Full Judgment Text
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CASE NO.:
Appeal (civil) 456-458 of 2000
PETITIONER:
COMMISSIONER BANGALORE DEVELOPMENT AUTHORITY
RESPONDENT:
S. VASUDEVA AND ORS.
DATE OF JUDGMENT: 18/01/2000
BENCH:
B.N. KIRPAL & M.B. SHAH
JUDGMENT:
JUDGMENT
2000 (1) SCR 275
The Judgment of the Court was delivered by
KIRPAL, J. Civil Appeal Nos, 456-458 of 2000 (arising out of Special Leave
Petitions Nos. 19742-44/1999)
Special leave granted.
Aggrieved by allotment of land to 34 persons by the Bangalore Development
Authority (hereinafter referred to as the "BDA"), respondent No. 1 filed a
writ petition in the Karnataka High Court challenging not. only the said
allotment but also some of the transfers of land which had been effected by
some of the said allottees. These 34 respondents were stated to be ex-
Legislators, ex-Ministers, etc. who were members of the Legis-lators
Housing Co-operative Society Ltd. (for short "the respondent-Society"). In
the writ petition, it was averred that out of turn allotment had been given
to these 34 persons and in violation of the Rules some of them had
transferred the land and, therefore, that land should be resumed by the
Government.
The aforesaid writ petition was filed in the High Court by an Advo-cate who
stated that he had no personal interest in the matter but was aggrieved by
the breach of the rule of law stated to have been committed by the
Government of Karnataka and the BDA. The appellant (BDA) herein as well as
the State of Karnataka represented before the High Court that the
allotments had been made in accordance with the provisions of the Bangalore
Development Authority Act, 1976 (hereinafter referred to as "the Act") and
the Rules framed thereunder. It was stated that the respondent-Society had
been registered in the year 1981 and bulk allotment had been made to the
Society which, in turn, allotted plots of land to its members, The details
with regard to allotment of land by the BDA to the said Society are as
under :
Authority Resolution No. & Date Government Order No. & date No of sites
approved for allotment Name of the Layout
272/2.4.81 HUD 225 MNX 81 Dt. 10/14.7.81 .100 Further Extn, of
Mattadahalli
139/17.7.86 HUD 339 MNX 86 Dt. 24.10.86 56 Koramangala, 4th
’B’ Block
251/23.10.86 HUD 339 MNX 86 Dt. 30.1.87 99 Koramangala,
Gangenahalli, & Sarakki
587/3.7.87 HUD 339 MNX 86 Dt. 30.9.87 100 Rajmahal Vilas
(Lottergollahalli)
379/16.1.87 HUD 347 MNX 88 Dt. 14.12.88 249 Rajmahal Vilas II
Stage (Bhoopasandra) and Hosur Sarjapur Road
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Total 604
It was also contended by the respondents that the writ petition should be
dismissed on the ground of laches, inasmuch as allotment of land had taken
place between 1981 and 1987 whereas the writ petition itself was filed in
1996. It was also contended that third party interest had arisen and it
would be unfair and unjust that allotment of land should be cancelled
especially when some, if not most, of the allottees had already spent
considerable amount of money and raised construction on the plots so
allotted. Defend-ing the allotment made to the respondent- Society, the BDA
relied upon the provisions of Section 38-B which was introduced in the Act
with effect from December 1975 which in terms permitted bulk allotment of
land to Housing Co-operative Societies for allotment to its members. The
High Court came to the conclusion that allotment of land was not validly
made to the respondent-Society. It also held that at this belated stage the
violations which had been committed should not render the allotment invalid
but nevertheless it observed that the said allotment re-quired
reconsideration of the cases. The High Court then issued the following
directions :
"Under the circumstances of the case and keeping in view the position of
law as noticed hercinabove, these petitions are allowed by issuance of the
following declarations and directions :
(I) Respondent No. 3 is directed to constitute a high power Committee for
the purpose of examining all the allotments made so far to the Members of
Respondent No. 39- Society keeping in view the provisions of the Act. the
Rules, the Regulations, the Orders issued in that behalf and the
observations and findings recorded in this Judgment. Such Committee should
comprise of experts in the fields and may be headed by a person of judicial
background preferably a former Judge of this Court, Such a Committee shall
be constituted within a period of one month from today with direction to
submit its Report to the Authority within a period of four months from the
date of its constitution. It is needless to say that such a Committee shall
examine all individual cases after notice to the concerned allottees.
