Karnataka High Court
Prestige Estates Projects Limited vs State Of Karnataka on 6 October, 2017
Author: B.S.Patil
Bench: B.S.Patil
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 6TH DAY OF OCTOBER, 2017
BEFORE
THE HON'BLE MR.JUSTICE B.S.PATIL
W.P.Nos.35011-12/2015 (KLR-RES)
BETWEEN:
1. Prestige Estates Projects Limited,
(formerly Prestige Estates Projects Private Limited),
The Falcon House,
No.1, Main Guard Cross Road,
Bangalore - 560 001.
Represented by its Managing Director,
Mr. Irfan Razack.
2. Mr. Irfan Razack,
S/o late S.Razack,
Aged 62 years,
At The Falcon House,
No.1, Main Guard Cross Road,
Bangalore - 560 001.
3. M/s. Joy Ice-Creams Pvt. Limited,
Having its office at
White Field Main Road,
Bengaluru - 560 066,
Represented by its Director. ..PETITIONERS
(Amended vide Court Order dated 21.04.2016)
(By Sri Udaya Holla, Sr. Counsel for
Sri Vivek Holla, Adv. for P-1 & P-2;
Sri Dhyan Chinnappa, Sr. Counsel for
Sri M.V.Sundaram, Adv. for P-3)
AND:
1. State of Karnataka,
Represented by its Chief Secretary,
2
Vidhana Soudha,
Bangalore - 560 001.
2. Special Deputy Commissioner,
Bangalore Urban District,
Bangalore - 560 001.
3. Deputy Commissioner,
Bangalore Urban District,
Bangalore - 560 001.
4. Principal Secretary,
Department of Revenue,
Government of Karnataka,
M.S.Building,
Bangalore - 560 001.
5. The CEO and Executive Member,
Karnataka Industrial Area Development Board,
Rashtrothana Building,
Nrupathunga Road,
Bengaluru - 560 001.
6. (Respondent no.6 transposed as Petitioner no.3
vide Court Order dated 21.04.2016)
7. Samaja Parivarthana Samudaya,
'Ashadeep', Jayanagar Cross,
Saptapur, Dharwad - 580 001,
Represented by its Secretary. ..RESPONDENTS
(By Sri A.G.Shivanna, AAG along with
Sri T.S.Mahanthesh, AGA for R-1 to R-4;
Sri Shashikiran Shetty, Sr. Counsel for
Sri I.Gopalakrishna, Adv. for R-5;
Sri S.Basavaraj, Adv. for R-7;
Sri P.Narayanappa, Adv. for Impleading applicant in IA-1/15)
THESE WRIT PETITIONS ARE FILED UNDER ARTICLES 226 &
227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE
GOVERNMENT ORDER DATED 06.08.2015 PASSED BY THE
PRINCIPAL SECRETARY, GOVERNMENT OF KARNATAKA, REVENUE
3
DEPARTMENT, BANGALORE VIDE ANNEXURE-AN, AND THE
GOVERNMENT ORDER DATED 11.08.2015 VIDE ANNEXURE-AO.
THESE PETITIONS HAVING BEEN HEARD AND RESERVED
FOR ORDERS ON 14.09.2017, COMING ON FOR 'PRONOUNCEMENT
OF ORDERS', THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
1. These writ petitions are filed challenging the Government Orders dated 06.08.2015 and 11.08.2015 passed by the Principal Secretary, Department of Revenue, Government of Karnataka, and the Under Secretary to Government, Department of Revenue (Land Grant-1), respectively.
2. The background facts are, M/s. Joy Ice Creams (Bangalore) Private Limited - petitioner no.3 herein was the owner of land bearing Sy. No.2/1D of Whitefield village and Sy. Nos.160 & 157(P) of Pattandur Agrahara village and was running a factory for manufacturing ice creams. The Government land measuring 3 acres 23 guntas which was part of Sy. No.42 of Pattandur Agrahara village, subject matter of these writ petitions was located in the midst of lands belonging to petitioner no.3. According to petitioner 4 no.3, the said land had no access to any road and was completely land locked and surrounded by the property belonging to petitioner no.3.
3. By a notification dated 16.09.1981 issued under Section 3(1) of the Karnataka Industrial Areas Development Act, 1966 (for short, 'KIAD Act'), the land in question bearing Sy. No.42 was declared as an industrial area for the purpose of KIAD Act. On 20.10.1989, petitioner no.3 requested the State Government to allot the schedule land to it. Considering the said request, Government of Karnataka leased the land to petitioner no.3 for a period of 30 years as per lease deed dated 20.10.1989. Subsequently, there were litigations between petitioner no.3 and the Government and in the year 2003, Government of Karnataka cancelled the lease and resumed the land, but the land remained unutilized.
