to real estate operators. None of
9
these aspects were addressed in Karithimmaiah . The learned
Single Judge noticed the G.V.K. Rao Report in detail, with
th
reference to the 4 respondent-Society, in its order and
th
extracted the same. The conclusions indicate that the 4
respondent-Society did not have any details of its members and
that huge amounts were paid by them to middlemen and
landlords directly. It was shockingly noticed that the
th
representatives of the 4 respondent-Society before the
Committee had spoken of bribe to the Land Acquisition Officers
(LAO). The observations made in the G.V.K. Rao Report,
th
specifically with respect to the 4 respondent-Society and the
conclusions arrived at by the said Committee, clearly indicated
the fraudulent manner in which the Society was functioned,
attempting to appropriate lands privately owned, for dubious
purposes under the guise of implementation of housing
C.A. Nos.13744-13747 of 2015 etc. Page 17 of 71

schemes, the like of which, was interfered with by another
Division Bench; approved in H.M.T. HBCS [M.
10
Venkataswamappa] and a batch of cases. The facts and the law
delineated are strikingly similar and identical, held the learned
Single Judge, which persuaded the learned Single Judge to
quash the acquisition proceedings on the ground of fraud and
colourable exercise of power, on finding also that the possession
had not been taken over by the State or the property handed
th
over to the 4 respondent-Society till date. Learned Single Judge
after quashing the notifications issued under Section 4 and the
declaration under Section 6, proceeded to consider the
irresponsible and illegal manner in which the officers of the State
acted mala fide in condemning privately owned properties
exercising powers of eminent domain and thus perpetrating
injustice on the citizens through the fraudulent measure of land
acquisition, not intended for public purposes. The learned
Single Judge came down heavily on the false affidavit filed
before the Court and directed contempt notice to be issued
against the Under Secretary, who was the deponent in the
affidavit. Costs of Rs.10,000/- in favour of each of the four
petitioners were also ordered.
C.A. Nos.13744-13747 of 2015 etc. Page 18 of 71

The Impugned Judgment: -
17. In fact, we are concerned with another set of appeals in
which the writ petition was dismissed on the ground of delay,
which the landowners had challenged in writ appeal. Both the
appeals, from the decision, quashing the notification, and the
other rejecting the challenge on delay, were considered
together. While affirming the dismissal on the ground of delay,
the judgment of the learned Single Judge in WP No.9412 of 2007;
which we are looking at presently, was reversed and the writ
petition itself got dismissed on the ground of delay and res
judicata .
18. The Division Bench judgment, which is impugned herein,
passed a common judgment in the two appeals; one, from the
dismissal of Writ Petition No.10843 of 2008 on the ground of
delay and latches, and the other, from Writ Petition No.9412 of
2007 which quashed the entire acquisition. The Division Bench
9
first noticed the decision in Karithimmaiah in which the very
same acquisition was under challenge, which challenge stood
negated. The impugned judgment relied on the
recommendations of the Three Men Committee as also the SLCC
and subsequent approval of the Government, which stood
C.A. Nos.13744-13747 of 2015 etc. Page 19 of 71

9
upheld in Karithimmaiah , the SLP against which was also
dismissed by this Court. On considering whether the very same
issues could be reagitated by the writ petitioners on the ground
of fraud, reference was made to the decision of this Court in
12
Meghmala & Ors. v. G. Narasimha Reddy & Ors. . In that
case, the issue relating to fraud was held to be concluded by
reason of the principles of res judicata for reason of the very
same issue having been agitated in the earlier proceedings. The
discovery or detection of fraud at a belated stage would not be
sufficient to set aside the same, even if it has been procured
fraudulently, held the Supreme Court. The Division Bench also
dilated upon various legal aspects, specifically; propositions of
law regarding, finality of litigation and constructive res judicata
9
to reiterate that the decision in Karithimmaiah had brought in
th
finality to the acquisition proceedings for the 4 respondent
Society.
13
19. A.C. Ananthaswamy and Ors. v. Boraiah (dead) by LRs.
was also relied on. The decision of the learned Single Judge,
which set aside the acquisition, had considered the plea of res

12
(2010) 8 SCC 383
13
(2004) 8 SCC 588
C.A. Nos.13744-13747 of 2015 etc. Page 20 of 71

9
judicata based on Karithimmaiah . It was negatived on the
ground that it was just a ruse to get the writ petition dismissed
on technical pleas, without allowing the Court to embark on a
scrutiny into the records of the State Government as maintained
by the Special LAO. The Division Bench faulted this finding on
the ground that the acquisition commenced with the notifications
issued in the year 1988-89 the passing of the award in the year
1990 and the possession taken over in the year 1993. We
immediately notice that this is far from the reality as we see from
the records, which we referred to a little later. Continuing the
narration, the reliance on GVK Rao Report was also criticized on
the ground that it was available in the year 1989 and there was
no explanation why the writ petitioners did not assail the
acquisition proceedings at any earlier point of time. The
presumption arising out of sub-section (2) of Section 16 of the LA
Act by a notification issued on 18.11.1992, proclaiming
possession having been taken over, was specifically noticed.
The Division Bench also observed that a mahazar for taking over
possession would be drawn up only if Section 47 of the LA Act is
invoked, when there is an obstruction to the taking over of
possession, pursuant to a notice issued under Section 12(2) of the
C.A. Nos.13744-13747 of 2015 etc. Page 21 of 71

LA Act. There being no obstruction caused, there was no
requirement to invoke Section 47 was the finding; which again is
far from the facts as disclosed from the documents produced by
th
the 4 respondent Society in IA No.161082 of 2018; which we
would notice a little later. The decisions of this Court in which
the acquisition proceedings were interfered with were noticed
and distinguished.
20. Finding that the instant acquisition proceedings were
upheld by the Division Bench in the year 2001 in
9
Karithimmaiah , the allegation of fraud having vitiated
acquisition proceedings was rejected; especially since the said
ground having not been taken up in the earlier round of
litigation. On the ground of delay, the writ appeal against the
judgment interfering with the acquisition, was allowed and the
other impugned order rejecting the writ petition on the ground
of delay was affirmed. The Division Bench declined to look into
the facts as noticed by the learned Single Judge; while causing
interference to the acquisition proceedings, all relatable to the
fraud, colourable exercise of power and collusion, as coming out
from the records produced and the documents perused; which
we are unable to appreciate. On the ground of delay, we cannot
C.A. Nos.13744-13747 of 2015 etc. Page 22 of 71

but notice immediately that there was no proper housing
scheme with a layout plan of the sites, the roads, the common
area etc. approved by the State Government; which itself vitiates
the acquisition under Section 3(f)(vi) of the LA Act.
Fraud vs. Delay vis-à-vis Res judicata: -
12
21. Meghmala observed that judicial pronouncements,
unlike sand dunes, are known for their stability and finality,
while rejecting the claim made by a Society who had failed in
their earlier attempts to hold on to a property based on an
agreement to sell. The facts indicate that the appellants therein
asserted title over a property based on a sale deed, while the
respondent Society claimed possession based on an agreement
for sale. The Special Court for Land Grabbing Cases found the
purchaser to have title, which was unsuccessfully challenged in
a Writ Petition and a Special Leave Petition. The SLP was
withdrawn with liberty to file a review, which too stood rejected.
The appellants; while the review was pending before the High
Court, moved for execution, while the respondent moved an
application before the Executing Court to summon the records
of the Revenue Divisional Officer, Secunderabad, pertaining to
the survey of the suit land. The Special Court allowed the
C.A. Nos.13744-13747 of 2015 etc. Page 23 of 71

