M/S. VINAYAK HOUSE BUILDING COOPERATIVE v. THE STATE OF KARNATAKA & Ors.

11 S.C.R. 1 [2019] 11 S.C.R. 243 243 M/S. VINAYAK HOUSE BUILDING COOPERATIVE A SOCIETY LTD. v. THE STATE OF KARNATAKA & ORS. (Civil Appeal No. 3600 of 2011) AUGUST 26, 2019 [ARUN MISHRA, S. ABDUL NAZEER AND M. R. SHAH, JJ.] Land Acquisition Act, 1894 – ss.4(1), 6(1) and 48 – Withdrawal notification of the acquired land – State Government acquired 78 acres 16 guntas of land for public purpose – The State executed an agreement of the said land in favour of the appellant- cooperative society which included survey no.30 measuring 5 acres 33 guntas – Respondent no.3 claimed to be the owner of the survey no.30 – Before the acquisition proceedings, respondent no.3 had sold a certain portions of land to a third party – Thereafter, respondent no.3 filed writ petition questioning the acquisition and later filed another writ petition questioning the award determining the market value of the land – Both writ petitions were dismissed by the High Court – Out of the total 5 acres 33 guntas, 2 acres 36 guntas of land was handed over to the appellant by the State – Respondent no.3 sought de-notification of the remaining 3 acres 5 guntas i.e. the disputed property in survey no.30 – Inspite of dismissal of writ petitions rejecting the challenge made by the respondent no.3, the State Government issued a withdrawal notification u/s.

48 of the Act in respect of the disputed property, even without affording an opportunity of being heard to the appellant – Aggrieved, appellant filed writ petition before the High Court, which was dismissed – Writ appeal was also dismissed – On appeal, held: It is clear that sub-section (1) of s.48 of the L.A. Act empowers the government to withdraw from acquisition proceedings of the land of which possession has not taken place – In the instant case, the State had acquired 78 acres 16 guntas of land in favour of appellant including the land in survey no.30 and possession was also taken except the disputed land to an extent of 3 acres 5 guntas in survey no.30 – Further, the lands were notified for public purposes – The approved layout plan was issued by the government in compliance 243 B C D E F G H 244 SUPREME COURT REPORTS [2019] 11 S.C.R. A B C D E F G H with the provisions of the BDA Act and the planning Act – The disputed property was within the layout – Materials on record also made clear that the disputed property was earmarked as civic amenity – If the order of the de-notification is allowed to stand, the very object of the planned development of the layout would be lost – Thus, order of de-notification passed by the State was without application of mind and was arbitrary in nature – Further, respondent no.3 had already sold 1/3rd of the 3 acres 5 guntas of land in survey no.30, so she could not have maintained the application for de-notification of the said portion of the land as she had no subsisting interest in the said land – Karnataka Town and Country Planning Act, 1961 – Bangalore Development Act, 1976.

Land Acquisition Act, 1894 – s.48 – Purpose of – Held: A combined reading of sub-section (1) and sub-section (2) of s.48 of the L.A. Act makes it clear that the purpose of s.48 was mainly to ensure that the State Government is not compelled to acquire the land when the acquisition ceases to be beneficial for the intended purpose – That is why, sub-section (2) of s.48 provides for payment of compensation to the owner, whose land was notified for acquisition but not acquired for the reason that such an acquisition is against the public interest and public revenue. Land Acquisition Act, 1894 – s.48 – Precautions under – Held: The government should refrain from de-notifying or dropping any land being acquired for the formation of a layout, u/s.48 of the L.A Act or under any other law – The courts should also be very strict while considering the plea of the landowners seeking de-notification of the lands which are being acquired or quashing of the notification on the ground of lapsing of the scheme or on any other grounds in respect of the acquired lands for the formation of the layout – It has to be kept in mind that private interest always stands subordinated to the public good. Disposing of the appeal, the Court HELD:

It is clear that sub-section (1) of Section 48 of the Land Acquisition Act, 1894 empowers the government to withdraw from acquisition proceedings of the land of which possession has not been taken. It is further provided that when the government withdraws from acquisition, the Collector shall M/S. VINAYAK HOUSE BUILDING CO-OP. SOCIETY LTD. v. THE STATE OF KARNATAKA 245 determine the amount of compensation due for the damages suffered by the owner in consequence of notice or proceedings thereunder. A combined reading of sub-section (1) and sub- section (2) of Section 48 of the L.A. Act makes it clear that the purpose of Section 48 was mainly to ensure that the State Government is not compelled to acquire the land when the acquisition ceases to be beneficial for the intended purpose. That is why, sub-section (2) of Section 48 provides for payment of compensation to the owner, whose land was notified for acquisition but not acquired for the reason that such an acquisition is against the public interest and public revenue. [Para 27] [256- G-H; 257-A-C]