4. Petitioner no.3 approached the Karnataka Industrial Areas Development Board (for short, 'KIADB') with a request dated 20.10.2005 for acquisition of the land and 5 allotment of the same in their favour. KIADB moved the matter with the State Government for transfer of schedule land in their favour to enable it to allot the same to petitioner no.3. On 20.10.2005, the State Government directed the Deputy Commissioner, Bengaluru District, to transfer the schedule land in favour of KIADB. This communication is produced at Annexure-B to the writ petition.
5. A perusal of this communication discloses that a direction was issued to the Special Deputy Commissioner to grant and transfer this land in favour of KIADB as per Rule 20(c) of Karnataka Land Grant Rules 1969 (for short, 'the Rules') by collecting a sum of Rs.4,28,24,925/- being 50% of the total market value at the rate of Rs.550/- per square feet. This direction issued by the State Government also makes it clear that the land was transferred to KIADB for allotting it to petitioner no.3 on condition that they shall pay the said amount. This communication issued is in the form of prior approval of the State Government for 6 transferring the land in favour of KIADB for the purpose stated therein.
6. Pursuant to this communication/direction of the State Government, the Special Deputy Commissioner, Bengaluru Urban District, vide letter dated 07.11.2005 called upon the KIADB to collect the market value, conversion charges, phodi charges, etc. In response, KIADB informed petitioner no.3 on 22.11.2005 as per Annexure-C to pay the market value and other charges computed against different heads as under:
(1) Value of the land measuring 3.23 acres at the rate of Rs.1,19,79,000/- - Rs.4,28,24,925/-
(2) Conversion charges - Rs. 6,22,908/-
(3) Phodi charges - Rs. 55/-
Total - Rs.4,34,47,888/-
(4) Service charges of the Board - Rs. 96,01,983/-
Total - Rs.5,30,49,871/-
7. Petitioner no.3 paid the said amount by way of demand draft dated 12.12.2005 as per letter dated 7 14.12.2005 addressed to the KIADB. Thereafter, on 31.03.2006, the Deputy Commissioner passed an order granting the land in question in favour of KIADB for the purpose of allotting it to petitioner no.3. The Deputy Commissioner imposed certain conditions. Condition nos.1 & 3 of the said order which are relevant for the present purpose state that if the land in question or any part thereof were to be required by the State Government for its purpose, the land had to be returned to the Government; the granted land shall not be alienated by way of sale or lease or by way of effecting any other transfer without the permission of the State Government.
8. It is urged by the petitioners that conditions imposed by the Special Deputy Commissioner while transferring the land to KIADB were contrary to the Rules, particularly Rule 20(1) & Rule 28 of the Rules. Petitioner no.3 contends that it was not communicated with the order passed by the Deputy Commissioner containing the aforesaid conditions. 8
9. On 21.07.2006, KIADB executed a registered sale deed transferring absolute right, title and interest over the land in question in favour of petitioner no.3. It is urged by the petitioner that this sale deed does not impose any condition on petitioner no.3 restricting either the usage of the land or the right to deal with the same including by way of alienation or otherwise. This sale deed is produced at Annexure-F. A perusal of the conditions imposed in the sale deed, no doubt, does not disclose any such conditions restraining or restricting the rights of petitioner no.3 in using the land or dealing with it as per its choice including by way of alienation.
10. Learned Senior Counsel Mr. Holla and Mr. Dhyan Chinnappa appearing for petitioners inviting the attention of the Court to the specific clauses contained in the sale deed, whereunder it is stated that right, title and interest of the vendor in and upon the property or any part thereof was transferred in favour of petitioner no.3 'free from all encumbrances, charges and claim of whatsoever nature, to have and to hold the same unto the purchasers absolutely 9 and forever and the purchasers shall and may at all times peaceably enter upon and quietly hold, possess and enjoy the schedule property without any interruption, claim or demand whatsoever from the vendor or any one claiming under them', contend that the sale effected was an out and out sale free from any conditions and encumbrances.
11. Petitioner no.3 has inturn sold the lands held by it in the locality including the land in question in favour of Prestige Estates Projects Limited - petitioner no.1. One M/s. Wildflower Estate & Resorts Pvt. Ltd., a company incorporated under the provisions of the Companies Act, 1956, has joined petitioner no.3 as a confirming party in executing the sale deed in favour of petitioner no.1. This registered sale deed dated 30.08.2006 is produced at Annexure-G.
