Karnataka High Court
Smt. Chinnamma vs State Of Karnataka on 10 April, 2026
-1-
WA No. 99 of 2013
C/W WA No. 95 of 2013
WA No. 97 of 2013
AND 1 OTHER
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 10TH DAY OF APRIL 2026
PRESENT
®
THE HON'BLE MR. JUSTICE D K SINGH
AND
THE HON'BLE MS. JUSTICE TARA VITASTA GANJU
WRIT APPEAL NO. 99 OF 2013 (LA-KIADB)
C/W
WRIT APPEAL NO. 95 OF 2013 (LA-KIADB),
WRIT APPEAL NO. 97 OF 2013 (LA-KIADB) &
WRIT APPEAL NO. 2103 OF 2013 (LA-KIADB)
IN WA NO. 99/2013
BETWEEN:
1. SRI KRISHNAREDDY
S/O LATE PAPAIAH REDDY
SINCE DECEASED BY LRS
Digitally
signed by 1(A) SRI PAPAIAH REDDY
VASANTHA S/O LATE SRI KRISHNAREDDY
KUMARY B K SINCE DEAD BY LRS
Location:
HIGH
COURT OF 1(A)1 SMT. ANUSUYA
KARNATAKA W/O LATE PAPAIAH REDDY
AGED ABOUT 56 YEARS
NO.76, 2ND CROSS
1ST MAIN ROAD
PAPAYYA REDDY LAYOUT
MANORAYANAPALYA
BANGALORE NORTH
BANGALORE-560032
1(A)2 ARCHANA
D/O LATE PAPAIAH REDDY
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WA No. 99 of 2013
C/W WA No. 95 of 2013
WA No. 97 of 2013
AND 1 OTHER
AGED ABOUT 38 YEARS
NO.76, 2ND CROSS
1ST MAIN ROAD
PAPAYYA REDDY LAYOUT
MANORAYANAPALYA
BANGALORE NORTH
BANGALORE-560032
1(A)3 P. JAISHREE
D/O LATE PAPAIAH REDDY
W/O D. SANTOSH
AGED ABOUT 39 YEARS
NO.352
OUTER RING ROAD JUNCTION
NEAR MARATHAHALLI BRIDGE
MARATHAHALLI EXTENSION
BANGALORE NORTH
BANGALORE-560037
(AMENDED V/O DT. 19.09.2022)
1(B) SRI CHANDRA REDDY
S/O LATE KRISHNAREDDY
SINCE DECEASED BY LRS
1(B)1 NIRMALA
W/O LATE CHANDRA REDDY
AGED ABOUT 54 YEARS
NO.2/1, 1ST FLOOR, 2ND CROSS
PAPAIAH REDDY LAYOUT
MUNNARAYANA PALYA
R.T. NAGAR POST
BANGALORE-560032
1(B)2 RAMYA
D/O LATE CHANDRA REDDY
W/O MAHESH T. REDDY
AGED ABOUT 36 YEARS
NO.844/A, 4TH CROSS
9TH MAIN, K.N. EXTENSION
YESHWANTHAPURA
BANGALORE-560022
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WA No. 99 of 2013
C/W WA No. 95 of 2013
WA No. 97 of 2013
AND 1 OTHER
1(B)3 SHAMANTHI C
D/O LATE CHANDRA REDDY
W/O VINOD M REDDY
AGED ABOUT 32 YEARS
NO.427, PALLOT NILAYA ROAD
CHELEKERE, KALYAN NAGAR
BANGALORE
(AMENDED V/O DT. 19.09.2022)
1(C) SRI MUNIREDDY
S/O LATE SRI KRISHNAREDDY
SINCE DECEASED BY LRS
1(C)1 SMT. PURNIMA
W/O LATE MUNI REDDY
AGED ABOUT 52 YEARS
NO.69/1, 2ND CROSS
PAPAIAH REDDY LAYOUT
MUNNARAYANA PALYA
R.T. NAGAR POST
BANGALORE-560032
1(C)2 SMT. SHRUTHI
D/O LATE MUNIREDDY
W/O RAGHAVA REDDY
AGED ABOUT 30 YEARS
NO.G-1
K.A. ANANDA REDDY NAGAR
ANDRA BANK
KONAPPANA AGRAHARA
ELECTRONIC CITY
BANGALORE-560100
1(C)3 SWETHA
D/O LATE MUNI REDDY
AGED ABOUT 32 YEARS
NO.69/1, 2ND CROSS
PAPAIAH REDDY LAYOUT
MUNNARAYANA PALYA
R.T. NAGAR POST
BANGALORE-560032
(AMENDED V/O DT. 19.09.2022)
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WA No. 99 of 2013
C/W WA No. 95 of 2013
WA No. 97 of 2013
AND 1 OTHER
1(D) SRI VENKATESHREDDY
S/O LATE SRI KRISHNAREDDY
AGED ABOUT 56 YEARS
NO.2/9, 2ND CROSS
PAPAIAH REDDY LAYOUT
MUNNARAYANA PALYA
R.T. NAGAR POST
BANGALORE-560032
2. SRI UMESH
S/O LATE ABBAIAH REDDY
AGED ABOUT 43 YEARS
3. SRI RAVI KUMAR
S/O LATE IYAPPAIAH REDDY
AGED ABOUT 43 YEARS
4. SRI P VENKATASWAMY REDDY
S/O LATE PAPAIAH REDDY
SINCE DECEASED BY LRS
4(A) SRI V. ANANDA REDDY
S/O LATE VENKATASWAMY REDDY
AGED ABOUT 56 YEARS
4(B) SRI V. LAKSHMI NARAYANA REDDY
S/O LATE VENKATASWAMY REDDY
AGED ABOUT 51 YEARS
APPELLANT NO.4(A TO B)
ARE R/AT NO.9, 2ND CROSS
PAPAIAH REDDY LAYOUT
MANORAYANAPALYA
R.T. NAGAR POST
BANGALORE NORTH
BANGALORE-560032
(AMENDED V/O DT. 19.09.2022)
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WA No. 99 of 2013
C/W WA No. 95 of 2013
WA No. 97 of 2013
AND 1 OTHER
5. MUNISWAMY REDDY
S/O PAPAIAH REDDY
AGED ABOUT 78 YEARS
ALL ARE RESIDENTS OF
PAPAIAH REDDY LAYOUT
MUNNARAYANA PALYA
R.T. NAGAR POST
BANGALORE-560032
...APPELLANTS
(BY SRI S.N. ASHWATHNARAYANA, SENIOR COUNSEL FOR
SRI NARASIMHA MURTHY L, ADVOCATE)
AND:
1. STATE OF KARNATAKA
REPRESENTED BY ITS
PRINCIPAL SECRETARY
DEPARTMENT OF COMMERCE AND
INDUSTRIES
M.S. BUILDING
BANGALORE-560001
2. THE KARNATAKA INDUSTRIAL AREAS
DEVELOPMENT BOARD
BY ITS EXECUTIVE MEMBER
RASHTROTHANA PARISHATH BUILDING
NRUPATHUNGA ROAD
BANGALORE-560001
3. BANGALORE DEVELOPMENT AUTHORITY
REPRESENTED BY ITS SECRETARY
KUMARA PARK WEST
BANGALORE-560020
4. M/S LAKE VIEW TOURISM CORPORATION
REPRESENTED BY ITS DIRECTOR
SRI DAYANANDA PAI, NO.10/1
LAKSHMINARAYANA COMPLEX
GROUND FLOOR
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WA No. 99 of 2013
C/W WA No. 95 of 2013
WA No. 97 of 2013
AND 1 OTHER
PALACE ROAD
BANGALORE-560052
...RESPONDENTS
(BY SRI MOHAMMAD JAFFAR SHAH, AGA FOR R-1;
SRI K. SHASHI KIRAN SHETTY, SENIOR COUNSEL
A/W SRI B.B. PATIL, ADVOCATE FOR R-2;
SRI K. KRISHNA, ADVOCATE FOR R-3;
SRI K.N. PHANINDRA, SENIOR COUNSEL A/W
SRI BADRI VISHAL, ADVOCATE FOR C/R-4)
THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER PASSED
IN WRIT PETITION NO.40661/2004 DATED 19.11.2012.