Execution Petition and rejected the application filed by the
respondent-Society. The order of the Executing Court was
challenged unsuccessfully in a writ petition and a review too
failed. Having failed at every point, the respondents filed a
Review Application from the original decree in the land
grabbing case before the Special Court and filed a fresh
application before the Special Court for declaration; that, they
were the owners, alleging that, in fact the appellants were the
land grabbers. The respondents also impleaded the
Government Officers and the vendors of the appellants in the
fresh application, which application was rejected by the Special
Court. On a challenge before the High Court, the High Court
directed a de novo consideration of the merits, which was
challenged before this Court. This Court reversed the order of
the High Court specifically finding that the respondents were
unable to show any suppression of material information from the
Special Court, at the earlier instance, wherein the contention of
a proper identification of the suit land was taken and negatived.
The respondents were unable to prove their interest in the suit
land and they completely failed to show any document
transferring the land to the Society, but for the agreement of sale,
C.A. Nos.13744-13747 of 2015 etc. Page 24 of 71

on which there was no suit for specific performance initiated.
The questions attempted to be agitated on the ground of fraud
and misrepresentation, were already agitated unsuccessfully in
the earlier round of litigation, was the specific finding.
12
22. We are unable to find any application of Meghmala in
9
considering Karithimmaiah on the ground of res judicata.
9
Karithimmaiah only based itself on the approval of the
Government communicated by the Under Secretary, and held it
a valid approval of the housing scheme, without verifying the
records to understand whether actually there was a housing
scheme, with the proper lay out approved by the Government,
prior to initiation of acquisition proceedings. As we noticed, the
Division Bench, at the earlier instance, had cursorily looked at
the files to find a public purpose, while in the present
proceedings, the learned Single Judge had dealt with the issues
raised on fraud, colourable exercise of power and collusion.
Pertinent also is the singular factum of an agreement entered
into with a so-called service provider to facilitate acquisition of
lands, already agreed to be purchased by the service provider,
for a commission; which aspect was not before the Court at the
earlier instance.
C.A. Nos.13744-13747 of 2015 etc. Page 25 of 71

13
23. A.C. Ananthaswamy was also in a totally different
circumstance. Therein, an ex-parte decree was sought to be set
aside under Order IX Rule 13 of the Code of Civil Procedure,
1908, and a First Appeal was also filed against it. The First
Appeal was dismissed as time barred and when the plaintiff
moved for execution of the decree when the defendant filed a
separate suit seeking setting aside of the ex-parte decree on the
allegation of fraud and misrepresentation; which allegation was
specifically raised on the ground of incorrect details of the
defendant having been shown in the plaint. This Court found not
only that bare non-service of summons cannot lead to an
allegation of fraud, but also that the specific contention raised in
the second suit regarding fraud and misrepresentation, was
never raised in the application to set aside the ex-parte decree
or the appeal filed from that decree; at which stage the details of
the defendants shown in the plaint was very much within their
knowledge. Annexure P1 agreement produced in the writ
petition is the distinctive aspect on which, in this case the ground
of res judicata and delay are liable to be rejected.
9
24. In Karithimmaiah , the learned Single Judge quashed the
th
acquisition proceedings on multiple grounds i.e. the 4
C.A. Nos.13744-13747 of 2015 etc. Page 26 of 71

respondent being not a bona fide society, absence of public
purpose, invalid declaration under Section 6, and the State
Government not being a contributory. The Division Bench
noticed that the learned Judge merely observed that the
Government did not produce any record to show that there was
a scheme submitted by the appellant-society and the same was
approved by the Government. Section 3(f)(vi) was noticed along
with the communication of 13.11.1987 signed by the Under
Secretary to Government, Revenue Department to find that there
th
was a prior approval. The application of the 4 respondent
Society was perused to find that the communication more than
satisfies the Court, to find a proper approval from the
Government having been obtained.
25. Be that as it may, we cannot but observe that a more
detailed examination has brought out facts, which clearly
indicate collusion and colourable exercise of power, leading to
a fraud played on the landowners, which according to us cannot
be ignored, merely on the ground of res judicata . In this context
7
we also have to notice that G. Jayarama Reddy was a decision
of another Division Bench, which interfered with the similar
acquisition proceedings, upheld in a Civil Appeal, by this Court.
C.A. Nos.13744-13747 of 2015 etc. Page 27 of 71

The precedential value of the judgments of this Court assumes
relevance while the mere dismissal of an SLP approving the
9
judgment in Karithimmaiah does not have the sheen of a
precedent of this Court, under Article 141 of the Constitution of
India, on application of the principles of merger.
The Precedents: -
10
26. H.M.T. HBSC [M. Venkataswamappa] upheld the

decision of the Division Bench of the High Court of Karnataka in
7
G. Jayarama Reddy and followed H.M.T. HSBC [Syed
2
Khader] . The facts of the said cases are strikingly similar to the
instant case and hence we need to dwell on those for a better
understanding.
7
27. In G. Jayarama Reddy , the challenge was against the
acquisition under the LA Act in favour of certain House Building
Cooperative Societies inter alia on the ground that, though,
apparently the acquisition was in implementation of housing
schemes, in truth, the Society joined hands with builders and
contractors to do real estate business, making enormous profit
taking advantage of the huge demand for building sites in the
growing city. The Division Bench found that the acquisition of
land in favour of the six respondent-Societies, though stated to
C.A. Nos.13744-13747 of 2015 etc. Page 28 of 71

be in implementation of housing schemes, the materials placed
clearly established that, in fact and truth, the acquisition was not
for any bona fide housing scheme for the benefit of bona fide
members but was substantially for the purpose of indulging in
real estate business under the guise of allotment, to either bogus
members or in favour of intending purchasers by enrolling them
as associate members. The Societies and the middlemen with
whom the societies had entered into agreements, were reaping
profits by exploiting the existence of the great demand for
residential sites, arising in the nascent stages of Bangalore City’s
development.
28. The agents of the Societies had paid huge amounts to
influence the Government officers, to get the preliminary and
final notifications published acquiring large extent of lands from
private land owners. It was held that the decision of the
Government to acquire lands brought about by the influence of
such agents appointed as ‘go-betweens’ and ‘carriers’ between
the Government and the Society concerned, warranted the
acquisition notifications to be set aside on the ground that it is a
colourable exercise of power and it suffers from legal mala fides.
It was also held in Paragraph 49(7) as a general observation: -
C.A. Nos.13744-13747 of 2015 etc. Page 29 of 71

’49.7 There is considerable force in the contention
of the petitioners that acquiring large extent of
lands for formation of large number of Societies in
the area for which the Bangalore Development
Authority is constituted under an Act of Legislature
and on whom the obligatory function of formation of
layouts and distribution of sites to citizens is vested,
has the effect of circumventing the provisions of the
B.D.A. Act and rendering the Bangalore
Development Authority workless and purposeless
and therefore as a rule, the formation of layouts in
the City should ordinarily be undertaken by the
Bangalore Development Authority and only as an
exception the work may be permitted to be
undertaken by any Housing Co-operative Society
after satisfying its suitability, merit and bona fides
and therefore requires serious consideration by the
Government.’

29. In the course of the judgment, it was found that a detailed
investigation by the Court in respect of the serious allegations
made by the landowners was unnecessary, due to the G.V.K Rao
Report. The widespread acquisition of lands in favour of
Cooperative Housing Societies, which had sprung up within the
Bangalore Metropolitan Planning Area, had become a matter of
public debate and criticism, as a result of which, a statutory
inquiry was directed by the Registrar of Cooperative Societies
under Section 64 of the Karnataka Cooperative Societies Act,
1959, by Sri G.V.K. Rao, the Controller of Weights and Measures,
who had submitted his report. The Division Bench noted the
C.A. Nos.13744-13747 of 2015 etc. Page 30 of 71

contention of the petitioner that the report fully establishes the
allegations made by the petitioner and copiously extracted the
same in its judgment.

