Satyappa and Others vs State of Karnataka and Others

Anand Byrareddy, J.—These petitions are heard and disposed of together as the petitioners are all similarly placed and have preferred the petitions on identical grounds.

It is the case of the petitioners that they are residents of Hiremalligwad, Kelageri and Chikkamalligwad villages of Dharwad taluk, Dharwad District, ironically in the vicinity of this court''s premises of the Dharwad Bench. The brief particulars of the lands belonging to each of the petitioners, of the respective village, is mentioned hereunder in tabular form.

It transpires that the Karnataka Housing Board, (Hereinafter referred to as ''the KHB'', for brevity) a body established under the Karnataka Housing Board Act, 1962, (Hereinafter referred to as ''the KHB Act'', for brevity), is said to have formulated a Scheme to develop a housing layout in the lands bearing Survey Nos. 7 to 49 of Hiremalligwad village. The said lands are in close proximity to the National Highway No. 4, the Pune - Bangalore Road; The lands are said to be at a distance of about 10 KM from Dharwad City.

It is alleged that the acquisition process was not preceded by any public notification or even personal notices to the land owners aforementioned. It is stated that the sub-ordinate officials of the KHB had conducted a spot inspection of the lands lead by the Executive Engineer, KHB and the Assistant Commissioner, Dharwad District, but they had not revealed the purpose of the spot inspection. However, it is learnt that certain persons acting as middlemen, who claimed to have the confidence of the land owners are said to have had discussions with the said officials as regards an expeditious and voluntary sale of the lands by the land owners. It is particularly alleged that respondents 6 and 7 in particular, who are said to be the then Executive Engineer and Assistant Executive Engineer of the KHB, and who were acting in their self interest to benefit from the proposed transactions, had acted in close concert with several middlemen, in persuading the land owners to appoint the said middlemen as their agents and power of attorney holders to transact with the KHB, in order to ostensibly obtain a better price for their lands. However, it is the case of the petitioners that they were misled by the said agents who succeeded in taking all the petitioners into confidence, en masse, to part with their lands for a paltry sum, only to enable the middlemen and officials of the KHB, particularly respondents 6 and 7 to make illegal gains, at the cost of the petitioners.

When the petitioners realized the fraud played on them, in retrospect, they are said to have approached the second respondent with a complaint with regard to the manner in which they had been deprived of their lands. On the basis of the said complaint, respondent No. 2 is said to have directed respondent No. 3 to hold an enquiry under Section 15(3)(a) of the Karnataka Lokayukta Act, 1984. An enquiry having been conducted, a report was said to have been submitted clearly implicating respondents No. 6 and 7 in having acted through middlemen, in inducing the petitioners to part with their lands for a paltry sum, in order to make illegal gain for themselves. The matter is said to have been forwarded to the Police for further action. However, even as on the date of filing of these petitions, no action is said to have been taken by the Police.

The learned counsel Shri V.M. Sheelavanth, Shri F.V. Patil, Shri Vinay S. Koujalagi and Smt. Girija S. Hiremath appearing for the petitioners, would contend that there are clear findings in the enquiry report based on the enquiry conducted at the behest of the Lokayukta, regarding the purchase of lands through middlemen by playing fraud on the petitioners by the KHB. The said transactions are violative of Section 33(1) of the KHB Act. In that, for purchase of lands exceeding Rs. 10 lakh in value, the previous approval of the State Government was mandatory. It is evident on record that there was no such approval in respect of lands of Chikkamalligwad, Kelageri and Mummigatti villages.

It is further contended that there are also guidelines for the purchase of lands by the KHB, which have been completely given a go by. It is stated that on 28.12.2005, a meeting of the District Land Conveyance Committee is said to have been held under the Chairmanship of the Deputy Commissioner, Dharwad District. It is alleged that Respondents No. 6 and 7, without intimation of the meeting to the petitioners, had kept their accomplices, who were acting as purported agents of the present petitioners and a price of Rs. 5.75 lakh per acre was said to have been fixed as the price for the lands in question. However, the lands in question had been sold by the power of attorney holders for that price, who had also received payment by account payee cheques in their personal names. However, the land owners were given less than half that amount by the said middlemen, as was discovered at the enquiry conducted. And it was in such a similar fashion an extent of more than 300 acres of land was sold and approval of the State Government was also said to have been obtained in so far as Hiremalligwad village is concerned. It is however, significant that even though there was no such approval of the State Government seen to have been obtained in respect of Kelageri and other villages are concerned, sale deeds were said to have been executed by the middlemen who had also received payment from the KHB in a similar manner as aforesaid in their own names.