IN WA NO. 95/2013
BETWEEN:
1. SRI MUNIYAPPA
S/O LATE HEMANNA
AGED ABOUT 53 YEARS
R/AT HEBBALA GRAMA
KASABA HOBLI
BANGALORE NORTH TALUK-560024
2. SRI VENKATAPPA ALIAS
VENKATARAM
S/O LATE MUNIYELLAPPA
SINCE DECEASED BY HIS LRS
2(a) SRI V. MUNIRAJU
S/O LATE VENKATAPPA ALIAS
VENKATARAM
AGED ABOUT 65 YEARS
R/AT NO.563, 3RD MAIN, HEBBAL
BANGALORE-560024
(AMENDED V/O DT. 29.03.2023)
3. SRI MUNIYAPPA ALIAS
JOTHE MUNIYAPPA
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WA No. 99 of 2013
C/W WA No. 95 of 2013
WA No. 97 of 2013
AND 1 OTHER
S/O LATE MUNIYELLAPPA
AGED ABOUT 78 YEARS
R/AT HEBBALA GRAMA
KASABA HOBLI
BANGALORE NORTH TALUK-560024
...APPELLANTS
(BY SRI N J RAMESH AND SRI P.H. VIRUPAKSHAIAH,
ADVOCATES FOR APPELLANT NO.1;
SRI ASHOK HARANAHALLI, SENIOR COUNSEL A/W
SRI ABHIJIT HARANAHALLI, ADVOCATE FOR
APPELLANT NOS.2(a) & 3)
AND:
1. STATE OF KARNATAKA
REPRESENTED BY ITS SECRETARY
DEPARTMENT OF COMMERCE &
INDUSTRIES, M S BUILDING
BANGALORE-560001
2. THE KARNATAKA INDUSTRIAL AREAS
DEVELOPMENT BOARD
REPRESENTED BY ITS
CHIEF EXECUTIVE OFFICER &
EXECUTIVE MEMBER
SITUATED AT NO.14/3, II FLOOR
RASHTROTHANA PARISHED BHAVAN
NRUPATHUNGA ROAD
BANGALORE-560002
3. THE SPECIAL LAND ACQUISITION OFFICER
KARNATAKA INDUSTRIAL AREAS
DEVELOPMENT BOARD, PLOT NO.488/B
14TH CROSS, KIADB COMPLEX
3RD BLOCK, 4TH PHASE
PEENYA INDUSTRIAL AREA, II STAGE
BANGALORE-560058
4. M/S LAKE VIEW TOURISM CORPORATION
REPRESENTED BY ITS DIRECTOR
NO.10/1, LAKSHMINARAYANA COMPLEX
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WA No. 99 of 2013
C/W WA No. 95 of 2013
WA No. 97 of 2013
AND 1 OTHER
GROUND FLOOR, PALACE ROAD
BANGALORE-560052
...RESPONDENTS
(BY SRI MOHAMMAD JAFFAR SHAH, AGA FOR R-1;
SRI SHASHI KIRAN SHETTY, SENIOR COUNSEL A/W
SRI P.V. CHANDRASHEKAR, ADVOCATE FOR R-2 & R-3;
SRI K.N. PHANINDRA, SENIOR COUNSEL A/W
SRI BADRI VISHAL, ADVOCATE FOR C/R-4)
THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER PASSED
IN WRIT PETITION NO.7029/2007 DATED 19.11.2012.
IN WA NO. 97/2013
BETWEEN:
1. SMT. CHINNAMMA
WIFE OF VENKATAPPA ALIAS VENKATARAM
SINCE DECEASED BY HER LRS
1(a) VENKATAPPA ALIAS VENKATARAM
HUSBAND OF LATE CHINNAMMA
AGED ABOUT 90 YEARS
1(b) SRI V. MUNIRAJU
S/O LATE CHINNAMMA
AGED ABOUT 71 YEARS
BOTH ARE R/O HEBBAL VILLAGE
BENGALURU-560024
(AMENDED V/O DT. 19.09.2022)
...APPELLANTS
(BY SRI N.S. VIJAYANTH BABU, ADVOCATE FOR
APPELLANT NO.1(a);
BY SRI N.J. RAMESH AND SRI P.H. VIRUPAKSHAIAH,
ADVOCATES FOR APPELLANT NO.1(b))
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WA No. 99 of 2013
C/W WA No. 95 of 2013
WA No. 97 of 2013
AND 1 OTHER
AND:
1. STATE OF KARNATAKA
REPRESENTED BY ITS SECRETARY
DEPARTMENT OF COMMERCE &
INDUSTRIES, M.S.BUILDING
BENGALURU-560001
2. KARNATAKA INDUSTRIAL AREAS
DEVELOPMENT BOARD
14/3, II FLOOR
RASHTROTHANA PARISHAD BHAVAN
NRUPATHUNGA ROAD
BENGALURU-560002
REPRESENTED BY ITS CEO
3. SPECIAL LAND ACQUISITION OFFICER
KARNATAKA INDUSTRIAL AREA
DEVELOPMENT BOARD
PLOT NO.488/B, 14TH CROSS
KIADB COMPLEX
3RD BLOCK, 4TH PHASE
PEENYA INDUSTRIAL AREA, II STAGE
BENGALURU-560058
4. M/S LAKEVIEW TOURISM CORPORATION
NO.10/1, GROUND FLOOR
LAKSHMINARAYANA COMPLEX
PALACE ROAD, BENGALURU-560052
REPRESENTED BY ITS DIRECTOR
...RESPONDENTS
(BY SRI MOHAMMAD JAFFAR SHAH, AGA FOR R-1;
SRI SHASHI KIRAN SHETTY, SENIOR COUNSEL A/W
SRI P.V. CHANDRASHEKAR, ADVOCATE FOR R-2 & R-3;
SRI K.N. PHANINDRA, SENIOR COUNSEL A/W
SRI BADRI VISHAL, ADVOCATE FOR C/R-4)
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WA No. 99 of 2013
C/W WA No. 95 of 2013
WA No. 97 of 2013
AND 1 OTHER
THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER
PASSED IN WRIT PETITION NO.7030/2007 DATED 19.11.2012.
IN WA NO. 2103/2013
BETWEEN:
1. SRI G GOPAL
AGED ABOUT 52 YEARS
S/O JAYANNA
RESIDING AT HEBBALA
BANGALORE-560024
REPRESENTED BY HIS
GPA HOLDER
SMT. INDIRAMMA
W/O SRI A S CHINNASWAMY RAJU
AGED ABOUT 72 YEARS
NO.294, UPPER PALACE ORCHARDS
16TH CROSS, SADASHIVANAGAR
BANGALORE-560080
...APPELLANT
(BY MS. LEKHA JAIN, ADVOCATE FOR
SRI SIDDHARTH SUMAN, ADVOCATE)
AND:
1. STATE OF KARNATAKA
REPRESENTED BY ITS
PRINCIPAL SECRETARY
COMMERCE AND INDUSTRIES DEPARTMENT
(INDUSTRIES DEVELOPMENT)
M S BUILDING
DR. AMBEDKAR VEEDHI
BANGALORE-560001
2. THE KARNATAKA INDUSTRIAL AREAS
DEVELOPMENT BOARD
RASHTROTHANA BUILDINGS
N R ROAD, BANGALORE-560001
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WA No. 99 of 2013
C/W WA No. 95 of 2013
WA No. 97 of 2013
AND 1 OTHER
REPRESENTED BY ITS
EXECUTIVE MEMBER
3. THE SPECIAL LAND ACQUISITION OFFICER
KARNATAKA INDUSTRIAL AREA
DEVELOPMENT BOARD
10A, 5TH FLOOR
CHANDRA KIRAN BUILDING
KASTURBA ROAD
BANGALORE-560001
4. BANGALORE DEVELOPMENT AUTHORITY
REPRESENTED BY ITS COMMISSIONER
CHOWDAIAH ROAD
KUMARA PARK WEST
BANGALORE-560020
5. M/S LAKE VIEW TOURISM CORPORATION
NO.10/1, LAKSHMINARAYANA COMPLEX
GROUND FLOOR, PALACE ROAD
BANGALORE-560052
...RESPONDENTS
(BY SRI MOHAMMAD JAFFAR SHAH, AGA FOR R-1;
SRI SHASHI KIRAN SHETTY, SENIOR COUNSEL
ALONG WITH SRI B.B. PATIL, ADVOCATE FOR R-2 & R-3;
SRI K. KRISHNA FOR R-4;
SRI K.N. PHANINDRA, SENIOR COUNSEL A/W
SRI BADRI VISHAL, ADVOCATE FOR C/R-5)
THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER
PASSED IN WRIT PETITION NO.45960/2004 DATED
19.11.2012.
THESE APPEALS HAVING BEEN HEARD AND RESERVED
FOR JUDGMENT ON 12.02.2026, COMING ON FOR
PRONOUNCEMENT THIS DAY, HON'BLE MR. JUSTICE
D K SINGH PRONOUNCED THE FOLLOWING:
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WA No. 99 of 2013
C/W WA No. 95 of 2013
WA No. 97 of 2013
AND 1 OTHER
CORAM: HON'BLE MR. JUSTICE D K SINGH
and
HON'BLE MS. JUSTICE TARA VITASTA GANJU
CAV JUDGMENT
(PER: HON’BLE MR. JUSTICE D K SINGH)
I BACKGROUND:-
1. The present batch of writ appeals are directed
against the common judgment and order dated
19.11.2012 passed by the learned Single Judge in
W.P.Nos.40661/2004, 7029/2007, 7030/2007 and
45960/2004 respectively, wherein the petitioners have
challenged the land acquisition proceedings initiated by
the State Government under the provisions of the
Karnataka Industrial Areas Development Act, 1966
(hereinafter referred to as ‘the KIAD Act‘) for an entity
called M/s. Lakeview Tourism Corporation. The learned
Single Judge, however, has dismissed the said writ
petitions by the impugned judgment and order.
