TaxTMI 
TaxTMI 
1995 (2) TMI 476
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....ted at Thindlu and Chikkabettahalli, for 1001 members of the Society. It is the case of the appellant that the Government being fully satisfied with the scheme submitted by the appellant, approved the same by an order dated 7.11.1984 and accorded approval for initiation of acquisition proceeding for the lands. On 17.3.1988 the Society entered into an agreement with the State Government agreeing to the conditions for acquisition, as required by Sections 39 and 40 of Part-VII of the Land Acquisition Act (hereinafter referred to as the 'Act'). But on 12.7.1988 a notification under Section 4(1) of the Act was issued proposing to acquire lands for the Society to the extent of 133.33 acres in the aforesaid two villages, saying it was needed for public purpose. 4. The writ petitioners-respondents questioned the validity of the aforesaid notification under Section 4(1) of the Act on several grounds including that the acquisition itself was not for public purpose. During the pendency of the writ application on 11.8.1989 the State Government issued declaration under Section 6(1) of the Act in respect of 99.01 acres of land in the aforesaid two villages for the appellant's soci....
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....t Party lands at Thindlu and Chikkabettahally to an extent of 80 acres as specified in the annexures to this agreement to begin with and such further extend as the First Party may require and shall arrange for agreements to be executed between the owners of such lands and the First Party within a period of 2-3 months from this day to facilitate the acquisition of lands in favour of the first Party. The Second Party hereby agrees strictly to conform and act according to the terms of this agreement. The Second Party who has already entered into sale agreement with the owners of land (the details of the land fully described in the schedule to this agreement) has agreed to negotiate and ensure the acquisition of the land in favour of First Party. The First Party after inspection of the lands and discussions with the Second Party has agreed to have the lands from the owners acquired for the First Party subject to the other Services to be rendered by the Second Party as agreed to hereinafter. NOW THIS AGREEMENT spells out the terms and conditions, rights, powers, obligations and liabilities of the parties to this agreement. 1. I....
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.... after the completion of civil portion layout; (i) Executing and doing all other acts, and things necessary for forming full fledged layout of residential building sites on the lands required complete in all respects, fit and ready for construction of houses on the completion of civil portion of lay out works; (j) To get all the sites released from the B.D.A. or any other competent authority within 2 months of completion of layout works. 3. The Second Party has agreed and undertaken to take up the above mentioned works and has agreed to carry out the works within 245 months time from the date of this agreement subject to any delay caused at the B.D.A. and other authorities in procuring the land, sanctioning or issuing layout plan and work order. 4. The First Party agrees to pay to the Second Party an amount calculated at Rs. 112 per Sq. Yard based on the actual sital area (inclusive of the cost of the land acquired and the compensation payable thereto either under the award or any enhanced compensation under any proceedings, security fee and amounts payable to the B.D.A. towards supervision charges, chip carpeting, tree pl....
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....4(1) and 6(1) of the Act is not based on objective considerations of the materials, on the basis of which the appropriate Government could have formed an opinion that the lands of the writ petitioners were required for public purpose and because of that it was necessary to acquire the same. 9. The High Court came to the conclusion, on this question : The agents of each of these societies had been paid heavy amounts in consideration of which they were required to influence the Government and to get the preliminary and the final notifications acquiring large extent of lands, from the Government. The decision of the Government to acquire the land was brought about by the influence of such agents appointed to be "go betweens "and "carriers" between the Government and the society concerned and therefore such a decision is liable to be set aside on the ground that it is a case of colourable exercise of power and suffers from legal mala fides, in that, though the acquisition is stated to be for public purpose, in reality, the acquisition is substantially not for the purpose of bona fide housing schemes. 10. From the judgment of the High Court, it further appears that ....
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....he members, whereas it was necessary for members to take atleast five shares. The committee solely responsible for these irregularities. Secondly, the Society made huge advances to the agents without commensurate amount of guarantee or security and without any work being done by the agents. There is atleast Rs. 1.6 crores which has been advanced to the agents without any work. The committee in general and the Hon. Secretary of the Society in particular is responsible for these irregularities. Taking into consideration all the facts and the circumstances of the case including the report of Mr. G.V.K. Rao, the High Court observed : Before concluding, it is necessary to observe that as pointed out in the report of G.V.K. Rao, it is on account of unlimited territorial jurisdiction and vague provisions as to who could become members and associate members and also as to what are the rights of associate members, it has been possible for many of the societies to manipulate membership in such a way as to enroll all those who are desirous of purchasing sites as also those who do not possess the territorial or other qualification as members. It was said that it was necess....
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....y referred to in Clause (CC) 13. The expression "public purpose" has been defined in Section 3(f) of the Act. 3(f) - the expression "public purpose" includes - (i) the provision of village-sites, or the extension, planned development or improvement of existing village-sites; (ii) the provision of land for town or rural planning; (iii) the provision of land for planned development of land from public funds in pursuance of any scheme or policy of Government and subsequent disposal thereof in whole or in part by lease, assignment or outright sale with the object of securing further development as planned; (iv) the provision of land for a corporation owned or controlled by the State; (v) the provision of land for residential purposes to the poor or landless or to persons residing in areas affected by natural calamities, or to persons displaced or affected by reason of the implementation of any scheme undertaken by government, any local authority or a corporation owned or controlled by the State; (vi) the provision of land for carrying out any educational, housing, health or slum ....
