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M/s. Boulder Hills Villa Owners' Associa Vs. the State of Andhra Pradesh and others. - Court Judgment

LegalCrystal Citation
CourtAndhra Pradesh High Court
Decided On
AppellantM/s. Boulder Hills Villa Owners' Associa
RespondentThe State of Andhra Pradesh and others.
the hon'ble mr justice l.narasimha reddy of 2011 & w.v.m.p.nos.2667 and 2912 of 2011 in of 2011; of 2011 in of 2011 and of 2012 in o”13. 03.2012 m/s. boulder hills villa owners' association and others. the state of andhra pradesh and others. counsel for petitioners: sri d.prakash reddy, senior counsel sri r.raghunandan rao counsel for respondents : advocate general common order: the constitution of our country has identified certain goals for the nation and issued directives to be kept in mind, while framing policies. some of them are: "38. state to secure a social order for the promotion of welfare of the people.- (1) the state shall strive to promote the welfare of the people by securing.....

THE HON'BLE MR JUSTICE L.NARASIMHA REDDY W.P.M.P.No.21190 of 2011 & W.V.M.P.Nos.2667 and 2912 of 2011 in W.P.No.17618 of 2011; W.P.M.P.No.24352 of 2011 in W.P.No.20098 of 2011 and W.P.M.P.No.6552 of 2012 in W.P.No.5143 o”

13. 03.2012 M/s.

Boulder Hills Villa Owners' Association and others.

The State of Andhra Pradesh and others.

Counsel for petitioners: Sri D.Prakash Reddy, Senior Counsel Sri R.Raghunandan Rao Counsel for Respondents : Advocate General COMMON ORDER: The Constitution of our country has identified certain goals for the nation and issued directives to be kept in mind, while framing policies.

Some of them are: "38.

State to secure a social order for the promotion of welfare of the people.- (1) The State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life.

(2) The State shall, in particular, strive to minimise the inequalities in income, and endeavour to eliminate inequalities in status, facilities and opportunities, not only amongst individuals but also amongst groups of people residing in different areas or engaged in different vocations.


Certain principles of policy to be followed by the State.- The State shall, in particular, direct its policy towards securing - (a) that the citizen, men and women equally, have the right to an adequate means of livelihood; (b) that the ownership and control of the material resources of the community are so distributed as best to sub-serve the common good; (c) that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment; The Chairman of the Constituent Assembly, Dr.Rajendra Prasad, started his concluding address to the Assembly with the following note: "The welfare of the country will depend upon the way in which the country is administered.

That will depend upon the men who administer it.

It is a trite saying that a country can have only the Government it deserves...

If the people who are elected are capable and men of character and integrity, they would be able to make the best even of a defective Constitution.

If they are lacking in these, the Constitution cannot help the country.

After all, a Constitution like a machine is a lifeless thing.

It acquires life because of the men who control it and operate it, and India needs today nothing more than a set of honest men who will have the interest of the country before them." After being elected as the first President of the Republic, Dr.Rajendra Prasad did not loose any opportunity to spread the true spirit of the Constitution.

He delivered a speech with the caption 'True Happiness' on 11.10.1954, while unveiling the statue of Gandhiji at Delhi.

He said: "I have also heard that the countries which are known to be prosperous and resourceful are not blessed with mental peace, whereas, on the other hand, we find lots of poor people, who excite our pity, leading a happy and contented existence.

The truth is that the source of real happiness is in one's own inner self and not in the outside world.

We equate happiness with the world of external things and that is why there is scramble for acquisition and accumulation of things.

The fact is that these things are, at best, no more than the means to achieve happiness and not happiness itself.

One can experience happiness even without them." In conclusion, he said: "It is, therefore, necessary to realise that what we have assumed as axiomatic truth, namely, that increase in material prosperity also means the attainment of happiness, is neither quite correct nor so self-evident.

This assumption is true only up to a certain limit and the more we transgress this limit the more remote become our chances of being happy.

This limit has to be fixed by a man himself.

This is undoubtedly beset with countless difficulties, but I do think that it is not altogether impossible for man to achieve happiness without the usual paraphernalia which passes for his everyday necessities.