2. The appellants are aggrieved by the declaration
dated 11.05.2004 under Section 28(4) of the KIAD Act in
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C/W WA No. 95 of 2013
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AND 1 OTHER
relation to the lands bearing Survey No.2/11A
admeasuring 31 guntas and Survey No.2/16A
admeasuring 6 guntas of Hebbal and Ammanikere Villages,
Kasaba Hobli, Bangalore North Taluk and the order of the
respondent No.2 under Section 3(1) of the KIAD Act
declaring the area of the land to be an industrial area. It
is the contention of the appellants that the respondent
No.1 (Government) tried to acquire the land in question
with the sole motive of benefiting the respondent No.4 by
handing over valuable land for pittance.
3. The appellants have contended that the land was
acquired based on the clearance given by the State High
Level Committee in the year 2001 in pursuance of the
Karnataka Industries (Facilitation) Act, 2002, which came
into force only in the year 2003 and therefore, the whole
acquisition proceedings were non est as being without
authority of law.
4. Concededly, the promoters of the entity had
approached the State Government during the year 2000
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AND 1 OTHER
and the State Government placed the proposal before the
State High Level Committee. The Committee, by its order
dated 28.06.2000, recommended that 37 acres of land
could be acquired and allotted under the provisions of the
KIAD Act. This recommendation was accepted by the State
Government by its order dated 10.07.2000. Thereafter,
the Committee, by an order dated 14.08.2001, opined that
entire extent of 70 acres of land be acquired by the State
under the provisions of the KIAD Act. Thus, what was
initially stated to be acquired was only 37 acres of land
since 33 acres of land had already been sold to the entity
by the villagers, however, within few months, the
acquisition was stated to be 70 acres of land.
5. Thereafter, a Preliminary Notification was issued on
25.11.2002 proposing to acquire 46 acres 20 guntas of
land in Hebbal village and 15 Acres 22 guntas in Hebbal
Ammanikere village in all, admeasuring 62.02 acres. The
Final Notification under Section 28(4) of the KIAD Act was
issued on 11.05.2004 proposing to acquire 53 acres and
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AND 1 OTHER
26 guntas being 40 acres and 12 guntas in Hebbal village
and 13 acres and 14 guntas of Hebbal Ammanikere
Village.
6. Another Notification was also issued under Section 17
of the Bangalore Development Authority Act, 1976
(hereinafter referred to as ‘the BDA Act‘) dated
03.02.2003 proposing to acquire these very lands for
formation of residential layout known as the ‘Arkavathi
Layout’. These proceedings were quashed by an order
dated 20.05.2005 passed by the learned Single Judge of
this Court on the ground of overlapping acquisition.
(W.P.No.46785/2004 decided on 23.10.2010). The
acquisition qua the remaining writ appeals was also
similarly quashed or had lapsed.
7. Another contention of the appellants is that the
acquisition proceedings initiated by the Karnataka
Industrial Areas Development Board (KIADB) in the years
2002 and 2004 have been abandoned as the KIADB
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AND 1 OTHER
neither passed an award nor took possession even after
lapse of 22 years.
8. The learned Advocate General appearing on behalf of
the State has referred to a similar judgment which has
already been dismissed by the Division Bench in
W.A.No.333/2013 dated 26.03.2014. However, the facts
were distinguishable about other.
9. The learned Single Judge has found that the decision
by the State Government to refer the proposal to the State
High Level Committee and to acquire the land by recourse
to the provisions of the KIAD Act is finally of the State
Government. It was further held that the State
Government had acted independently in arriving at its
decision which was consistent with the opinion expressed
by the Committee.
10. The fact remains that firstly it was contended that the
acquisition was for 37 acres since 33 acres had already
been purchased. Shortly thereafter, the application is
modified to include entire 70 acres for the acquisition. The
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C/W WA No. 95 of 2013
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AND 1 OTHER
State Authorities and the KIADB, in consonance with each
other, very quickly accorded approval to this project. The
project was never materialized and after a lapse of more
than 22 years of the application, the entire project
changes over from an industrial project to residential area.
The learned Single Judge, however, lost sight of all these
aspects in the matter.
II FACTS:-
11. The promoters of M/s. Lakeview Tourism
Corporation, an entity which was yet to be incorporated,
approached the State Government during the year 2000
intending to establish “Unicare Tourist Centre” comprising
of a resort, a five-star hotel, an amusement park and
other recreation facilities by stating that they had already
negotiated with the landowners of Hebbal and Hebbal
Ammanikere Villages for sale of 33 acres of land in their
favour and they would require another 37 acres of land in
the same area for their project. They requested the
Government to acquire 37 acres of land as identified by
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AND 1 OTHER
them for their benefit. It may be noted that though the
promoters asserted that they had negotiated with the
landowners of Hebbal and Hebbal Ammanikere Villages for
sale of 33 acres of land, but no sale deed was executed by
any of the landowners in their favour.
12. The application would disclose that the entity would
be a private-sector undertaking to be incorporated.
The filling-in instructions/check list for making an
application under Single Window Agency inter alia provide
as under:
(1) Application in prescribed form in 20 sets, duly filled in;
(2) 3 copies of the Project Report/Project Profile;
(3) 3 Copies of Memorandum and Articles of Association of
the Company/Society/Partnership Deed/Trust Deed (as
may be applicable);
(4) A brief note on the present activities of the
company/associate companies/subsidiaries, the present
proposal, the bio-data of the promoters, etc., – 3 copies;
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AND 1 OTHER
(5) 3 copies of the acknowledgment of Industrial
Entrepreneurs Memorandum (IEM) filled with the
Government of India/Letter of Intent obtained from the
Government of India/100% Export Oriented Unit (EOU)
letter of permission/FIPB/RBI approval etc.
13. The check list itself would disclose that the
application could have been filed by an entity which was in
existence and not by an entity which was non-existent and
imaginary one inasmuch as the Memorandum and Articles
of Association of the Company/Society/Partnership
Deed/Trust Deed would be of an existent entity and not of
an entity to be incorporated in future.
14. The details of the activities and other details as were
required in the said application form are blank. The
expected date of commencement of trial production or the
activities was mentioned as 31.12.2001. However, the
application was filed on 23.06.2000 and a promise was
made that within a period of one and a half years, they
would commence the activity. The total investment
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AND 1 OTHER
proposed was of Rs. 2500 Million. This application was
submitted by one P. Satish Pai before the Government to
be placed before High Level Committee/State Level Single
Window Agency.
15. Interestingly, the Project Report of the proposed
development of a Tourism Complex in Bengaluru (India)
by M/s. Lakeview Tourism Corporation contains the
promoters’ background. It would suggest that Dr. Ramdas
Pai is involved in different walks of life including
professional education, hospitals, medical and dental
colleges, nursing and pharmacy colleges, applied sciences,
hotel industry etc. Another promoter’s name is given as
Syed Mohammed Salahuddin. It is stated that Syed
Mohammed Salahuddin runs a family business called
ASCON, a civil contracting company in Dubai since 1973
and because of his visionary leadership, guidance and
wisdom, ASCON had transformed itself into a multi-
division conglomerate known as the ETA ASCON Group.
The turnover of the Group was in excess of US $850
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AND 1 OTHER
million in the year of 1995 and he desired to step up
investment since India was emerging as the fast growing
economy. Other promoters’ names are P. Dayananda Pai
and of course, P Satish Pai who signed and submitted the
application on behalf of the ‘non-existent entity’ to be
incorporated in future.
16. Another interesting aspect of the matter is that the
said non-existent entity also identified the survey numbers
which should be acquired by the Government for making
profit and developing the real estate to the benefit of this
non-existent entity which was to be incorporated in future.
17. The said non-existent entity was incorporated only
on 04.01.2011 i.e., after 10 1/2 long years from the date
of the application. The address of the said entity is Mantri
House, 41, Vittal Malya Road, Bengaluru, a defunct real
estate developer in the city of Bengaluru. The share capital
of the said entity is Rs.5 crores divided into 50 lakhs
equity shares of Rs.10/- each. The Memorandum of
Association as on the date of incorporation would disclose
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AND 1 OTHER
the promoters as Sushil Mantri and Snehal Mantri. None of
the promoters whose background was given along with the
application filed by the entity in the year 2000 are the
promoters or shareholders of the Lakeview Development
Corporation Private Limited which got incorporated on
04.01.2011. Neither Ramdas Pai nor Syed Mohammed
Salahuddin nor Dayanand Pai nor P. Satish Pai are in any
manner associated today or on the date of incorporation
with the entity which got incorporated on 04.01.2011. The
financial statement of the said entity for the financial year
01.04.2022 to 31.03.2023 filed in Form No.AOC-4 would
suggest liability of Rs.3,46,017/- and assets of
Rs.3,46,017/-. The share capital is shown only Rs.1 lakh
and the income is shown as ‘zero’. The Profit and Loss
account as of Financial Year 2022-2023 would suggest
minus income of Rs.-51,611/- and the net worth is in
minus i.e., Rs. -8,60,686/-.
