CAG Report 2014 15 Para 3.13 Inadmissible payment of land compensation

Last modified at 10/06/2016 16:47 by Vanijyasachivalaya

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CAG Audit Para 2014-15 : 3.13   Inadmissible payment of land compensation

​3.13.1  Introduction

The Karnataka Land Reforms Act, 1961 (KLR Act) prescribes a ceiling on agricultural holdings by a person or family and Section 63 of the KLR Act prescribes the holding limits from 10 acres of 'A' class land to 108 acres of D class land and maximum of 20 acres of 'A' class land in respect of family comprising five members and above.  As per Section 66 of the Act, every person who acquires land in excess of the extent specified/deemed to be in excess of the ceiling area should furnish a declaration to the Tahsildar within whose jurisdiction the holding of such person containing the particulars of all the lands, members of the family, etc. and after due verification of particulars, Tahsildar refers the issue to Land Tribunal for determination of extent of surplus land held by a person or family.  The crucial date for determination of ceiling limit for person/family as per KLR Act was 1 March 1974.

3.13.2  Grant of land in violation of KLR Act

In pursuance of Section 66 of the KLR Act, the Mahanth of the Tripura Bhairava Mutt, Sri P. Krishnananda Giri Goswamy (declarant) filed (November 1969) a declaration in Form 11 with the Tahsildar, Nanjangud, and declared himself as individual, unmarried and holding 891-01 acres in different villages in Nanjangud taluk.  The declarant had expired in September 1989.  Upon the death of the declarant, dispute on succession arose between brother (Bhishma Pitamaha) and Mahanth of the Tripura Bhairava Mutt (Krishna Mohanananda Giri Goswamy).  The brother claimed that holdings declared were inherited and belonged to the family comprising of eight members while the Mahanth claimed (October 1989) that the land holdings belonged to the Mutt.

On the matter being referred to Land Tribunal, Nanjangud, the Tribunal granted (6 August 1993) 40 units[1] of land to the declarant and family members as below:

  • To the declarant – 10 units (53-24 acres)
  • To the family of Satyabhama, sister of the declarant – 10 units (54 acres)
  • To Bhishma Pitamaha, brother of the declarant & his family – 10 units    (53-39 acres)
  • To Kuldip Prakash, major son of Bhishma Pitamaha – 10 units (54 acres)

The Tribunal Order was challenged in a writ petition in the Hon'ble High Court of Karnataka by the Mahanth which directed (January 1995) re-examination by the Land Tribunal.  The Second Tribunal passed order (22 May 1999) upholding the order passed by the previous Tribunal which was also challenged in Hon'ble High Court which ordered fresh hearing. 

The third Land Tribunal, among others, took cognizance of Hon'ble Supreme Court judgment (SLP No. 20359/2005), concurring (March 2008) with the lower court's order declaring Bhishma Pitamaha as the legal heir.  The third Land Tribunal passed order (14 September 2011) treating the lands as ancestral property and inherited by the declarant and granted 90 units to the family members as follows:

v  P. Krishnananda Giri Goswamy, declarant  – 10 units (53-24 acres) 

v  Satyabhama, sister of the declarant – 10 units (54 acres)

v  To Bhishma Pitamaha, brother of the declarant & Kuldip Prakash and family – 20 units (107-39 acres)

v  To five daughters of Bhishma Pitamaha – 10 units each – 50 units - granted as per Hindu Succession Act (HS Act), 1956

The Tahsildar, Nanjangud carried out changes in RTC[2] based on the applications received from the grantees/other family members.  Karnataka Industrial Areas Development Board had paid land compensation of                ` 100.57 crore to the family members of Bhishma Pitamaha based on RTC entries towards acquisition of 483-29 acres of land.

The order passed by the third Land Tribunal in granting 90 units of land was not in conformity with the provisions of KLR Act as discussed below:

v  Grant of land to deceased persons: The Land Tribunal granted 10 units each to the deceased persons i.e., declarant and late Satyabhama, who expired in 1960 which was irregular as:

Ø  The declarant was not married and had no family of his own.  The share could be transferred to his family members as per Succession Act i.e., Bhishma Pitamaha.  But as the Land Tribunal had already granted 10 units to Bhishma Pitamaha, the declarant's share cannot be transferred since it would exceed the ceiling limit prescribed in the KLR Act i.e., 10 units for a person.