The enquiry report at the behest of the Lokayukta has found that Respondent No. 6, who was assigned the task of issuing public notices in respect of the proposed acquisition and purchase of lands meant for the housing project, had failed to issue any such public notices. Similarly, there was no intimation to the true owners of the lands as regards the price fixation Committee meeting and the price having been fixed at Rs. 5.75 lakh, the petitioners have neither received the same nor was awarded the appropriate compensation.

The KHB has contested the petition to deny the allegations in the writ petitions. It is claimed that the petitioners had voluntarily offered their lands for sale. The price of the land was admittedly fixed at a meeting of the Committee headed by the Deputy Commissioner of the District, which had been accepted by the KHB and duly approved by the State Government as per Order dated 24.5.2006.

Between the period 1.6.2006 and 15.3.2007, about 206 acres had been purchased under 40 sale deeds by the KHB. It is thereafter, on learning the phenomenal increase in the land value on account of the proposed development by the KHB, that the petitioners are seeking to make false claims of having been defrauded and were seeking to question the transactions.

That the KHB has embarked on development of the purchased land by engaging third-party agencies at substantial cost and any impediment to the development would result in grave injury and irreparable loss to the KHB.

It is asserted that the allegations of fraud and deception is not borne out by the circumstance that the value of the land that was fixed was well above the guidance value in respect of the land at the relevant point of time. The allegation as to the agents of the petitioners having withheld the monies due to them, is a matter purely between the petitioners and those agents. The allegation of an unholy nexus between the officials of the KHB and those agents is far fetched and even if there is any prima facie material in that regard and if it is subject matter of any enquiry, it would be premature to castigate the concerned, on that basis, in the present proceedings.

The admitted execution of sale deeds by the land owners and the receipt of full consideration thereof, several years prior to the filing of the writ petition would clearly render the present challenge as one barred by delay and laches. The involvement of a large number of petitioners would further demonstrate the falsity of the claim that there was a collective fraud played on them as being grossly exaggerated and false.

The KHB has by now invested over Rs. 110.38 crore in the formation of the layout and construction activity, the endeavour of the petitioners in seeking the annulment of the acquisition of the lands on the specious pleas put forth, if entertained would result in irreparable loss to the public exchequer.

It is also significant, according to the KHB, that in a second enquiry conducted by the Criminal Investigation Department, there is no fraud apparent in the execution of the sale deeds in favour of the KHB, as alleged.

It is also stated that the State Government by its order dated 11.5.2011 (No. VA.E.KHB/191/2011) had provided that all land owners, whose lands had been purchased or acquired in the villages of Hiremalligwad, Mummigatti, Kelageri and Chikkamalligwad would be entitled to house site of the dimension of 30 feet x 40 feet, free of cost, subject to the condition that the said land owners had not instituted any further legal proceedings in respect of the acquisition. It is stated that as these petitioners have made wild allegations on the one hand and have also demanded two sites measuring 30'' x 40'', in the place of one, they are disentitled to any such benefit and that their petition is also liable to be dismissed with costs.

In the light of the above facts and circumstances, if there are parallel proceedings addressing the irregularities, if any, in the above proceedings, the same cannot be addressed in these proceedings, especially if the same have not attained finality. Hence, the criminality of any action on the part of the officials of the KHB, including the then Commissioner, KHB or respondents 6 and 7, is not pertinent and cannot be acted upon.

The alleged fraud on the part of the agents, admittedly engaged by the petitioners, in having ''short changed'' the petitioners in retaining a major portion of the sale consideration and having paid them only a marginal amount of the sale consideration is entirely a private matter between the petitioners and their agents and cannot be enquired into in these proceedings. The legality of the procedure adopted by the respondents in purchasing the lands of the petitioners is only peripherally addressed as to the same being in violation of the provisions of the KHB Act and Rules, the same may not warrant consideration in view of the substantial delay in the initiation of the proceedings, the fact that there has been substantial investment of public funds in the development activity in the interregnum would certainly stay the hands of this court in addressing any alleged irregularity. However, in so far as the circumstance that the State Government had voluntarily offered a developed house site measuring 30'' x 40'' to every land owner, who had sold his lands for the project envisaged, on the condition that there were no further legal proceedings in respect of the land, possibly including claims for enhancement of compensation - wherever lands had been acquired by recourse to acquisition proceedings - and the petitioners now being denied the same on account of the present proceedings, may result in the petitioners being denied their just due on account of the present proceedings possibly being used as a bargaining point on the basis of legal advise, ill or otherwise. Therefore, subject to the petitioners undertaking before the respondents that they shall abide by this order and shall not venture to make any further claim directly or indirectly, the petitioners may be given the benefit of the above mentioned Government order dated 20.5.2011 and that each of them shall be provided with a site in terms of the same. The petitioners shall be conferred with such benefit forthwith, in any event within a period of six months from the date of this order, if not earlier.

The writ petitions are dismissed subject to the petitioners being granted the benefit as directed.