TaxTMI 
TaxTMI 
2005 (10) TMI 543
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....ement the purposes of the Act. The Board (commonly known as CITB) was given the power to draw the improvement scheme and for undertaking any work for improvement or development of any area in or around the city of Bangalore. The Board was also given the power to acquire land by agreement and was deemed to be a local authority for the purposes of Section 50(2) of the Mysore Land Acquisition Act which was in pari materia with the Land Acquisition Act of 1894. On 28.1.1960 a preliminary notification dated 26.11.1959 was published in the official Gazette proposing to acquire the land of the 1st respondent for formation of a scheme to set up a layout called the Koramangala Layout. Final notification was published on 28.9.1965 and the award was made on 29.11.1966. The amount of compensation was paid and in some cases it was deposited in the treasury. 1st respondent sought a reference for enhancement of the compensation. In the cases in which a reference had been sought by the 1st respondent the amount of compensation was deposited in the Civil Court. Immediately after the passing of the award the possession of the land in question was taken. On 26.6.1968 a resolution was passed by the C....
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....acted. Bangalore Development Authority constituted under the 1976 Act succeeded to the City Improvement Trust Board. The resolution passed by the CITB to re-convey 6 acres and 20 guntas of land was not given effect to as the High Court of Karnataka in a series of judgment held that the land acquired for the development scheme could not be returned or reconveyed to the owner and that it must be applied for the purpose for which it was acquired and the sites formed therein should be distributed according to the allotment rules. In view of the declaration of law made by the High Court the resolution was not given effect to by the BDA and sites were formed by the appellant in the said 6 acres and 20 guntas of land and the sites were allotted sometime in the year 1985-86. After the formation of sites in said 6 acres and 20 guntas and their allotment the 1st respondent approached the High Court of Karnataka at Bangalore seeking a writ of mandamus directing the BDA to reconvey 6 acres and 20 guntas of land as per resolution of CITB dated 19.4.1972. A learned Single Judge of the High Court dismissed the writ petition summarily at the admission stage as being concluded by the decision of t....
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....compensation. In view of the above findings the Division Bench held that there was no necessity to give a direction to re-convey the land but the proper direction would be to direct the BDA to issue the possession certificate to 1st respondent in respect of the land which is the subject matter of the writ petition. It was further held that since the allottees of the sites out of 6 acres and 20 guntas were likely/bound to be affected by the order a direction was required to be issued to BDA to allot equivalent sites/plots of land to such allottees within 4 months of the passing of the order. Learned counsels for the parties have been heard at length. A Division Bench of the High Court of Karnataka in Writ Appeal No.729 of 1983 (Sri. A.V. Lakshman Vs. B.D.A. & Others) upheld the order of the Single Judge by observing that the owners of the land did not have a right in law to seek re-conveyance of the acquired land. Another Division Bench in Writ Appeal No.581 of 1975 (Rachappa & Others Vs. State & Others) held that the lands acquired become the property of the Trust Board and it has to be dealt with in accordance with the law and owners of the land in the absence of a statutory pro....
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....s framed thereunder which enable the B.D.A. to re-convey the site. Re-conveyance in a way is opposed to the scheme itself. Scheme is formed for the purpose of forming site for allotting them as per the Rules. The rules do not provide for re-conveyance. Therefore it is not possible to hold that the petitioners have a right to seek re-conveyance." Plea of promissory estoppel noticed in para 5 of the order to the effect: "However, the learned Counsel for the petitioners has tried to take refuge under the equitable doctrine of promissory estoppel on the basis of the notification issued by the then Chairman of the B.D.A. dated 14.7.76 as per Annexure-B. The petitioners claim that as per and in pursuance of the notification (Annexure-B) they have filed the affidavits and have not challenged the acquisition and have altered their position to their disadvantage, therefore, it is not now open to the B.D.A. to resile from the notification and deny allotment of sites to the petitioners by way of reconveyance." The said plea was rejected by observing thus: "In addition to this it is not possible to apply the rule of promissory estoppel in cases where there is no provision contained in the A....