Ø  Satyabhama, sister of the declarant was not alive as on 1 March 1974 i.e., the date of determination for ceiling limit.  As the sister was unmarried, was not having a family of her own and further, had already expired on 1 March 1974, the grant of land to late Satyabhama was irregular.

v  Grant of 50 units of land to Bhishma Pitamaha's daughters: The third land tribunal granted 10 units of land to each of the five daughters of Bhishma Pitamaha as per amended (September 2005) provision of HS Act, 1956 instead of determining of ceiling of land holding under KLR Act.  As on 1 March 1974 i.e., date prescribed for determining ceiling on holding of lands, five daughters of Bhishma Pitamaha were minors and unmarried and forms part of family of Bhishma Pitamaha.  Hence, each daughter cannot be treated as a separate family.

v  The provision of the Sub-section 4 of Section 63[3] of KLR Act was misconstrued.  The proviso is applicable only in cases where a member of a joint family possessed land and such land would be clubbed with lands held by the joint family and such share would be allotted to that member as if the partition of entire land held by the joint family has taken place.  The daughters of Bhishma Pitamaha were minors and formed part of his family and were also not holding lands separately to aggregate with the holdings of joint family.  Hence, the proviso is not applicable in this case.

v  Further, in the Land Tribunal Order, it was also recorded that genuineness of the succession certificate (6 October 1994) issued by the Assistant Commissioner, Nanjangud (AC) was doubtful but was taken as valid since no objections were received.  Also, the claimants did not produce other supporting documents to prove that they were family members/successors.

On this being pointed out, the Tahsildar, Nanjangud reiterated (January 2015) the grounds adduced by the Land Tribunal and also stated that:

v  The Land Tribunal relied on the Subsection 4 of Section 63 of KLR Act, treating each daughter as a separate family.

v  Accepted that transfer of land granted to declarant and late Satyabhama to the grandsons of Bhishma Pitamaha was incorrect.  Further, stated that the coparcenary property of Late Krishnananda Giri Goswamy (declarant) and Late Satyabhama (unmarried sister of declarant and had expired before declaration) devolves to surviving sons and daughters of Bhishma Pitamaha. 

The reply is not acceptable as:

v  The Land Tribunal was required to determine ceiling as per KLR Act but  70 units of land granted was not as per the provisions of KLR Act.  The Chairman of the Land Tribunal had expressly stated in the order that the amended provision of HS Act was not applicable and granting land to daughters would be erroneous.  Thus, the order passed by Land tribunal was defective.

v  The provision of the Sub-section 4 of Section 63 of KLR Act was misconstrued and not applicable for the reasons as stated earlier.  Further, the fixing of ceiling limit of land cannot be determined based on assumptions.

As per the Act, the family was entitled for grant of 20 units[4] of land.  Failure to challenge the defective Land Tribunal Order and passing mutation orders resulted in receiving compensation by family members of Bhishma Pitamaha for 90 units as against 20 units (377-24 acres) of land eligible as per KLR Act and resulted in receiving land compensation amount of ` 79.29 crore, which was not admissible.

Deputy Commissioner, Mysuru accepted (September 2015) the audit observation and intimated that permission from Government had been sought for filing writ petition in Hon'ble High Court to challenge the Land Tribunal Order to recover land compensation amount paid.  The Government issued order (December 2015) to challenge the Land Tribunal Order by filing writ petition in the Hon'ble High Court of Karnataka.


3.13.3 Violations by Karnataka Industrial Areas Development Board while making payment of ` 79.29 crore towards land compensation

The land acquired by Karnataka Industrial Areas Development Board (KIADB) for setting up industrial areas comprises both Government and private lands.  As land transactions involve scrutiny of complex revenue records, establishing the title of the land based on revenue and other records assumes a lot of significance.  Persons whose lands were acquired were to submit a set of documents as per the list devised by the Special Land Acquisition Officers, KIADB (SLAOs) for claiming compensation.  After scrutiny of the documents received from the claimants as per these lists, the SLAOs process the claims and disburse compensation to the claimants.  KIADB had paid ` 79.29 crore as compensation to eight persons for acquisition of land in Sy nos. 390 to 400, 582 and 583-587 (377-24 acres) of Immav village.