This is exactly what is meant by the adage, 'simple living and high thinking'.

It was by practising this truth that Mahatma Gandhi could enjoy that happiness which an humble follower of his is unable to have even in the palatial Rashtrapati Bhavan.

I do not suggest that ambition or high aspirations or desire for progress should be discouraged.

But let us be sure that our will to progress and rise high will materialise in the true sense only after we have realised that the source of our happiness does not lie outside us but is enshrined within our own hearts.

Our happiness will vary directly in proportion to the degree of our faith in the above truth.

The more we try to achieve happiness, basing it on the outside world, the more we shall be inviting conflicts and depriving others of their happiness." Half a century down the history, a phenomenal change appears to have taken place in the approach of the Governments.

They have chosen to evolve policies and taken decisions which are aimed at promoting the rich and to create luxuries for them, even by bending or amending laws, wherever necessary.

If the change had taken place as a sequel to fulfilment of the basic necessities of all the citizens, nobody can have any qualms.

The fact of the matter is that the number of persons below poverty line, did not record any decrease and the number beneficiaries identified for elimination of poverty is on the increase.

It is also not without reason that the enrolment under the National Rural Employment Guarantee Scheme is on the rise, suggesting that a citizen, who hitherto was a farmer, has either chosen or was forced to become an agricultural labourer.

Now, about the facts of this case.

In the year 2002, the Government of Andhra Pradesh issued G.O.Ms.No.359 Industries and Commerce (Inf) Department, dated 04.09.2002, providing for an integrated project that includes an International Standard Convention Centre, a Star Hotel, Golf Course and Villas.

The Andhra Pradesh Industrial Infrastructure Corporation (for short 'the Corporation') was chosen as an agency to co-ordinate.

However, the task of bringing about the project was assigned to M/s.

EMAAR Properties, PJSE, Dubai.

An extent of 535 acres was earmarked for that purpose.

This included land owned by the Government, the one resumed from assignees and the balance acquired from private individuals.

Two agencies known as Special Purpose Vehicles, viz., EMAAR Hills Township Private Limited (SPV-I) and Cyberabad Convention Centre Private Limited (SPV-II), were identified.

In the work assigned to SPV-I, the shareholding of the Corporation was 26% and in the one assigned to SPV-II, it was 49%.

Detailed modalities were provided for, in the Collaboration Agreement.

In the year 2005, certain changes were made through G.O.Ms.No.14, dated 11.01.2005.

Another agency, by name, M/s.Boulder Hills Leisure Private Limited, was brought into the scene.

The share holding of the Corporation in the Cyberabad Convention Centre Private Limited was brought down from 49% to 26%.

Changes were also made as to the state of affairs that must exist on expiry of lease period of 66 years.

A deed of Conveyance was executed by the Corporation in favour of M/s.EMAAR Hills Township, one of the respondents herein, on 28.12.2005.

That, in turn, entered into a development agreement with EMAAR MGF.

An extent of about 45 acres was earmarked for construction of towers, named as 'Excelsior', comprising of luxurious flats, and about 200 acres was earmarked for plots in a layout known as 'Boulder Hills Villas' for construction of Villas.

Wide publicity was given to impress upon the prospective purchasers.

The respective agencies allotted plots for construction of villas and entered into agreements.

Agreements were also entered into with the persons, who intended to purchase flats.

Almost the entire consideration was received by the concerned agency under the project.

By the time, the sale deeds were executed, allegations and counter-allegations came to be made by the stakeholders in the project, against one another and by others.

The Government expressed the view that large scale irregularities have taken place in the matter of allotment of plots or sale of flats, and that the actual consideration was not reflected in the transactions.


EMAAR Properties and other agencies involved in the matter had a different version about the matter.

The controversy received the attention of this Court in a Public Interest Litigation, entertained on the basis of a letter addressed by one of the Ministers in the Cabinet.

A Division Bench of this Court entrusted the investigation to Central Bureau of Investigation (CBI) on some aspects of the matter and the same is in progress.

The Government issued G.O.Ms.No.1279, dated 08.10.2010, in exercise of powers under Section 22-A(1)(e) of the Registration Act, introduced through A.P.

Act 19 of 2007 prohibiting registration of documents in relation to the properties under the project.

