1. These intra court appeals arise out of an order dated 06.10.2017 passed by the learned Single Judge in a writ petition. W.A. No. 6845/2017 has been filed by the State Government (hereinafter referred to as 'the GOK' for short) whereas W.A. No. 6438/2017 has been filed by Samaj Parivardhana Samadaya (hereinafter referred to as 'the Association' for short). Both these appeals were therefore heard analogously and are being decided by this common judgment.

2. Facts leading to filing of these appeals in nutshell are that M/s. Joy Ice creams (Bangalore) Pvt. Ltd., (hereinafter referred to as 'the Joy Ice Creams' for short) is the owner of land bearing Sy. No. 160 and Sy. No. 157(P) of Pattandooru, Agrahara Village, where it had established a factory for manufacture of ice creams. In the middle of the aforesaid land held by the Joy Ice Creams, land measuring 3 acres and 23 guntas in Sy. No. 42 of Pattandooru, Agrahara Village (hereinafter referred to as 'the schedule land' for short) is situate. GOK issued a notification dated 16.09.1981 under Section 3 of Karnataka Industrial Areas Development Act, 1966 (hereinafter referred to as 'the 1966 Act' for short) declaring the schedule land as an industrial area for the purposes of the 1966 Act. Thereafter, GOK leased out the schedule land on 20.10.1989 to Joy Ice Creams and executed a lease deed in its favour.

3. Joy Ice Creams requested the Karnataka Industrial Areas Development Board (hereinafter referred to as 'the KIADB' for short) to allot the aforesaid land. Thereupon the KIADB approached the Government with a request to transfer the schedule land in favour of Joy Ice Creams. The GOK by an order dated 20.10.2005 directed the Deputy Commissioner to transfer the schedule land in favour of KIADB. Joy Ice Creams was directed by KIADB, to pay an amount of Rs. 5,30,49,079/- on 22.11.2005. The aforesaid amount was remitted by Joy Ice Creams on 14.12.2005. The Special deputy Commissioner by a memorandum dated 31.03.2006 transferred the schedule land in favour of KIADB and imposed a condition of non alienation of the same.

4. The KIADB thereafter executed a registered sale deed on 21.07.2006 in favour of Joy Ice Creams. The schedule land was conveyed by Joy Ice Creams vide sale deed dated 30.08.2006 in favour of Prestige Estates Projects Private Limited (hereinafter referred to as 'the Prestige Estates' for short).

5. Between the period from 27.02.2007 to 20.04.2009, the Prestige Estates obtained NOC from BSNL, Fire Force Department, BESCOM, BWSSB, Karnataka State Pollution Control Board, State Level Environment Impact Assessment Authority, Airport Authority of India and KIADB for construction of residential buildings on the schedule land. On 20.01.2010, the BDA issued a Work Order for construction of residential apartments and on 03.03.2010, building licence was issued by Bruhat Bangalore Mahanagara Palike (BBMP) for construction of apartments on the schedule property.

6. The Special Deputy Commissioner by a communication dated 19.05.2011 informed the GOK that its office had imposed the condition with regard to non alienation of the schedule land. However, in view of Rule 28(2) of the Karnataka Land Grant Rules, 1969 (hereinafter referred to as 'the Rules' for short), the aforesaid condition is not applicable. The GOK in its reply dated 29.07.2011 sent to the Special Deputy Commissioner informed him that since condition with regard to non alienation of schedule land does not apply, therefore, the same be withdrawn/cancelled. The Special Deputy Commissioner by communication dated 02.08.2011 issued a corrigendum to official memorandum dated 31.03.2006 and withdrew all the conditions imposed in the official memorandum including the non alienation clause. Thereafter, on 10.01.2012, the Deputy Commissioner, Bangalore District informed the Bangalore Development Authority (hereinafter referred to as 'the BDA' for short) that non alienation clause contained in office memorandum dated 30.01.2006 has been withdrawn. The State Government by an order 29.07.2011 withdrew the condition with regard to the alienation in view of Rule 28(2) of the Rules.

7. The Deputy Commissioner suo motu initiated the proceedings under Section 136(3) of the Karnataka land Revenue Act, 1964. The Deputy Commissioner however by an order dated 15.06.2012 dropped the proceeding.

8. Thereafter on 25.05.2015, the Deputy Commissioner (Urban) along with Additional Commissioner, accompanied by policemen came to the schedule land. On 25.05.2015 itself the GOK withdrew the grant made in respect of schedule lands in favour of Joy Ice Creams, on account of violation of the conditions of grant. The Joy Ice Creams thereupon submitted a representation to the Principal Secretary to GOK, which was rejected by an order dated 06.08.2015.