30. The illegalities pointed out in the report were highlighted
in the decision, which are as follows; which we summarize for
brevity: -
(i) There were gross irregularities in admission of
members and the Registers maintained are
haphazard and incapable of pinpointing the
resolutions, admitting the members or the date on
which such admissions were carried out.
(ii) Persons who were residing outside the jurisdiction
of the Society had been admitted and despite no
provision for admission of associate members or
allotment of sites to such members, such privileges
of allotment were conferred on associate members
despite absence of a specific provision to benefit
the associate members with such allotments.
(iii) Many of the societies had acquired lands outside
the jurisdiction which the Government has
approved in a lackadaisical manner.
(iv) Most of the Societies had entered first, into
agreements with agents, who undertook
acquisition through the Government machinery for
payment of a consideration. There were also
instances of repeated advances having been paid
to middlemen, often resulting in the Societies,
facing the problem of overlapping claims. The
agreements with the agents alone warrant
treatment of such acquisitions to be bogus and
C.A. Nos.13744-13747 of 2015 etc. Page 31 of 71

illegal, especially since it reveals the vested
interest of the Management of the Societies.
(v) There were also specific irregularities and
illegalities found with reference to the named
societies, who were the respondents therein.

[underlining by us for emphasis ]

31. After copious reference to the report of Sri G.V.K. Rao, it
was found that the State Government had given approval for
acquisition for more than 100 societies within the area of the
BDA. The submission of the Government, noticed in Paragraph
26, was also with reference to a Cabinet Sub-Committee having
been constituted by the Government to take a final decision in
the matter and in view of the change of the Government, the
Cabinet Sub-Committee having been reconstituted. A copy of
the order dated 14.01.1991 reconstituting the Cabinet Sub-
Committee was also produced, which was extracted, which
specifically dealt with the mushrooming growth of House
Building Cooperative Societies and the unregulated purchase
and allotment of large extents of land.

32. Immediately, we have to notice that there are a number of
similarities with respect to the irregularities and illegalities
highlighted in the judgment of the learned Single Judge, subject
C.A. Nos.13744-13747 of 2015 etc. Page 32 of 71

matter of this appeal, which we will deal with a little later. We
also have to notice that when the Cabinet Sub-Committee was
appointed on 14.01.1991 seeking review of the purchase and
allotments of land to Cooperative Housing Societies, a specific
contention raised in the present case by the Government was
that possession was taken over of the lands decided to be
acquired on 23.10.1992. The decision of the Cabinet Sub-
Committee, unfortunately, is not forthcoming nor does the
notification speak of the constitution of the Cabinet Sub-
Committee on 14.01.1991.
33. It was categorically found in Paragraph 33 after referring
to the conclusions in the G.V.K. Rao Report, that the agreement
entered into by the Societies with the agents and the huge
amounts advanced by the agents in order to procure the
preliminary and final notifications under the LA Act, are
agreements opposed to public policy and totally expose the
want of bona fides on the part of the housing scheme, sponsored
by the Societies. This very fact was found to be injurious to public
interest and detrimental to purity of administration in Paragraph
40, which led to quashing of the notifications, insofar as the five
respondent-Societies, based on G.V.K. Rao Committee Report
C.A. Nos.13744-13747 of 2015 etc. Page 33 of 71

and relating to one other Society, based on the report of the Joint
Registrar.
34. It was held so in Paragraph 40, which is extracted
hereinbelow:
’40.………The irresistible inference flowing from the
facts and circumstances of these cases is, whereas the
power conferred under the Land Acquisition Act is for
acquiring lands for carrying out housing scheme by a
housing society, in each of the cases the acquisition of
lands is not for a bona fide Housing Scheme but is
substantially for the purpose of enabling the
concerned office bearers of respondent-Societies and
their agents to indulge in sale of sites in the guise of
allotment of sites to the Members/Associate Members
of the Society and to make money as alleged by the
petitioners and therefore it is a clear case of
colourable exercise of power. Thus, the decision of the
Government to acquire the lands suffers from legal
mala fides and therefore the impugned Notifications
are liable to be struck down.’

2
35. H.M.T. HBCS [Syed Khader] dealt with the acquisition of
lands in two villages and the challenge made to the Section 4(1)
Notification dated 12.07.1988 and the Section 6(1) declaration
made in respect of 99.01 acres of land. The High Court quashed
the steps taken in connection with the acquisition thereof, which
was challenged before this Court. Therein also the High Court
held that the acquisition was not for allotment to bona fide
members and the Society had indulged in a commercial venture
C.A. Nos.13744-13747 of 2015 etc. Page 34 of 71

for sale of lands acquired under the provisions of the LA Act,
which was a colourable exercise of power. The High Court also
opined that the procedure adopted there, by the State
Government for acquisition of lands for the Society, was likely to
defeat the schemes under the BDA Act. Therein also, far earlier
to the Section 4(1) Notification of 12.07.1988, the appellant
Society had entered into an agreement with M/s SR
Constructions on 19.09.1984, wherein the latter undertook to
secure lands in the two villages, as specified in the annexure to
the agreement. It was held so in Paragraphs 21 and 22 as
under:
‘21. Mr G. Ramaswamy, learned Senior Counsel
appearing on behalf of the appellant, submitted that
merely because the appellant-Society had entered into an
agreement with Respondent 11, M/s S.R. Constructions, in
which the latter for the consideration paid to it had
assured that the lands in question shall be acquired by the
State Government, no adverse inference should be drawn
because that may amount to a tall claim made on behalf
of M/s S.R. Constructions in the agreement. He pointed
out that the notifications under Sections 4(1) and 6(1) have
been issued beyond the time stipulated in the agreement
and as such, it should be held that the State Government
has exercised its statutory power for acquisition of the
lands in normal course, only after taking all facts and
circumstances into consideration. There is no dispute that
in terms of agreement dated 1-2-1985 payments have
been made by the appellant-Society to M/s S.R.
Constructions. This circumstance alone goes a long way
to support the contention of the writ petitioners that their
C.A. Nos.13744-13747 of 2015 etc. Page 35 of 71

lands have not been acquired in the normal course or for
any public purpose. In spite of the repeated query, the
learned counsel appearing for the appellant-Society
could not point out or produce any order of the State
Government under Section 3(f)(vi) of the Act granting
prior approval and prescribing conditions and
restrictions in respect of the use of the lands which were
to be acquired for a public purpose. There is no
restriction or bar on the part of the appellant-Society on
carving out the size of the plots or the manner of allotment
or in respect of construction over the same. That is why
the framers of the Act have required the appropriate
Government to grant prior approval of any housing
scheme presented by any cooperative society before the
lands are acquired treating such requirement and
acquisition for public purpose. It is incumbent on the part
of the appropriate Government while granting approval
to examine different aspects of the matter so that it may
serve the public interest and not the interest of few who
can as well afford to acquire such lands by negotiation in
open market. According to us, the State Government has
not granted the prior approval in terms of Section 3(1)(vi)
of the Act to the housing scheme a in question. The power
under Sections 4(1) and 6(1) of the Act has been whether
the acquisition of the exercised for extraneous
consideration and at the instance of the persons who had
no role in the decision making process lands in question
shall be for a public purpose. This itself is enough to
vitiate the whole acquisition proceeding and render the
same invalid.
22. In the present case there has been contravention of
Section 3(f)(vi) of the Act inasmuch as there was no prior
approval of the State Government as required by the said
section before steps for acquisition of the lands were
taken. The report of Shri G.K.V. Rao points out as to how
the appellant-Society admitted large number of persons
as members who cannot be held to be genuine members,
the sole object being to transfer the lands acquired for
"public purpose", to outsiders as part of commercial
venture, undertaken by the office-bearer of the appellant-
Society. We are in agreement with the finding of the High
C.A. Nos.13744-13747 of 2015 etc. Page 36 of 71

Court that the statutory notifications issued under Sections
4(1) and 6(1) of the Act have been issued due to the role
played by M/s S.R. Constructions, Respondent 11. On the
materials on record, the High Court was justified in
coming to the conclusion that the proceedings for
acquisition of the lands had not been initiated because the
State Government was satisfied about the existence of the
public purpose but at the instance of agent who had
collected more than a crore of rupees for getting the lands
acquired by the State Government.