18. The acceptance of such an application which was
totally incomplete and bereft of details was not only
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entertained, but the High Level Committee, in its second
meeting held on 28.06.2000, considered the proposal and
decided to recommend to the Government to acquire the
land as identified by the said entity. They believed that
this entity had entered into contracts with private
landowners for an extent of 33 acres of land and they
would require 37 acres more for establishing the Unicare
Tourist Centre giving rise to collusion between the so-
called promoters of the non-existent entity and the
Government Officers.
19. An alarming aspect as appearing from the facts as
revealed from examination of the record is that an almost
blank application was submitted by the non-existent entity
on 23.06.2000 and the so-called High Level Committee
held the meeting just 5 days after receiving the application
to acquire the land of the choice of the non-existent entity.
The high speed and alacrity with which the Government
had acted to exercise its power of eminent domain to
favour a non-existent entity for its business and private
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gain was nothing but a gross abuse of the powers by the
State machinery and fraud on statute and a colourable and
arbitrary exercise of the powers to favour the non-existent
entity by depriving the landowners of their property in
violation of their constitutional right protected under
Article 300A of the Constitution of India.
20. Immediately thereafter, as the Government was ever
ready and more than willing to oblige the non-existent
entity and as if acting on the dictates and directions of the
said entity, had issued the Preliminary Notification dated
25.11.2002 under Section 28(1) of the KIAD Act proposing
to acquire 63.33 acres of land in Hebbal and Hebbal
Ammanikere Villages and called for objections by the
landowners. Despite several objections by the landowners,
the Final Notification under Section 28(4) of the KIAD Act
was issued on 11.05.2004 to acquire 53 acres and 26
guntas of land.
21. The rate of compensation per acre of land of the
choice of the non-existent entity was fixed
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@Rs.15,00,000/- per acre. However, the so-called
promoters of the non-existent entity said that they had
entered into contracts with private landowners for an
extent of 33 acres of land @Rs.1.50 crore per acre.
22. A non-existent entity which promised to commence
its operation with effect from 31.12.2001 providing
employment to 2,000 persons had net worth of Rs. –
8,60,686/- in the financial year 2022-23. The Director’s
Report for the financial year 2022-23 would also suggest
“the Company is still in the process of identifying
viable business opportunities and start its principal
business operations. The Company is hopeful for the
growth of the Company in the coming years”. The
Cash and Bank balance as on 31.03.2022 was only
Rs.45,963/- and by 31.03.2022, the profit was Rs. –
66,715/-.
23. The non-existent entity whose application was filed
by one P. Satish Pai had submitted the application with the
proposed investment of Rs. 2500/- crores in Hebbal Village
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in the year 2000 and operation would commence within
one and a half years.
24. Thus, it is evident that the application was a
fraudulent exercise to acquire the valuable land from the
landowners for pittance to benefit a non-existent entity. It
is unclear as to on whose behalf the entire proceedings of
land acquisition by exercising the power of eminent
domain was carried out and who would have invested in
this non-existent entity for diverting the land for real
estate development and depriving the landowners of their
land in violation of their constitutional right protected
under Article 300A of the Constitution and the statute
itself.
25. This aspect gets fully fortified by the fact that the
Government has issued Order No.CI 82 SPI 2023,
Bengaluru dated 23.03.2023 changing the land use for
residential complex. The 138th State Level Single Window
Clearance Committee in its meeting held on 07.03.2023
had considered the request of M/s. Lakeview Tourism
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Corporation, Bengaluru and mentioned it as a partnership
firm. Another fraud was played while treating this as a
partnership firm in the year 2023 of M/s. Ashwitha
Property Developers Private Limited and M/s. Shivashakti
Estate and Investment Private Limited and it was stated
that the partnership was executed as long back as on
22.04.2004 and in view of the partnership, M/s. Lakeview
Tourism Corporation became a partnership firm. The fraud
is on the face of the record inasmuch as M/s.Lakeview
Tourism Corporation was incorporated as private limited
company on 04.01.2011, but the so-called State Level
Single Window Clearance Committee, in the year 2023,
considered it to be a partnership firm of two real estate
developers of the same promoters/directors.
26. The authorities have appeared to be ever ready and
willing to oblige and accede to any demand/request,
accepted the demand of the said entity for change of the
land use allotted to M/s.Lakeview Tourism Corporation for
construction of a Unicare Tourism Centre with a Resort
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and Five Star Hotel, Amusement Park, Water Park, Health
Club, Recreation Facility, Conference/Convention Centre
with all ultra modern facilities, the Indian Arts and Crafts
Exhibition, a Mini Theatre, Restaurants, Modern Shopping
Complex and Service Apartments. Now the object is to
develop “Integrated township with development of
Commercial office spaces, Information Technology Park
etc. The Government Order dated 23.03.2023 reads
under:
“GOVERNMENT ORDER NO.CI 82 SPI 2023,
BENGALURUDATED 23.03.2023
Government is pleased to accord
approval for the following proposals
of M/s Lakeview Tourism
Corporation:
• Extension of time by 3 years,
with a condition that further
extension of time will not be
considered.
• Change of activity from
establishment of “Unicare Tourist
Centre with a Resort and Five Star
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Hotel, Amusement Park, Water Park,
Health Club, Recreation Facility,
Conference/ Convention Centre with
all ultra modern facilities, the Indian
Arts and Crafts Exhibition, A mini
Theatre, Restaurants, Modern
Shopping Complex and service
Apartments with transit flat facilities”
to “Integrated township with
development of Commercial office
spaces, Information Technology
Park, R&D Centre, Retail, Shopping
Mall, Residential multi-storied
apartment complex, Hospitals,
Educational Institutions, School,
Hotels, Convention Centre, Other
Hospitality Usages like Service
Apartments, Branded Apartments,
Residential Apartments or
establishing any other permissible
usage under the law”, subject to
obtaining necessary clearances and
submission of documents to
concerned authorities.
• Increase in investment from
Rs.250 crore to Rs.440 croreAll other terms and conditions
indicated in the Government Order
read at (2) above remains
unaltered.”
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27. Mr. K.N. Phanindra, learned Senior Counsel
appearing for the respondent-entity has vehemently
argued that the land acquisition proceedings in favour of
the Lakeview Tourism Corporation has attained finality by
the decision of the Division Bench of this Court in
W.A.No.333/2013 dated 26.03.2014 and the review
petition bearing R.P.No.363/2015 filed against the said
judgment came to be dismissed vide order dated
06.04.2018. He, therefore, submits that once this Court
has already upheld the land acquisition in favour of the
respondent- entity, the challenge to such acquisition
proceedings in writ petitions filed by the appellants would
not be maintainable and the appeals ought to be
dismissed. It has been further submitted by him that
under the KIAD Act, the land acquisition can be made in
favour of a single entity as held in MSPL LIMITED VS
STATE OF KARNATAKA ([2002) 20 SCC 58).
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III QUESTIONS:-
28. In view of the aforesaid facts, this Court is required
to consider the following questions in the present writ
appeals:-
(1) Whether the land acquisition in question for M/s.
Lakeview Tourism Corporation, a non-existent entity, by
the Government under the provisions of the KIAD Act was
just, proper, legal, valid and as per the object and purpose
of the Act?
(2) Whether the entire exercise of acquiring a large extent
of land on behest of a non-existent entity was a fraud on
statute by the applicant in active collusion with the
Government authorities in divesting the land holders of
their valuable land for the purposes of putting the valuable
lands at throwaway price in the hands of the real estate
developers and therefore, it vitiates the entire exercise
and the land acquisition proceedings are liable to be
quashed?
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(3) Whether the Government can exercise the power of
eminent domain to acquire the land from the
farmers/landowners to achieve the objective of creating
wealth in the hands of private individuals and whether
such an exercise would justify the purpose and object of
the KIAD Act?
IV RELEVANT PROVISIONS OF THE STATUTE:-
29. Before averting to the aforesaid questions, it would
be apt to take note of the relevant provisions of the KIAD
Act.
30. The statements of objects and reasons of the KIAD
Act read as under:-
“It is considered necessary to make
provision for the orderly establishment
and development of Industries in
suitable areas in the State. To achieve
this object, it is proposed to specify
suitable areas for Industrial
Development and establish a Board to
develop such areas and make available
lands therein for establishment of
Industries.”
