Writ Appeal No. 1238 of 2021 · The High Court
Case Details
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH DAY OF JANUARY, 2025 PRESENT THE HON'BLE MRS. JUSTICE ANU SIVARAMAN AND THE HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL WRIT APPEAL NO. 1238 OF 2021 (LA-BDA) BETWEEN: M/s. SOBHA LIMITED (FORMERLY KNOWN AS M/s. SOBHA DEVELOPERS LIMITED) A COMPANY INCORPORATED UNDER THE COMPANY'S ACT 1956 HAVING ITS REGISTERED OFFICE AT DEVARABEESANAHALLI SARJAPUR-MARATHHALLI OUTER RING ROAD BELLANDUR POST, BENGALURU-560 103 REP. BY ITS AUTHORIZED SIGNATORY MR. PRASAD M.S. (BY SRI. P.S. RAJAGOPAL, SENIOR ADVOCATE FOR SRI. SANJAY NAIR, ADVOCATE) ...APPELLANT AND: 1 . THE DEPUTY COMMISSIONER BENGALURU URBAN DISTRICT KANDAYA BHAVANA K.G. ROAD BENGALURU-560 009 2 . THE PRINCIPAL SECRETARY TO GOVERNMENT REVENUE DEPARTMENT M.S. BUILDING BENGALURU-560 001 - 2 3 . THE STATE OF KARNATAKA REP. BY ITS SECRETARY DEPARTMENT OF URBAN DEVELOPMENT M.S. BUILDING BENGALURU-560 001 4 . BANGALORE DEVELOPMENT AUTHORITY T. CHOWDAIAH ROAD KUMARA PARK WEST PALACE GUTTAHALLI BENGALURU-560 020 5 . ADDITIONAL LAND ACQUISTION OFFICER BANGALORE DEVELOPMENT AUTHORITY T. CHOWDAIAH ROAD BENGALURU-560 020 (BY SMT. PRATHIMA HONNAPUR, AAG WITH SRI. DEVARAJ C.H., GA FOR R1 TO R3; SRI. AJAY KUMAR M. PATIL, ADVOCATE FOR R4 & R5) …RESPONDENTS THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO ALLOWING THIS APPEAL AND SET ASIDE THE ORDER DATED 27.09.2021 PASSED BY THE LEARNED (LA-BDA) AND IN WP No.27833/2014 SINGLE CONSEQUENTLY GRANT THE RELIEFS CLAIMED BY THE APPELLANT IN W.P. No.27833/2014 AND ETC. JUDGE, THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON FOR PRONOUNCEMENT OF JUDGMENT THIS DAY, ANU SIVARAMAN J., PRONOUNCED THE FOLLOWING: AND COMING ON 22.01.2025 CORAM: HON'BLE MRS. JUSTICE ANU SIVARAMAN
Legal Reasoning
and HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL - 3 CAV JUDGMENT (PER: HON'BLE MRS. JUSTICE ANU SIVARAMAN) The Writ Appeal is filed challenging the Order dated 27.09.2021 passed by the learned Single Judge in Writ Petition No.27833/2014 (LA-BDA). 2. We have heard Shri. P.S. Rajagopal, learned senior counsel as instructed by Advocate Shri. Sanjay Nair, learned counsel appearing for the appellant, Smt. Prathima Honnapur, learned Additional Advocate General along with Shri. Devaraj C H, learned Government Advocate appearing for respondents No.1 to 3 and Shri. Ajay Kumar M. Patil, learned counsel for respondents No.4 and 5. 3. The brief facts of the case are as follows:- The Tahasildar, Bangalore North Taluk, submitted a report dated 07.03.2007 to Assistant Commissioner, stating that the land measuring 1 acre 12 guntas in Sy. No.30 of Sampigehalli Village, Yelahanka Hobli, Bangalore North Taluk, Bangalore, is vacant, and its market value is Rs.40,00,000/- per acre and it could be allotted/sold in public auction. The Assistant Commissioner, conducted spot - 4 inspection of the said property on 09.03.2007 and vide report dated 14.03.2007, recommended for sale of schedule property in public auction. Pursuant to the said reports, the Principal Secretary to Government accorded permission vide order dated 23.03.2007 to the Deputy Commissioner (1st respondent) to sell the schedule property and other Government lands in public auction to be held on 26.04.2007 under Rule 12 (2) of the Karnataka Land grant Rules, 1969. 4. Accordingly, respondent No.1 issued public auction Notice dated 11.04.2007 bearing No.Spl.DC.PUC(Auction)CR/14/06-07 for sale of schedule property and other Government lands and the Assistant Commissioner, Legal Cell and Prevention of Un-authorized Construction, Deputy Commissioner Office, Bengaluru was appointed as Authorized Officer and date of auction was fixed as 26.04.2007 and venue was Deputy Commissioner's Office, Bangalore Urban District, K.G.Road, Bangalore. It was further mentioned that the auction proceedings will be video graphed by the concerned officer, land proposed to be - 5 auctioned as per the zonal regulations of CDP/concerned planning authorities, interested bidder may inspect the land from 11.04.2007 to 25.04.2007 with the assistance of the Village Accountant of that revenue circle. 