[underlining by us for emphasis]

36. The aforesaid decision was followed in H.M.T. HBCS [M.
10
Venkataswamappa] , which common judgment affirmed G.
7
Jayarama Reddy and the other cases, as referred to by the
learned Senior Counsel for the appellants.
The Instant Acquisition: -
37. We commence with the agreement produced as Annexure
P1 which is dated 21.09.1984. Pertinently, we have to observe
that the agreement was executed before sub-clause (f) to Section
3 was incorporated by way of a substitution in the LA Act by Act
th
68/1984 with effect from 24.09.1984. The 4 respondent Society
admits the execution of the agreement and the contention is that
there was no intention to appoint middlemen or to confer them
with statutory powers or authorise them to indulge in any illegal
activities. Definitely, there can be no conferment of statutory
C.A. Nos.13744-13747 of 2015 etc. Page 37 of 71

authority on the second party to the agreement, by the first party
who is only a Cooperative Society. We are also unable to accept
the contention that the second party to the agreement was a
mere service provider, especially going by the recitals in the
document.
38. Annexure P1 produced along with the Civil Appeals
categorically states that the second party had entered into an
agreement to purchase lands having an extent of 11 acres and
16 guntas in Nelakadirenahalli village and was in the process of
purchasing a further extent of 61 acres and 38 guntas in the very
same village. The second party assured that the landlords would
execute necessary documents and effectuate conveyance of the
said lands. Clause 2 of the agreement clearly indicates that the
second party agreed to ensure acquisition of the land as
government land in favour of the Society as also prepare and get
sanctioned all the plans through the Bangalore Development
Authority (BDA). Clause 3 was an undertaking that the second
party would do and carry out all acts, things and deeds as may
be necessary to facilitate the sale or acquisition by the
Government and the sanction of layout plan by the BDA, with
th
possession handed over to the 4 respondent Society. The
C.A. Nos.13744-13747 of 2015 etc. Page 38 of 71

Society had also agreed to make payment of amounts to the
second party per square feet acquired; a portion, after the
notification under Section 4(1), then, after the objections are
heard and before the Section 6 declaration and the balance, after
the issuance of the declaration. The agreement so executed was
in furtherance of the scheme to divest the lands from the owners,
through acquisition by the Government, for eventual handover
th
of such lands to the 4 respondent Society; even prior to the
statutory regime, incorporating housing schemes promoted by
Cooperative Societies with the prior approval of the
Government defining it as a public purpose.
th
39. The agreement entered into by the 4 respondent Society
with the third party was akin to those referred to in the cited
decisions; which practice was deprecated by this Court and was
also one of the grounds; nay, the major ground on which the
acquisitions were struck down. We fail to comprehend as to how
a third party could undertake invocation of the provisions of the
LA Act by the Government for allotment of land, purportedly for
the purpose of allotment to the members of a Society, which by
itself was not a public purpose at that juncture. Here we have to
reiterate that acquisition for the purpose of carrying out a
C.A. Nos.13744-13747 of 2015 etc. Page 39 of 71

housing scheme by a Cooperative Society, with the prior
approval of the appropriate Government, was introduced for the
first time by the Act 68 of 1984 by substituting sub-clause (f) of
Section 3 of the LA Act; which also included sub-clause (vi).
Section 3(f)(vi) of the LA Act reads as under:
‘(vi) the provision of land for carrying out any
educational, housing, health or slum clearance
scheme sponsored by 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 (21 of 1860), or under any corresponding
law for the time being in force in a State, or a co-
operative society within the meaning of any law
relating to co-operative societies for the time being
in force in any State;’

40. It is crystal clear that the acquisition for a public purpose
for implementation of a housing scheme by a Cooperative
Society, can be only carried out with the prior approval of the
appropriate Government. The approval of the appropriate
Government is not of the mere requisition made, by a
Cooperative Society. It should be for the scheme; not one in
contemplation but, forma et descriptio ( the layout and the
blueprint ), placed before the appropriate authority.
Immediately, we also have to observe that there is no such
C.A. Nos.13744-13747 of 2015 etc. Page 40 of 71

scheme or a layout plan as contemplated in the LA Act, placed
before or approved by the Government.
th
41. The 4 respondent Society has produced additional
documents from Annexures R1 to R33 to substantiate a valid
acquisition having been taken out and the possession also
th
delivered to the 4 respondent Society. We have to consider
these documents with reference to the statutory provisions and
the Karnataka Government (Transactions of Business) Rules and
the copy of the Government File No. RD 242 AQB 84 produced
by the State. But, before that, we would briefly refer to the
provisions under the LA Act and the timelines provided therein.
The preliminary notification under Section 4 has to be published
in the official gazette in two daily newspapers with circulation in
the locality, one of which should be in the regional language.
The Collector shall also cause public notice of the substance of
such notification to be given at convenient places in the said
locality and the last of the dates of such publication and public
notice given, is referred as the date of publication of the
notification. Section 6 (1) refers to the declaration that the land
is required for a public purpose, which has to be made after
considering the report, if any, made under Section 5A, after
C.A. Nos.13744-13747 of 2015 etc. Page 41 of 71

hearing of the objections. The proviso inter alia prohibits, any
declaration in respect of any particular land covered by a
notification under Section 4(1), published after the
commencement of the Land Acquisition (Amendment), Act 1894,
to be made after the expiry of one year from the date of
publication of Section 4(1) notification. Sub-section (2) provides
that such declaration shall be published in the official gazette
and in two daily newspapers, as provided under Section 4(1).
Herein too, the last of the date of such publication or giving of
such public notice, is referred to as the date of publication of the
declaration. We pause here only to observe that these timelines
are reflected in Annexure P1 agreement for payment of
commission to the service provider, a sure manifestation of the
attempted fraud.
42. The application dated 08.10.1984 for acquisition of land
th
submitted by the 4 respondent Society to the Revenue
Commissioner is produced as Annexure R1. Annexure R1 itself
indicates that the Society has entered into agreements with the
landlords for the under mentioned lands, after paying heavy
advances. We are unable to understand if private agreements
were entered into, why the government machinery was utilised
C.A. Nos.13744-13747 of 2015 etc. Page 42 of 71

to acquire the said lands; which was the recital in Annexure P1
agreement also. The lands covered by the said agreements with
the extent and the survey numbers, as also the village, has been
merely specified in the said application, without any detailed
plan. The proposal in the form of a ‘checklist’ is produced at
Annexure R4 which is said to have been considered and
approved by the Committee. It speaks inter alia of the number
of members; total of 1774 out of which 1442 members are found
eligible for allotment, the total fund of the Society was declared
as Rs.6,16,000.70/- and the sites proposed to be acquired,
mentioned with the specific extent. There is no layout plan seen
produced along with the application.

