TaxTMI 
TaxTMI 
TaxTMI 
2011 (9) TMI 971
X X X X Extracts X X X X
X X X X Extracts X X X X
....y the Corporation, the State Government issued notification dated 29.12.1981 under Section 4(1) of the Land Acquisition Act, 1894 (for short, `the Act') for the acquisition of 39 acres 27 guntas land comprised in various survey numbers including Survey No.122 of Kodihalli and Challaghatta villages, Bangalore South Taluk. After considering the reports submitted by the Special Deputy Commissioner, Bangalore under Section 5A(2) and Section 6(1A) (added by the Karnataka Act No.17 of 1961), the State Government issued declaration under Section 6 in respect of 37 acres 4 guntas land. A combined reading of the two notifications makes it clear that the public purpose for which land was sought to be acquired was to establish Golf-cum- Hotel Resort near Bangalore Airport, Bangalore by the Corporation. The Special Land Acquisition Officer passed award dated 7.4.1986. However, as will be seen hereinafter, instead of utilizing the acquired land for the purpose specified in the notifications or for any other public purpose, the Corporation transferred the same to private parties. 3. One Dayananda Pai, a real estate developer, who is said to have entered into agreements with the landow....
X X X X Extracts X X X X
X X X X Extracts X X X X
....espicable than the candid admission by the Tourism Development Corporation that they did not have the necessary funds required to meet the cost of acquisition. If really there was no amount available, how the acquisition was embarked upon, we are left to the realm of guess. Not only that, this particular resolution makes it appear that respondent-5 Dayanand Pai was the only saviour of the Karnataka State Tourism Development Corporation from the difficult situation. For our part we do not know what exactly was the difficulty then, Land acquisition proceedings were complete in all material respects. All that required was possession to be taken. Merely because there are Writ Petitions or some cases pending, does it mean that the Tourism Development Corporation must plead helplessness? Does not it have the wherewithal to contest these litigations? Is it not a part of the Government although it be a Corporation? What is it that it wants to do? In consideration of the withdrawal of the cases which were thorns in the flesh of the Tourist Development Corporation, he is given of a silver salver an extent of 12 acres 31 guntas of land. To say the least, it appears right from the beginn....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on? Therefore it appears to us this is nothing more than a conspiracy to deprive the owners of the lands by use of the power of the eminent domain which is to be used for an avowedly public purpose and for strong compelling reasons and not whimsically or to satisfy the private needs of an individual." (emphasis supplied) The Division Bench then referred to some judicial precedents including the judgment in Industrial Development & Investment Company Private Limited v. State of Maharashtra AIR 1989 Bombay 156 and observed: "...........But, in the case on hand what is most striking is negotiations took place even before taking possession of lands. On 8-5-1987 agreement was entered into and in the wake of taking possession on 12-11-1987, transfers are made on 23-3-1988 and 24-3-1988. This is where we consider that with the motive of securing lands to respondent-5 Dayanand Pai, acquisition had come to be embarked upon. This was the reason why we conclude that this is a case of fraudulent exercise of power. It is no consolation to say that the owners of lands have accepted the compensation because in Industrial Development & Investment Co. Pvt. Ltd. v. State of Maharashtra it is st....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ame had been illegally transferred to private persons. They pleaded that the acquisition proceedings were vitiated due to mala fides and misuse of power for oblique and collateral purpose. Those petitions were allowed by the Division Bench of the High Court vide order dated 18.9.1991, the relevant portions of which are extracted below: "In our considered view, it is one thing to say that acquisition is actuated by legal malafides, but it is totally different thing to say that acquisition for all intents and purposes is embarked on an apparent public purpose and ultimately that purpose is not served. In other words, what we mean is their where the lands have been acquired, undoubtedly for public purpose for the benefit of the Karnataka State Tourism Development Corporation and after acquisition, even before taking possession, if agreements were entered into on the ground that the Karnataka State Tourism Development Corporation did not have enough money to meet the cost of acquisition and that it would be better to get rid of the litigation by selling away the same or leasing away the properties and thereby give it to private individuals. We are of the view that it is a clear case ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... entered into even before possession was taken to part with substantial portion of the land. Where object of providing lands to a private individuals, if acquisition proceedings are reported to or power of eminent domain