Karnataka High Court
M/S. Sobha Limited vs The Deputy Commissioner on 30 January, 2025
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 30TH DAY OF JANUARY, 2025
PRESENT
THE HON'BLE MRS. JUSTICE ANU SIVARAMAN
AND
THE HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL
WRIT APPEAL NO. 1238 OF 2021 (LA-BDA)
BETWEEN:
M/s. SOBHA LIMITED
(FORMERLY KNOWN AS M/s. SOBHA
DEVELOPERS LIMITED)
A COMPANY INCORPORATED UNDER THE
COMPANY'S ACT 1956
HAVING ITS REGISTERED OFFICE AT
DEVARABEESANAHALLI
SARJAPUR-MARATHHALLI OUTER RING ROAD
BELLANDUR POST, BENGALURU-560 103
REP. BY ITS AUTHORIZED SIGNATORY
MR. PRASAD M.S.
...APPELLANT
(BY SRI. P.S. RAJAGOPAL, SENIOR ADVOCATE FOR
SRI. SANJAY NAIR, ADVOCATE)
AND:
1. THE DEPUTY COMMISSIONER
BENGALURU URBAN DISTRICT
KANDAYA BHAVANA
K.G. ROAD
BENGALURU-560 009
2. THE PRINCIPAL SECRETARY TO GOVERNMENT
REVENUE DEPARTMENT
M.S. BUILDING
BENGALURU-560 001
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2
3. THE STATE OF KARNATAKA
REP. BY ITS SECRETARY
DEPARTMENT OF URBAN DEVELOPMENT
M.S. BUILDING
BENGALURU-560 001
4. BANGALORE DEVELOPMENT AUTHORITY
T. CHOWDAIAH ROAD
KUMARA PARK WEST
PALACE GUTTAHALLI
BENGALURU-560 020
5. ADDITIONAL LAND ACQUISTION OFFICER
BANGALORE DEVELOPMENT AUTHORITY
T. CHOWDAIAH ROAD
BENGALURU-560 020
...RESPONDENTS
(BY SMT. PRATHIMA HONNAPUR, AAG WITH
SRI. DEVARAJ C.H., GA FOR R1 TO R3;
SRI. AJAY KUMAR M. PATIL, ADVOCATE FOR R4 & R5)
THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT PRAYING TO ALLOWING THIS APPEAL AND SET
ASIDE THE ORDER DATED 27.09.2021 PASSED BY THE LEARNED
SINGLE JUDGE, IN WP No.27833/2014 (LA-BDA) AND
CONSEQUENTLY GRANT THE RELIEFS CLAIMED BY THE
APPELLANT IN W.P. No.27833/2014 AND ETC.
THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 22.01.2025 AND COMING ON FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY, ANU SIVARAMAN
J., PRONOUNCED THE FOLLOWING:
CORAM: HON'BLE MRS. JUSTICE ANU SIVARAMAN
and
HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL
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3
CAV JUDGMENT
(PER: HON'BLE MRS. JUSTICE ANU SIVARAMAN)
The Writ Appeal is filed challenging the Order dated
27.09.2021 passed by the learned Single Judge in Writ
Petition No.27833/2014 (LA-BDA).
2. We have heard Shri. P.S. Rajagopal, learned
senior counsel as instructed by Advocate Shri. Sanjay Nair,
learned counsel appearing for the appellant, Smt. Prathima
Honnapur, learned Additional Advocate General along with
Shri. Devaraj C H, learned Government Advocate appearing
for respondents No.1 to 3 and Shri. Ajay Kumar M. Patil,
learned counsel for respondents No.4 and 5.
3. The brief facts of the case are as follows:-
The Tahasildar, Bangalore North Taluk, submitted a
report dated 07.03.2007 to Assistant Commissioner, stating
that the land measuring 1 acre 12 guntas in Sy. No.30 of
Sampigehalli Village, Yelahanka Hobli, Bangalore North
Taluk, Bangalore, is vacant, and its market value is
Rs.40,00,000/- per acre and it could be allotted/sold in
public auction. The Assistant Commissioner, conducted spot
-
inspection of the said property on 09.03.2007 and vide
report dated 14.03.2007, recommended for sale of schedule
property in public auction. Pursuant to the said reports, the
Principal Secretary to Government accorded permission vide
order dated 23.03.2007 to the Deputy Commissioner (1st
respondent) to sell the schedule property and other
Government lands in public auction to be held on
26.04.2007 under Rule 12 (2) of the Karnataka Land grant
Rules, 1969.