5. The appellant participated in the public auction and emerged as highest and successful bidder having quoted Rs.4,60,00,000/-. As per the terms and conditions, the appellant has deposited 25% of the final bid amount within 24 hours and sought for conversion of the schedule property from agricultural to non-agricultural purpose. 6. Respondent No.2 granted approval vide Order dated 11.05.2007, to confirm public auction of land. Accordingly, respondent No.1 issued an intimation dated 25.06.2007, to the appellant confirming the appellant as successful bidder for schedule property and directed to deposit the balance 75% final bid amount being Rs.3,45,00,000/-, the same was paid by the appellant through pay order dated 27.07.2007. - 6 7. The appellant wrote a letter dated 28.01.2008 to respondent No.1 requesting to take immediate steps to deliver the possession of schedule property and execute a registered Sale Deed. BDA vide letter dated 22.05.2008, wherein, it is clearly mentioned that the schedule property is classified as “mainly residential” zone. Thereafter, Special Deputy Commissioner issued a demand notice on 05.06.2008 to the appellant to pay the conversion fee and phodi fee. On 21.08.2008, appellant paid the conversion fee of Rs.70,785/- and phodi fee of Rs.55/-. Thus, on 17.10.2008 possession of the schedule property was given to appellant and since then the appellant is in actual, exclusive and physical possession of the schedule property. 8. Subsequently, respondent No.1 has issued conversion order dated 01.07.2013, where under schedule property was duly converted to residential purpose, further respondent No.1 also issued Certificate of Sale dated 01.07.2013, in favour of appellant. Respondent No.1 issued a letter dated 06.07.2013 to Sub-Registrar, Yelahanka authorizing Tahasildar, Bangalore North Taluk, Bangalore - 7 District, to appear on his behalf for registration of Sale Deed. But, Sub Registrar, Yelahanka refused to registrar the property on the pretext that the entire 10 acres 8 guntas of land in Sy.No.30 of Sampigehalli Village, Yelahanka has been notified for acquisition by respondent No.4 for the purpose of forming Arkavathy layout, vide Final Notification dated 23.02.2004. 9. Respondents No.1 and 2 have suppressed the fact of acquisition of schedule property in favour of respondent No.4 and respondent No.4 also suppressed the acquisition of land for Arkavathy Layout, as per Final Notification dated 23.02.2004, while giving clearance to respondent No.1 for conversion of schedule property into residential use. 10. Thereafter, appellant addressed a letter to the first respondent and requested to get the property de- notified from the land acquisition proceedings and execute the sale deed in appellant's favour. The appellant addressed similar letters dated 25.07.2013 to respondent No.2. Thereafter, respondent No.1 addressed a letter dated 20.08.2013 to respondent No.2 to sent appropriate - 8 representation/proposal to the Urban Development Department to de-notify/delete the schedule property from acquisition proceedings in terms of Final Acquisition Notification and also stated that respondent No.4 has not utilized the said land for formation of Arkavathy layout and that appellant had already constructed compound wall around schedule property and it is in actual possession of the appellant. Hence, appellant has filed Writ Petition No.27833/2014. The writ petition was heard along with several other writ petitions challenging the acquisition for the same Layout and came to be dismissed. The learned Single Judge held that transactions that have occurred after the notification of land for acquisition cannot confer any
Decision