W.P.No.17618 of 2011 is filed by the Welfare Association of Owners of Excelsior, challenging the said G.O.

W.P.No.20098 of 2011 is filed by the Owners Association of Boulder Hills Villas and W.P.No.5143 of 2012 is filed by one of the agreement holders in respect of Plot not A74 challenging the said G.O.

In the affidavit filed in support of the writ petitions, a detailed account of the manner in which the agreements of sale came to be entered into and the hardship being faced by the agreement holders on account of the impugned G.O., is given.

W.P.No.17618 of 2011 was admitted on 04.07.2011 and in W.P.M.P.No.21190 of 2011, an interim order was passed suspending G.O.Ms.No.1279, dated 08.10.2010, expressing the prima facie view that the G.O.

does not fit into Section 22-A of the Registration Act.

In W.P.Nos.20098 of 2011 and 5143 of 2012, applications are filed for interim orders in the form of direction to the Registering Authority, to register the sale deeds.

At the stage of admission, the Corporation filed counter-affidavit, opposing the applications and for vacating the interim order dated 04.07.2011.

The respondents state that the G.O.

was issued to protect the public interest.

According to them, the correct picture in the matter would emerge once the proceedings initiated by the CBI, as per the directions of this Court, conclude.

Arguments on behalf of the petitioners are advanced by Sri D.Prakash Reddy, learned Senior Counsel, and Sri R.Raghunandan Rao, learned counsel.

They submit that the impugned G.O., is ultra vires Section 22-A of the Registration Act, apart from being unconstitutional.

It is pleaded that as of now, the land in question stood absolutely vested with the EMAAR Hills Township Pvt.

Ltd., on the basis of a deed of conveyance, and when the Government does not have rights of ownership or other interest in the land, Section 22-A of the Registration Act has no application.

They submit that even otherwise, Clause (e) of sub-section (1) of Section 22-A applies only when the State Government, Central Government or any local authority have any subsisting or avowed interest in the property and that in many judicial pronouncements, it was held that the Corporation does not answer the description of 'local authority'.

They further submit that the internal disputes among the Government, Corporation and the developers cannot constitute the basis for prohibiting registration of documents.

They contend that the state which is required to protect the interests of citizens, cannot take measures which defeats the rights of the citizens.

According to the learned counsel, the balance of convenience is in favour of the petitioners.

Learned Advocate General appeared on behalf of the State Government as well as the Corporation.

He submits that large scale irregularities were noticed, in the context of allotment of flats or stipulation of the prices for the land allotted for villas and that taking the gravity of the situation into account, the Government issued the impugned G.O., in exercise of statutory powers.

He contends that when the matter is under investigation by the CBI and trial before a competent Court of law, is in progress; it is not at all advisable to permit the sale transactions to take place.

Learned counsel appearing for EMAAR Properties and Boulders Hills Villas, and other similar agencies, in a way, support the cases of the petitioners.

They submit that every step in the project was taken in terms of the relevant agreements and if there exist any disputes, the same need to be resolved in accordance with the procedure prescribed under the agreements.

The challenge in the writ petitions is to the G.O.Ms.No.1279, dated 08.10.2010, issued in exercise of power under Section 22-A(1)(e) of the Registration Act.

It is only in the final hearing of the writ petitions, that an opinion touching on the merits of the matter can be expressed.

The present issue before this Court is as to whether the interim order passed by this Court on 04.07.2011 in W.P.M.P.No.21190 of 2011 in W.P.No.17618 of 2011, deserves to be vacated, or whether the same needs to be continued; and whether similar orders need to be passed in the other two writ petitions.

On hearing learned counsel for the parties and on perusal of the voluminous record, may be, for the limited purpose of miscellaneous petitions, this Court finds that the State Government has chosen to promote the schemes intended to benefit the elite and rich in the society.

This is not to suggest that the Government must be oblivious to the needs of different sections of the society.

The unfortunate part of it is that such schemes were evolved even while imposing a total ban on assignment of house sites to the poor, in the districts of Hyderabad and Ranga Reddy.

The preamble of the G.O.

reads: "Government of Andhra Pradesh had proposed to establish an Integrated project which includes an International standard Convention Centre, a Star Hotel, Golf Course and Villas.