4. Accordingly, respondent No.1 issued public
auction Notice dated 11.04.2007 bearing
No.Spl.DC.PUC(Auction)CR/14/06-07 for sale of schedule
property and other Government lands and the Assistant
Commissioner, Legal Cell and Prevention of Un-authorized
Construction, Deputy Commissioner Office, Bengaluru was
appointed as Authorized Officer and date of auction was
fixed as 26.04.2007 and venue was Deputy Commissioner's
Office, Bangalore Urban District, K.G.Road, Bangalore. It
was further mentioned that the auction proceedings will be
video graphed by the concerned officer, land proposed to be
-
auctioned as per the zonal regulations of CDP/concerned
planning authorities, interested bidder may inspect the land
from 11.04.2007 to 25.04.2007 with the assistance of the
Village Accountant of that revenue circle.
5. The appellant participated in the public auction
and emerged as highest and successful bidder having
quoted Rs.4,60,00,000/-. As per the terms and conditions,
the appellant has deposited 25% of the final bid amount
within 24 hours and sought for conversion of the schedule
property from agricultural to non-agricultural purpose.
6. Respondent No.2 granted approval vide Order
dated 11.05.2007, to confirm public auction of land.
Accordingly, respondent No.1 issued an intimation dated
25.06.2007, to the appellant confirming the appellant as
successful bidder for schedule property and directed to
deposit the balance 75% final bid amount being
Rs.3,45,00,000/-, the same was paid by the appellant
through pay order dated 27.07.2007.
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7. The appellant wrote a letter dated 28.01.2008 to
respondent No.1 requesting to take immediate steps to
deliver the possession of schedule property and execute a
registered Sale Deed. BDA vide letter dated 22.05.2008,
wherein, it is clearly mentioned that the schedule property is
classified as "mainly residential" zone. Thereafter, Special
Deputy Commissioner issued a demand notice on
05.06.2008 to the appellant to pay the conversion fee and
phodi fee. On 21.08.2008, appellant paid the conversion fee
of Rs.70,785/- and phodi fee of Rs.55/-. Thus, on
17.10.2008 possession of the schedule property was given
to appellant and since then the appellant is in actual,
exclusive and physical possession of the schedule property.
8. Subsequently, respondent No.1 has issued
conversion order dated 01.07.2013, where under schedule
property was duly converted to residential purpose, further
respondent No.1 also issued Certificate of Sale dated
01.07.2013, in favour of appellant. Respondent No.1 issued
a letter dated 06.07.2013 to Sub-Registrar, Yelahanka
authorizing Tahasildar, Bangalore North Taluk, Bangalore
-
District, to appear on his behalf for registration of Sale
Deed. But, Sub Registrar, Yelahanka refused to registrar the
property on the pretext that the entire 10 acres 8 guntas of
land in Sy.No.30 of Sampigehalli Village, Yelahanka has
been notified for acquisition by respondent No.4 for the
purpose of forming Arkavathy layout, vide Final Notification
dated 23.02.2004.
9. Respondents No.1 and 2 have suppressed the fact
of acquisition of schedule property in favour of respondent
No.4 and respondent No.4 also suppressed the acquisition
of land for Arkavathy Layout, as per Final Notification dated
23.02.2004, while giving clearance to respondent No.1 for
conversion of schedule property into residential use.
10. Thereafter, appellant addressed a letter to the
first respondent and requested to get the property de-
notified from the land acquisition proceedings and execute
the sale deed in appellant's favour. The appellant addressed
similar letters dated 25.07.2013 to respondent No.2.