12. It is relevant to notice here that the Special Deputy Commissioner - respondent no.2 herein having noticed the fact that, undeniably the land had no access to any road and was situated amidst the lands owned by petitioner 10 no.3 and that grant was made as per Rule 21(c) of the Rules; that while granting prior approval, the State Government had not imposed any conditions; that the Special Deputy Commissioner had already collected all the charges including 50% of the market value of the land; that the condition regarding non-alienation was imposed as a matter of routine practice as adopted by the Special Deputy Commissioner ignoring Rule 28(2) of the Rules; that KIADB had transferred the land without imposing any condition in favour of petitioner no.1 by executing absolute sale deed dated 21.07.2006; that petitioner no.1 had deposited development charges with the Bengaluru Development Authority (for short, 'BDA') and after getting the land use converted, huge amount was spent for construction of apartments; however, in the meanwhile, certain organizations had submitted complaints; the Government having examined the matter had issued a communication dated 28.10.2010 making it clear that the Special Deputy Commissioner could relax the conditions imposed by taking appropriate action, addressed a letter 11 dated 19.05.2011 produced at Annexure-H to the State Government narrating all the above facts. In response, the State Government vide letter dated 29.07.2011 having come to the conclusion that for the land transferred in favour of KIADB for allotment to petitioner no.3, conditions regarding alienation was not applicable as per Rule 28(2) of the Rules, granted prior permission for canceling the said condition. This is evident from Annexure-J. Thereafter, in furtherance of the said Government Order, the Special Deputy Commissioner, Bengaluru District, issued a corrigendum dated 02.08.2011 to the Official Memorandum dated 31.03.2006 and withdrew the conditions imposed in granting/transferring the land in favour of KIADB.
13. At this stage, certain representations were given to the Tahsildar, Bengaluru East, by certain bodies of people belonging to Scheduled Castes and Scheduled Tribes contending that the land in question had been classified as Gomala land and by violating the conditions of grant, the same had been transferred in favour of petitioner no.3. The 12 Tahsildar referred the matter to the Deputy Commissioner
- respondent no.3. The Deputy Commissioner initiated proceedings under Section 136(3) of the Karnataka Land Revenue Act, 1964. After conducting inquiry, he passed a detailed order dated 15.06.2012 holding that the non- alienation clause in the official memorandum dated 31.03.2006 issued by the Special Deputy Commissioner while transferring the land in favour of KIADB having been cancelled, the sale made in favour of petitioners was not in violation of any law. This order is produced at Annexure- M.
14. Petitioner no.1 having purchased all the lands owned by petitioner no.3 including the land in question secured necessary approvals including No Objection Certificate from different authorities such as BSNL, Fire Force Department, BWSSB, State Pollution Control Board, and Airport Authority of India, to put up residential apartments in the lands purchased by it. The building plan approved by the BDA and the building license issued by the Bruhat Bengaluru Mahanagara Palike (for short, 'BBMP') for 13 construction of residential apartments are produced along with the writ petitions. Petitioner no.1 has obtained commencement certificate from the BBMP on 07.07.2012 which is produced at Annexure-AA. It has availed financial assistance from financial institutions as is evident from the certificate issued by the ICICI Bank produced at Annexure-AH. Petitioner has also produced photographs of the buildings constructed along with this writ petition. The architect of the petitioner has issued certificate stating that 90% of the construction has been completed. The Chartered Accountant of the petitioner has certified that an amount of Rs.127.79 Crores have been spent on construction. This certificate is produced at Annexure-AF. Petitioner claims that ICICI Bank has issued a certificate stating that it has provided loan facility of Rs.350 Crores to the petitioner for construction of buildings on the aforementioned property. This certificate is at Annexure- AH. It is also urged by the petitioners that 25 persons have entered into agreements with them and have paid advance for purchase of flats.
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15. When things stood thus, respondent no.3 along with police personnel entered the schedule land without any prior notice and claimed that they had taken over possession of the schedule land along with buildings constructed thereon. It is urged by the learned Senior Counsel appearing for the petitioner that though possession continued with the petitioner, highhanded action was resorted to illegally by the respondent- authorities with a mala fide intention. Thereafter, the Deputy Commissioner served the proceedings/order dated 23.05.2015 on the petitioner on 25.05.2015 informing them that the land had been sold by them contrary to the non-alienation clause imposed in the official memorandum dated 31.03.2006, and therefore, sanction given by the Government vide letter dated 20.10.2005 had been cancelled and the land along with buildings thereon had to be taken over to the Government. As this order was passed without providing any opportunity to the petitioner, petitioner challenged the same before this Court in W.P.Nos.22880-881/2015. This Court allowed the writ 15 petition and remanded the matter for fresh inquiry, whereupon petitioner filed detailed objections before the State Government and the State Government after conducting inquiry has passed the impugned order canceling the grant of schedule property in favour of petitioner no.3 and directed the Special Deputy Commissioner to resume the land along with structures. In this background, petitioners have approached this Court challenging the order passed by the State Government and the consequential order dated 11.08.2015.
16. I have heard the learned Senior Counsel Mr. Udaya Holla and Mr. Dhyan Chinnappa appearing for the petitioners. Learned Senior Counsel Mr. Shashikiran Shetty has appeared and argued for the respondent- KIADB. Learned Additional Advocate General Mr. A.G.Shivanna appearing for the State has defended the action of the State and its authorities. Learned Counsel Mr. Basvaraj has appeared and addressed his arguments for respondent no.6.
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17. Learned Counsel have taken me through the pleadings including additional statements and documents produced along with the memo. They have also referred to the relevant provisions contained in Rules 20, 22 & 28 of the Rules.
