'Monumental Fraud': Karnataka High Court orders CBI probe into acquisition of prime land in Hebbal

Bengaluru: The High Court of Karnataka has ordered a CBI investigation against government officials and directors of a non-existent firm - Lakeview Tourism Corporation, in whose favour around 55 acres of land was acquired by KIADB in Hebbal and Amanikere Hebbal villages during 2002-2004 and further permitting change of land use for township and other schemes in 2023.

“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 Directors of Lakeview Development Corporation Private Limited, which was incorporated only in the year 2011. This was a fraud on statute to deprive the landowners of their valuable property for pittance at the behest of a non-existent entity,” a division bench comprising Justices DK Singh and Justice Tara Vitasta Ganju said in the order. The division bench quashed the entire acquisition and slapped a cost of Rs 10 lakh on Lakeview Tourism Corporation.

The lands in question are adjacent to the Hebbal fly-over in Bengaluru city. In 2000, an application was submitted by P Satish Pai with specific survey numbers requesting the government to acquire lands to establish "Unicare Tourist Centre" comprising a resort, five-star hotel, amusement park etc. The promoters of the firm were shown as Dr Ramdas Pai, Syed Mohammed Salahuddin, P Dayananda Pai and P Satish Pai. The preliminary and the final notifications were issued by the KIADB in 2002 and 2004, respectively.

The division bench noted none of the promoters, named in the application by Satish Pai in 2000, were found to be associated with the entity when it got incorporated in 2011. At the time of incorporation, the share capital of the entity was Rs one lakh and the income shown as 'zero'. With no development for the next 12 years, on March 7, 2023, State Level Single Window Clearance Committee considered the Lakeview Tourism Corporation as a partnership firm of two real estate developers and approved change of land use for an integrated township with development of commercial office spaces, Information Technology Park etc.

The landowners filed an appeal after their petitions were dismissed by a single bench. The division bench noted that it was a fraud on statute to deprive the landowners of their valuable property for pittance at the behest of a non-existent entity. “A non-existent entity which promised to commence its operation with effect from 31.12.2001 providing employment to 2,000 persons had a net worth of Rs 8,60,686 in the financial year 2022-23. The Director's Report for the financial year 2022-23 would also suggest that the Company is still in the process of identifying viable business opportunities and starting its principal business operations. The Company is hopeful for the growth of the Company in the coming years. The Cash and Bank balance as on 31.03.2022 was only Rs 45,963 and by 31.03.2022, the profit was Rs 66,715,” the division bench noted.

The division bench also negated the submissions made on behalf of the entity that the high court had upheld the land acquisition in the earlier rounds of litigation. The bench said that even where a competent court has rendered a final decision, fraud discovered later can invalidate that decision and permit recall or correction.

“The decision for acquiring the land for the respondent entity was taken by an Authority in the State. We cannot expect an impartial and independent investigation at the hands of the State agencies when the State instrumentally itself was involved in committing the monumental fraud as pointed out above. Therefore, it is required that the matter should be investigated by an independent agency for proper, impartial and unbiased investigation. Hence, we deem it appropriate to entrust the investigation to the Central Bureau of Investigation,” the bench said.