Thereafter, respondent No.1 addressed a letter dated
20.08.2013 to respondent No.2 to sent appropriate
-
representation/proposal to the Urban Development
Department to de-notify/delete the schedule property from
acquisition proceedings in terms of Final Acquisition
Notification and also stated that respondent No.4 has not
utilized the said land for formation of Arkavathy layout and
that appellant had already constructed compound wall
around schedule property and it is in actual possession of
the appellant. Hence, appellant has filed Writ Petition
No.27833/2014. The writ petition was heard along with
several other writ petitions challenging the acquisition for
the same Layout and came to be dismissed. The learned
Single Judge held that transactions that have occurred after
the notification of land for acquisition cannot confer any
rights on the purchasers and the Writ Petitions filed by such
subsequent transferees stand rejected.
11. Shri. P.S. Rajagopal, learned Senior Counsel
appearing for the appellant submits that the learned Single
Judge failed to notice the extreme injustice which had
occurred to the appellant. The fact that the schedule
property was included in the Final Notification for
-
acquisition, which was known to the respondents. They have
concealed these facts and induced the general public
including the appellant and the same caused injustice to the
appellant. The acquisition proceedings to the extent of said 3
acres 8 guntas has lapsed for not passing the award and
schedule property is the part of it as admitted by the
respondents and the same was not considered by the
learned Single Judge. Respondents are duty bound to set
right their mistake and to provide justice to the appellant
who has deposited the entire auction final bid amount of
Rs.4,60,00,000/- and also respondents have collected
conversion fee and phodi fees also, the same was not
properly appreciated by the learned Single Judge.
12. The Writ Appeal was admitted on 18.11.2022.
Thereafter, by an interim order dated 23.01.2023, it was
ordered that the BDA., shall not create any third party
interest in respect of the site in question. The said order has
been extended from time to time. While the appeal was
pending consideration, the learned senior counsel for the
appellant submitted that in case the State Government
-
decides to refund the amount deposited by the appellant
with interest, the grievance of the appellant would stand
redressed.
13. The learned Government Advocate was directed
to get instructions on the said submission. Thereafter, the
matter was adjourned several times to enable the
respondents to get instructions on the proposal. Finally, on
23.09.2024, it was submitted by the learned Government
Advocate that the Government had granted sanction on
20.09.2024 to return the bid amount of Rs.4,60,00,000/- to
the appellant. It was submitted that with regard to the
incidental charges and the interest on the bid amount,
instructions are awaited. Thereafter also, the case was listed
on several occasions for return of the bid amount as decided
on 20.09.2024. Ultimately, by order dated 21.11.2024, it
was recorded that the principal amount of Rs.4,60,00,000/-
had been refunded to the appellant on 20.11.2024. Learned
Government Advocate sought further time to get
instructions from the Government with regard to issue of
-
interest on the said amount as well as the refund of the
conversion charges paid by the appellant.
14. The learned senior counsel appearing for the
appellant had placed before us the judgment dated
28.05.2024 in W.A.No.1640/2016 (KLR-RES) (State of
Karnataka v. Ramaiah Reddy), wherein, this Court had
directed the payment of interest at 10% per annum on the
amount deposited till it was refunded. Even thereafter no
instructions were provided and the learned Additional
Advocate General sought further adjournments on
12.12.2024 and 07.01.2025 to get instructions with regard
to rate of interest for the principal amount and the
conversion charges. It was in those circumstances, the
order dated 09.01.2025 was passed directed that in case the
decision of the Committee as directed is not placed on
record by the next date of hearing.
15. We have heard learned Additional Advocate
General for respondents No.1 to 3. Since instructions were
not made available to the learned Additional Advocate
General in spite of repeated adjournments granted for that
-
purpose, we had required the presence of the Principal
Secretary, Revenue Department before this Court.
16. Shri. Rajender Kumar Kataria, Principal Secretary,
Department of Revenue, Government of Karnataka, who was
present before this Court on 22.01.2025.