rights on the purchasers and the Writ Petitions filed by such subsequent transferees stand rejected. 11. Shri. P.S. Rajagopal, learned Senior Counsel appearing for the appellant submits that the learned Single Judge failed to notice the extreme injustice which had occurred to the appellant. The fact that the schedule property was included in the Final Notification for - 9 acquisition, which was known to the respondents. They have concealed these facts and induced the general public including the appellant and the same caused injustice to the appellant. The acquisition proceedings to the extent of said 3 acres 8 guntas has lapsed for not passing the award and schedule property is the part of it as admitted by the respondents and the same was not considered by the learned Single Judge. Respondents are duty bound to set right their mistake and to provide justice to the appellant who has deposited the entire auction final bid amount of Rs.4,60,00,000/- and also respondents have collected conversion fee and phodi fees also, the same was not properly appreciated by the learned Single Judge. 12. The Writ Appeal was admitted on 18.11.2022. Thereafter, by an interim order dated 23.01.2023, it was ordered that the BDA., shall not create any third party interest in respect of the site in question. The said order has been extended from time to time. While the appeal was pending consideration, the learned senior counsel for the appellant submitted that in case the State Government - 10 decides to refund the amount deposited by the appellant with interest, the grievance of the appellant would stand redressed. 13. The learned Government Advocate was directed to get instructions on the said submission. Thereafter, the matter was adjourned several times to enable the respondents to get instructions on the proposal. Finally, on 23.09.2024, it was submitted by the learned Government Advocate that the Government had granted sanction on 20.09.2024 to return the bid amount of Rs.4,60,00,000/- to the appellant. It was submitted that with regard to the incidental charges and the interest on the bid amount, instructions are awaited. Thereafter also, the case was listed on several occasions for return of the bid amount as decided on 20.09.2024. Ultimately, by order dated 21.11.2024, it was recorded that the principal amount of Rs.4,60,00,000/- had been refunded to the appellant on 20.11.2024. Learned Government Advocate sought further time to get instructions from the Government with regard to issue of - 11 interest on the said amount as well as the refund of the conversion charges paid by the appellant. 14. The learned senior counsel appearing for the appellant had placed before us the judgment dated 28.05.2024 in W.A.No.1640/2016 (KLR-RES) (State of Karnataka v. Ramaiah Reddy), wherein, this Court had directed the payment of interest at 10% per annum on the amount deposited till it was refunded. Even thereafter no instructions were provided and the learned Additional Advocate General sought further adjournments on 12.12.2024 and 07.01.2025 to get instructions with regard to rate of interest for the principal amount and the conversion charges. It was in those circumstances, the order dated 09.01.2025 was passed directed that in case the decision of the Committee as directed is not placed on record by the next date of hearing. 15. We have heard learned Additional Advocate General for respondents No.1 to 3. Since instructions were not made available to the learned Additional Advocate General in spite of repeated adjournments granted for that - 12 purpose, we had required the presence of the Principal Secretary, Revenue Department before this Court. 16. Shri. Rajender Kumar Kataria, Principal Secretary, Department of Revenue, Government of Karnataka, who was present before this Court on 22.01.2025. 17. We have heard him and considered his contentions as well. It is contended by the learned Additional Advocate General as well as by the Principal Secretary that the Writ Petition had been filed challenging the Notification for acquisition of property and that there was no prayer raised for return of the amounts paid by the appellant as value of the land in question. It is contended that since the question of refund of the amounts paid was raised for the first time in the Writ Appeal, the request was considered and an order was passed permitting refund of the amounts on 20.09.2024. The amount was refunded on 20.11.2024. It is submitted that the amounts have also been refunded. It is submitted that in view of the fact that the claim raised by the appellant for quashing the - 13 Notification for acquisition has been found against by this Court which has been upheld by the Apex Court, the appellant's further contentions with regard to refund of the amount would arise only thereafter and the appellant cannot claim interest on the refund which has been ordered only on 20.09.2024. 