18. Mr. Holla has mainly contended that action of the State Government in passing the impugned order is highly illegal, arbitrary and hence unsustainable. In particular, he has urged that the land was not granted to petitioner no.3 under the Rules, but was granted/transferred in favour of KIADB for the purpose of granting it to petitioner no.3. No condition could have been imposed on KIADB by the State regarding non-alienation as was evident from Rule 28(2) of the Rules; the grant of land originated from the State Government vide letter dated 20.10.2005; the Government did not impose any condition except to collect 50% of the market value. After the amount was paid by petitioner no.3 on 14.12.2005, the Deputy Commissioner imposed untenable and unauthorized conditions in his order restricting the KIADB from alienating the land; this 17 mistake having been realised by the Deputy Commissioner, he had corrected the same by withdrawing the condition with prior approval of the State Government. Therefore, there was no question of violation of any condition of grant or the relevant rule regulating the grant of land.
19. Mr. Holla points out that State Government having been fully aware of the fact that the land was fully developed by constructing apartments incurring huge cost, acted with ulterior motive. He also points out that the condition imposed by the Deputy Commissioner were unenforceable, in as much as, the KIADB could not be expected not to alienate or transfer the land because the very purpose of granting land to it gets frustrated. In the face of such conditions KIADB could not have transferred the land to anybody, much less to petitioner no.3. Hence, he justifies the action of the State Government and the Deputy Commissioner in canceling the condition imposed, but takes serious objections to the subsequent proceedings initiated to cancel the grant and for 18 resumption of the land. He is highly critical of the highhanded act on the part of respondent-authorities in their attempt to take over possession of the land along with buildings constructed thereon. He also points out that at an undisputed point of time, the Deputy Commissioner, Bengaluru, in exercise of his power under Section 136(3) of the Karnataka Land Revenue Act, 1964, has held that there was no violation of the condition of grant in view of the orders subsequently passed by the State Government and the Deputy Commissioner withdrawing such conditions.
20. Learned Counsel for petitioners have placed strong reliance on the judgment of the Apex Court in the case of JOINT COLLECTOR, RANGA REDDY DISTRICT & ANOTHER VS D.NARSING RAO & OTHERS - (2015) 3 SCC 695. Inviting the attention of the Court to paragraph 25 of the said order, it is urged that there was no justification for the State Government or the Deputy Commissioner to initiate action after long lapse of time for cancellation of grant of land made in favour of KIADB and consequently the sale in 19 favour of the petitioner, even in cases where allegations of fraud had necessitated exercise of such corrective power.
21. Learned Senior Counsel Mr. Holla has placed reliance on the following judgments:
(1) MOHAMAD KAVI MOHAMAD AMIN VS FATMABAI IBRAHIM - (1997) 6 SCC 71;
(2) GODREJ AND BOYCE MANUFACTURING COMPANY LIMITED & ANOTHER VS STATE OF MAHARASHTRA & OTHERS - (2014) 3 SCC 430;
(3) VENKATAGIRIYAPPA VS THE STATE OF KARNATAKA, REVENUE DEPARTMENT - ILR 1998 KAR 4000;
(4) THE BANGALORE DEVELOPMENT AUTHORITY, REP. BY ITS COMMISSIONER VS SMT.
SUMITRADEVI - ILR 2004 KAR 1386;
(5) CHAIRMAN, INDORE VIKAS PRADHIKARAN VS PURE INDUSTRIAL COKE & CHEMICALS LTD. & OTHERS - (2007) 8 SCC 705;
(6) SMT. N.DHAKSHAYINI VS THE COMMISSIONER, BANGALORE DEVELOPMENT AUTHORITY - ILR 2013 KAR 2221;
(7) NOIDA ENTREPRENEURS ASSOCIATION VS NOIDA & OTHERS - (2011) 6 SCC 508;
(8) M/S. HANUMAN SILKS & ANR. VS KARNATAKA INDUSTRIAL AREAS DEVELOPMENT BOARD & OTHERS - ILR 1996 KAR 3384;
(9) BISHAN DAS & OTHERS VS STATE OF PUNJAB & OTHERS - AIR 1961 SC 1570;
20(10) STATE OF W.B. & OTHERS VS VISHNUNARAYAN & ASSOCIATES (P) LTD. & ANOTHER - (2002) 4 SCC 134;
(11) M/S. PATIL EXHIBITORS (P) LTD. VS CORPORATION OF THE CITY OF BANGALORE -
1985(2) KAR.LJ 533;
(12) STATE OF U.P. & OTHERS VS MAHARAJA DHARMANDER PRASAD SINGH & OTHERS -
(1989) 2 SCC 505;
(13) JOHN B.JAMES & OTHERS VS BANGALORE DEVELOPMENT AUTHORITY & ANOTHER - ILR 2000 KAR 4134;
(14) PATEL NARSHI THAKERSHI & OTHERS VS PRADYUMANSINGHJI ARJUNSINGHJI - AIR 1970 SC 1273;
22. Learned Senior Counsel Mr. Dhyan Chinnappa who represents petitioner no.3 refers to the order dated 18.11.2015 passed in the review petition by the Division Bench to contend that petitioners are entitled to defend the grant made by the State Government and the right, title and interest they have acquired in the property. He urges that there is no power under Rule 20 of the Rules to impose any condition; once land is granted to KIADB, the purpose of grant has to be upheld as has been provided in 21 Rule 20(2) of the Rules. He juxt apposes Rule 20 with Rule 22 to contend that it was always open to the Deputy Commissioner and the State Government to grant the land to industrial concerns, in which event, certain conditions could have been imposed. However, when the land was not granted under Rule 22 of the Rules, but was granted invoking power under Rule 20, question of imposing conditions would not arise. In this regard, he invites the attention of the Court to Rule 28(2) of the Rules.