Government of Andhra Pradesh have designated Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC) as the nodal agency to develop and implement the integrated project.

The new facility would cater to the potential tourist traffic arising from conventions and congresses.

The Golf Course would also enhance the value proposition for Hyderabad as a "tourist-cum- business" destination for International and domestic travellers.

The project would thus be a major tourism-cum-business infrastructure asset for the State." If the intention was to develop tourism, there is A.P.

Tourism Development Corporation.

In case it was intended to develop the city, there are the Greater Hyderabad Municipal Corporation and the Hyderabad Metropolitan Development Authority.

As though a football team was identified to play with a visiting cricket team of a foreign country, the Corporation, which has no concern with, or no experience in tourism or urban development, was chosen as the agency to co-ordinate with a real estate agency of foreign origin.

The Corporation, which has contributed a lot for industrial growth in the State, was made to do something, which is not at all in its field of activity.

An organisation, which was meant to provide infrastructure for the industries has changed its route and became the one, to provide infrastructure for the elite.

Normally, one finds instances of intervention by the State and its agencies, if there is unprecedented or unregulated escalation on account of the gap between demand and supply.

Intervention by the Reserve Bank of India in the event of there being phenomenal growth of inflation or depletion of exchange rates; or the one by the civil supplies department, whenever there is scarcity of essential commodities, can be taken as examples.

If there was escalation in prices of house sites, the intervention of the State in one form or the other, would have improved the situation.

Unfortunately, the steps that were taken by the Government over the past decade have resulted in promotion of the real estate as an organised and prominent activity.

Speculative purchasers of land, and investment on the land for business purposes has led to a situation where lands, up to the depth of few kilometres on either side of the highways connecting important cities, came to be fenced and agriculture has become either a prohibited activity or an impossibility.

Added to that, indiscriminate acquisition of huge extents of land in the names of Special Economic Zones or "Cities" "Parks" of one category or the other, indiscriminate expansion of existing highways; have cumulatively have brought about a situation, where land has become a community in commerce, than a substratum for sustainance through agriculture, horticulture, forestry or a place to live.

Hundreds of irrigation tanks disappeared together with their ayacut and villages around the cities up to the radius of kilometres together, lost their identity.

In stead of playing its protective role to curb such tendencies, the Governments of the day have directly or indirectly contributed to this.

Further, every opportunity is availed to extend open invitation to Multi- national companies or foreign agencies, to have their establishment in our country.

It is not that there is dearth of money for investment.

Even while the country looks for Foreign Direct Investment (FDI) in the wholesale markets, and of late; in the retail markets, Indian money is being 'invested' in trillions, in Swiss Bank.

Projects to create world class facilities are taken up to suit the convenience of the favourites of the Government, the multi- nations or the foreign companies.

"Special purpose vehicles are created" are brought into existence to facilitate such companies, with a view to overcome the rigour of the law.

These vehicles are not the conventional ones, with wheels.

The only commonity of such vehicles transport is the wealth.

While some are visible others are not.

This, even by raising loans from World Bank and other agencies, to the tune of billions of dollars or trillions of rupees.

Participation of native citizens is ensured in such projects, only in the form of sharing the burden of debts.

One would only wonder as to why it did not occur to those in the power from time to time as to how far it is safe to the country to keep its resources, at the disposal of the foreign companies, when it had to struggle for 200 years to get rid of one foreign company, and thousands of patriots had to attain martyrdom.

The enormous wealth generated in such projects or ventures is having its own impact upon the social and moral fibre on the society at large.

It is not without reason that the members of the political executive and the top beaurocracy who, till recently commanded respect for their yeomen service, in the respective fields or getting a different tag.

Unabated clamour for wealth has disturbed the balance between the ends and means.

The events that are unfolding in the recent past show that those who pursued the ends in total disregard of means, have ended up elsewhere.

Madhapur, which till recently was a village abutting Hyderabad, today stands as an example of the modern development.

The project in question is said to be part of it.

It also exemplifies the approach of the successive Governments.

While the entire area glitters with Malls, offices, hotels, convention centres, etc., making the night, brighter than the day, a small primary school and veterinary hospital are made to remain in a state of shame.