17. We have heard him and considered his
contentions as well. It is contended by the learned
Additional Advocate General as well as by the Principal
Secretary that the Writ Petition had been filed challenging
the Notification for acquisition of property and that there
was no prayer raised for return of the amounts paid by the
appellant as value of the land in question. It is contended
that since the question of refund of the amounts paid was
raised for the first time in the Writ Appeal, the request was
considered and an order was passed permitting refund of the
amounts on 20.09.2024. The amount was refunded on
20.11.2024. It is submitted that the amounts have also
been refunded. It is submitted that in view of the fact that
the claim raised by the appellant for quashing the
-
Notification for acquisition has been found against by this
Court which has been upheld by the Apex Court, the
appellant's further contentions with regard to refund of the
amount would arise only thereafter and the appellant cannot
claim interest on the refund which has been ordered only on
20.09.2024.
18. Having considered the contentions advanced, we
notice that the Notification for acquisition of land was issued
on 23.02.2004. It is thereafter that the property was put to
public auction and was sold in favour of the appellant herein.
The auction was conducted on 26.04.2007. We also find
that even though the acquisition was specifically for the BDA
for forming a layout, the appellant's application for
conversion of land was taken up, considered and positive
orders passed thereon after accepting such conversion by
the Deputy Commissioner vide order dated 01.07.2013,
after obtaining no objection from the BDA. It is further clear
that it was on account of no fault of the appellant that the
property which was already been notified for acquisition had
been specifically put to auction and sold to the appellant by
-
the respondents herein, who are the functionaries of the
Government of Karnataka. The amount paid by the appellant
was retained by the Government without any justification
thereafter.
19. In the above said situation, we are of the opinion
that the contention of the claim for refund was raised only
belatedly in this appeal will not help the Government in any
manner since the property was also notified for acquisition;
no justifiable reason exists for the retention of the amounts
by the Government at all. In W.A.No.1640/2016 (KLR-RES),
the question raised was with regard to refund of 25% of the
bid amount deposited by a successful bidder on 28.05.2005.
The land had vested with the State vide forfeiture orders
dated 22.09.2004 and 16.05.2005. The appeals filed by the
original land owner before the Karnataka Appellate Tribunal
were allowed on 11.06.2013 and the land was restored to its
original owner.
20. On those facts, this Court found that since if
factum of challenge to the forfeiture orders was not
-
mentioned in the auction notification and since 25% of the
bid amount was deposited on 28.05.2005, the refund of the
amount was to carry interest. Relying on the Judgments of
the Constitution Bench in Mafatlal Industries Ltd.,
Ahmedabad v. Union of India reported in AIR OnLine
1996 SC 1268 and in State of Rajasthan v. Fero
Concrete Construction (P) Ltd., reported in (2009) 12
SCC 1, 10% interest per annum on the 25% of the bid
amount was ordered between 28.05.2005 and on the
balance 75% of the amount deposited before the Court on
24.11.2019 as well. In case, such interest was not paid, it
was further directed that the amount would carry additional
interest at the rate of 4% on the ordered interest and that
the amount after payment to the respondent shall be
recovered from the erring officials of the Department.
21. Having regard to the facts of the case and in view
of the judgments which are relied on, we are of the opinion
that the appellant is entitled to simple interest at 10% per
annum for the amount of Rs.4,60,00,000/- from 27.07.2007
to 20.11.2024 and as also for return of conversion and phodi
-
charges and for interest thereon from 17.10.2008 till the
date of refund. We further hold that it would be open to
the State to recover the amounts that have been paid as
interest pursuant to this judgment from any of the
officers, who are found responsible for the lapses that
occurred in this matter, in a manner known to law.
22. Accordingly, the writ appeal stands disposed
of recording the refund of the principal amount of
Rs.4,60,00,000/- to the appellant on 20.11.2024 and
directing payment of 10% simple interest on the said
amount from 27.07.2007 to 20.11.2024. Further, refund
of the conversion and phodi charges with simple interest
thereon at the rate of 10% per annum from the date of
receipt of such amounts till the date of refund is also
ordered. The aforesaid amount shall be paid within three
months from the date of receipt of a copy of this
judgment.
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There will be no order as to costs.
Pending I.As, if any, shall stand disposed of.
Sd/-
(ANU SIVARAMAN)
JUDGE
Sd/-
(VIJAYKUMAR A. PATIL)
JUDGE
cp*