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31. Thus, the object of the KIAD Act is for the orderly
establishment and development of industries in suitable
areas in the State and for such purpose, to make available
lands therein for establishment of industries. The suitable
area has to be identified by the State/KIADB and not the
private/non-Government persons/agencies.
32. The object of the KIAD Act is to acquire the land for
the purpose of setting up the industrial areas and not for
acquiring the land for an individual/non-existent entity.
After setting up an industrial area, the Government may
allot the land to an applicant for setting up the industries
in the industrial area. The Government cannot acquire the
land for an individual entity that too, a non-existent entity
of its choice for creating the wealth at the hands of its
promoters at the expense and cost of the landowners. The
object of the Act is public purpose in creating industrial
areas for development of the industries and
industrialisation of the State and not for the purpose of
creating wealth and income in the hands of individual
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entities/persons. The Government cannot acquire the land
for an individual person/entity of its choice by exercising
the power of eminent domain.
33. The functions and powers of the Board, as provided
under Section 13 of the KIAD Act, are to promote and
assist in the rapid and orderly establishment, growth and
development of industries and to provide industrial
infrastructural facilities and amenities in industrial areas.
Therefore, the Government may acquire the land to set up
the industrial area and the Board would then have to
provide industrial infrastructural facilities and amenities for
the rapid and orderly establishment, growth and
development of industries in the said area. The Act does
not contemplate for acquiring the land for making profit/
wealth by an individual entity and such a purpose cannot
be said to be a public purpose. Setting up an industrial
area is a public purpose and not putting the land after
exercising the power of eminent domain in the hands of
unknown parties, real estate developers and such other
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persons would not be in the line of the objects of the KIAD
Act, and it is nothing but a fraud on statute committed by
the authorities to divest the landowners from their land
holdings for a pittance. This kind of exercise is a statutory
and constitutional fraud by the State Authorities and a
criminal act.
34. The acquisition and disposal of land is provided in
Chapter VII of the KIAD Act. Sections 28 and 29, which
are relevant, are extracted hereunder:-
“28. Acquisition of land.- (1) If at
any time, in the opinion of the State
Government, any land is required for
the purpose of development by the
Board, or for any other purpose in
furtherance of the objects of this Act,
the State Government may by
notification, give notice of its intention
to acquire such land.
(2) On publication of a notification
under sub-section (1), the State
Government shall serve notice upon the
owner or where the owner is not the
occupier, on the occupier of the land
and on all such persons known or
believed to be interested therein to
show cause, within thirty days from the
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date of service of the notice, why the
land should not be acquired.
(3) After considering the cause, if any,
shown by the owner of the land and by
any other person interested therein,
and after giving such owner and person
an opportunity of being heard, the
State Government may pass such
orders as it deems fit.
(4) After orders are passed under sub-
section (3), where the State
Government is satisfied that any land
should be acquired for the purpose
specified in the notification issued
under sub-section (1), a declaration
shall, by notification in the official
Gazette, be made to that effect.
(5) On the publication in the official
Gazette of the declaration under sub-
section (4), the land shall vest
absolutely in the State Government
free from all encumbrances.
(6) Where any land is vested in the
State Government under sub-section
(5), the State Government may, by
notice in writing, order any person who
may be in possession of the land to
surrender or deliver possession thereof
to the State Government or any person
duly authorised by it in this behalf
within thirty days of the service of the
notice.
(7) If any person refuses or fails to
comply with an order made under sub-
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section (5), the State Government or
any officer authorised by the State
Government in this behalf may take
possession of the land and may for that
purpose use such force as may be
necessary.
(8) Where the land has been acquired
for the Board, the State Government,
after it has taken possession of the
land, may transfer the land to the
Board for the purpose for which the
land has been acquired.
29. Compensation.- (1) Where any
land is acquired by the State
Government under this Chapter, the
State Government shall pay for such
acquisition compensation in accordance
with the provisions of this Act.
(2) Where the amount of compensation
has been determined by agreement
between the State Government and the
person to be compensated, it shall be
paid in accordance with such
agreement.
(3) Where no such agreement can be
reached, the State Government shall
refer the case to the Deputy
Commissioner for determination of the
amount of compensation to be paid for
such acquisition as also the person or
persons to whom such compensation
shall be paid.
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(4) On receipt of a reference under
sub-section (3), the Deputy
Commissioner shall serve notice on the
owner or occupier of such land and on
all persons known or believed to be
interested herein to appear before him
and state their respective interests in
the said land.”
35. Section 28 provides a complete machinery in respect
of the method and manner in which the land can be
acquired by the State Government, non-compliance of any
of the provisions would render the acquisition invalid,
illegal and fraud on statute. Sub-section (1) of Section 28
also specifically provides that the State Government may
acquire the land for the purpose of development by the
Board or for any other purpose in furtherance of the
objects of the Act. If the land is not acquired either for the
purpose of development by the Board or for any other
purpose in furtherance of the objects of the Act, such
acquisition is nothing but a mala fide and illegal exercise of
power and a fraud on statute and Constitution in
exercising the eminent domain by the State.
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36. Sub-section (2) of Section 28 provides an
opportunity for filing objections by the landowners or other
interested persons and sub-section (3) provides for
considering the objections and affording an opportunity of
hearing to them. After the aforesaid exercise is
undertaken, then only the final notification is to be issued
under sub-section (4) of Section 28 of the Act. Under sub-
section (5), it is provided that on publication of the final
notification under sub-section (4), the land vests
absolutely in the State Government free from all
encumbrances, but sub-section (6) requires the
Government Authorities to serve a notice in writing and
order any person who is in possession of the land to
surrender or deliver the possession thereof to the State
Government within thirty days of the service of the notice
and Section (7) provides that if such person refuses or
fails to comply with the order made under sub-section (5),
the State Government may take possession of the land by
using the force as may be necessary.
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37. Under Section 29 of the KIAD Act, the Government is
under a statutory and constitutional obligation to pay
adequate compensation in accordance with the provisions
of the Act for the land acquired and if the landowner is not
satisfied with the compensation, the reference has to be
made to the Deputy Commissioner for determination of
the amount of compensation to be paid for such
acquisition. Before deciding the reference, the Deputy
Commissioner is required to serve a notice on the owner
and on all such persons who are interested in the land, to
appear before him and to state their respective interests in
the land so acquired.
38. Thus, Sections 28 and 29 provide a complete
mechanism for acquiring the land under the provisions of
the KIAD Act i.e., issuing the notification under Section
28(1), filing the objections, considering the objections,
providing opportunity of hearing, issuing the final
notification under Section 28(4), issuing notice to
surrender or deliver possession of the land to the State
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Government and thereafter, for payment of compensation.
All steps are to be taken in the manner as provided for in
the statute and if time has not been granted for filing the
objections or the objectors have not been heard or no
notice has been issued for surrendering possession or no
compensation has been paid, then the land acquisition
proceedings cannot be said to be complete and susceptible
to be declared illegal and ultra vires the statute and the
Constitution of India being in violation of Articles 14, 19
and 21 of the Constitution.
V RIGHT TO PROPERTY:-
39. Article 300A of the Constitution of India provides that
“no person shall be deprived of his property except by
authority of law”. The right of property is not only a
constitutional or statutory right but also a human right.
Though it is not a basic feature of the Constitution or
fundamental rights, the human rights are considered to be
in the realm of individual rights such as, the right to
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health, right to livelihood, right to shelter and employment
etc.
40. The Supreme Court, in the case of TUKARAM KANA
JOSHI AND OTHERS THROUGH POWER OF
ATTORNEY HOLDER vs M.I.D.C. AND OTHERS (AIR
2013 SC 565), has held that now human rights are
gaining even greater multifaceted dimension. The right to
property is considered very much to be part of such new
dimension. The expression ‘property’ in Article 300A is not
confined to land alone. It includes intangibles like
copyright and other intellectual properties and embraces
every possible interest recognized by law.
41. A Constitution Bench, in the case of K.T.
PLANTATION PRIVATE LIMITED AND ANOTHER vs
STATE OF KARNATAKA ([2011] 9 SCC 1), has held
that the right to compensation is inbuilt in Article 300A.
Just, fair and reasonable compensation is inbuilt in right to
property and is also a requirement of Articles 14,
19(1)(g), 21, 26(b), 30(1-A) of the Constitution. No
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person can be deprived of his property merely by an
executive fiat, without any specific legal authority or
without support of law. Deprivation of property even under
the provisions of the statute within the meaning of Article
300A must take place for public purpose or public interest.
It has been held that any law which deprives a person of
his private property for private interest will be unlawful
and unfair and undermines the rule of law and can be
subjected to judicial review.