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....was expressed in para 3 of the judgment in the following words:- "The learned Single Judge has pointed out that the B.D.A. had or has no power to re-convey the lands acquired to implement a scheme relying upon the decisions of this Court in B.N. Sathyanarayan Rao Vs. State of Karnataka, ILR 87 Kar. 790, and in B. Venkataswamy Reddy Vs. State of Karnataka, ILR 1989 Kar. 75. This proposition is absolutely unexceptionable having regard to the provisions of the B.D.A. Act as also the Rules of Allotment of Sites framed under the said Act." [Emphasis supplied] The Bench after going through the pleadings of the party came to the conclusion that it was not a case of re-conveyance of the land but allotment of the site as contemplated under Rule 5 and the word "re-conveyance" appears to have been used in a loose sense because the allottee happened to be the owner of the land prior to its acquisition. It was held:- ".. Further, the CITB had the power to allot site under Rule 5 without following the procedure prescribed in Rule 3 provided the other requirements of Rule 5 are fulfilled. No serious contention could be urged on behalf of the respondent to rebut the contention urged on behalf ....
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.... and Section 9 of the Amendment Act validated the allotments made between 20.12.1973 to 8.5.1986 retrospectively. Although the Division Bench in the impugned judgment held that though the issue regarding applicability of Section 38-C after its incorporation in the BDA Act lifting the ban on reconveyance was irrelevant because the 1st respondent did not contend that he was entitled to any relief under this provision but indirectly relying upon it the Division Bench held that in a given case for good reasons it would be permissible for the authority to alter the terms of the acquisition and restore the lands that had been acquired under the provisions of the Land Acquisition Act if the facts and circumstances so justified. Section 38-C and Section 9 of the Amendment Act are reproduced below:- "38-C. Power of Authority to make allotment in certain cases. Notwithstanding anything contained in this Act or in any other law or any development scheme sanctioned under this Act, or City Improvement Trust Board Act, 1985 where the Authority or the erstwhile City Improvement Trust Board, Bangalore has already passed a resolution in favour of any persons any site formed in the land which bel....
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....d which belong to them or vested in or acquired by them for the purpose of any development scheme and on the ground that it is not practicable to include such site for the purpose of any development scheme, the Authority allot such site for the purpose of development scheme by way of sale or lease in favour of such persons subject to the allottee paying such charges which the authority may levy from time to time and the extent of site allotted under this provision together with the land already held by the allottee shall not exceed ceiling limit specified under Section 4 of the Urban Land (Ceiling & Regulation) Act, 1976. Section 9 of the Amendment Act speaks of validation of certain allotment. It also starts with the non obstante clause and provides that if a resolution has been passed by the Bangalore Development Authority or the City Improvement Trust Board to re-convey in favour of any person any site out of the land which belonged to him or vested or acquired from him for the purpose of any development scheme, the Authority has already made allotment of such site by way of sale, lease or otherwise in favour of such person after 20th of December, 1974 and before 8th of May, 19....
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....he counsel for the respondent to contend that Section 38-C would be applicable to the present case. In this case the BDA had acquired land for the development of the scheme called "Rajamahal Vilas II Stage." BDA passed a Resolution on 26.6.1984 whereunder it was decided that each of the owners of the land whose land had been acquired would be given a site measuring 40' x 60' free of cost. BDA did not implement the decision on the ground that the Resolution was not approved by the State Government. The appellants challenged the decision of the State Government by way of a writ petition under Article 226 of the Constitution of India before the Karnataka High Court. A Division Bench of the High Court by the judgment dated 8.2.1991 dismissed the writ petition. Aggrieved against the decision of the High Court appeals were filed in this Court which were accepted. Taking note of Section 38-C read with Section 9 of the Amendment Act it was held that the provisions of Section 9 were fully applicable to the allotments made to the appellants during the period 1984-85. It was observed in later part of para 10 as under:- "...Even if it is assumed that the basis for the allotment of sites to th....