23. It is also strenuously urged by him that sale deed executed by KIADB in favour of petitioner no.3 does not impose any condition, on the other hand, it recites that transfer made was free from any encumbrance. He also urged that it is very common that KIADB permits the allottees to enter into joint development agreements in respect of land allotted by it. He produces a model agreement to substantiate his contention that even where allotments were made by the KIADB with certain conditions without transferring any title, the allottees were permitted to develop the lands by entering into joint 22 development agreements. He is highly critical of the allegation of fraud made against the petitioners. According to him, KIADB has acted within legal limits in transferring the land in favour of petitioner no.3. Further, it is strongly contended by him that Government cannot be permitted to turn around and undo whatever it had done long back in 2005 thereby pushing the petitioners into serious and irretrievable crisis.
24. Mr. A.G.Shivanna, learned Additional Advocate General appearing for the State submits that non- alienation condition as provided in Rule 9(3) of the Rules was applicable and the same had been rightly imposed by the Deputy Commissioner. He urges that Rule 28 had no application to the case. Referring to Annexure-G - sale deed dated 30.08.2006, he urges that even before the grant was made, there was a conspiracy to get the property granted in favour of petitioner no.3 by funding it through the petitioners. He points out that by the conduct of petitioner no.3, the very purpose of grant was vitiated as it had sold the property by making profit of Rs.2.89 Crores 23 within a matter of 40 days from the date of grant. He also contends that decision of the Government taken by the Revenue Department approving relaxation of the condition was contrary to law because the same had been taken five years after the grant. He, therefore, strongly urges that the writ petition is liable to be dismissed.
25. Mr. Shashikiran Shetty, learned Senior Counsel appearing for the KIADB submits that petitioner no.3 was aware of the conditions of grant. He urges that KIADB has power to sell the property as per Section 14(a) of the KIAD Act. He, however, contends that the sale deed executed by KIADB in favour of petitioner no.3 gives sufficient indication that all the conditions which the Deputy Commissioner had imposed in the official memorandum dated 31.03.2006 were part of the sale transaction and that title was transferred subject to such conditions. He, therefore, justifies the action of KIADB contending that it was not a sale absolute and out and out in favour of petitioner no.3 but was subject to conditions as 24 enumerated in the official memorandum dated 31.03.2006.
26. Mr. Basvaraj, learned Counsel representing respondent no.6 has taken me through the statement of objections filed and the documents produced along with a memo. He urges that respondent no.6 is interested in espousing the public cause; that the whole transaction is vitiated by fraud, hence respondent no.6 is interested to highlight the same and bring it to the notice of this Court how public property was sought to be transferred to private bodies. He supports the action taken of the State Government in canceling the grant of land made in favour of KIADB and consequently the sale deeds executed in favour of the petitioners.
27. It is urged by him that contrary to what was asserted by petitioner no.3 regarding their financial distress they have garnered sufficient funds to pay nearly Rs.4.5 Crores towards the value of the property; this was obviously done at the instance of M/s. Wildflower Estate & Resorts Pvt. 25 Ltd., who were parties to the sale deed executed by petitioner no.3 in favour of petitioner no.1 as confirming party. It is pointed out by him that a systematic effort has been made to take away the public property for private gains by paying a very paltry sum as consideration through the instrumentality of the State viz., KIADB. It is urged by him that there was no delay in initiating action against the petitioners and though petitioners had full knowledge of the illegal acts resorted by them, they have invested money hence the same cannot be a ground to challenge the action of the State Government.
28. Having heard the learned Counsel for all the parties, the points that arise for consideration are, (1) whether the impugned order passed by the State Government canceling the grant made in favour of KIADB and annulling the sale deeds executed in favour of the petitioners and consequently directing forfeiture of the land to the State Government suffers from any illegality?
26(2) Whether there was any fraud committed by the petitioners in securing the land bearing Sy.
No.42 measuring 3 acres 23 guntas of Pattandur Agrahara village by petitioner no.3 from the Government through KIADB?