comes to be exercised, it would nothing more than fraud on power. There it is a case of fraud it would unreveal everything. It cannot be valid in part and invalid in other parts (See Lazarus Estates Ltd. VS. Gurdial Singh - AIR 1980 SC 319: Pratap Singh v. State of Punjab - AIR 1964 SC 73: Narayana Reddy v. State of Karnataka - ILR 1991 KAR. 2248.) Therefore the question of limitation does not arise in such cases. Where the actions are found to be mala fide, courts have not failed to strive down those actions as laid down by the Supreme Court in Pratap Singh v. State of Punjab's case cited supra." (emphasis supplied) The operative portion of the order passed in that case is extracted below: "In the result, we allow these writ petitions quash the notification issued under Section 4(1) and the declaration under Section 6 of the Act and all subsequent proceedings." 6. Smt. H.N. Lakshmamma and others also questioned the acquisition of their land comprised ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....orporation in favour of M/s. Universal Resorts Limited through its Managing Director, Sri C.K. Baljee purporting to lease out 5 acres land for a period of 30 years on an annual rent of Rs. 1,11,111/- per acre for the first 10 years. 8. In the meanwhile, Shri C.K. Baljee, Managing Director of M/s. Universal Resorts Limited filed suit for injunction against respondent No.1 and his brothers by alleging that they were trying to forcibly encroach upon the acquired land. He also filed an application for temporary injunction. By an ex parte order dated 29.10.1991, the trial Court restrained respondent No.1 and his brothers from interfering with the plaintiff's peaceful possession and enjoyment of the suit schedule property. After about two years, the brothers of respondent No.1 filed Writ Petition Nos.2379 and 2380 of 1993 for quashing the acquisition of land measuring 0.29 guntas and 0.38 guntas respectively, which came to their share in the family partition effected in 1968. They relied upon the judgments of the Division Bench in Mrs. Behroze Ramyar Batha and others v. Special Land Acquisition Officer (supra) and Writ Appeal No.2605 of 1991 - Smt. H.N. Lakshmamma and others ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....acquisition. Writ Appeal Nos.4536 and 4541 of 1995 filed by G. Ramaiah Reddy and G. Nagaraja Reddy were dismissed by the Division Bench of the High Court on 1.1.1996 by a one word order and the special leave petitions filed by them were summarily dismissed by this Court vide order dated 26.2.1996. 9. In a separate petition filed by him, which came to be registered as Writ Petition No.34891 of 1995, respondent No.1 prayed for quashing notifications dated 29.12.1981 and 16.4.1983 insofar as the same related to 1 acre 3 guntas land comprised in Survey No.122/1 of Kodihalli village and for issue of a mandamus to respondent Nos.3 to 5 (the appellants herein) to redeliver possession of the said land. He pleaded that in the garb of acquiring land for a public purpose, the official respondents have misused the provisions of the Act with the sole object of favouring private persons. In the counter affidavits filed on behalf of the appellants, it was pleaded that the writ petition was highly belated and that by having accepted the compensation determined by the Special Land Acquisition Officer, respondent No.1 will be deemed to have waived his right to challenge the acquisition proceedings....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... The writ appeals filed by the appellants were allowed by the Division Bench on the ground that the learned Single Judge was not justified in ignoring the order passed by the coordinate Bench. The Division Bench observed that merits of the case could have been considered only if he was convinced that the writ petitioner had given cogent explanation for the delay and, accordingly, remitted the matter for fresh disposal of the writ petition. 12. In the second round, the learned Single Judge dismissed the writ petition by observing that even though fraud vitiates all actions, the Court is not bound to give relief to the petitioner ignoring that he had approached the Court after long lapse of time. Writ Appeal No.7772 of 1999 filed by respondent No.1 was allowed by the Division Bench of the High Court. While dealing with the question whether the learned Single Judge was justified in non suiting respondent No.1 on the ground of delay, the Division Bench referred to the explanation given by him, took cognizance of the fact that even after lapse of more than a decade and half land had not been put to any use and observed: ".................It is the definite case of the appellant that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at but for the fraud committed by the 3rd respondent in diverting the acquired land in favour of respondents 4 and 5 and others clandestinely for the purposes other than the purpose for which it was acquired, perhaps, the appellant would not have challenged the land acquisition proceedings at all. It is his definite case that he was approaching this Court under Article 226 for quashing the impugned notifications only because the acquired land was sought to be diverted by the 3rd respondent-beneficiary in favour of third parties, that too, for