Scrutiny of land compensation payments revealed that SLAO, KIADB, Mysuru had not exercised due checks and did not obtain original documents from claimants before making payments in respect of 377-24 acres of land which was granted by the Land Tribunal, Nanjangud.  The details of lapses are shown in Appendix 3.1.

Thus, grant of excess land in violation of KLR Act by Revenue authorities and failure to exercise due diligence and to obtain prescribed documents by KIADB resulted in payment of land compensation of ` 79.29 crore to non-eligible persons. Necessary rectificatory action may be taken in this regard.  No reply was furnished by KIADB.

The matter was referred to Government in May 2015, followed by reminder in September 2015; their reply is still awaited (December 2015).
APPENDIX 3.1

(Reference: Paragraph 3.13.3, Page 63)

Statement showing details of lapses committed while disbursing land compensation payment


Sl. No.
Allottee as per Land Tribunal awardSurvey No./ Extent of landPayment of compensation disbursedViolations/lapses noticed
1.Sri Krishnandagiri Goswamy
390 to 400/53-24 acres


` 11.25 crore[5]
The Land Tribunal allotted 53.24 acres of land in Survey Nos. 390 to 400 to Sri Krishnananda Giri Goswamy.  The land in this survey nos. was in the name of allottee's brother, Bhishma Pitamaha and​ the allottee had expired before the land tribunal award.  Based on the first land tribunal's award, the land was transferred in favour of Pradeep Bin Sudhir and Sonu Bin Sudhir. 

Ø  SLAO, KIADB has not insisted succession certificate, copy of Land tribunal award, death certificate, etc., before payment of compensation to Pradeep Bin Sudhir and Sonu Bin Sudhir and their names were not notified in the final notification.   
2.Smt Satyabhama

Old 424; New 582/ 54 acres

` 11.34 crore[6]
KIADB had made payment of compensation primarily on the basis of RTC and Mutation.  Claimants seeking compensation were to submit RTC from the year 1999 till the year of claim.  It was, however, seen that the RTC was in the name of Bhishma Pitamaha from 1996-97 to 2000-01, after which, it was changed into the name of Satyabhama till 2010-11 and subsequently it was changed to Harsha Bin Rajesh Kumar. 

Ø  SLAO, KIADB failed to verify the genuineness of RTC as there was a change in the RTC from living person to a demised person and did not insist the death certificate, the succession certificate from the claimant.

Ø  Hence, payment of compensation by the Board to Harsha Bin Rajesh Kumar was irregular.


3.Five Daughters of Bhishma Pitamaha (Shobha devi  Hemalatha; Nisha Sharma; Anjana Sharma & Vijayalakshmi)

Old 424; New 583-587/270 acres

Rs. 56.70 crore[7]
 In the third Land Tribunal Order, the Chairman had expressed dissent opinion for grant of 50 units of land to five daughters and expressly stated as erroneous. Despite determination being not as per law and involved undue benefit due to payment of compensation, the KIADB had not contested the Land Tribunal Order.

Ø  KIADB had paid land compensation to five daughters based on RTC and also disbursed land compensation to non-eligible persons without obtaining prescribed documents.

Ø  However, their names were not notified in the final notification (issued on 3 April 2008) and no corrigendum was issued by the KIADB in this regard. 

​[1] one unit = 5.40 acre

[2] Record of Rights, Tenancy & Crop Inspection Certificate

[3] In calculating the extent of land by a person who is not a member of a family but is a member of a joint family and also in calculating the extent of land held by a member of a  family who is also a  member of the joint family, the share of such member in the lands held by the joint family shall be taken into account and aggregated with the lands, if any, held by him separately and for the purpose such share shall be deemed to be extent of land which would be allotted to such person had there been partition of the lands held by the joint family.

[4]10 units each to Bhishma Pitamaha & Kuldip Prakash, who is the son of Bhishma Pitamaha

[5] Compensation paid to Pradeep: Rs. 5,15,02,500 and Sonu: Rs. 6,10,57,500

[6] Compensation paid to Harsha Bin Rajesh Kumar who is the grandson of Bhishma Pitamaha

[7]  Rs. 11,34,00,000 to each daughter 

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