An average poet would have got the inspiration to write an elegy on them.

Of course, it is the very activity and culture that prevails in the area which has crucified telugu and had virtually written an elegy on conventional English, be it through e-mails or SMSes.

But for the fact that those two institutions are located in a smaller area, they too would have been bumped of, by this time, as was the Gandhi Medical College, and the land would have been made over to someone, who has the energy and wherewithal to make the law and order machinery, appear to be disturbed.

This Court is conscious of the fact that many of the observations made above do not fit into a typical judgment.

However, when the Court is faced with a situation, which has the effect of shaking the very foundations of the society, or damaging the social and moral fibre, it cannot remain as a mute spectator.

The effort is only to impress on the policy makers, who are busy in "looking forward" to have a look backward also.

The principal argument advanced on behalf of the Government in support of the impugned G.O.

is that the plots were sold at a highly unrealistic prices, and it is just unbelievable that such big plots of land are sold in such an important locality @Rs.5,000/- per square yard.

According to it, the rate would not have been less than Rs.50,000/- per square yard.

If the only suspicion or illegality is about the unrealistic nature of the cost of the land, such a thing happened at the very inception of the project, when with its eyes wide open, the Government and the Corporation, have sold and conveyed land in such an important locality @ Rs.29 lakhs per acre.

Added to that, only a fraction of the consideration that was paid and rest of it was in the form of share and debentures.

The transparency of the deal is evident from the following clause in the Annexure to the G.O.

"6.5 Confidential Information Except as required by any governmental authority, the Parties hereto including third party sub-contractors shall not disclose or otherwise divulge to any third person or persons any secret or confidential information of any of them which may have come to their knowledge through the establishment and operation of APIIC and/or the Developer.

This obligation shall survive the termination or cancellation of this Agreement for any reason whatsoever.

It is agreed that this provisions shall not apply to any information in the public domain at the date of execution of this Agreement, becomes part of the public domain through no fault of any of the Parties hereto, or is known to any of them before the initiation of discussions regarding the formation of APIIC or the Developer or by disclosure by a third party." It is not as if the Government or the Corporation were dealing with any sensitive projects in the field of defence or nuclear science that the security of the State was involved.

When this was the manner in which the project was launched, one hardly expects that everything would be normal, till the end.

The CBI is investigating into certain aspects of the matter on the directions issued by this Court.

The ultimate result of the same would tell upon the complicity or otherwise of some of the persons and agencies associated with the project, at certain stages.

As of today, the State Government did not take any steps to wind up the project or to resume the land.

If one goes by the text of the clauses in the Annexure to the G.O., or the deed of conveyance, an impression would be gathered that the Government permitted a web to be woven around it.

Be that as it may, its concern appears to be mostly about the reduction of the equity of the Corporation.

Across the Bar, it is stated that the equity of the Corporation which was at 26% was reduced to about 6%.

In the ultimate analysis, the Corporation should be interested in ensuring that its share of the profits or the consideration does not deplete as long as the project is in tact.

Necessary measures in this regard can certainly be taken.

The G.O.

was issued in exercise of power under Section 22-A of the Registration Act.

It reads: "22-A Prohibition of Registration of certain documents:- (1) The following classes of documents shall be prohibited from registration, namely:- (a) documents relating to transfer of immovable property, the alienation or transfer of which is prohibited under any statute of the State or Central Government; (b) documents relating to transfer of property by way of sale, agreement of sale, gift, exchange or lease in respect of immovable property owned by the State or Central Government, executed by persons other than those statutorily empowered to do so; (c) documents relating to transfer of property by way of sale, agreement of sale, gift, exchange or lease exceeding (ten) 10 years in respect of immovable property, owned by Religious and Charitable Endowments falling under the purview of the Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1987 or by Wakfs falling under the Wakfs Act, 1995 executed by persons other than those statutorily empowered to do so; (d) Agricultural or urban lands declared as surplus under the Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act, 1973 or the Urban Land (Ceiling and Regulation) Act, 1976; (e) any documents or class of documents pertaining to the properties the State Government may, by notification prohibit the registration in which avowed or accrued interests of Central and State Governments, Local Bodies, Educational, Cultural, Religious and Charitable Institutions, those attached by Civil, Criminal Revenue Courts and Direct and Indirect Tax Laws and others which are likely to adversely affect these interests." (remaining part omitted, since it is not necessary for this case) A perusal of that provision discloses that it prohibits registration of documents pertaining to the lands mentioned in clauses (a) to (e).