the purposes other than the one for which it was acquired and the acquisition of the entire extent of land under the same notification in its entirety is already quashed by this Court as fraud on power and tainted by malafide. Therefore, the Court has necessarily to consider the question of delay and laches in the premise of the specific case of the appellant and it will be totally unfair and unjust to take into account only the dates of Section 4(1) notification and Section 6(1) declaration. It is also necessary to take into account the fact that well before the appellant approached this Court, the Division Bench of this Court in Writ A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....consumed has to be condoned in view of the judgment of the Supreme Court already referred to above, we are of the considered opinion that the learned single Judge is not justified in dismissing the writ petition on the ground of delay and laches. It needs to be noticed further that admittedly, no developments have taken place in the schedule land despite considerable passage of time. Further more, admittedly, no rights of third parties are created in the schedule land. The schedule land being a meagre extent of land compared to the total extent of land acquired for the public purpose, cannot be put to use for which it was originally acquired. Looking from any angle, we do not find any circumstance on the basis of which we would be justified in refusing the relief on the ground of delay and laches even assuming that there was some delay on the part of the appellant before approaching this Court by way of writ petition in the year 1995." The Division Bench then referred to orders dated 18.9.1991 and 3.10.1991 passed in Writ Petition Nos.19812 to 19816 of 1990 - Annaiah and others v. State of Karnataka and others and Writ Appeal No.2605 of 1991 - Smt. H.N. Lakshmamma and others v. St....
X X X X Extracts X X X X
X X X X Extracts X X X X
....7 and argued that quashing of notifications by the High Court in three other cases would enure to the benefit of only those who approached the Court within reasonable time and respondent No.1, who had kept quiet for 12 years cannot take advantage of the same. Shri Naganand lamented that even though his clients had given highest bid in May, 1987 and lease deed was executed in January, 1992, they have not been able to utilize the land on account of pendency of litigation for last more than 16 years and have suffered huge financial loss. 14. Shri Mahendra Anand, learned senior counsel appearing for respondent No.1 supported the impugned judgment and argued that the Division Bench of the High Court did not commit any error by directing return of land to respondent No.1 because acquisition thereof was vitiated by fraud. Learned senior counsel emphasised that in view of the unequivocal finding recorded in Mrs. Behroze Ramyar Batha and others v. Special Land Acquisition Officer (supra) and other cases that land acquired for the specified public purpose, i.e. Golf-cum-Hotel Resort could not have been transferred to private persons and that there was conspiracy to deprive the owners of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ncountered difficulties in acquiring the required land of 39 acres in 1986-87 as a result of the land owners/power of attorney holders moving the Courts for stay of the acquisition proceedings. Instead, the Company opted to pursue the acquisition of land even at the cost of surrendering 14 acres and 8 guntas of land (out of 23 acres 36 guntas acquired) to Sri Dayananda Pai, a power of attorney holder, for a group housing scheme for employees of public/private sector undertakings, which was a purpose/scheme not contemplated by the Company and in no way connected with the Company's objectives. The so-called compromise Agreement of March 1987 with Sri Dayananda Pai had the effect of only compromising the Company's interests in that it contained no provisions regarding commitment and penalties on Sri Dayananda Pai to assist the Company to acquire the entire lands of 39 acres 27 guntas while he was presented with 14 acres 8 guntas of land on a platter as it were for executing the group housing scheme for his purpose and pecuniary benefits. Whether Sri Dayananda Pai has really implemented the Group Housing Scheme in Challaghatta for the employees of Public and Private Undertakin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hority including any Government, directions, orders or writs including writs in the nature of habeas corpus, mandamus, prohibition, quo-warranto and certiorari is not hedged with any condition or constraint, in last 61 years the superior Courts have evolved several rules of self-imposed restraint including the one that the High Court may not enquire into belated or stale claim and deny relief to the petitioner if he is found guilty of laches. The principle underlying this rule is that the one who is not vigilant and does not seek intervention of the Court within reasonable time from the date of accrual of cause of action or alleged violation of constitutional, legal or other right is not entitled to relief under Article 226 of the Constitution. Another reason for the High Court's refusal to entertain belated claim is that during the intervening period rights of third parties may have crystallized and it will be inequitable to disturb those rights at the instance of a person who has approached the Court after long lapse of time and there is no cogent explanation for the delay. We may hasten to add that no hard and fast rule can be laid down and no straightjacket formula ca....