18. Having considered the contentions advanced, we notice that the Notification for acquisition of land was issued on 23.02.2004. It is thereafter that the property was put to public auction and was sold in favour of the appellant herein. The auction was conducted on 26.04.2007. We also find that even though the acquisition was specifically for the BDA for forming a layout, the appellant's application for conversion of land was taken up, considered and positive orders passed thereon after accepting such conversion by the Deputy Commissioner vide order dated 01.07.2013, after obtaining no objection from the BDA. It is further clear that it was on account of no fault of the appellant that the property which was already been notified for acquisition had been specifically put to auction and sold to the appellant by - 14 the respondents herein, who are the functionaries of the Government of Karnataka. The amount paid by the appellant was retained by the Government without any justification thereafter. 19. In the above said situation, we are of the opinion that the contention of the claim for refund was raised only belatedly in this appeal will not help the Government in any manner since the property was also notified for acquisition; no justifiable reason exists for the retention of the amounts by the Government at all. In W.A.No.1640/2016 (KLR-RES), the question raised was with regard to refund of 25% of the bid amount deposited by a successful bidder on 28.05.2005. The land had vested with the State vide forfeiture orders dated 22.09.2004 and 16.05.2005. The appeals filed by the original land owner before the Karnataka Appellate Tribunal were allowed on 11.06.2013 and the land was restored to its original owner. 20. On those facts, this Court found that since if factum of challenge to the forfeiture orders was not - 15 mentioned in the auction notification and since 25% of the bid amount was deposited on 28.05.2005, the refund of the amount was to carry interest. Relying on the Judgments of the Constitution Bench in Mafatlal Industries Ltd., Ahmedabad v. Union of India reported in AIR OnLine 1996 SC 1268 and in State of Rajasthan v. Fero Concrete Construction (P) Ltd., reported in (2009) 12 SCC 1, 10% interest per annum on the 25% of the bid amount was ordered between 28.05.2005 and on the balance 75% of the amount deposited before the Court on 24.11.2019 as well. In case, such interest was not paid, it was further directed that the amount would carry additional interest at the rate of 4% on the ordered interest and that the amount after payment to the respondent shall be recovered from the erring officials of the Department. 21. Having regard to the facts of the case and in view of the judgments which are relied on, we are of the opinion that the appellant is entitled to simple interest at 10% per annum for the amount of Rs.4,60,00,000/- from 27.07.2007 to 20.11.2024 and as also for return of conversion and phodi - 16 charges and for interest thereon from 17.10.2008 till the date of refund. We further hold that it would be open to the State to recover the amounts that have been paid as interest pursuant to this judgment from any of the officers, who are found responsible for the lapses that occurred in this matter, in a manner known to law. 22. Accordingly, the writ appeal stands disposed of recording the refund of the principal amount of Rs.4,60,00,000/- to the appellant on 20.11.2024 and directing payment of 10% simple interest on the said amount from 27.07.2007 to 20.11.2024. Further, refund of the conversion and phodi charges with simple interest thereon at the rate of 10% per annum from the date of receipt of such amounts till the date of refund is also ordered. The aforesaid amount shall be paid within three months from the date of receipt of a copy of this judgment. - 17 There will be no order as to costs. Pending I.As, if any, shall stand disposed of. Sd/- (ANU SIVARAMAN) JUDGE Sd/- (VIJAYKUMAR A. PATIL) JUDGE cp*