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....such for any housing co-operative society lands can be acquired by the appropriate Government, treating the same as acquisition for the public purpose. But, in that event, there has to be a prior approval of such scheme by the appropriate Government. When the lands are acquired for any co-operative society with prior approval of the scheme by the State Government, there is no question of application of the provisions of Part - VII of the Act. Such acquisition shall be on the mode of acquisition by the appropriate Government for any public purpose. 17. If lands are acquired for any co-operative society treating it to be a company within the meaning of Section 3(e), then in view of Section 39 of the Act the provisions of Sections 6 to 16 and Sections 18 to 37 shall not be put in force unless there is previous consent of the appropriate Government, and the co-operative society has executed an agreement. The consent required under Section 39 of the Act has to be given by the appropriate Government only after the conditions mentioned in Section 40 are fulfilled. Sub-section (1) of Section 40, of the Act prescribes the conditions : 40. Previous enquiry. -  ....
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....the question which is to be answered is as to whether in view of the definition of "public purpose" introduced by the aforesaid amending Act 68 of 1984 in Section 3(f)(vi), is it open to the appropriate Government to acquire land for co-operative society for housing scheme without making proper enquiry about the members of the Society and without putting such housing co-operative society to term in respect of nature of construction, the area to be allotted to the members and restrictions on transfer thereof? 21. According to us, in Section 3(f)(vi) the expression "housing" has been used along with educational and health schemes. As such the housing scheme contemplated by Section 3(f)(vi) shall be such housing scheme which shall serve the maximum number of members of the society. Such housing scheme should prove to be useful to the public. That is why the Parliament while introducing a new definition of "public purpose", said that any scheme submitted by any co-operative society relating to housing, must receive prior approval of the appropriate Government and then only the acquisition of the land for such scheme can be held to be for public purpose. If requirement of Section 3(f....
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.....R. Constructions (respondent No. 11). 23. Mr. G. Ramaswami, learned senior counsel appearing on behalf of the appellant, submitted that merely because the appellant society had entered into an agreement with respondent No. 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 lands have not been acquired in normal course or for any public purpose. In spite of the repeated que....
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.... 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. 25. The appeals are accordingly dismissed. But in the circumstances of the case there shall be no orders as to costs. 26. We direct that as a result of quashing of the land acquisition proceedings including the notifications as aforesaid, the possession of the lands shall be restored to the respective land owners irrespective of the fact whether they had challenged the acquisition of their lands or not. On restoration of the possession to the land owners they shall refund the amounts received by them as compensation or otherwise in respect of their lands. The appellant, the respondents and the State Government including all concerned authorities/persons shall implement the aforesaid directions at an early date. 27. The connected Appeal Nos. 3011-19 of 1995 (arising out of S.L.P. (C) Nos. 11482-90 of 1991) H.M.T. House Building Co-op. Society v. Syed Khadar and Ors., have already been disp....
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.... inviting persons who want to have mansions in the city of Bangalore. It also gave the name and address of a representative at Dubai. On basis of the aforesaid materials, the High Court has come to the conclusion that the Society itself was not a bona fide House Building Society. The High Court has also recorded a finding that the notifications under Sections 4(1) and 6(1) of the Act had been issued at the instance of the agents appointed by the petitioner society, to whom huge amounts had been paid for influencing the Government to issue the aforesaid notifications. Mr. Ramaswamy, appearing for the petitioner society purported to distinguish this case on facts from the case of H.M.T. House Building Co-operative Society. But according to us, the facts of the present case are similar to the case of H.M.T. House Building Co-operative Society and there is no scope to interfere with the order of the High Court, quashing the notifications under Sections 4(1) and 6(1). Accordingly, the special leave petitions filed on behalf of the petitioner society are dismissed. No costs. 30. In the appeals arising out of SLP (C) Nos. 11482-90 of 1991, after the dismissal of the appeals a direction....
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....sition of their lands or not. A further direction has been given that on restoration of the possession to the land owners, they shall refund the amount received by them as compensation or otherwise in respect of their lands. We issue a similar direction even in this case. The petitioner, the respondents and the State Government including all concerned authorities/persons shall implement the aforesaid directions at an early date. SPECIAL LEAVE PETITION (C) NOS. 12032-37 OF 1991. 33. These special leave petitions have been filed for setting aside the judgment of the High Court, quashing the notifications under Sections 4(1) and 6(1) of the Land Acquisition Act, on the ground that the said notifications had been issued at the instance of the agents, appointed by the petitioner society. The High Court has also referred to the agreement entered into, by the petitioner and the said middle-man, who had undertaken to get the lands in question acquired. The agent had undertaken in the agreement to manage all concerned "at all levels". No order granting prior approval by the State Government for the acquisition of the lands, as required by Section 3(f)(vi) of the Act has been produced.....
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.... Section 40 of Part VII of the Act, which part is applicable when acquisition of land is made for companies. It is surprising as to how the present House Building Co-op. Society was being treated even as a company on 9.8.1984, because the new definition of company was also introduced in Section 3(e) with effect from 24.9.1984. Accordingly, there is not merit in these special leave petitions, which are dismissed. No costs. 36. In the appeals Nos. 3011-19/95 arising out of SLP (C) Nos. 11482-90 of 1991, after the dismissal of the appeals a direction has been given that as a result of the quashing of the land acquisition proceedings including the notifications in question, the possession of the land shall be restored to the respective land owners irrespective of the fact whether they had challenged the acquisition of their lands or not. A further direction has been given that on restoration of the possession to the land owners, they shall refund the amount received by them as compensation or otherwise in respect of their lands. We issue a similar direction even in this case. The petitioner, the respondents and the State Government including all concerned authorities/persons shall i....