'Monumental Fraud By Authorities In Conspiracy With Private Entity': Karnataka High Court Orders CBI Probe Into Acquisition Of 53-Acre Land

Terming the acquisition of 53 acre of land parcels near Bengaluru's Hebbal flyover in favour of a non-existent private entity as a 'monumental fraud', the Karnataka High Court has directed a CBI investigation into the discrepancies surrounding the process that took place over two decades ago. “…The entire exercise of acquiring the land for a non-existent entity was nothing but a monumental fraud committed by the authorities in a criminal conspiracy with the applicant and the Directors of Lakeview Development Corporation Private Limited... This was a fraud on statute to deprive the landowners of their valuable property for pittance on behest of a non-existent entity”, a division bench of Justices D.K. Singh and Tara Vitasta Ganju observed in its order.The court quashed the 'fraudulent' land acquisition process, noting that the officials of state machinery had colluded with private individuals in the name of land development, to deprive the lawful land owners of their assets."…The high speed and alacrity with which the Government had acted to exercise its power of eminent domain to favour a non-existent entity for its business and private gain was nothing but a gross abuse of the powers by the State machinery and fraud on statute and a colourable and arbitrary exercise of the powers to favour the non-existent entity by depriving the landowners of their property in violation of their constitutional right protected under Article 300A of the Constitution of India.…", the Court said.The High Court has also transferred the investigation responsibility to the Central Bureau of Investigation (CBI) since it involves state officials and private stakeholders alike. The court underscored that a state agency cannot be entrusted with the responsibility of the investigation, given the peculiar circumstances that could result in bias.“…The State instrumentality itself was involved in criminal conspiracy with the private individuals. We need to get this matter investigated by an independent agency for the crime committed by the persons, including the State Government officials and the private individuals...We, therefore, direct registration of a criminal case by the Central Bureau of Investigation for investigation of the offence(s) bringing to the book the persons of the Government machinery as well as the private individuals who were involved in this statutory and constitutional fraud," the court noted. The High Court has also quashed the land acquisition made under Section 28(4) and the declaration [of industrial areas] under Section 3(1) of the Karnataka Industrial Areas Development Act (KIAD) 1966. These orders were challenged by the landowners before the High Court. Consequently, the division bench has also set aside a previous single judge order dismissing the landowners' petition against the notification.As a penalty, M/s Lakeview Tourism was also directed by the court to deposit Rs 10 Lakhs to the Army Battle Casualties Welfare Fund within 4 weeks.ContextThe court pointed out that the application was filed by a non-existent entity in 2002 named M/s Lakeview Tourism Corporation to the government, to establish "Unicare Tourist Centre" comprising of a resort, a five-star hotel, an amusement park and other recreation facilities. The company had stated it had already negotiated with the landowners of Hebbal and Hebbal Ammanikere Villages for sale of 33 acres of land in their favour and they would require another 37 acres of land in the same area for their project. They requested the Government to acquire 37 acres of land as identified by them for their benefit. It may be noted that though the promoters asserted that they had negotiated with the landowners of Hebbal and Hebbal Ammanikere Villages for sale of 33 acres of land, but no sale deed was executed by any of the landowners in their favourThe company was only incorporated later in 2011 as per the records, the court observed. The final notification was issued under Section 28(4) of the KIAD Act on 11.05.2004 to acquire 53 acres and 26 guntas of land.The application/proposal filed before the government by the promoters of the non-existent company in 2000 was bereft of details. Yet, the High-Level Committee approved their application within five days without sufficient scrutiny which surprised the court. The land acquisition was at the rate of Rs 15 lakhs per acre by the government, whereas the promoters of the company said that they negotiated the prices at the rate of Rs 1.5 Crores per acre with the land owners. In 2011, when the company was incorporated for real, none of the original promoters who submitted the proposal before the High-Power Committee were included.The 'use' of land acquired was also converted from a 'tourism centre' to an 'integrated township' with the development of Commercial office spaces, etc., in 2023. Despite all this, no project commencement ever occurred for over 22 years since the acquisition, the court inferred. The alleged fraud further...

'Monumental Fraud By Authorities In Conspiracy With Private Entity': Karnataka High Court Orders CBI Probe Into Acquisition Of 53-Acre Land

Sebin James

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