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....w or not authorised by law was rejected by observing that Act to reconvey the land was not prohibited as there was a shift in the judicial thinking in Muniyappa's case (supra). It was held that the appellant was bound to re-convey the land to the petitioner as per its resolution. That the appellant was debarred from resiling from the promise/representation made especially in view of the fact that the respondent acting on the promise made to him had altered his position to his prejudice. The doctrine of promissory estoppel is not based on the principle of estoppel. It is a doctrine evolved by equity in order to prevent injustice. Where a party by his word or conduct makes a promise to another person in unequivocal and clear terms intending to create legal relations knowing or intending that it would be acted upon by the party to whom the promise is made and it is so acted upon by the other party the promise would be binding on the party making it. It would not be entitled to go back on the promise made. This Court in M/s. Motilal Padampat Sugar Mills Co. Ltd. Vs. State of Uttar Pradesh, 1979 (2) SCC 409, after analyzing the doctrine of promissory estoppel as applied in the Courts o....
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....romissory estoppel" applied to the facts of this case. There could be no estoppel against the statute. The Industry could not therefore seek an NOC after violating the policy decision of the Government. Point 4 is decided against the 7th respondent accordingly." [Emphasis supplied] Similarly, in Sharma Transport represented by D.P. Sharma Vs. Government of A.P. , 2002 (2) SCC 188, it was held that the Government as a public authority cannot be compelled to carry out a representation or promise which is prohibited by law or which was devoid of authority or power of the officer of the Government or the public authority to make the promise. It was observed in para 24 as under:- "It is equally settled law that the promissory estoppel cannot be used to compel the Government or a public authority to carry out a representation or promise which is prohibited by law or which was devoid of the authority or power of the officer of the Government or the public authority to make. Doctrine of promissory estoppel being an equitable doctrine, it must yield place to the equity, if larger public interest so requires, and if it can be shown by the Government or public authority for having regard ....
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....mand raised by the State of Punjab on the principle of promissory estoppel as the State of Punjab had promised to abolish the purchase tax on milk for the period in question and was estopped from contending to the contrary. The respondent writ petitioners were the factories producing various milk products. As registered dealers under the Punjab General Sales Tax Act, 1958 the respondent writ petitioners had been paying purchase tax on milk in terms of Section 4-B of the Act however for one year i.e. from the period 1.4.1996 to 4.6.1997 none of the respondents paid the purchase tax on the plea that the Government had decided to abolish purchase tax on milk for the period in question and was estopped from contending to the contrary. It was averred in the writ petition that the Chief Minister of Punjab on 26.2.1996 while addressing dairy farmers at the State level function had announced that the State Government had abolished purchase tax on milk and milk products in the State. Similarly, the Finance Minister in his Budget Speech echoing the view of the Chief Minister had stated that the State Government had abolished the purchase tax on milk. The Financial Commissioner in its memo ....
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....e Act or the Rules framed thereunder authorizing the BDA to re-convey the land direction cannot be issued to the BDA to reconvey a part of the land on the ground that it had promised to do so. The rule of promissory estoppel cannot be availed to permit or condone a breach of law. It cannot be invoked to compel the Government to do an act prohibited by law. It would be going against the statute. The principle of promissory estoppel would under the circumstances be not applicable to the case in hand. It is well-settled that there cannot be any estoppel against a statute. In Tata Iron & Steel Co. Ltd. Vs. State of Jharkhand and Others [(2005) 4 SCC 272], this Court observed: "53. This is also not a case where the appellant altered its position pursuant to or in furtherance of a promise made to it by the State. The doctrine of promissory estoppel, therefore, is not applicable. It is not even a case where the doctrine of legitimate expectation could be invoked. (See Hira Tikkoo v. Union Territory, Chandigarh) 54. We, however, are not oblivious that the doctrine of promissory estoppel would be applicable where a representation has been made by the State in exercise of its power to exem....