(II) Consequent upon the submission of the Report by the Committee,
Respondent No. 3 shall initiate legal process for cancellation of the
allotments wherever needed, obviously in accordance with the provisions of
the Act, Rules, Regulations and after compliance of the principles of
natural justice.
(III) To facilitate an early report, Respondent No. 3 shall notify the
constitution of the Committee, its functions and the place of sitting by
means of publication of a notice in three daily newspapers published from
Bangalore having vide circulation in the State of Karnataka. Out of these
three newspapers one shall be in Kannada language. Such publication shall
be deemed sufficient notice to all concerned. The Committee shall, however,
in its discretion be entitled to issue personal notice to the concerned.
(IV) Respondent No, 27, who was allotted a site measuring 50’ x 80’ at HSR
Layout is proved to have violated the terms of the lease-cum-sale agreement
and the provisions of law, thus incurring a liability of cancellation of
the site. The allotment of a site No, L-1118 of Hosur Sarjapur L.H. Colony
made in favour of Respon-dent No. 27 is hereby cancelled with direction to
Respondent No. 3 to resume the site and take its immediate possession.
Respondent No, 27 is held entitled to the payment of such amount as is
permissible to him under Rule 14 of the Allotment Rules only
notwithstanding the amounts spent by him on the construction of a Hotel in
violation of the provisions of law.
(V) All permissions granted to the Respondents for alienation of land are
held to be in violation of Rule 13 of the Allotment Rules and the
conditions of lease-cum-sale agreement executed between the parties. Such
permissions insofar as the concerned Respondents are concerned are declared
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to be nullity, void and inoperative not affecting the rights of the
Respondent No. 3-Authority. Consequent upon the setting aside of the
permissions granted for alienation, Respondent No. 3 is directed to take
immediate consequential action under the provisions of the Act, Rules
issued thereunder and the agreement executed between the parties. So far as
the other allottees of the sites, who have been granted permission of
alienation, but are not parties before us, a direction is issued to
Respondents 1 and 3 to immediately initiate process for cancellation of
such permission after notice to the concerned and compliance of the
principles of natural justice. Appropriate action shall be initiated within
one month and effective orders be passed with respect to all concerned
within a period of three months.
(VI) The alienations made by the allottees in favour of the third parties
would not come in the way of Respondents I to 3 to implement the directions
of this Court. It is, however, directed that in all such cases where the
name of the transferees are notified, the Respondents 1 to 3 shall pass
effective orders after notice to :the concerned transferees also.
(VII) That pending amendment of the Rules, no further per-mission shall be
granted to any allottee for transfer of the site to any person under any
circumstances.
(VIII) Even after the Rules are amended as recommended by Respondent No. 3-
Authority, the allottees of the sites from the B.D.A are held not eligible
to transfer the vacant site to any person for any reason. Allottees of such
sites shall however upon proof of the conditions specified under Rule 14(3)
of the Allotment Rules be eligible to surrender the sites in favour of the
Authority on receipt of the amount as provided under the aforesaid Rule.
(IX) The allottees of the sites who have put up buildings shall be
permitted to sell the sites only upon declaration of their status regarding
insolvency or impecuniosity by a competent Court of jurisdiction and in the
light of the findings returned by us in this judgment.
(X) Such of the allottees of the sites who are unable to reside in the
city of Bangalore shall be required to surrender the site whether any
construction is raised or not in favour of Respondent No. 3-Authority on
receipt of the amounts calculated as per terms of Rule 14(3) of the
Allotment Rules.
(XI) Respondent No. 3 is further directed to immediately appoint an
officer to ascertain within one week regarding the position of the sites so
far as the construction of the building in terms of lease-cum-sale
agreements is concerned. Such officer shall submit his Report positively
within a period of two weeks.
(XII) Pending Report of the Committee appointed in terms of direction No.
1, no allottee of any site, which is in dispute and allotted at the
instance of Respondent No. 39 shall be permitted to commence or carry on
any construction on the site.
(XIII) The directions issued and law laid down in this case shall mutatis
mutandis apply to B.D.A. Act and Rules whether directly :or through Housing
Societies."
The aforesaid judgment of the: High Court and the directions issued by it
have been challenged in this appeal and the connected petitions which have
been filed. At the outset, we are of the opinion that the High Court
travelled way beyond the scope of the writ petition which was before it.
