Karnataka HC Orders BDA To Convey Up To 5 Acres To Co-op Society, Quashing Cancellation 16 Years After ₹51.27 Lakh Payment

The petitioner society applied for bulk allotment of five acres in Sy. No. 78, Nagarbhavi. After the BDA and the State Government approved the allotment and fixed the price, the society paid ₹51,27,500 in October 2000.

The BDA later asserted that the society’s objects did not qualify it for bulk allotment under Section 38B of the Bangalore Development Authority Act, 1976 (BDA Act), and issued a notice in 2016 withdrawing the allotment and forfeiting the amount paid.

After the High Court, in earlier proceedings, treated that order as a show-cause notice and permitted the society to respond, the BDA rejected the society’s claim in September 2024.

The society challenged both decisions and sought conveyance of the land.

Section 38B of the BDA Act provides a framework for bulk allotment to eligible societies; the BDA argued that it is enabling rather than mandatory and that eligibility must exist when an application is made.

Under Section 12(2-A) of the Karnataka Co-operative Societies Act, 1959, an amendment proposal is deemed registered if it is not dealt with within the prescribed period; the Court treated the petitioner’s amendment as having been deemed registered before the impugned order.

The Court applied the principles of legitimate expectation and estoppel by conduct, holding that a statutory authority that had accepted payment and treated the society as an allottee could not, after prolonged inaction, take a contrary position without acting arbitrarily.

It also held that the authority had to act within a reasonable time.

The BDA had approved the allotment, obtained Government approval, demanded and accepted the full consideration, and then left the allotment undisturbed for years while the society participated in litigation concerning the land as an allottee.

The BDA had opportunities to revisit the allotment earlier but did not do so, and in prior proceedings it had not relied on the society’s alleged ineligibility.

Although the society’s amendment to its objects was registered after the impugned order, the Court considered it deemed registered under Section 12(2-A) before that order; in any event, the BDA’s prior conduct and delay made its late reversal arbitrary.

The Court therefore held that the BDA could not rely on the society’s original objects to withdraw the allotment and retain the amount paid.

It directed the BDA to convey five acres in Sy. No. 78 within one month; if less than five acres were available, it must convey the available extent and refund the proportionate consideration with 12% annual interest from the date of deposit.

Following conveyance, the society must obtain an approved layout plan and relinquish the required roads, drains, parks and open spaces to the BDA.

The society was also directed to circulate the order to its members and file a seniority list based on the dates on which members deposited the site value.