29. Point nos.1 & 2: As both the points are interconnected, they are considered and answered together. It is not in dispute that petitioner no.3 owned lands bearing Sy. No.2/1D of Whitefield village and Sy. Nos.160 & 157(P) of Pattandur Agrahara village. It is also not in dispute that the subject land belonging to the Government measuring 3 acres 23 guntas comprised in Sy. No.42 of Pattandur Agrahara village was surrounded by lands belonging to petitioner no.3. That location of Sy. No.42 was such that it was surrounded and land locked by lands belonging to petitioner no.3 without having any access by road is an admitted fact as is forthcoming from the correspondence made by the Deputy Commissioner with the State Government vide Annexure-H. It is for this reason, petitioner no.3 was interested in Sy. No.42. Indeed, it is the case of petitioner no.3 that it was running a factory for 27 manufacturing ice creams and as the land Sy. No.42 belonging to Government was surrounded by petitioner no.3's land, it was interested in securing the grant of land for its purpose. As a matter of fact, this land had been leased by the State Government in favour of petitioner no.3 way back on 20.10.1989 for a period of 30 years. Subsequently dispute arose with regard to lease as the government kept the lease in abeyance. Petitioner no.3 claims to have been in possession and enjoyment of the land for a period of 15 years till 2003. It is only in the year 2003, Government cancelled the lease and resumed the land, but the land remained unutilized.
30. As the land had been notified as one required for industrial area by KIADB, petitioner no.3 made a request on 20.10.2005 seeking allotment of the land in their favour. Therefore, these background facts would make it very clear that petitioner no.3 was not trying to lay its hand on this land for the first time in the year 2005 or that it was totally unconnected and not interested in the land in question. On the contrary, the land in question having 28 been sandwiched between the lands belonging to petitioner no.3 and there being no other access to this land except through the lands belonging to petitioner no.3, it had sufficient justification to approach the KIADB for grant of land, particularly because it was carrying on its industrial activities in the adjoining lands.
31. It is relevant to notice that the State Government having taken note of the aforesaid relevant factors entertained the request made by KIADB which had moved the State Government for transfer of schedule land in their favour to enable it to allot the same to petitioner no.3. Direction issued by the State Government on 20.10.2005 to the Deputy Commissioner, Bengaluru District, to transfer the land in question in favour of KIADB does not refer to any conditions to be imposed either against KIADB or against petitioner no.3. Annexure-B - communication issued by the State Government in this regard makes it clear that the Special Deputy Commissioner was directed to transfer the land in favour of KIADB as per Rule 20(c) of the Rules by collecting Rs.4,28,24,925/-. This 29 communication of the State Government also makes it clear that the land was transferred to KIADB for allotting it to petitioner no.3 on condition that they shall pay the said sum. When the direction issued by the government is in the nature of prior permission and specifically stipulated the condition for collecting 50% of the market value for allotment by the KIADB in favour of petitioner no.3, it cannot be construed that the State Government intended to impose conditions other than what was spelt out there and in Rule 20(c) of the Rules.
32. It is also important to notice that after receiving this direction from the State Government, the Deputy Commissioner called upon the KIADB to collect not only the market value as directed, but also conversion charges, phodi charges, etc., from petitioner no.3. Petitioner no.3 paid the entire charges in a total sum of Rs.5,30,49,871/- by way of demand draft dated 12.12.2005. After collecting the entire amount on 31.03.2006, the Deputy Commissioner issued the order granting the land in question in favour of KIADB imposing certain conditions. 30 First of all, petitioner no.3 was not informed of any conditions for grant of land except those incorporated in the Government direction while collecting the amount of Rs.5,30,49,871/-. Secondly, as the Deputy Commissioner was granting land in favour of KIADB, there was no question of imposing any condition regarding the non- alienation or non-transfer because the very purpose of transfer of land to KIADB was to enable it to grant it to petitioner no.3. In addition, it has to be borne in mind that as the grant was made under Rule 20, the Rule did not enable imposition of such conditions. It is also not understandable how the Deputy Commissioner could impose such condition against KIADB requiring it not to transfer the land to anybody else without prior permission of the Government when the Government itself had made clear that the land has to be granted to KIADB to allot it to petitioner no.3. Therefore, there was an apparent incongruity and confusion in the order of the Deputy Commissioner dated 31.03.2006 while granting the land to KIADB.
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33. Having realized the aforesaid mistake committed by the Deputy Commissioner in his order dated 31.03.2006 in imposing such unwarranted, unauthorized and unnecessary conditions, the Deputy Commissioner has subsequently corrected this mistake. This is evident from the letter addressed by the Deputy Commissioner on 19.05.2011 to the State Government as per Annexure-H. In response, the State Government as per its letters dated 29.06.2011 granted prior permission for canceling the said condition as per Annexure-J - communication dated 29.07.2011. Thereafter, the Special Deputy Commissioner issued a corrigendum dated 02.08.2011 to the official memorandum dated 31.03.2006 and withdrew the conditions imposed while transferring the land to KIADB. In the meanwhile, much water had flown, in that KIADB had executed the absolute sale deed in favour of petitioner no.3 on 21.07.2006 transferring absolute right, title and interest over the land in question in favour of petitioner no.3.