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....whether within or outside City. (2) Subject to such restrictions, conditions and limitations as may be prescribed by rules made by the Government, the Board shall have power to lease, sell or otherwise transfer any movable or immovable property which belongs to it, and to appropriate or apply any land vested in or acquired by it for the formation of open spaces or for building purposes or in any other manner for the purpose of any improvement scheme. (3) The restrictions, conditions and limitations contained in any grant or other transfer of any immovable property or any interest therein made by the Board shall, notwithstanding anything contained in the Transfer of Property Act, 1882 (Central Act 4 of 1882) or any other law, have effect according to their tenor." First part of Clause (1) of Section 29 provides that the Board shall have the power for the purpose of the Act to acquire and hold movable and immovable property, whether within or outside the city. Clause (2) provides that subject to such restrictions, conditions and limitations as may be prescribed by rules made by the Government, (i) the Board shall have power to lease, sell or otherwise transfer any movable or immo....
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.... State of Karnataka in its application to the State of Karnataka. It was specifically provided that all amendments made by the Act repealed shall cease to continue and shall be omitted from the Land Acquisition Act of 1894 and such of the provisions thereof as were affected by the repealed Act shall stand revived to the extent to which they would have otherwise continued in operation but for the passing of the repealed Act. Preliminary notification under Section 4 dated 26.11.1959 was published under the Karnataka Land Acquisition Act, 1894 (The Mysore Land Acquisition Act). But all proceedings thereafter including the final notification and the subsequent proceedings were under the Land Acquisition Act, 1894. The Division Bench in the impugned order has taken the view applying the principle laid down in Section 21 of the General Clauses Act which provides that power to issue the notification, order or rules or bye-laws would include the power to add, amend, vary or rescind any notification, order, rule or bye-law held that where the authority is vested with the power to do something then it is entrusted with the power to undo it as well. Since the State Government had the power t....
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....withdrawn or cancelled in exercise of powers under Section 48 of the Land Acquisition Act. Power under Section 21 of the General Clauses Act cannot be exercised after vesting of the land statutorily in the State Government. The High Court also erred in holding that land acquisition process and the vesting process became incomplete since the land owners were asked to redeposit the amount of compensation. High Court failed to take notice of Section 31 of the Land Acquisition Act. Section 31 contemplates that on making of an award under Section 11 the Collector shall tender amount of compensation awarded by him to the person interested and entitled thereto according to the award and shall pay to them unless prevented by any one or more of the contingencies mentioned in the subsequent clauses. None of those contingencies arose in the present case. Thus, once the amount was tendered and paid the acquisition process was complete. After making the award under Section 11 the Collector can take possession of the land under Section 16 which shall thereupon vest absolutely in the Government free from all encumbrances. In the instant case, after making the payment in terms of the award, posse....
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....e authority which in its opinion are necessary or expedient for carrying out the purpose of the Act. It is the duty of the BDA to comply with such directions. Contention that BDA is bound by all directions of the Government irrespective of the nature and purpose of the directions cannot be accepted. Power of the Government under Section 65 is not unrestricted. Directions have to be to carry out the objective of the Act and not contrary to the provisions of the Act. The Government can issue directions which in its opinion are necessary or expedient for "carrying out the purposes of the Act". Directions issued by the Chief Minister in the present case would not be to carry out the purpose of the Act rather it would be to destroy the same. Such a direction would not have the sanctity of law. Directions to release the lands would be opposed to the statute as the purpose of the Act and object of constituting the BDA is for the development of the city and improve the lives of the persons living therein. The authority vested with the power has to act reasonably and rationally and in accordance with law to carry out the legislative intent and not to destroy it. Direction issued by the Ch....
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....stan Petroleum Corpn. Ltd. Vs. Darius Shapur Chenai & Ors. [2005 (7) SCALE 386], this Court noticed: " In Commissioner of Police, Bombay vs. Gordhandas Bhanji [AIR 1952 SC 16], it is stated : "We are clear that public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind; or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself." Yet again in Mohinder Singh Gill (supra), this Court observed : "The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. We may here draw ....