Karnataka High Court decides 26-year-old case; allows State government to resume 75 acres granted land in Ballari  

Adjudicating a case pending for the past 26 years, the High Court of Karnataka has upheld the notice issued by the State government way back in 1984-86 for resumption of 75 acres of land, granted conditionally in January 1963 by the erstwhile State of Mysore to the erstwhile Bellary Spinning and Weaving Company Ltd (wound up in 1987) in Ballari for establishing a spinning and weaving mill.

The court rejected the claim of a public sector bank, which had granted loan to the company during November 1963 based on mortgage of this land and the mill, that the loan was a secured credit as the company had absolute ownership over 75 acres of granted land, and that the government had no right for resumption of the land.

A Division Bench comprising Justice D.K. Singh and Justice Venkatesh Naik T. passed order after rehearing an appeal filed in 1999 by the State government, which had challenge a 1998 judgment of a single Judge, who had set aside the notices for resumption of the land.

An earlier order passed by a different Division Bench in 2007 was set aside by the apex court in 2023 while asking the Division Bench of the High Court to reconsider its 2007 judgment on the issue of resumption of the land. The issue was pending before the apex court between 2007 and 2023.

Analysing the provisions of the rules framed under the Mysore Land Revenue Code, 1888, and the Land Grant (Madras Area and Bellary District) Rules, 1960, the Bench said the Government is the owner of this land and what it transferred in favour of the company was limited rights for using the land for specific purpose of setting up of spinning mill based on a series of conditions.

Referring to the then prevailing laws, the Bench said that there was no transfer of ownership of the land in favour of the company, and hence the bank cannot claim that the company had absolute title over the land and hence the bank could treat the mortgaged land as secured credit.

Thus, the Bench said that the government is entitled to resume the entire 75 acres of land, if it so desires as there was no illegality in notices issued in 1984-86 for resumption of land.

Pendency of this issue had locked the 75 acres of land in the hands of the official liquidator even after winding of the company due rival claim over the land by the bank and the State government.