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... not a rule of law but a rule of practice based on sound and proper exercise of discretion. Each case must depend upon its own facts. It will all depend on what the breach of the fundamental right and the remedy claimed are and how delay arose. The principle on which the relief to the party on the grounds of laches or delay is denied is that the rights which have accrued to others by reason of the delay in filing the petition should not be allowed to be disturbed unless there is a reasonable explanation for the delay. The real test to determine delay in such cases is that the petitioner should come to the writ court before a parallel right is created and that the lapse of time is not attributable to any laches or negligence. The test is not to physical running of time. Where the circumstances justifying the conduct exists, the illegality which is manifest cannot be sustained on the sole ground of laches. The decision in Tilokchand case relied on is distinguishable on the facts of the present case. The levy if based on the net profits of the railway undertaking was beyond the authority and the illegal nature of the same has been questioned though belatedly in the pending proce....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ecided on its own facts. (5) That representations would not be adequate explanation to take care of the delay." 21. Another principle of law of which cognizance deserves to be taken is that in exercise of power under Article 136 of the Constitution, this Court would be extremely slow to interfere with the discretion exercised by the High Court to entertain a belated petition under Article 226 of the Constitution of India. Interference in such matters would be warranted only if it is found that the exercise of discretion by the High Court was totally arbitrary or was based on irrelevant consideration. In Smt. Narayani Debi Khaitan v. State of Bihar [C.A. No.140 of 1964 decided on 22.9.1964], Chief Justice Gajendragadkar, speaking for the Constitution Bench observed: "It is well-settled that under Article 226, the power of the High Court to issue an appropriate writ is discretionary. There can be no doubt that if a citizen moves the High Court under Article 226 and contends that his fundamental rights have been contravened by any executive action, the High Court would naturally like to give relief to him; but even in such a case, if the petitioner has been guilty of laches,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1987 along with other parcels of land (total measuring 5 acres) and Corporation executed lease in favour of M/s. Universal Resorts Limited in 1992. However, no material has been placed on record to show that the said exercise was undertaken after issuing notice to the landowners. When respondent No.1 discovered that his land has been transferred to private entity, he made grievance and finally approached the High Court. During the intervening period, he pursued his claim for higher compensation. Therefore, it cannot be said that he was sleeping over his right and was guilty of laches. 24. A reading of the impugned judgment, the relevant portions of which have been extracted hereinabove shows that the Division Bench of the High Court adverted to all the facts, which had bearing on the issue of delay including the one that on the advice given by an advocate, respondent No.1 had availed other remedies and opined that the delay had been adequately explained. Thus, it cannot be said that the discretion exercised by the High Court to entertain and decide the writ petition filed by respondent No.1 on merits is vitiated by any patent legal infirmity. It is true that the writ petitio....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Division Bench of the High Court categorically held that the exercise undertaken for the acquisition of land was vitiated due to fraud. The Division Bench was also of the view that the acquisition cannot be valid in part and invalid in other parts, but did not nullify all the transfers on the premise that other writ petitions and a writ appeal involving challenge to the acquisition proceedings were pending. In Annaiah and others v. State of Karnataka and others (supra), the same Division Bench specifically adverted to the issue of diversification of purpose and held that where the landowners are deprived of their land under the cover of public purpose and there is diversification of land for a private purpose, it amounts to fraudulent exercise of the power of eminent domain. 26. The pleadings and documents filed by the parties in these cases clearly show that the Corporation had made a false projection to the State Government that land was needed for execution of tourism related projects. In the meeting of officers held on 13.1.1987, i.e. after almost four years of the issue of declaration under Section 6, the Managing Director of the Corporation candidly admitted that the ....