43. We reckon that the extract of the files produced indicate
the proposed area to be acquired in Nelkadaranahalli Village in
th
favour of the 4 respondent Society. This only indicates a sketch
of land without any layout plan, without housing sites, roads of
access, common area and so on and so forth. Here we have to
again refer to sub-clause (vi) of Section 3(f) of the LA Act which
includes in the definition of ‘public purpose’, inter alia housing
schemes of a Cooperative Society; but only with prior approval
of the appropriate government. What is required is not just an
C.A. Nos.13744-13747 of 2015 etc. Page 43 of 71

approval of the extent and the mere expression of a laudable
housing scheme, but housing sites demarcated for allotment to
landless members with the detailed descriptive lay-out plan laid
before the Government. We find no such scheme having been
laid out before the Government.
44. The Three-Men Committee, which examined the scheme
and filed a report, as Annexure R7 specifically speaks of the
Assistant Registrar of the Cooperative Societies having not
verified the membership with reference to the bye laws and
provisions, and that he has merely done a verification based on
the records made available by the Society. Juxtaposed with this,
we have to specifically notice the finding of the learned Single
Judge, from the G.V.K. Rao Committee Report that the
th
membership register of the 4 respondent Society was not
available, the same having been removed by the erstwhile
employee. The SLCC considered very many proposals, almost
120 cases referred by the Government and approved by the
th
Three Men Committee, out of which, the 4 respondent Society’s
case was considered as No.7. Again, no reference to the
detailed scheme was made, but on the mere expression of a
proposed housing scheme the issue was considered and
C.A. Nos.13744-13747 of 2015 etc. Page 44 of 71

approved. We find from a reading of the two paragraphs, in
three quarters of a page, to be lackadaisical and without any
application of mind.

45. The approval of the Government evidenced at Annexure
R10 dated 13.11.1987, is a cryptic order conveying approval
without any specific mention of the order by which such
approval was made. The Officer of the Government who was
present before us referred to the Minutes from the extract of the
documents to contend that the Minister In-charge had approved
the same with his initials. We are unable to find any such formal
order having been issued by the Minister In-charge, even going
by the Transaction of Business Rules. Rule 66 under the heading
‘ E. Land Acquisition ’, relates to acquisition of land under the LA
Act for any Department of Government, which has to be dealt
with by the revenue department and all administrative decisions
connected with it being taken by the administrative department
under orders of the Minister-in-charge. We cannot but observe
that the said rule does not apply to the instant acquisition, which
is with respect to a housing scheme being brought in as a public
purpose under the LA Act by an amendment to the Act, far later
C.A. Nos.13744-13747 of 2015 etc. Page 45 of 71

to the Rules of 1977. Rule 18 of the Rules of 1977 assumes
relevance, which reads as under:
‘18. All orders or instruments made or executed
by or on behalf of Government shall be
expressed to be made or executed in the name
of the Governor of Karnataka.’

46. Hence, any approval of the Government, for a housing
scheme to be carried on as a public purpose and to facilitate
acquisition under the LA Act, it should be expressed to be
approved in the name of the Governor of Karnataka.
47. More pertinently, we notice Section 11A of the LA Act
which speaks of the period within which an award shall be made.
The provision mandates that the Collector shall make an award
under Section 11 within a period of two years from the date of
publication of the notification and if no such award is made
within that period, the entire proceedings for acquisition shall
elapse. In computation of the period of two years referred to in
this Section, as per the Explanation, excludes any period in
which there is a stay order of a Court from pursuing with the
proceedings under the LA Act.
C.A. Nos.13744-13747 of 2015 etc. Page 46 of 71

48. We have not been apprised of any stay order having been
passed and we pertinently notice from the records, the following
handwritten note in the file: -
118) In this case 6(1) Notification was issued
pending payment of balance amount. The
balance amount to be paid was Rs.27,77,226=20.
The Spl D.C. has now reported that the Society
has deposited Rs.12,45,226=20 and a sum of
Rs.19,60,00=00 has been paid directly to the
land owners. From this, it is seen that the Society
has actually paid Rs.32,05,226=20 which is more
than the stipulated due.
119) In view of the above position, we may
perhaps accept the conclusion of the Spl D.C.
regarding the payments made and close the
matter.
For orders.
Sd
31/5

120) D.S. We can assent to further proposals
like passing of awards, handover possession
etc.
Sd.
8.6.90


49. Two aspects assume significance, from the above extract.
The proviso to Section 6(1), require the compensation to be
awarded to be paid by a Company wholly or partly out of public
revenues or some fund controlled or managed by a local
C.A. Nos.13744-13747 of 2015 etc. Page 47 of 71

authority. If there was a proper approval under Section 3(f)(vi)
for a public purpose, then the money would have to be paid by
the Cooperative Society, after the award of the Collector. The
files indicate that the Government reckoned an amount of
Rs.19,60,000.00 which had been paid directly to the land owners
while the total assets of the Cooperative Society as declared in
the proposal submitted was Rs.6,16,021.70. In this context, we
also have to come back to Annexure P1 agreement produced
along with Civil Appeal which spoke of a third party having
entered into agreements with the land owners which was
th
reiterated in the first proposal of acquisition submitted by the 4
respondent Society before the Government as per Annexure R1.
The Society has thus paid Rs.32,05,226.20, some privately
disbursed and the other deposited before the Government for
disbursal, clearly in violation of the LA Act.
50. We are unable to find a proper acquisition proceeding
under the LA Act having been pursued by the Government. It is
also pertinent that the order passed on 08.06.1999, included in
the above extract, also indicates no award having been passed
till then, since the order specifically directs the passing of
awards. This is contrary to the timelines provided under Section
C.A. Nos.13744-13747 of 2015 etc. Page 48 of 71

11A of two years from the date of the notification. We would not
stress unduly on the aspect of delayed awards since there was
no challenge raised against the notification, on the grounds of
the timelines having been not adhered to; thus, the State being
offered no opportunity to respond.
Karithimmaiah’s Precedential Value: -
51. We have already found that the delay or the ground of
9
res judicata on the basis of Karithimmaiah does not enable
outright dismissal of the writ petition filed by the writ petitioners.
3
Here we would look at Bangalore CCHS , which is relied upon
by the respondents as supporting their contentions, specifically
paragraphs 78 and 79. On a reading of the decision, we are not
impressed by the said argument and paragraph 78 is with
respect to Section 32 of the Bangalore Development Authority
Act, 1976, which permits formation of new extensions or layouts
by private persons with the written sanction of the BDA. The
instant case is not projected as a privately administered
extension or layout, especially since, it is styled as a housing
society formed for the purpose of development of a housing
scheme under the nomenclature of a public purpose. Paragraph
79, in fact, fortifies our finding that there should be approval of a
C.A. Nos.13744-13747 of 2015 etc. Page 49 of 71

housing scheme forma et descriptio and we hence extract the
same hereunder:
79. Although, the appellant may not have been
required to frame a scheme in strict conformity
with the provisions of the 1976 Act and the
Housing Board Act, but it was bound to frame a
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 apply mind whether or
not the housing scheme framed by the appellant
should be approved.

