H.M.T. HOUSE BUILIDNG CO-OP. SOCIETY versus SYED KHADER AND ORS.

Citation: [1995] 2 S.C.R. 200 · Decided: 21-02-1995 · Supreme Court of India · Bench: J.S. VERMA · Disposal: Dismissed

Judgment (excerpt)

A 
H.M.T. HOUSE BUILIDNG CO-OP. SOCIETY 
v. 
SYED KHADER AND ORS. 
FEBRUARY 21, 1995 
B 
[J.S. VERMA, N.P. SINGH AND S.P. BHARUCHA, JJ.) 
LandAcquisitionAct, 1894-Ss.3(cc), 3(e), 3(f)(vi), 39, 40Acquisition 
for a deemed company-Appropriate government-Prior approval and not 
previous consent-A condition precedent not just a formality-Provisions must 
C be strictly construed. 
The appellant, a Co-operative society, registered under the Kar-
nataka Co-operative Societies Act, submitted a housing scheme to the 
State Government for acquisition of certain lands in Bangalore. The 
society also entered into an agreement with a construction company 
D (respondent no. 11), which, for a consideration, a.ssured acquisiton of the 
land by the appropriate government. Respondent no. 11 had also entered · · 
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into agreements with landowners who agreed to give their consent for 
acquisition. 
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E 
Appellant s~iJty, a deemed company under the Land Acquisition 
Act, submitted its housing scheme to the appropriate government which 
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was allegedly approved by an order dated 7.11.1984. The society then 
entered into an agreement with the appropriate government agreeing to 
the conditions of acquisiton as required under Part VII of the Act. The 
State government then issued a notification under section 4(1) proposing 
F to acquire lands for the society on the grounds of public purpose. 
The said notification was challenged in the High Court by land-
owners and other persons affected thereby inter alia stating that the 
acquisition itself was not for a public purpose as respondent no. 11, had 
G influenced the exercise of statutory power by the approprite government 
for the substantial amount paid by the society as consideration for exercise 
of the same, and that it cannot be held that the appropriate Government 
had exercised its own independent discretion and that the exercise of power 
is not based on an objective consideration of the material on record. 
H 
During the pendency of the writ petition, a declaration under Section 
. 200 
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H.M T. HOUSE BLDG. C-OP. SOCY. v. SYED .KHADER 
201 
6(1) was issued by the State government pursuant to the earlier notifica· A 
tion under challenge. Awards were made for that part of the land covered 
by the declaration. 
In the meanwhile, the Registerar of Cooperative Societies, Kar-
nataka directed a statutory inquiry and a report relating to several 
societies including the Appellant Society -was submitted pointing out B 
several irregularities committed by the Appellant in the matter of admis-
sion of members and also that the Appellant had entered into an agree-
ment with an agent, respondent no. 11, and had paid him Rs. 92,52,938 
and Rs. 35 Lakhs to the Special Land Acquisition officer. 
The High Court allowed the writ petitions, quashed the entire ac-
quisiton and inter alia, held (a) The acquisition was not for a public 
purpose and not for the benefit of bonafide members of the society; (b) On 
the basis of the enquiry report, many of the societies manipulated mem-
bership so as to enroll all those who are desirous of purchasing sites as 
c 
. -also those who do not possess the territorial or other qualification as D 
membns; (c) that the society had indulged in commercial venture for sale 
of the sites; hence the acquisition of the lands under the provisions of the 
Act of 1984 was a colourable exercise of power and suffers from legal 
malafides and; (d) that it defeats the provisions of the Bangalore Develop· 
ment Authority Act. 
E 
The High Court observed that it was necessary that the government 
should frame rules for according previous approval for acquisiton of lands 
for housing co-operative societies inter alia prescribing the procedure for 
inquiry and report to aid the government in deciding whether or not 
approval should be given for carrying out such schemes. 
F 
In this appeal, the Society contended that as the notifications under 
Sections 4(1) and 6(1) were issued beyond the time stipulated in the 
agreement it should be held that the State government had exercised its 
statutory power for acquisition in normal course only after taking all facts G 
and circumstances into consideration and that merely because the society _ 
had entered into an agreement with respondent no. 11, who for a con-
sideration assured that the land would be acquired by the government, no 
adverse inference could be drawn. 
Dismissing the appeal, this court 
H 

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