The prayer in the writ petition was for quashing the out of turn allotments
in favour of MLAs, MPs and others who were impleaded as respondents Nos. 4
to 38 before the High Court. The further prayer was that permission which
had been granted to some of these MLAs, MPs and others to transfer plots of
land which had been allotted to them should also be quashed. It is
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pertinent to note that in this writ petition there was no challenge either
to the registration of the respondent-Society with the BDA or to the
allotment of land to the Society as such. As already noted, the challenge
was to the allotment to the 34 persons who were stated to be members of the
said Society. The High Court, on the other hand, not only came to the con-
clusion that bulk allotment of land was not permissible but also directed
the constitution of a Committee to go into all allotments made by the BDA.
The effect of this would be that the Committee which was sought to be
constituted was empowered to carry out a roving and fishing inquiry with
regard to allotments of land made by the BDA since the time it was
constituted in the year 1976, There was neither any prayer in the writ
petition to this effect nor do we find any affidavit having been filed by
the respondents before the High Court in relation to such allotments of
land to the Society and others. The writ petitioner had not chosen to
enlarge the scope of the writ petition by amending his petition and,
therefore, the High Court, in our opinion, was not justified in issuing the
type of direc-tions which it did.
Coming to the merits of the case and without going into the question of
laches, we find that during the pendency of the hearing of the writ
petition, two of the respondents, namely, Jagannatha Rao Chandraki and K.G.
Ramaswamy had expired. The High Court ordered their deletion from the array
of respondents. In addition thereto, it was found that some of the persons
who were originally impleaded as respondents were not Legislators and on a
memo being filed by the writ petitioner 13 such respondents were deleted
from the array of respondents vide Court’s order dated 27th August, 1998.
We are thus concerned with the remaining ex-Legislators and Ministers to
whom allotment had been made by virtue of their being members of the
respondent-Society.
In justification of allotment of land, the appellant BDA has placed strong
reliance on Section 38B of the Act which reads as under :
38B. Power of Authority to make bulk allotment. - Notwithstand-ing anything
contained in this Act or Development Scheme sanc-tioned under this Act, the
Authority may, subject to any restriction, condition and limitation as may
be prescribed, make bulk allotment by way of sale, lease or otherwise of
any land which belongs to it or is vested in it or acquired by it for the
purpose of any develop-ment scheme, -
(i) to the State Government; or (ii) to the Central Government; or
(iii) to any Corporation, Body or Organisation owned or con-trolled by the
Central Government or the State Government; or
(iv) to any Housing Co-operative Society registered under the Karnataka Co-
operative Societies Act, 1959 (Karnataka Act 11 of 1959)’
(v) to any society registered under the Karnataka Societies Registration
Act, 1960 (Karnataka Act 17 of 1960); or
(vi) to a Trust created wholly for charitable, educational or religious
purpose:
Provided that prior approval of the Government shall be ob-tained for
allotment of land to any category listed above.
It may here be noticed that Section 38 of the Act gives power to the
Authority to lease, sell or transfer property, inter alia, for building
pur-poses or for the purposes of any development scheme. It appears that
the Karnataka High Court had in an earlier decision interpreted this Act to
mean that the BDA could not make bulk allotment. This resulted in the
passing of the Bangalore Development Authority (Third Amendment) Act, 1993.
By Section 5 of the said Amending Act, Section 38B was inserted in the
principal Act with effect from 20th December, 1975. A plain reading of this
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Section shows that bulk allotment of land by way of sale, lease or
otherwise can be made, inter alia, to any Housing Co-operative Society.
This being so, the allotment of land made in favour of the respondent-
Society between 1981 and 1987 would come within the ambit of Section 38B.
There is no material on record to indicate that there was any society or
organisation or anybody else who had been registered with the BDA prior to
the date of registration of the respondent-Society and who had not been
allotted land. In the absence of any averment in this behalf or any
specific finding in regard thereto, the allotment of land which consisted
of 604 sites in favour of the respondent-Society cannot be held to be
invalid. It is not in dispute that the respondents whose allotment was
challenged were members of the respondent-Society and if this being so they
would be entitled to allotment of sites from out of the land which had been
allotted to the said Society.
We now come to the question of transfer of sites by the allottees. There
were 11 persons who were not members of the respondent-Society, who had
applied to the BDA for permission to sell the land allotted to them. The
BDA had recommended to the Government that approval be accorded to them to
transfer the land. This approval was granted and there is no challenge to
the same in the present proceedings. The challenge, however, is to the
approval which was granted to 13 other members of the .Society, who were
impleaded as respondents in the writ petition, and who were permitted to
sell the sites which had been allotted to them.