3
52. Bangalore CCHS needs to be noticed in detail for it lays
out the history of the development of Bangalore City. After the
BDA Act came into force, there was unprecedented increase in
the population of the city by 1981, which made the Government
realize that BDA may not be able to meet the demand for
developed residential sites. Hence, it was decided to encourage
formation of private layouts, as permissible under Section 32 of
the BDA Act, and for this purpose, the guidelines for approval of
private layouts were revised by Circular No. HUD 260 MNX 82
dated 03.03.1983. However, finding gross misuse of the
guidelines by the housing societies who resorted to
uncontrolled purchase of lands with haphazard layouts, resulted
C.A. Nos.13744-13747 of 2015 etc. Page 50 of 71

in the policy being abandoned. It was then that a Three-Men
committee consisting of the Registrar of the Co-operative
Societies, the Secretary, BDA and the Special Deputy
Development Commissioner, was constituted to scrutinize the
land requirements of housing societies, fixing 30.06.1984 as the
cut-off date for consideration of the applications made, by the
housing societies. The cut-off date was then extended to
30.06.1987. We have to pertinently notice that the Three-Men
Committee, hence, was not intended to look at the land
acquisitions under the LA Act as such.
53. Dealing with the acquisition, which was the subject of the
cited decision, it was categorically held in paragraph 68 that,
carrying out any scheme inter alia of housing by a Co-operative
Society, can be regarded as public purpose, only if the
appropriate Government, before initiation of the acquisition
proceedings, grants approval. Answering the contention that
violation of Section 3(f)(vi) of the LA Act was not raised, the
averment from the writ petition was categorically noticed in
paragraph 70. It was found that the Society, which was the
appellant therein, neither controverted the averments
specifically raised on this count in paragraph 2 of the writ
C.A. Nos.13744-13747 of 2015 etc. Page 51 of 71

petition, resulting in the Division Bench holding the acquisition
to be not for a public purpose as defined under Section 3(f)(vi).
3
This Court in Bangalore CCHS specifically referred to the
decision of a Division Bench of the High Court in G. Jayarama
7
Reddy , which differed from a co-ordinate Bench in Narayana
14
Raju v. State of Karnataka . The Division Bench in G. Jayarama

7
Reddy (mistakenly referred to a Narayana Raju in the report of
Bangalore CCHS at para 83 to 85) while holding that the
acquisition was vitiated due to mala fides and manipulations
done by the house building societies through an agent, relied on
8
Rattan Chand Hira Chand . It applied the ratio of the said
th
decision to find that the agreements entered into between the 6
respondent Society, which indicated a condition of payment of
huge sums of money by the Society to an agent, in consideration
of the agent facilitating the preliminary and final notifications by
the Government, clearly indicated the purpose of influencing
the Government to secure approval for acquisition of lands,
which is opposed to public policy. Dealing with the subject
3
acquisition, Bangalore CCHS held so in paragraph 89 as under:

14
1988 SCC OnLine Kar 161
C.A. Nos.13744-13747 of 2015 etc. Page 52 of 71

‘89. As noticed earlier, in this case also no
housing scheme was framed by the appellant
which is sine qua non for treating the
acquisition of land for a cooperative society
as an acquisition for public purpose within
the meaning of 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 more than rupees
5 crores. This agreement was similar to the
agreement executed by H.M.T. Employees'
House Building Society with M/s S.R.
Constructions. The Estate Agent engaged by
the appellant had promised that it will get the
notifications issued under 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
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.’

54. This Court also from paragraph 90 to paragraph 109
referred to various decisions of the High Court of Karnataka,
finding in favour of the Societies, the challenge to some of which
were also rejected in the Special Leave Petitions filed before this
Court. The reliance on these decisions, which obtained approval
of this Court, was to buttress the contention that, though, a
housing scheme with a layout plan is not submitted, the
C.A. Nos.13744-13747 of 2015 etc. Page 53 of 71

representation made to the Government, clearly indicating that
the land would be used for developing a housing scheme and
providing sites to land-less people, would be due compliance of
Section 3 (f)(vi); deeming it to be a public purpose. It was held
that the findings recorded by the Division Bench of the High
7
Court in G. Jayarama Reddy case clearly indicated money
having played an important role in facilitating acquisition, which
was substantially approved by this Court in three cases
(specified in the extract below), illustrating how unscrupulous
elements in the society use money and other extraneous factors
for influencing the decision-making process by the executive
(sic. para 130). It was held so in paragraph 132:
‘132. Before concluding we consider it necessary to
observe that in view of the law laid down in 1st H.M.T.
(1995) 2 SCC 677
case (paras 19, 21 and 22), which was
(1995) 3 SCC 128
followed in 2nd H.M.T. case and
(2007) 9
Vyalikaval House Building Coop. Society case
SCC 304
, the view taken by the Division Bench of the
1988 SCC OnLine Kar 161
High Court in Narayana Raju case
that the framing of scheme and approval thereof can
be presumed from the direction given by the State
Government to the Special Deputy Commissioner to
take steps for issue of notification under Section 4(1)
cannot be treated as good law and the mere fact that
this Court had revoked the certificate granted by the
High Court cannot be interpreted as this Court's
approval of the view expressed by the High Court on
the validity of the acquisition.’

C.A. Nos.13744-13747 of 2015 etc. Page 54 of 71

9
55. This fortifies our finding that Karithimmaiah is not a
reliable precedent to reject the writ petitions on the ground of
th
res judicata ; despite the 4 respondent Society being the
appellant therein. The Division Bench of the High Court in
9 14
Karithimmaiah just as in Narayana Raju case presumed that
the framing of a scheme and approval thereof can be inferred,
on the direction given by the State Government to the Special
Deputy Commissioner to take steps to issue notification under
9
Section 4(1). Karithimmaiah was approved by this Court by
declining special leave, akin to the revocation of the leave
14
granted by the High Court in Narayana Raju . Bangalore
3
CCHS and the extract above applies on all fours in the instant
case.

Fraud; it’s ominous resonance, restated: -

56. ‘Fraud vitiates all solemn acts’ is a principle which cannot
be reduced to providing a mere lip service. We notice two
classic decisions of this Court on the overwhelming effect of
fraud, even when there are binding decisions between the very
same parties bringing in a valid ground of res judicata . S.P.
Chengalvaraya Naidu (Dead) by LRs. v. Jagannath (Dead) by
C.A. Nos.13744-13747 of 2015 etc. Page 55 of 71

15
LRs. , and A.V. Papayya Sastry & Ors. v. Government of A.P.
16
& Ors. resonate still despite the passage of time.
15
57. The facts in S.P. Chengalvaraya Naidu indicate that the
Clerk of a Decree Holder (DH) purchased a land in a court
auction, on behalf of the DH, but in his own name, the rights to
which was relinquished in favour of the DH by a registered
document. In the meanwhile, the Judgement Debtors (JD) had
paid the decretal amounts to the DH and the same having been
accepted without demur, the DH was no longer entitled to the
property which he had purchased through his Clerk.
Suppressing the execution of a release deed in favour of the DH,
the Clerk filed a suit for partition of the property and obtained a
preliminary decree. The defendants were unaware of the lack of
locus standi of the Clerk since the registered release deed
executed by him was not within their knowledge. The same
having been brought to their notice, the preliminary decree was
challenged in the application for final decree. The trial Judge
accepted the contention and dismissed the application for final
decree while the High Court reversed it on the finding that, at