It is only in respect of the lands or properties mentioned in clause (c) that publication of notification is necessary.

Clause (e) would become relevant, if only the State Government, Central Government or any local authorities have an accrued or avowed interest in the properties and a notification is published in the Gazette.

This Court has already referred in the interim order passed on 04.07.2011, the judgments rendered by various Courts to the effect that the Corporation i.e.

APIIC is not a local authority.

Further, once the Corporation has executed a deed of conveyance conferring absolute rights in favour of EMAAR Properties, it is just unthinkable as to how it can be said to be having subsisting, accrued or avowed interest.

The petitioners or their members have responded to the advertisements or notifications issued by the agencies associated with the project.

The State did not take exception to the matter at any point of time till the agreements were entered into.

In case of the flats almost the entire consideration was paid.

In the counter-affidavit it is not even mentioned that the considerations received for the flats is inadequate.

It is only in respect of plots that doubt is expressed as to the adequacy of consideration, or allotment.

It is to the effect that the land which was to cost about Rs.50,000/- per square yard was agreed to be sold at Rs.5,000/-.

The Corporation's share in 26% of Rs.50,000/- would work out to about Rs.12,500/-, per square yard.

So far as the selection process is concerned, nowhere in the G.Os., or the Memorandum of Understanding or other relevant documents any particular procedure was stipulated.

The question as to whether any fraud or irregularity was committed in the process would be known only after the proceedings initiated by the CBI assume finality.

Till such time, the petitioners or their members who parted with substantial amounts cannot be left in suspended animation.

It is necessary to bring about a semblance of certainty vis--vis the development agency on the one hand and the ultimate consumer on the other hand.

The sale of flats and villas is one part of the entire project.

The citizens who parted with the amount cannot be left in the lurch.

Interests of the Corporation can be protected by directing that the probable share, in the event of the actual cost prevailing as on the relevant date, is not denied to it.

From the point of balance of convenience also, the petitioner deserves to be granted the relief.

The reason is that EMAAR and other private agencies have already got the land of 258 acres, valued at Rs.29 lakhs per acre.

As against the total cost of Rs.74, 92,00,000/- even at this moderate price, what all it parted was only Rs.3,60,72,000/-.

Rest of it is in the form of the share of the Corporation and debentures.

Added to that, the Government, which gets almost, 1/5th of the value of every property, in the form of stamp duty, and registration charges, has exempted the said agency from such obligation.

The agencies have enriched themselves by receiving almost the entire consideration from the petitioners and their members.

Unless the sale deeds are executed, the said agencies are likely to take advantage of the situation, and there will not be any possibility for recovering the amounts.

If, on the other hand, the sale deeds are executed, a semblance of clarity will exist.

It is not even alleged by the State that the land was put to any use different from what it was meant for.

The execution of the sale deeds will not in any way effect, the ongoing investigation or trial and they can certainly made subject to the outcome of the ongoing proceedings.

Hence, the order dated 04.07.2011 passed in W.P.M.P.No.21190 of 2011 is made absolute and W.V.M.P.Nos.2667 and 2912 of 2011 in W.P.No.17618 of 2011, are dismissed.

W.P.M.P.No.24352 of 2011 in W.P.No.20098 of 2011 and W.P.M.P.No.6552 of 2012 in W.P.No.5143 of 2012 are ordered subject to the condition that, a) the purchasers of plots shall be under obligation to deposit a sum of Rs.15,000/- per square yard to the credit of the Corporation, before the documents are presented for registration; b) the amount so deposited shall be invested by the Corporation in fixed deposits to be in force till the writ petitions are disposed of finally; and c) the registration of the documents in favour of the petitioners or their members shall be subject to the out come of the writ petitions and other proceedings pending in various Courts.

____________________ L.NARASIMHA REDDY, J.


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