Rule 14 of the Bangalore Development Authority (Allotment of Sites) Rules,
1984 provides for restrictions and conditions on sales of sites. The said
Rule which was in existence in 1994-95, when permission was granted to the
ex-Legislators to transfer the land, reads as follows:
14. Restrictions, conditions on sales of sites -
(1) Notwithstanding anything contained in these rules, the Commissioner
may at the request of the allottee of a site execute a deed of conveyance
subject to the restrictions, conditions and limitations specified in sub-
rule (2).
(2) The conveyance of site by the Commissioner in favour of an allottee
(hereinafter referred to as the purchaser) shall be subject to the
following restrictions, conditions and limitations namely :
(a) in the case of a site on which a building has not been constructed :
(i) the purchaser shall construct a building on the site within such period
as may be specified by the Authority as per plans, designs, and conditions
to be approved by the Authority or in conformity with the provisions of the
Karnataka Municipal Cor-porations Act, 1976 and the Bye-laws made
thereunder.
(ii) the purchaser shall not without the approval of the Authority
construct on the site any building other than a build-ing for the
construction of which the site was allotted, granted or sold.
(iii) the purchaser shall not alienate the site within a period of ten
years from the date of the conveyance except by mortgage in favour of the
Government of India or the Government of Kar-nataka, the Life Insurance
Corporation of India or the Karnataka Housing Board or any Company or Co-
operative Society approved by the Authority or any Corporation set up owned
or controlled by the Stale Government or the Central Government to secure
money advanced by such Government, Corporation, Company, Board, Society or
Corporation, as the case may be for the con-struction of the building on
the site.
(b) in the case of a site on which a building has been con-structed, the
purchaser shall not alienate the site and the building constructed thereon
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within a period of ten years from the date of agreement except by mortgage
in favour of the Government of India, the Government of Karnataka, the Life
Insurance Corpora-tion of India, or the Karnataka Housing Board or any
Company or Co-operative Society approved by the Authority to secure moneys
advanced by such Government, Corporation, Board or Society or Company for
the construction of the building on the site.
(c) in the event of the purchaser committing breach of any of the
conditions in clause (a) or clause (b) the Authority may at any time, after
giving the purchaser reasonable notice, resume the site free from all
encumbrances. The purchaser may remove all things which he has attached to
the earth.
Provided that if he has left the site in the state in which he received it,
all transactions entered into in contravention of the conditions specified
in clauses (a) and (b) shall be null and void ab-initio.
Explanation - In this rule, references to the authority shall be deemed to
include the references to the commissioner when authorised by the general
resolution to exercise any power vested in the authority.
(3) Notwithstanding anything contained in sub- rule (2) but without
prejudice to the provisions of rule 13 where the lessee applies that for
reasons beyond his control he is unable to reside in the City of Bangalore
or by reasons of his insolvency or im-pecuniosity it is necessary for him
to sell the site and the building, if any, he may have put up thereon the
Bangalore Development Authority may, with the previous approval of the
State Govern-ment, either :
(a) require him to surrender the site, where there is no building in its
favour; or
(b) where there is a building put up permit him to sell the vacant site
and building :
Provided that -
(i) in case covered by clause (a) the Authority shall pay to the lessee the
allotted value of the site and an additional sum equal to the amount of
interest at twelve per cent per annum thereon; and
(ii) in case covered by clause (b) the lessee shall pay to the authority a
sum equal to the amount of interest at twelve per cent per annum on the
allotted value of the site."
The said Rule did not permit transfer of site on which building had not
been erected. According to sub-rule (3), under certain conditions art
allottee could only surrender the site in which case he was entitled to
receive the value of the site plus 12 per cent interest thereon. It is only
if a building was erected that permission could be given to sell the vacant
site and building subject to payment of interest at the rate of 12 per cent
on the allotted value of the site. It is represented before us that the BDA
permitted that allottees to sell the sites, inasmuch as under Section 65 of
the Act the Government of Karnataka had issued a direction requiring the
BDA to permit the said transfers. Section 65 of the Act gives power to the
Government to issue directions to the Authority and reads thus :
65. Government’s power to give directions to the Authority. - The
Government may give such directions to the Authority as in its opinion are
necessary or expedient for carrying out the purposes of this Act, and it
shall be the duty of the Authority to comply with such directions.