15
(1994) 1 SCC 1
16
(2007) 4 SCC 221
C.A. Nos.13744-13747 of 2015 etc. Page 56 of 71

the most, the plaintiff can only be found to have falsely asserted
title and it was for the defendants to plead and establish by way
of oral and documentary evidence that, the plaintiff had no title
to the suit property. The defendants ought to have obtained an
encumbrance certificate to find out whether the plaintiff had still
a subsisting title at the time of the suit and there was no trick or
deceit employed by the plaintiff, who merely made a false
assertion and did not, in any event, prevent the defendants, in
any manner, from raising proper pleas and adducing necessary
evidence, held the High Court.
58. This Court found the High Court to have fell into a patent
error since the facts and circumstances of the case clearly
indicated the Clerk to have obtained a preliminary decree, by
playing a fraud on the Court. The High Court was found to have
gone haywire and made observations, which were termed
perverse. It was categorically held that the principle of ‘finality
of litigation’ cannot be pressed to the extent of such an
absurdity, that it becomes an engine of fraud in the hands of
dishonest litigants. Unequivocally, it was held that when the case
of a person is based on falsehood, he has no right to approach
the Court and can be summarily thrown out at any stage of the
C.A. Nos.13744-13747 of 2015 etc. Page 57 of 71

litigation. A litigant who approaches the Court, is bound to
produce all documents executed by him which are relevant to
the litigation. If he withholds a vital document in order to gain
advantage, then he would be guilty of playing fraud on the Court
as well as on the opposite party ( sic paragraph 6 ). The
proposition applies squarely not only to the party who initiates
the litigation, but also to the party who defends it.
16
59. A.V. Papayya Sastry was again a case of land acquisition
in which, based on an acquisition initiated by the Port Trust,
which never fructified by reason of no award having been
passed, the parties sought avoidance of the proceedings
initiated under the Urban Land Ceiling and Regulation Act, 1976.
In fact, repeated attempts for acquisition were made by the
Government on the request of the Port Trust, none of which
culminated with an award. On the Ceiling Act coming into force,
the appellants on the strength of the acquisition proceedings
sought to be absolved from the ceiling proceedings. The finding
of the Authority under the Ceiling Act that they were ‘non-
surplus land holders’ were taken up in a suo motu revision. This
led to a Writ Petition being filed by the landowners before the
High Court which was heard with another Writ Petition filed by
C.A. Nos.13744-13747 of 2015 etc. Page 58 of 71

the very same landowners to complete the acquisition
proceedings. The Writ Petitions were disposed of with a
direction to complete the land acquisition proceedings which
were originally initiated, and the order passed exercising
revisional jurisdiction under the Ceiling Act after thirteen years
was set aside.
60. The State filed a recall application, alleging fraud and
suppression of material facts by the landowners as also by the
Port Trust and the Government, especially since the land was
never handed over to the Port Trust and the possession was
always with the tenants and not the landowners, subject also to
pending disputes inter se . The High Court, in review found the
earlier proceedings to be vitiated by fraud and suppression of
material facts and recalled its earlier order which was
challenged before this Court. This Court heavily relied on the
15
decision in S.P. Chengalvaraya Naidu , and a host of other
decisions of this Court as also that of other jurisdictions.
61. We would specifically extract paragraphs 24 and 25 from
the aforesaid decision which reads as under: -
24. In Duchess of Kingstone, Smith's Leading Cases,
13th Edn., p. 644, explaining the nature of fraud, de
C.A. Nos.13744-13747 of 2015 etc. Page 59 of 71

Grey, C.J. stated that though a judgment would be res
judicata and not impeachable from within, it might be
impeachable from without. In other words, though it is
not permissible to show that the court was “mistaken”,
it might be shown that it was “misled”. There is an
essential distinction between mistake and trickery.
The clear implication of the distinction is that an action
to set aside a judgment cannot be brought on the
ground that it has been decided wrongly, namely, that
on the merits, the decision was one which should not
have been rendered, but it can be set aside, if the
court was imposed upon or tricked into giving the
judgment.

25. It has been said: fraud and justice never dwell
together (fraus et jus nunquam cohabitant); or fraud
and deceit ought to benefit none (fraus et dolus nemini
patrocinari debent).

(underlining supplied by us for emphasis)

62. Hence, the clear distinction is between mistake and
trickery; the former leading to a wrong decision but the later
resulting in a decision which would not at all have been
rendered, if the Court was not misled and was made conscious
of the entire facts and circumstances. Just as the Port Trust and
the Government officials had misled the High Court as alleged
16
in A.V. Papayya Sastry which upheld the decision of the High
th
Court in recalling its earlier order; here the 4 respondent
C.A. Nos.13744-13747 of 2015 etc. Page 60 of 71

Society and the Government had consciously suppressed
material facts from the notice of the Court which resulted in the
14 9
decisions in Narayana Raju and Kartihimmai .
16

63. In A.V. Papayya Sastry , a contention was also taken that
the order sought to be recalled was challenged in a Special
Leave Petition which was rejected and hence it was not open to
the High Court to thereafter entertain the application and grant
the relief of recalling of the earlier order, affirmed by this Court.
This Court placed reliance on Kunhayammed & Ors. v. State of
17
Kerala & Anr. , and found the rejection of SLP to be
inconsequential since there was no merger of the decisions of
the High Court with that of this Court. In fact, this Court
contemplated an extreme situation where this Court does not
merely dismiss an SLP but after grant of leave decides an appeal
by recording reasons which clearly is a binding precedent,
under Article 141 of the Constitution, disabling any party to the
judgment from approaching any Court or authority to review,
recall or reconsider the matter. However, a caveat was made in

17
(2000) 6 SCC 359
C.A. Nos.13744-13747 of 2015 etc. Page 61 of 71

16
paragraph 39 in A.V. Papayya Sastry which we extract
hereunder: -
39. The above principle, however, is subject to exception of
fraud. Once it is established that the order was obtained by
a successful party by practising or playing fraud, it is vitiated.
Such order cannot be held legal, valid or in consonance with
law. It is non-existent and non est and cannot be allowed to
stand. This is the fundamental principle of law and needs no
further elaboration. Therefore, it has been said that a
judgment, decree or order obtained by fraud has to be
treated as a nullity, whether by the court of first instance or
by the final court. And it has to be treated as non est by every
court, superior or inferior.

64. That fraud has it is ominous overwhelming resonance is
beyond any cavil and in this case, it assumes undeniable and
unquestionable relevance.
The Conclusion: -
65. The agreement produced at Annexure P1; before sub-
section (f) of Section 3 of the LA Act was substituted, clearly
brings out the fraud employed, which had not been considered
at the earlier point of time. The further revelation from the files,
regarding the manner in which the compensation was paid,
clearly vitiates the acquisition proceedings. Insofar as the GVK
Rao Committee Report, the learned Single Judge had
elaborately considered the same and found that the
C.A. Nos.13744-13747 of 2015 etc. Page 62 of 71

membership applications were not produced on the ground that
one M. Lakkappa Gowda, who was previously working in the
Society, had carried away the records. The members were
admitted, in violation of the byelaws and amounts collected from
the members were at different rates; at Nelkadaranahalli, at a far
lower price than those in the other sites. In addition to Annexure
P1, the report found that the Society had entered into
agreements with two other agents for the three layouts at
Jarakabande Kaval, Nelkadaranahalli and Laggere. The records
which were available, were found to be tainted and there was no
proper maintenance of the same. The conclusions with respect
th
to the 4 respondent Society were that:
(i) The admission that an employee took away the records
of the Society, indicates the mismanagement pervading it.
(ii) Huge amounts were paid to agents and landlords and
the general power of attorneys were obtained in the name
of the agents and not in the name of the Society.
(iii) The Society also did not exercise necessary care in
their final transactions, especially, regarding the
agreements and payment of advances.
(iv) The Office Bearers submitted to the Committee that
they had paid bribes to Government Officials to facilitate
acquisition.