42. Paragraphs 180, 181, 182, 183, 189 and 190 to 193
of the judgment in K.T. PLANTATION (supra) are
extracted hereunder:
“Public purpose
180. Deprivation of property within
the meaning of Article 300A,
generally speaking, must take place
for public purpose or public interest.
The concept of eminent domain
which applies when a person is
deprived of his property postulates
that the purpose must be primarily
public and not primarily of private
interest and merely incidentally
beneficial to the public. Any law,
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which deprives a person of his
private property for private interest,
will be unlawful and unfair and
undermines the rule of law and can
be subjected to judicial review. But
the question as to whether the
purpose is primarily public or
private, has to be decided by the
legislature, which of course should
be made known.
181. The concept of public purpose
has been given fairly expansive
meaning which has to be justified
upon the purpose and object of the
statute and the policy of the
legislation. Public purpose is,
therefore, a condition precedent, for
invoking Article 300A.
Compensation
182. We have found that the
requirement of public purpose is
invariably the rule for depriving a
person of his property, violation of
which is amenable to judicial review.
Let us now examine whether the
requirement of payment of
compensation is the rule after the
deletion of Article 31(2).
183. Payment of compensation
amount is a constitutional
requirement under Article 30(1-
A) and under the second proviso
to Article 31-A(1), unlike Article 300-
A. After the Forty-fourth Amendment
Act, 1978, the constitutional
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obligation to pay compensation to a
person who is deprived of his
property primarily depends upon the
terms of the statute and the
legislative policy. Article 300A,
however, does not prohibit the
payment of just compensation when
a person is deprived of his property,
but the question is whether a person
is entitled to get compensation, as a
matter of right, in the absence of
any stipulation in the statute,
depriving him of his property.
189. Requirement of public purpose,
for deprivation of a person of his
property under Article 300-A, is a
precondition, but no compensation
or nil compensation or its
illusiveness has to be justified by the
State on judicially justiciable
standards. Measures designed to
achieve greater social justice, may
call for lesser compensation and
such a limitation by itself will not
make legislation invalid or
unconstitutional or confiscatory. In
other words, the right to claim
compensation or the obligation to
pay, though not expressly included
in Article 300-A, it can be inferred
in that article and it is for the State
to justify its stand on justifiable
grounds which may depend upon the
legislative policy, object and purpose
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of the statute and host of other
factors.
190. Article 300-A would be equally
violated if the provisions of law
authorizing deprivation of property
have not been complied with. While
enacting Article 300-A Parliament
has only borrowed Article 31(1) (the
“Rule of law” doctrine) and
not Article 31(2) (which had
embodied the doctrine of eminent
domain). Article 300-A enables the
State to put restrictions on the right
to property by law. That law has to
be reasonable. It must comply with
other provisions of the Constitution.
The limitation or restriction should
not be arbitrary or excessive or what
is beyond what is required in public
interest. The limitation or restriction
must not be disproportionate to the
situation or excessive.
191. The legislation providing for
deprivation of property under Article
300-A must be “just, fair and
reasonable” as understood in terms
of Articles 14, 19(1)(g), 26(b), 301,
etc. Thus in each case, courts will
have to examine the scheme of the
impugned Act, its object, purpose as
also the question whether payment
of nil compensation or nominal
compensation would make the
impugned law unjust, unfair or
unreasonable in terms of other
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provisions of the Constitution as
indicated above.
192. At this stage, we may clarify
that there is a difference between
“no” compensation and “nil”
compensation. A law seeking to
acquire private property for public
purpose cannot say that “no
compensation shall be paid”.
However, there could be a law
awarding “nil” compensation in cases
where the State undertakes to
discharge the liabilities charged on
the property under acquisition and
onus is on the Government to
establish validity of such law. In the
latter case, the court in exercise of
judicial review will test such a law
keeping in mind the above
parameters.
193. Right to property no more
remains an overarching guarantee in
our Constitution, then is it the law,
that such a legislation enacted under
the authority of law as provided
in Article 300-A is immune from
challenge before a constitutional
court for violation of Articles 14,
21 or the overarching principle of
the rule of law, a basic feature of our
Constitution, especially when such a
right is not specifically incorporated
in Article 300-A, unlike Article 30(1-
A) and the second proviso to Article
31-A(1)”
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43. Thus, depriving the landowners of their land for
private interest and merely incidentally beneficial to the
public is against the foundational principle of the
Constitution i.e., the rule of law and it is against the
constitutional mandate as provided under Article 300A.
44. The aforesaid principles have been reiterated by the
Supreme Court in the case of KOLKATA MUNICIPAL
CORPORATION AND ANOTHER vs BIMAL KUMAR
SHAH AND OTHERS ([2024] 10 SCC 533) and further
explained. It has been held that the right to property has
to be given broader and meaningful interpretation. The
right to property has seven sub-rights and it does not limit
to twin components of public purpose and compensation.
The seven sub-rights or strands of the swadeshi
constitutional fabric constituting the right to property,
which are non-exhaustive, have been enumerated as
under:-
“(i) The duty of the State to inform
the person that it intends to acquire
his property – the right to notice,
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(ii) The duty of the State to hear
objections to the acquisition – the
right to be heard,
(iii) The duty of the State to inform
the person of its decision to acquire
– the right to a reasoned decision,
(iv) The duty of the State to
demonstrate that the acquisition is
for public purpose – the duty to
acquire only for public purpose,
(v) The duty of the State to restitute
and rehabilitate – the right of
restitution or fair compensation,
(vi) The duty of the State to conduct
the process of acquisition efficiently
and within prescribed timelines of
the proceedings – the right to an
efficient and expeditious process,
and
(vii) The final conclusion of the
proceedings leading to vesting – the
right of conclusion.”
45. These seven rights though are procedures, but they
do constitute real content of the right to property under
Article 300A and non-compliance of these will amount to
violation of the right to property being without the
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authority of law. It has been specifically held in paragraph
33.4 that it is the duty of the State to acquire the property
only for public purpose, and it is an important fetter on the
discretion of the authorities to acquire the property. The
acquisition of the property must be for larger constitutional
goals of a welfare State and distributive justice.
VI POWER OF THE EMINENT DOMAIN OF THE STATE
IN ACQUIRING THE PROPERTY OF A PRIVATE
PERSON:-
46. The State can exercise the eminent domain power for
a private entity, but only when there is a genuine public
purpose and cost of acquisition (including compensation)
is borne by the State instrumentality or the public fund so
that the transaction remains by the State for public
purpose.
47. The Supreme Court, in SOORARAM PRATAP
REDDY AND OTHERS vs DISTRICT COLLECTOR,
RANGA REDDY DISTRICT AND OTHERS ([2008] 9
SCC 552), has held that if the power of eminent domain
has been exercised mala fide or for collateral purposes or
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the purported action is dehors the Act, irrational or
otherwise unreasonable or the so-called purpose is “no
public purpose” at all and fraud on statute is apparent, the
writ Court would have the jurisdiction to interfere with
such acquisition and exercise of the power of eminent
domain by the State. Paragraphs 128 and 133, which are
relevant, are extracted hereunder:-
“128. Applying the aforesaid
principles to the case on hand, in our
considered opinion, it cannot be said
that the proceedings initiated by the
State for acquisition of land under
the Land Acquisition Act, 1894 are
illegal, unlawful, unwarranted, mala
fide, fraud on statute or have been
taken in colourable exercise of
power.
133. The entire amount of
compensation is to be paid by State
agency (APIIC) which also works as
nodal agency for execution of the
project. It is primarily for the State
to decide whether there exists public
purpose or not. Undoubtedly, the
decision of the State is not beyond
judicial scrutiny. In appropriate
cases, where such power is
exercised mala fide or for collateral
purposes or the purported action is
dehors the Act, irrational or
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otherwise unreasonable or the so-
called purpose is “no public purpose”
at all and fraud on statute is
apparent, a writ court can
undoubtedly interfere. But except in
such cases, the declaration of the
Government is not subject to judicial
review. In other words, a writ court,
while exercising powers under
Articles 32, 226 or 136 of the
Constitution, cannot substitute its
own judgment for the judgment of
the Government as to what
constitutes “public purpose”.
48. The acquisition of land or the property of individuals
in exercise of the powers of eminent domain must not be
conveyable exercise or fraud on statute or merely a device
to transfer land to private hands. When an act is done by
the State under the colour of authority of law, it must be
for lawful purpose envisaged under the statute. If the
purpose namely, public purpose as envisaged under a
statute under which the property is acquired is not
subserved, then the exercise of the power of use of
eminent domain must be held to be colourable exercise of
power and fraud on the statute.