As we read the above Section, the Government has no power to issue any
directions which are in conflict with the provisions of the Act and, by
necessary implication, in conflict with the Rules framed under the said
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Act. The directions which can be given under Section 65 are such which are
necessary or expedient for the carrying out of the purposes of the Act.
When Rule 14, as it stood in the year 1994-95, did not permit sale of
vacant sites by an allottee to anybody else, even after getting permission
from the BDA, the Government could not have permitted or directed the said
land to he sold or transferred. This being the position, the transfer of
land by 13 such ex-Legislators and ex-ministers who were members of the
respon-dent-Society, and whose names are included in the BDA’s letter dated
27th/28th October, 1995 written to the Principal Secretary to Government,
Housing & Urban Development Department, Bangalore, was clearly illegal and
the permission so granted and the consequent transfer of land would become
liable to be set aside.
Rule 14 has now been amended by Notification dated 6th February, 1998. Rule
5 of the Bangalore Development Authority (Allotment of Sites) (Amendment)
Rules, 1997 which makes the amendment in Rule 14 reads thus :
5. Amendment of Rule-J4: - In ruIe-14 of the said Rules. -(i) after sub-
rule (2), the following shall be inserted namely :-
’’2A. Notwithstanding anything contained in sub- rule (2), where a lessee
has alienated the site in contravention of sub-clause (iii) "of clause (a)
sub-rule (2), the authority may on application of the purchaser of such
site and subject to payment by the purchaser an amount equal to twenty-five
per cent of the sital value determined at the rates specified by the State
Government from time to time for the purpose of registration, order for
regularisation of such alienation and may also convey title to such
purchaser,"
(2) in sub-rule (3),
(i) after clause (a), the following clause shall be inserted namely:
"(aa) permit the allottee to sell the site during the lease period of ten
years."
(ii) in the proviso, after clause (i), the following clause shall be
inserted namely:
"(ia) in case covered by clause (aa), mentioned above, the lessee shall pay
to the Authority an amount equivalent to fifteen per cent of the sital
value determined at the rates specified by the State Government from time
to time for the purpose of registration.
As a result of the Rules as they now stand were there has been alienation
of site in contravention of sub-rule (2), then on an application being made
by the purchaser the said sale or alienation in his favour can be
regularised on the purchaser paying an amount equal to 25 per cent of the
sital value determined at the rates specified by the State Government from
time to time. Inasmuch as the permission which was granted in 1994 and 1995
for transferring the land was illegal, the effect would be that the
original allottees had transferred the land in violation of the provisions
of sub-rule (2) of Rule 14 and now after the amendment of the said Rule
regularisation of the said alienation can take place by the purchaser
paying the amount referred to in sub-rule (2A). If this payment is not
made, the result obviously would be that the alienation will not be
validated and the allotment of land itself would stand cancelled. It is
obvious that under Rule 14 permission to transfer can be granted under the
circumstances provided by sub-rule (3). The said sub-rule provides that an
application for transfer can be made by an allottee on the ground that (a)
for reasons beyond his control he is unable to reside in the city of
Bangalore; or (b) by reasons of his insolvency or impecuniosity, it is
necessary for him to sell the site and the building. The High Court has
interpreted this Rule to mean that it is only for reason of insolvency that
permission under sub-rule (3) can be granted. This does not appear to be
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correct because on the ground that the allottee is unable to reside in the
city of Bangalore and also on the ground of impecuniosity, permission can
be granted to sell the land or the land and the building constructed
thereon, after the amendment of the Rule of 1998,
For the aforesaid reasons, these appeals are allowed and the judg-ment of
the High Court is set aside. We, however, direct that the BDA will give an
opportunity to the purchasers of land referred to in its letter dated
27/28th October, 1995 who had purchased the same from the members of the
respondent-Society to get the transfer regularised on payment of 25 per
cent of the sital value determined at the rates specified by the
Government. Notice to this effect should he issued within eight weeks from
today and the notice would indicate that if the amount so determined is not
deposited, the land in question will stand resumed by the BDA. No other
directions are called for.
No costs.
Civil Appeal Nos. 459-461, 462-463, 464 and 465 of 2000 (arising out of
Special Leave Petition (Civil) Nos. 1419-1421, 3418-3419, 3444 and 7820 of
1999)
Special leave granted.
For the reasons stated above, these appeals are disposed of in terms of the
directions given above.