66. The G.V.K. Rao Committee report was heavily relied on by
3
this Court in the three decisions referred to by Bangalore CCHS
C.A. Nos.13744-13747 of 2015 etc. Page 63 of 71

14 9
in its paragraph 132. Narayana Raju and Karithimmaiah ,
both of Division Benches of the High Court cannot upset the
precedential value of this Court’s decisions in Civil Appeals as
14
against the negation of leave in Narayana Raju and dismissal
9
on rejection of leave in Karithimmaiah . This is so, on the
principle of merger as expounded by this Court in
17
Kunhayammed .
67. It is also pertinent that even going by the additional
th
documents produced by the 4 respondent Society with I.A.
No.161082 of 2018, there is a lack of information regarding the
Society, which has been glossed over by the Government
authorities. Annexure R6, proceedings of the Three-Men
Committee indicate that in the verification carried out, some of
the membership applications were not made available nor were
the receipt books for collection of share amounts, share fee or
entrance fee, available for verification. Despite entries in the
cashbooks as well as the share ledger, the specific submission
of the Society was that the share certificates were kept ready in
the Society, and they were not collected by the members.
Although, 1,499 members had deposited the site amounts partly,
no verification, as such of the members, were carried out and the
C.A. Nos.13744-13747 of 2015 etc. Page 64 of 71

affidavits proffered by them were accepted. Annexure R7,
report of the Three-Men Committee also clearly indicated that
the Assistant Registrar of Co-operative Societies could not verify
the membership with reference to the byelaw provisions.
68. Much reliance was placed on Section 16(1) notifications
issued, which as per the State amendment, makes it conclusive
evidence of the fact of taking over of the land. As any statutory
presumption. Section 16(2) of the LA Act, incorporated by a State
Amendment, is only a rebuttable presumption. The complete
absence of mahazars of taking over, was brushed aside by the
Division Bench on the ground that it would be required only if
Section 47 of the LA Act is invoked, which was not required in the
present acquisition. Contrary to the said finding, Annexure R18,
produced as an additional document, clearly indicates the
invocation of Section 47, at least with respect to certain extent of
land in Nelkadaranahalli Village, which document does not
th
contain the date on which the possession was taken over. The 4
respondent Society relies on Annexure R25 to fortify its
submission of the defects noticed by the GVK Rao Committee
having been resolved, which we find is only an undertaking to
cure the defects and not resolution as such.
C.A. Nos.13744-13747 of 2015 etc. Page 65 of 71

69. We fail to understand why an agreement for developing a
layout has been produced as Annexure R28, which in its
schedule, refers to certain villages in Bangalore South Taluk,
while Nelkadaranahalli Village is in Bangalore North Taluk. In
th
any event, Annexure R28 of the year 2007 indicates that the 4
respondent Society engaged the services of the second party
therein, for forming the layout and distributing the sites to its
members on the identified land for developing them into
layouts. This clearly indicates that no lay out was finalized before
the acquisition was made, further fortifying the argument of the
statutory mandate in getting a prior approval of the housing
scheme having not been complied with.

70. We once again refer to Winger v. Aires (supra), which
encapsulates succinctly the raison d’etre for judicial review,
which power we invoke to cause interference to the present
acquisition proceedings, as follows: -
‘There is no authority under our form of
government that is unlimited. The genius of our
democracy springs from the bedrock foundation
on which rests the proposition that office is held
by no one whose orders, commands or
directives are not subject to review.’

C.A. Nos.13744-13747 of 2015 etc. Page 66 of 71

71. On a conspectus of the above reasoning, we are unable to
sustain the impugned judgment of the Division Bench, and we
set it aside and find vitiated the instant acquisition for the
following reasons:
i. An agreement with a third party to facilitate acquisition
of lands for developing a housing scheme, with an
undertaking to facilitate steps under the LA Act of 1894,
even before such housing schemes were brought
under the nomenclature of public purpose, clearly
exposes the fraud intended to be carried out.
th
ii. Though, the application was made by the 4
respondent Society after clause (f) was substituted in
Section 3 of the LA Act, 1894, by the Act 68 of 1984 w.e.f.
24.09.1984, the cryptic consideration of the same and
the absolute absence of a housing scheme with a
proper layout plan placed for the approval of the
Government, vitiates the acquisition and reveals the
colourable exercise of power.
th
iii. With respect to the 4 respondent Society, the G.V.K.
Rao Committee report clearly found that the
membership details were not fully placed before it.
C.A. Nos.13744-13747 of 2015 etc. Page 67 of 71

The allegation of misplacing of registers by an
employee, the verification of memberships not being
possible, puts the very formation and continuation of
the Society under a cloud.
iv. The Three-Men committee and the SLCC had
proceeded in a lackadaisical manner and there is
absolutely no application of mind nor a
recommendation of a properly laid out housing
scheme, for approval by the Government.
v. There is no layout or blueprint of the housing scheme
laid before the two committees or the Government for
its approval.

vi. The notes in the Government file, as extracted
hereinabove, clearly indicates that the amounts to
satisfy the award were not paid by the Society to the
Government for disbursal to the landowners. Private
transactions of payment of money to landowners,
without any substantiation were relied on to absolve
the Society from making full deposit of the award
amounts, again indicating the fraud played on
unsuspecting citizens.
C.A. Nos.13744-13747 of 2015 etc. Page 68 of 71

vii. The irregularity and illegality in the management of the
Societies, as pointed by the G.V.K. Rao Committee, as
also the statements made by the office bearers of the
th
4 respondent Society, that bribes were paid to the
Government Officials, further vitiates the acquisition.

72. We are unable to sustain the decision of the Division Bench
which failed to look into the compelling contentions regarding
fraud and colourable exercise of power and upset a detailed
consideration by the learned Single Judge merely on grounds of
res judicata and delay; which pale into insignificance, especially
in the teeth of the established allegations of illegal acquisitions
through fraud and undue influence, as was categorically found
by various decisions of this Court in the case of similar Societies,
on identical allegations.
73. We, hence, set aside the order of the Division Bench and
restore the order of the learned Single Judge. However, only due
to the passage of time, we delete the direction to take contempt
proceedings against the Government Officers. The costs
imposed by the learned Single Judge shall stand enhanced to
Rs.50,000/- to, each of the petitioners or the combination of the
C.A. Nos.13744-13747 of 2015 etc. Page 69 of 71

legal representatives of the original petitioners in the writ
petitions, who are the appellants in the above Civil Appeals.
74. Insofar as the consequences of the interference caused to
the acquisition, we reiterate the directions in H.M.T. HSBC
2
[Syed Khader] . The possession of the land shall be restored to
the respective landowners, irrespective of the fact whether they
had challenged the acquisition of their lands or not. On
restoration of possession, they shall refund the amounts, if any
received by them, as compensation from the Government,
without any interest. We make it clear that this shall not facilitate
any refund of the amounts received by them in any private
th
transaction. The 4 respondent Society shall not have any claim
over the lands acquired, even if possession handed over or the
money refunded, since they facilitated the fraud and the
colourable exercise of power by the Government Officers. If any
of the plots are not resumed to the original landowners for
reason of their inability or unwillingness to refund the amounts
paid to them by the Government, the Government shall auction
such lands and the proceeds shall be used for the purpose of
victim compensation and remitted to the appropriate Head of
Account at the directions of the Chief Justice of the High Court in
C.A. Nos.13744-13747 of 2015 etc. Page 70 of 71

consultation with the Karnataka Legal Services Authority. The
auction shall be conducted by the Revenue Authorities but under
the supervision of a Judicial Officer not below the rank of a
District Judge (Selection Grade) as authorised by the Chief
Justice.
75. The appeals are allowed.
76. Pending application(s), if any, shall stand rejected.


.……………………………... J.
(J. B. PARDIWALA)



..………….…………………. J.
(K. VINOD CHANDRAN)

NEW DELHI;
OCTOBER 26, 2026.
C.A. Nos.13744-13747 of 2015 etc. Page 71 of 71