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49. In ROYAL ORCHID HOTELS LIMITED AND
ANOTHER VS G. JAYARAM REDDY AND OTHERS
([2011] 10 SCC 608), the Court was confronted with
transfer of land required for public purpose (Golf-cum-
Hotel Resort) to private transferees and it was held that
such acquisition was fraud on the power where the land
acquired ostensibly for public use got diverted to private
beneficiaries. It has been held that in exercise of the
power of eminent domain, the State can compulsorily
acquire land of private persons, but this proposition cannot
be overstressed to legitimize a patently illegal and
fraudulent exercise undertaken for depriving the
landowners of their constitutional right to property with a
view to favour private persons. Paragraphs 36 to 39 of the
said judgment are extracted hereunder:-
“36. The next question which merits
examination is whether the High
Court was justified in directing
restoration of land to Respondent 1.
In Behroze Ramyar Batha v. Land
Acquisition Officer [Behroze Ramyar
Batha v. Land Acquisition Officer,
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(1992) 1 Kant LJ 589 : ILR 1991 Kant
3556] , the Division Bench of the High
Court categorically held that the
exercise undertaken for the
acquisition of land was vitiated due to
fraud. The Division Bench was also of
the view that the acquisition cannot
be valid in part and invalid in other
parts, but did not nullify all the
transfers on the premise that other
writ petitions and a writ appeal
involving challenge to the acquisition
proceedings were pending. In Annaiah
v. State of Karnataka [Annaiah v.
State of Karnataka, WPs (C) Nos.
19812-16 of 1990 order dated 18-9-
1991 (Kant)] the same Division Bench
specifically adverted to the issue of
diversification of purpose and held
that where the landowners are
deprived of their land under the cover
of public purpose and there is
diversification of land for a private
purpose, it amounts to fraudulent
exercise of the power of eminent
domain.
37. The pleadings and documents filed
by the parties in these cases clearly
show that the Corporation had made a
false projection to the State
Government that land was needed for
execution of tourism-related projects.
In the meeting of officers held on 13-
1-1987 i.e. after almost four years of
the issue of declaration under Section
6, the Managing Director of the
Corporation candidly admitted that
the Corporation did not have the
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requisite finances to pay for the
acquisition of land and that
Dayananda Pai, who had already
entered into agreements with some of
the landowners for purchase of land,
was prepared to provide funds subject
to certain conditions including transfer
of 12 acres 34 guntas land to him for
house building project. After 8
months, the Corporation passed a
resolution for transfer of over 12
acres land to Dayananda Pai. The
Corporation also transferred two other
parcels of land in favour of Bangalore
International Centre and M/s
Universal Resorts Limited. These
transactions reveal the true design of
the officers of the Corporation, who
first succeeded in persuading the
State Government to acquire a huge
chunk of land for a public purpose and
then transferred a major portion of
the acquired land to a private
individual and corporate entities by
citing poor financial health of the
Corporation as the cause for doing so.
38. The courts have repeatedly held
that in exercise of its power of
eminent domain, the State can
compulsorily acquire land of the
private persons but this proposition
cannot be overstretched to legitimise
a patently illegal and fraudulent
exercise undertaken for depriving the
landowners of their constitutional
right to property with a view to favour
private persons. It needs no emphasis
that if land is to be acquired for a
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company, the State Government and
the company is bound to comply with
the mandate of the provisions
contained in Part VII of the Act.
Therefore, the Corporation did not
have the jurisdiction to transfer the
land acquired for a public purpose to
the companies and thereby allow
them to bypass the provisions of Part
VII. The diversification of the purpose
for which land was acquired under
Section 4(1) read with Section 6
clearly amounted to a fraud on the
power of eminent domain. This is
precisely what the High Court has
held in the judgment under appeal
and we do not find any valid ground
to interfere with the same more so
because in Annaiah v. State of
Karnataka [Annaiah v. State of
Karnataka, WPs (C) Nos. 19812-16 of
1990 order dated 18-9-1991 (Kant)]
the High Court had quashed the
notifications issued under Sections
4(1) and 6 in their entirety and that
judgment has become final.
39. The judgment in Om Parkash v.
Union of India [(2010) 4 SCC 17 :
(2010) 2 SCC (Civ) 1] on which
reliance has been placed by Shri
Naganand is clearly distinguishable.
What has been held in that case is
that quashing of the acquisition
proceedings would enure to the
benefit of only those who had
approached the Court within
reasonable time and not to those who
remained silent. In this case,
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acquired land to M/s Universal Resorts
Ltd. In other words, he approached
the High Court for vindication of his
right and succeeded in convincing the
Division Bench that the action taken
by the Corporation to transfer his land
to M/s Universal Resorts Limited was
wholly illegal, arbitrary and
unjustified.”
VII FRAUD VITIATES EVERY DECISION OF THE
COMPETENT AUTHORITY AND EVEN THE JUDGMENT
AND ORDER OF THE COMPETENT COURT:-
50. It is no longer res integra that if the fraud is the
basis for the decision of the authority and even the matter
had attained finality by the decision of the Competent
Court, if the fraud is detected later, such a decision of the
Government authority is to be declared as void because
fraud vitiates every judicial act and finality of litigation
cannot be invoked to permit ongoing or irrevocable
wrongful consequences. The core principle is that the fraud
defeats the validity of judicial acts and once fraud is
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established, the decision can be recalled or set aside
notwithstanding prior finality.
51. In S.P.CHENGALVARAYA NAIDU vs JAGANNATH
([1994] 1 SCC 1), it has been held that “fraud avoids all
judicial acts” and a judgment obtained by fraud is a nullity
that can be challenged in any appropriate proceedings.
Paragraph 5 of the said judgment is extracted hereunder:
“5. The High Court, in our view, fell into
patent error. The short question before
the High Court was whether in the facts
and circumstances of this case,
Jagannath obtained the preliminary
decree by playing fraud on the court.
The High Court, however, went haywire
and made observations which are
wholly perverse. We do not agree with
the High Court that “there is no legal
duty cast upon the plaintiff to come to
court with a true case and prove it by
true evidence”. The principle of “finality
of litigation” cannot be pressed to the
extent of such an absurdity that it
becomes an engine of fraud in the
hands of dishonest litigants. The courts
of law are meant for imparting justice
between the parties. One who comes to
the court, must come with clean hands.
We are constrained to say that more
often than not, process of the court is
being abused. Property-grabbers, tax-
evaders, bank-loan-dodgers and other
unscrupulous persons from all walks of
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life find the court-process a convenient
lever to retain the illegal gains
indefinitely. We have no hesitation to
say that a person, who’s case is based
on falsehood, has no right to approach
the court. He can be summarily thrown
out at any stage of the litigation.”
52. The Courts and Tribunals have inherent power to
recall their own orders or judgments if those orders were
obtained by fraud, even when statutory review is not
available or has been exhausted (MEGHMALA vs
NARASIMHA REDDY ([2010] 8 SCC 383); HAMZA
HAJI vs STATE OF KERALA ([2006] 7 SCC 416);
INDIAN BANK vs SATYAM FIBRES (INDIA) PRIVATE
LIMITED ([1996] 5 SCC 550).
53. The relevant paragraphs of the decision in
MEGHMALA (supra) have been extracted hereunder:-
“28. It is settled proposition of law that
where an applicant gets an order/office
by making misrepresentation or playing
fraud upon the competent authority,
such order cannot be sustained in the
eye of the law. “Fraud avoids all judicial
acts, ecclesiastical or temporal.” (Vide
S.P. Chengalvaraya Naidu v. Jagannath
[(1994) 1 SCC 1 : AIR 1994 SC 853] .)
In Lazarus Estates Ltd. v. Beasley
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[(1956) 1 QB 702 : (1956) 2 WLR 502 :
(1956) 1 All ER 341 (CA)] the Court
observed without equivocation that :
(QB p. 712) “No judgment of a court,
no order of a Minister, can be allowed
to stand if it has been obtained by
fraud. Fraud unravels everything.”
32. The ratio laid down by this Court in
various cases is that dishonesty should
not be permitted to bear the fruit and
benefit to the persons who played fraud
or made misrepresentation and in such
circumstances the Court should not
perpetuate the fraud. (See
Vizianagaram Social Welfare Residential
School Society v. M. Tripura Sundari
Devi [(1990) 3 SCC 655 : 1990 SCC
(L&S) 520 : (1990) 14 ATC 766] ,
Union of India v. M. Bhaskaran [1995
Supp (4) SCC 100 : 1996 SCC (L&S)
162 : (1996) 32 ATC 94] , Kendriya
Vidyalaya Sangathan v. Girdharilal
Yadav [(2004) 6 SCC 325 : 2005 SCC
(L&S) 785] , State of Maharashtra v.
Ravi Prakash Babulalsing Parmar
[(2007) 1 SCC 80 : (2007) 1 SCC (L&S)
5] , Himadri Chemicals Industries Ltd.
v. Coal Tar Refining Co. [(2007) 8 SCC
110 : AIR 2007 SC 2798] and Mohd.
Ibrahim v. State of Bihar [(2009) 8 SCC
751 : (2009) 3 SCC (Cri) 929] .)
