New Delhi, 26 October

Supreme Court on Monday quashed land acquisition proceedings covering around 59 acres in Nelakadiranahalli village, Bengaluru, initiated in the late 1980s, citing fraud, serious procedural irregularities and the absence of a duly approved housing scheme for a cooperative society.

A bench of Justices JB Pardiwala and K Vinod Chandran allowed appeals filed by N Arasappa and others, set aside a Karnataka High Court division bench judgment and restored a single judge’s order quashing the acquisition notifications.

The controversy dates back to September 1984, when Peenya-based House Building Cooperative Society entered into an agreement with M/s Bhagya Enterprises to facilitate the acquisition of private land. State notifications were subsequently issued between 1988 and 1989.

The court noted that the agreement preceded the 24 September, 1984, amendment to the Land Acquisition Act, 1894, which recognised housing schemes sponsored by cooperative societies as a public purpose. It held that the arrangement to pay commission to private entities to facilitate government notifications was illegal, opposed to public policy and an abuse of state machinery.

The bench said the acquisition proceeded without a properly formulated and approved housing scheme, a finalised layout plan or blueprint, and adequate scrutiny by the relevant committees and government authorities. It also noted that the society had not deposited the amounts required to meet compensation awards to landowners.

Emphasising that compulsory acquisition must have legal authority and serve a genuine public purpose, the court said payment of compensation alone could not justify an otherwise unlawful acquisition.

It held that the division bench had erred in relying on delay and res judicata without adequately examining the allegations of fraud and misuse of power.

The court directed that physical possession of the land be restored to the original landowners, including those who had not individually challenged the acquisition. Those receiving the land must refund any statutory compensation received from the state government, without interest.

Considering the passage of time, the bench deleted the direction to initiate contempt proceedings against government officers. It enhanced costs to Rs 50,000 for each petitioner or the group of legal representatives of an original petitioner who appealed.