2011 (9) TMI 971 - SC - Indian Laws

Whether land acquired by the State Government at the instance of the Karnataka State Tourism Development Corporation (for short the Corporation ) for the specified purpose i.e. Golf-cum-Hotel Resort near Bangalore Airport Bangalore could be transferred by the Corporation to a private individual and corporate entities?

Issues Involved:
1. Legality of the transfer of land acquired by the State Government to private individuals and corporate entities.
2. Validity of the acquisition proceedings in light of the alleged fraudulent exercise of power.
3. Justification for granting relief despite the delay in filing the writ petition.
4. Entitlement of the petitioner to restoration of the acquired land.

Detailed Analysis:

1. Legality of the Transfer of Land:
The primary issue was whether the land acquired by the State Government at the instance of the Karnataka State Tourism Development Corporation (the Corporation) for the purpose of establishing a Golf-cum-Hotel Resort could be transferred to private individuals and corporate entities. The Supreme Court noted that instead of utilizing the acquired land for the specified public purpose, the Corporation transferred the land to private parties, including Dayananda Pai, Bangalore International Centre, and M/s. Universal Resorts Limited. The Court highlighted that the Corporation's actions were contrary to the notifications issued under Sections 4(1) and 6 of the Land Acquisition Act, 1894, which specified the public purpose for the acquisition.

2. Validity of the Acquisition Proceedings:
The Court examined the acquisition proceedings and found that the Corporation did not have the necessary funds for the acquisition and relied on private individuals like Dayananda Pai to provide the required finances. The Division Bench of the Karnataka High Court had previously quashed the acquisition proceedings, observing that the Corporation's actions amounted to a "fraud on power" and a clear case of "diversification of purpose." The High Court held that the land was acquired under the guise of public purpose but was ultimately transferred for private purposes, which was fraudulent and invalidated the entire acquisition process.

3. Justification for Granting Relief Despite Delay:
The Supreme Court considered whether the High Court erred in granting relief to the petitioner despite the delay in filing the writ petition. The Court noted that while there is no prescribed period of limitation for filing a petition under Article 226 of the Constitution, the principle of laches (delay) is a rule of practice based on sound discretion. The Court observed that the petitioner had provided a reasonable explanation for the delay, including pursuing other legal remedies and being misled by incorrect legal advice. The Court emphasized that the delay should not bar relief when the petitioner was not aware of the fraudulent actions at the time of the acquisition and approached the Court promptly upon discovering the fraud.

4. Entitlement to Restoration of Acquired Land:
The Supreme Court upheld the High Court's decision to direct the return of the land to the petitioner. The Court noted that the Corporation's actions in transferring the land to private entities were fraudulent and constituted a misuse of the power of eminent domain. The Court emphasized that the land was acquired for a public purpose, and its subsequent transfer to private individuals without adhering to the provisions of Part VII of the Land Acquisition Act was illegal. The Court held that the fraudulent exercise of power vitiated the entire acquisition process, and the petitioner was entitled to the restoration of the land.

Conclusion:
The Supreme Court dismissed the appeals, affirming the High Court's judgment that the acquisition proceedings were vitiated by fraud and misuse of power. The Court directed the appellants to return the land to the petitioner within a specified period, emphasizing the importance of adhering to the principles of eminent domain and ensuring that land acquired for public purposes is not diverted for private gain.

← Previous Next →