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34. A perusal of the conditions imposed in this sale deed does not disclose that any conditions were imposed restraining or restricting the right of petitioner no.3 in using the land or dealing with it as per its choice including by way of alienation. Indeed, the recitals in the sale deed unmistakably showed that the land was transferred absolutely as an out and out sale without any condition. In such circumstances, contention urged by the learned Counsel for KIADB and the learned Counsel appearing for respondent no.6 that this sale deed has to be construed as conferring only limited right in favour of petitioner no.3 subject only to the conditions enumerated in the order passed by the Deputy Commissioner while granting the land cannot be accepted. There would have been some substance in this argument had the State Government decided to impose such conditions and that the Deputy Commissioner had by following such direction of the State Government imposed the said conditions.
35. Apart from the above, even if the Deputy Commissioner had acted in accordance with law and as 33 per the power vested in him in the relevant Rule and also so as to achieve certain specific objective while imposing such conditions, then also such an argument could have carried some weight. But, as already pointed out, neither the State Government authorized imposition of such condition nor Rule 20(c) of the Rules permitted imposition of such conditions. On the other hand, as per Rule 28(2), imposition of such conditions while transferring the land in favour of KIADB was not permissible. In addition, the Deputy Commissioner having realized his mistake that he had imposed such condition as a matter of routine, dehors the relevant Rules, sought permission of the Government to correct the mistake by canceling/withdrawing such untenable conditions. The State Government granted permission for withdrawing the said conditions.
36. In between, certain persons had approached the Tahsildar complaining that Gomala land had been illegally granted in favour of petitioner no.3. Therefore, the Tahsildar referred the matter to the Deputy Commissioner. The Deputy Commissioner initiated proceedings under 34 Section 136(3) of the Karnataka Land Revenue Act and after conducting a detailed inquiry passed an order on 15.06.2012 holding that there was no illegality committed in the grant made and the consequent sale deed executed in favour of petitioners. This order was produced at Annexure-M.
37. In the wake of the above state of affairs, it was impermissible for the State Government to now turn around and pass the impugned order completely going back on its previous actions and conduct in granting the land and in reiterating that the grant was without any condition. It could not have annulled the grant and the sale deeds by passing the impugned order in the year 2015 unmindful of all that had been done by it and all that had ensued thereafter for a period of nearly 10 years, in the guise of the so-called investigation into the illegalities committed in allotting Government lands to private individuals or bodies.
35
38. It is ununderstandable how such condition could be imposed by the Deputy Commissioner stating that Government was at liberty to resume the land to itself if and when required, without prior notice to KIADB having once transferred it to KIADB with the specific purpose of allotting it to petitioner no.3 by collecting 50% of the market value along with all charges including conversion fee, etc. The impugned order passed by the State Government which proceeds on the basis of such conditions imposed by the Deputy Commissioner holding that the conditions had been rightly imposed is wholly illegal and unsustainable.
39. It is also not permissible for the State Government to contend that as the sale deed executed by KIADB in favour of petitioner no.3 referred to the official memorandum dated 31.03.2006 by the Special Deputy Commissioner, wherein conditions had been imposed while transferring the land to KIADB, it had to be construed that no absolute title had been transferred in favour of petitioner no.3 and that the said conditions have to be read into the sale deed. 36 Terms of a registered document cannot be constructed by referring to other documents.
40. Further, there is nothing to show that petitioners were in any manner instrumental in KIADB executing the absolute sale deed in favour of petitioner no.3. It cannot be lost sight that petitioner was litigating over the land in question for decades based on the lease deed executed by the State Government. The important circumstance that the land in question was surrounded by lands belonging to petitioner no.3 and it had great advantage in securing the grant of land for its purpose cannot be forgotten. Therefore, there is no justification to make inferences of conspiracy or fraud behind the action of petitioner no.3 in securing the land for its use. It may be true that petitioner no.3 had some financial constraints, and therefore, it had availed support from M/s. Wildflower Estate & Resorts Pvt. Ltd., to pay the value of the land to KIADB. Therefore, mere fact that an understanding had been reached between petitioner no.3 and M/s. Wildflower Estate & Resorts Pvt. Ltd. regarding joint development of the subject 37 land along with other lands belonging to petitioner no.3 by making joint investments cannot be taken to presume that they had fraudulent design to knock off the public property. When the State Government itself has come to the conclusion, as per its earlier order passed and when the Deputy Commissioner pursuant to the said order has cancelled the condition imposed in the order transferring the land to KIADB, it is not open for the Government subsequently to say that what had been earlier done by the Government was illegal.