34. An act of fraud on court is always
viewed seriously. A collusion or
conspiracy with a view to deprive the
rights of the others in relation to a
property would render the transaction
void ab initio. Fraud and deception are
synonymous. Although in a given case a
deception may not amount to fraud,
fraud is anathema to all equitable
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principles and any affair tainted with
fraud cannot be perpetuated or saved
by the application of any equitable
doctrine including res judicata. Fraud is
proved when it is shown that a false
representation has been made (i)
knowingly, or (ii) without belief in its
truth, or (iii) recklessly, careless
whether it be true or false. Suppression
of a material document would also
amount to a fraud on the court. (Vide
S.P. Chengalvaraya Naidu [(1994) 1
SCC 1 : AIR 1994 SC 853] ,
Gowrishankar v. Joshi Amba Shankar
Family Trust [(1996) 3 SCC 310 : AIR
1996 SC 2202] , Ram Chandra Singh v.
Savitri Devi [(2003) 8 SCC 319] ,
Roshan Deen v. Preeti Lal [(2002) 1
SCC 100 : 2002 SCC (L&S) 97 : AIR
2002 SC 33] , Ram Preeti Yadav v. U.P.
Board of High School & Intermediate
Education [(2003) 8 SCC 311 : AIR
2003 SC 4268] and Ashok Leyland Ltd.
v. State of T.N. [(2004) 3 SCC 1 : AIR
2004 SC 2836])”
54. The relevant paragraphs of the decision in HAMZA
HAJI (supra) have been extracted hereunder:-
“10. It is true, as observed by De Grey,
C.J., in R. v. Duchess of Kingston [2
Smith LC 687] that:
” ‘Fraud’ is an extrinsic, collateral act,
which vitiates the most solemn
proceedings of courts of justice. Lord
Coke says it avoids all judicial acts,
ecclesiastical and temporal.”
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20. It is not necessary to multiply
authorities on this question since the
matter has come up for consideration
before this Court on earlier occasions.
In S.P. Chengalvaraya Naidu v.
Jagannath [(1994) 1 SCC 1 : 1993
Supp (3) SCR 422] this Court stated
that: (SCC p. 2, para 1)
“It is the settled proposition of law that
a judgment or decree obtained by
playing fraud on the court is a nullity
and non est in the eye of the law. Such
a judgment/decree–by the first court
or by the highest court–has to be
treated as a nullity by every court,
whether superior or inferior. It can be
challenged in any court even in
collateral proceedings.”
The Court went on to observe that the
High Court in that case was totally in
error when it stated that there was no
legal duty cast upon the plaintiff to
come to the court with a true case and
prove it by true evidence. Their
Lordships stated: (SCC p. 5, para 5)
“The courts of law are meant for
imparting justice between the parties.
One who comes to the court, must
come with clean hands. We are
constrained to say that more often than
not, process of the court is being
abused. Property-grabbers, tax-
evaders, bank loan-dodgers and other
unscrupulous persons from all walks of
life find the court process a convenient
lever to retain the illegal gains
indefinitely. We have no hesitation to
say that a person, whose case is based
on falsehood, has no right to approach
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the court. He can be summarily thrown
out at any stage of the litigation.”
26. The High Court, as a court of
record, has exercised its jurisdiction to
set at naught the order of the Forest
Tribunal thus procured by the appellant
by finding that the same is vitiated by
fraud. There cannot be any doubt that
the Court in exercise of its jurisdiction
under Article 215 of the Constitution of
India has the power to undo a decision
that has been obtained by playing a
fraud on the Court. The appellant has
invoked our jurisdiction under Article
136 of the Constitution of India. When
we find in agreement with the High
Court that the order secured by him is
vitiated by fraud, it is obvious that this
Court should decline to come to his aid
by refusing the exercise of its
discretionary jurisdiction under Article
136 of the Constitution of India. We do
not think that it is necessary to refer to
any authority in support of this position
except to notice the decision in Ashok
Nagar Welfare Assn. v. R.K. Sharma
[(2002) 1 SCC 749 : 2001 Supp (5)
SCR 662].”
55. The finality does not immunize fraud. Even where a
Competent Court has rendered a final decision, fraud
discovered later can invalidate that decision and permit
recall or correction. The finality of judicial proceedings cannot
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cure fraud and the fraud, if discovered later, is a ground to
reopen or declare a final decision as void.
56. A Government decision or the decision of a statutory body
can be allowed to be recalled or set aside where fraud or
suppression of material facts tainted the proceedings, even after
lapse of long standing of the orders obtained by fraud and
challenge having been failed to such an order. A fraudulently
earned Governmental or judicial advantage cannot be insulated
from correction. The remedy often lies in recalling or quashing
the offending order as held in HAMZA HAJI (supra).
57. In the present case, as we have noted the facts, the
aforesaid fraud was not discovered in the earlier proceedings
under which the land acquisition was carried out in favour of the
respondent i.e., M/s. Lakeview Tourism Corporation. After going
through all the records, we have noted the facts which would
clearly indicate a monumental fraud having been committed by
the State Authorities in collusion, collaboration and criminal
conspiracy with the private individuals. Therefore, we are of the
considered view that the earlier judgments would not come in the
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way of declaring the land acquisition proceedings as null and
void as they are vitiated from the very inception on the ground of
fraud and misrepresentation.
VIII ANALYSIS AND CONCLUSION:
58. Thus, public purpose is central and indispensable
prerequisite for land acquisition under the Indian law. The
acquisition of land and property of private individuals in
exercise of the eminent domain by the State can justify
when it is done for public good. If the Court, on scrutiny,
finds that the exercise of the power by the State is a
colourable exercise or with mala fide motive, such
acquisition will be held to be illegal and unconstitutional
and against the rule of law. The public purpose
requirement is the touchstone for validity of the land
acquisition proceedings and the Court would not hesitate
in interfering with such acquisition if it is found that the
acquisition was a colourable exercise and for not genuine
public purpose.
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59. The public purpose doctrine survives constitutional
amendments and remains a test even after 44th
Amendment, while Article 300A requires that in order to
become “authority of law” and in order to become a cause
for deprivation of property, public purpose continues to
frame the legitimate scope of acquisition and the manner
of compensating owners. If the acquisition is challenged, it
would be the obligation of the State to prove the public
purpose and adhere to the statutory procedures as
prescribed under the statute. In any acquisition of the land
or the property, public purpose is a constitutional
precondition besides compensation.
60. In K.T. PLANTATION (supra), it has been held that
public purpose may be scrutinized in the light of
developmental goals, economic sovereignty and broader
welfare considerations as was held in SOORARAM
PRATAP REDDY (supra). It would be a colourable
exercise of power of eminent domain if the project is
framed for public purpose, but it is, in substance, for
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private gain. When the acquisition is not for genuine public
purpose, but it is masked for private gain, this would be a
colourable exercise of the power and fraud on the statute
and Constitution and against Articles 14, 19 and 21 of the
Constitution of India.
61. Looking at the facts of this case, we are of the view
that the entire exercise of acquiring the land for a non-
existent entity was nothing but a monumental fraud
committed by the authorities in criminal conspiracy with
the applicant and the Directors of Lakeview Development
Corporation Private Limited, which was incorporated only
in the year 2011. This was a fraud on statute to deprive
the landowners of their valuable property for pittance on
behest of a non-existent entity. As the State
instrumentality itself was involved in criminal conspiracy
with the private individuals, we need to get this matter
investigated by an independent agency for the crime
committed by the persons including the State Government
officials and the private individuals.
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62. The decision for acquiring the land for the respondent-
entity was taken by an Authority in the State. We cannot expect
an impartial and independent investigation at the hands of the
State agencies when the State instrumentally itself was involved
in committing the monumental fraud as pointed out above.
Therefore, it is required that the matter should be investigated by
an independent agency for proper, impartial and unbiased
investigation. Hence, we deem it appropriate to entrust the
investigation to the Central Bureau of Investigation.
63. We, therefore, direct registration of a criminal case
by the Central Bureau of Investigation for investigation of
the offence(s) bringing to the book the persons of the
Government machinery as well as the private individuals
who were involved in this statutory and constitutional
fraud.
64. In view of the aforesaid discussion, we quash the
entire acquisition made by the State Government for a
non-existent entity with costs of Rs.10 lakhs to be paid by
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the respondent No.4 i.e., M/s. Lakeview Tourism
Corporation in the Army Battle Casualties Welfare Fund
within a period of four weeks from today.
65. Accordingly, the writ appeals stand allowed.
66. In view of disposal of the writ appeals, pending IAs,
if any, do not survive for consideration and accordingly,
they stand disposed of.
67. Let a copy of this judgment be forwarded to the
Director, Central Bureau of Investigation, for necessary
compliance.
Sd/-
(D K SINGH)
JUDGE
Sd/-
(TARA VITASTA GANJU)
JUDGE
CT-SN
BKV
