No Lapse Where Possession Is Taken and Compensation Paid — Delay, Stay Orders or Public Charitable Status Cannot Undo Valid Acquisition: Karnataka HC

“Charity Is No Shield Against Eminent Domain”, In a landmark decision reiterating the primacy of public purpose and lawful acquisition, the High Court of Karnataka on January 30, 2026, upheld the acquisition of lands belonging to the Jamnalal Bajaj Seva Trust, rejecting the Trust’s prolonged challenge against the takeover of over 270 acres of land in Srigandada Kaval and Herohalli villages for the establishment of a Mega Agricultural Produce Market Committee (APMC) Yard.

Division Bench led by Chief Justice Vibhu Bakhru and Justice C.M. Poonacha affirmed the findings of the learned Single Judge, concluding that the acquisition was lawful, procedurally compliant, and justified under the Land Acquisition Act, 1894 as amended by Karnataka, and that the Right to Fair Compensation and Transparency in Land Acquisition Act, 2013 did not result in any lapse, especially after the Supreme Court had earlier remanded the matter for reconsideration.

“Mere Status as a Charitable Trust Does Not Exempt Land from Public Acquisition”

One of the main contentions raised by the Jamnalal Bajaj Seva Trust, a charitable institution inspired by the ideals of Mahatma Gandhi and Vinoba Bhave, was that the government ought not to acquire its land given its public-spirited objectives. The Court rejected this argument decisively, observing:

“The contention that the Trust is created with avowed objects and its lands ought not to be acquired does not merit consideration… the right of the State to acquire lands for public purposes cannot be thwarted merely because the land belongs to a charitable trust.” [Para 60]

The Court upheld the principle of eminent domain, clarifying that as long as public purpose is established and statutory compliance ensured, the identity or mission of the landowner has no bearing on the validity of acquisition.

“Award Was Passed, Possession Taken — Land Vested Absolutely in the State Free From Encumbrances”

Referring to both Section 16 of the Land Acquisition Act, 1894 and the Constitution Bench judgment in Indore Development Authority v. Manoharlal (2020) 8 SCC 129, the Court held:

“Once an award is made and possession is taken, the land vests absolutely in the State… non-payment or delayed payment of compensation only entitles the landowner to interest, not a declaration of lapse.” [Para 61]

The Court found that the State had taken possession through Mahazars dated 07.12.2017 and a contemporaneous official memorandum dated 06.10.2000, in line with the legal requirement. The Court reaffirmed that:

“Drawing of panchnama contemporaneously is sufficient… possession once taken under Section 16 results in absolute vesting in the Government.” [Para 53]

“Time Limit Under Section 6 and Section 11A Was Met — Interim Court Stays Must Be Excluded”

The Trust had also argued that the final notification under Section 6 was issued beyond the one-year period prescribed by law, and that the award was not made within two years, as required under Section 11A.

The Court, however, after a detailed timeline analysis, held that:

“Once the period during which acquisition proceedings were stayed by interim court orders is excluded, the final notification was well within the prescribed time… Similarly, delay in award was also justifiable due to subsisting litigation.” [Paras 35, 44]

It relied on Municipal Corporation of Delhi v. Lichho Devi (1997) 7 SCC 430, holding that:

“A stay on dispossession must be construed as stay on further acquisition steps, and hence such period must be excluded from limitation computation.” [Para 43]

“Invoking Urgency Clause Was Justified — Mega Market Needed for Farmers' Welfare”

Rejecting the Trust’s challenge to the invocation of urgency provisions under Sections 17(1) and 17(4) of the Land Acquisition Act, the Court emphasized that the subjective satisfaction of the State is largely immune from judicial interference, unless malafides or non-application of mind are clearly shown.

The Bench noted:

“The urgency was writ large… multiple meetings, including of the Single Window Committee, considered the APMC’s need for expansion. The Court will not second-guess the executive’s discretion in such cases.” [Paras 45–48]

“Substantial Compensation Was Paid — Withholding Remainder Due to Land Ceiling Proceedings Was Justified”

A core argument raised by the Trust was that full compensation was not paid. The Court, however, accepted the State’s explanation that while ₹14 crore had been deposited by APMC, a portion was withheld due to pending land ceiling proceedings under Section 66 of the Karnataka Land Reforms Act, 1961, which had finally ended only in 2022.

The Court held:

“It is public money… the State has to be cautious when land ceiling proceedings cast a shadow on title. No complaint of non-payment of 80% can be entertained in this backdrop.” [Para 51]

Importantly, the Trust had received over ₹2.36 crore, executed indemnity bonds, and later filed for enhancement of compensation under Section 18, thereby demonstrating acquiescence.

“Trust Cannot Approbate and Reprobate — Acceptance of Compensation Bars Challenge”

Strongly invoking the doctrine of approbate and reprobate, the Court ruled that the Trust, having voluntarily accepted substantial compensation and engaged in negotiations for market value, cannot now challenge the acquisition.

“The Trust cannot be permitted to approbate and reprobate… it retained compensation for more than a decade and participated in meetings finalising land rates. Mere use of the phrase ‘without prejudice’ in a letter cannot erase this conduct.” [Paras 62–64]

“Claim of Acquisition Being Dropped Based on Collateral Pleadings Is Meritless”

The Trust had also pointed to certain statements made by APMC in unrelated writ petitions allegedly suggesting that the acquisition would not be pursued. The Court summarily rejected this:

“The Trust was not a party to those proceedings… no finding of any Court suggests abandonment of acquisition.” [Para 55]

Acquisition Upheld, Appeals Dismissed

Ultimately, the High Court upheld every aspect of the land acquisition process — from compliance with statutory timelines, to proper invocation of urgency, valid possession, partial compensation, and the existence of public purpose.

Concluding, the Bench ruled: “The appellants have failed in demonstrating that the order of the learned Single Judge is in any manner erroneous… the appeals are dismissed as devoid of merit.” [Para 66]

Date of Decision: 30 January 2026