It has come to the notice of this Court that of late the State Government has been de-notifying the lands acquired for public purpose for the benefit of the authorities like BDA or other urban development authorities and for the formation of private housing layouts, adversely affecting the planned development of the city of Bangalore and other cities in the State of Karnataka. The instant case is a classic example where the power has been blatantly misused ignoring larger public interest. [Para 33] [259- C-D]

As noticed above, the State Government had accorded sanction for initiation of acquisition proceedings for the benefit of the appellant in the year 1982 itself. The State Government executed the agreement in the month of August 1984, undertaking to acquire 78 acres 16 guntas of land in favour of the appellant, including the land in Sy.No.30 belonging to the 3rd respondent. Notifications under Sections 4(1) and 6(1) of the L.A Act were issued and possession was taken except the disputed land to an extent of 3 acres 5 guntas. [Para 34] [259-E]

The approved layout plan was issued by the government in compliance with the provisions of the BDA Act and the Planning Act. The layout plan produced by the appellant would indicate that meticulous planning has been undertaken for planned development of the layout. The plan also indicates that lands have been reserved for civic amenities, open spaces and also for roads. The width of the street and its alignment, the building line and the proposed sites abutting the streets, have been perfectly drawn. [Para 35] [259-F-G] A B C D E F G H 246 SUPREME COURT REPORTS [2019] 11 S.C.R. A B C D E F G H

The appellant has contended that the disputed property falls in the layout. It is also clear from the materials on record that a portion of the disputed property has been earmarked as a civic amenity and the remaining portion abutting the street has been proposed for residential sites. If the order of de-notification is allowed to stand, the very object of the planned development of the layout would be lost. There will be shortage of civic amenity sites in the layout and it would no longer be possible to set the street alignment and the building line as per the approved plan. This will have adverse impact on the planned development of the layout leading to public inconvenience. It will nullify the object and the purpose for which Planning Act and the BDA Act have been enacted by the Legislature. [Para 36] [259-H; 260-A-C]

This Court is of the considered view that the government should refrain from de-notifying or dropping any land being acquired for the formation of a layout, under Section 48 of the L.A Act or under any other law. The courts should also be very strict while considering the plea of the landowners seeking de- notification of the lands which are being acquired or quashing of the notification on the ground of lapsing of the scheme or on any other grounds in respect of the acquired lands for the formation of the layout. It has to be kept in mind that private interest always stands subordinated to the public good. [Para 38] [260-G-H; 261-A]

The appellant has opposed the proposal for de- notification by filing detailed objections. The conduct of 3rd respondent in filing case after case for quashing the notification issued by the State Government for acquisition of the land has been brought to the notice of the government. It was also stated that since the lands have been notified for acquisition for a public purpose, namely, for the formation of a layout, a portion of the said land cannot be de-notified as it will adversely affect the layout, causing public inconvenience. The 1st respondent, without adverting any of these contentions, has passed an order of de- notification. The said order has been passed without application of mind and it is arbitrary in nature. [Para 45] [263-A-B]

According to the appellant, the disputed property is vacant and no allotment/sale of the sites have been made out of this land. However, it is evident from the referred two letters M/S. VINAYAK HOUSE BUILDING CO-OP. SOCIETY LTD. v. THE STATE OF KARNATAKA 247 and other materials on record that the appellant has illegally formed the sites in the other lands reserved for civic amenities in the approved plan. In order to compensate for the loss of land reserved for civic amenities, it is just and proper to direct the appellant to reserve the entire disputed property measuring 3 acres 5 guntas in Sy.No.30 for civic amenities and play ground. Therefore, we direct the appellant to utilize the portion of the disputed property reserved as a civic amenity site in the layout plan for providing civic amenities. The competent authorities are directed to develop the balance of the disputed property as a park or a playground or both for the benefit of general public. The appellant shall not allot/sell the disputed property or any portion thereof either to its members or to any other parties. The Commissioner BDA is directed to ensure compliance of this order. [Para 55] [268-C-E] Special Land Acquisition Officer, Bombay and Ors. v. M/s Godrej and Boyce (1988) 1 SCC 50 : [1988] 1 SCR 590 – relied on.