41. Rule 20(c) & Rule 28(2) of the Rules are relevant for the purpose of understanding the scope and power of the State Government in granting the land. As per Rule 20(1) lands may be granted by the Deputy Commissioner with the prior approval of the State Government. Rule 20(1) of the Rules state as under:
"20. Grant of land to Housing Board, Grama Panchayat, Taluk Panchayat, Zilla Panchayat, Co-operative Societies and other Statutory Board.- (1) Lands may be granted by the Deputy Commissioner with the prior 38 approval of the State Government under these rules to,-
(a) the Karnataka Housing Board, or any Urban Development Authority free of cost for construction of houses under the subsidized rental housing scheme or subsidized industrial housing scheme and on payment of fifty per cent of the market value in all other cases;
(b) Grama Panchayats, Taluk Panchayats and Zilla Panchayats free of cost for construction of schools, hospitals, dispensaries and public amenities and such other purposes deemed obligatory under the Karnataka Panchayat Raj Act, 1993;
(c) Co-operative Societies and Statutory bodies like the Karnataka State Road Transport Corporation, The Karnataka Power Transmission Corporation, etc., on collection of 50 per cent of market value to be determined by the Deputy Commissioner;
(d) The Karnataka Industrial Area Development Board, free of cost except the areas in Zone-A notified in G.O.No.CI 167 CP 39 2001, dated 30th June, 2001, i.e., Bangalore District and Bangalore Rural District excluding Kanakapura and Magadi Taluks:
Provided that where the extent of the land does not exceed four hectares, no such prior approval shall be necessary."
42. Further Rule 28(2) of the Rules provides for grant of lands in favour of various bodies. It reads as under:
"(2) Every person who is granted land for non-
agricultural purposes under these rules shall execute an agreement in Form VI:"
The proviso of Rule 28(2) which is relevant for our purpose is extracted as under:
"Provided that where the land is granted to the Karnataka Housing Board, any Urban Development Authority, the Industrial Areas Development Board, a Grama Panchayat, Taluk Panchayat or a Zilla Panchayat, the condition that the lands shall not be alienated shall not be applicable."40
43. Fact that land was granted under Rule 20(1)(c) and not under Rule 20(1)(d) would not make any difference in this case in as much as one cannot forget that the State Government consciously chose to grant the land in favour of KIADB which is a statutory body for allotting it to petitioner no.3 without imposing any conditions. When prior permission granted by the State Government did not require imposition of conditions as was sought to be done by the Deputy Commissioner, and when neither Rule 20(1)(c) nor Rule 20(1)(d) authorized imposition of any such condition and indeed imposition of non-alienation condition on the KIADB was unconceivable having regard to the purpose of grant, the Deputy Commissioner could not have imposed such conditions.
44. The allegations of fraud made are unfounded. In the impugned order passed, the State Government seems to proceed on the basis that action of all the authorities i.e., BDA, KIADB, Deputy Commissioner including that of the State Government taken earlier were illegal, and therefore, it was required to correct the same. This only shows that 41 the State Government has traversed the scope of inquiry before it and has ignored the rights of third parties which have set in on account of the consistent action that is taken by the authorities and the Government all the time. Merely because a different establishment takes over and there is possibility of looking at the actions in a different way, settled things cannot be unsettled thereby jeopardizing the rights of third parties. Petitioner no.1 has invested huge amount of money in the project. Several innocent third parties have already invested in the flats constructed. Materials are placed on record to show the nature of the investment and improvement made over the property. Therefore, it was neither just nor reasonable for the State Government to pass such an order annulling all the transactions including the sale deeds executed in favour of petitioner no.1.
45. As rightly contended by the learned Counsel for the petitioners, merely because the sale deed executed by petitioner no.3 in favour of petitioner no.1 makes reference to financial assistance rendered by M/s. Wildflower Estate 42 & Resorts Pvt. Ltd., to petitioner no.3 and there was an agreement between them to jointly develop the lands belonging to petitioner no.3 including the subject land, it cannot be said that there was a fraudulent design to knock off the public property. The grant of land in the instant case in favour of petitioner no.3 was mainly on account of the location of the subject land in the midst of the lands belonging to petitioner no.3 and the fact that it had already established factory and intended to make use of the same for industrial purpose. Mere fact that petitioner no.3 had made arrangement with M/s. Wildflower Estate & Resorts Pvt. Ltd., to secure financial help and to enter into joint development does not attribute sinister designs or characteristics to the action of petitioner no.3 in securing the grant of subject land. It cannot also be said that subsequent sale made by petitioner no.3 in favour of petitioner no.1 was illegal. Once it is held that conditions imposed by the Deputy Commissioner while issuing official memorandum were themselves not in accordance with law and were not authorized by the State Government and had 43 been duly cancelled/withdrawn, it follows that the Government Order now passed suffers from serious illegality, error of jurisdiction and hence unsustainable.
46. Hence, these writ petitions are allowed. Impugned orders are quashed.
Sd/-
JUDGE KK