9. The aforesaid orders were challenged in a writ petition before the learned Single Judge, who by an order dated 06.10.2017, inter alia held that grant in favour of Joy Ice Creams was made under Rule 20 of Rules. It was further held that Deputy commissioner on his own could not have imposed the condition with regard to non alienation of land in its order dated 20.10.2005 without seeking approval of the GOK. It was further held that transfer made in favour of Joy Ice Creams by registered sale deed was an absolute transfer and the condition with regard to non alienation of the land cannot be imposed in view of Rule 28(2) of the Rules. It was also held that the order canceling the grant was passed after an inordinate delay of 10 years and mere understanding between Joy Ice Creams and M/s. Wild Flower Estates and Resorts regarding joint development of the land cannot lead to presumption of fraud and the allegations of fraud are unfounded. Accordingly, the Government Orders dated 06.08.2015 and 11.08.2015 were quashed. In the aforesaid factual background, GOK and Association have filed these appeals.

10. Learned Additional Government Advocate submits that the schedule land were reserved for the purposes of grazing and could not have been allotted as no order has been passed under Section 95(4) of the. It is further submitted that, grant was made contrary to Rule 20(1)(c) of the Rules. It is also submitted that, KIADB had no authority to execute the Sale Deed in favour of Joy Ice Creams, as schedule land was not allotted absolutely to KIADB. It is contended that the Deputy Commissioner had the authority to incorporate the conditions and under Rule 20(2) of the Rules, the GOK has power to withdraw the grant. It is urged that proviso to Rule 28(2) of the Rules does not apply as the land was not allotted to KIADB. It is further submitted that the order of grant was made in favour of Joy Ice Creams for an unauthorized purpose, therefore, the same constitutes malice in law. In support of aforesaid submissions, reference has been made to decisions in KALABHARATI ADVERTISING v. HEMANT VIMALNATH NARICHANIA & ORS. - (2010) 9 SCC 437 [LQ/SC/2010/925] and R. RAJASHEKAR & ORS. v. TRINITY HOUSE BUILDING COOPERATIVE SOCIETY & ORS. - (2016) 16 SCC 46 [LQ/SC/2016/1202] .

11. Learned Senior Counsel for the appellant in W.A. No. 6438/2017 submits that the condition with regard to non-alienation of the schedule land merges with the Sale Deed. It is further submitted that, Wild Flower Estates and Resorts has hatched a conspiracy to finance Joy Ice Creams to get the schedule land at concessional price. It is further submitted that, Joy Ice Creams as well as Prestige Estates have played fraud with the State Government and learned single Judge ought to have appreciated that conduct of Joy creams and prestige estates disentitles them to any discretionary relief in exercise of powers under Article 226 of the Constitution of India.

12. Learned counsel for the KIADB has adopted the submissions made by learned Additional Government Advocate and has stated that KIADB had sold the land to Joy Ice Creams. It is further submitted that, the land is situate in an area reserved for industrial purpose, and the same has been utilized for residential purposes. Therefore, the construction made is unauthorized and is therefore required to be demolished. In support of aforesaid submissions, reliance has been placed on decision of Supreme Court in KERALA STATE COASTAL ZONE MANAGEMENT AUTHORITY v. STATE OF KERALA MARADU MUNICIPALITY & ORS. - (2019) 7 SCC 248 [LQ/SC/2019/863] .

13. Learned Senior Counsel for Joy Ice Creams submits that no condition was imposed by the State Government by an order dated 20.10.2005. However, the Deputy Commissioner by a memorandum dated 31.03.2006 imposed the conditions including the one relating to non alienation of the land which has been withdrawn by the GOK by an order dated 29.07.2011. It is contended that the Sale Deed executed in favour of Joy Ice Creams was an absolute Sale Deed. It is further submitted that, by an order dated 15.06.2012, the Deputy Commissioner has dropped the proceedings under Section 136(3) of 1964 Act. It is also submitted that, the land was allotted to KIADB and in view of proviso to Rule 28(2) of the Rules, the condition with regard to non-alienation does not apply.

14. Learned Senior Counsel for Prestige Estates submitted that recital to office memorandum dated 31.03.2006 is by way of reference and the office memorandum dated 31.03.2006 has been modified by issuing a corrigendum on 02.08.2011. It is further submitted that the Sale Deed executed in favour of Joy Ice Creams is an absolute Sale Deed and the land has been allotted to the KIADB under Rule 20(1)(c) of the Rules. It is contended that the order dated 15.06.2012 passed by the Deputy Commissioner is a quasi judicial order, by which the proceeding under Section 136(3) of the 1964 Act has been dropped and the same, has attained finality. It is further submitted that, the effect of aforesaid order cannot be set at naught by the State Government by an order dated 06.08.2015. It is also urged that cancellation of the grant in favour of KIADB is permissible only on the ground enumerated under Rule 25 of the Rules. In support of aforesaid submission, reliance has been placed on the decision of the Supreme Court in M.R. ENGINEERS & CONTRACTORS PVT. LTD. v. SOM DATT BUILDERS LTD. - (2009) 7 SCC 696 [LQ/SC/2009/1410] .

15. We have considered the submissions made on both sides and have perused the record. Before proceeding further, it is apposite to take note of the relevant provisions of Karnataka Land Revenue Act, 1964.

"136. Appeal and Revision--

(1) The provisions of Chapter V shall not apply to any decision or order under this Chapter.

(2) Any person affected by an order made under sub-section (4) or an entry certified under sub-section (6) of section 129 may, within a period of sixty days from the date of communication of the order or the knowledge of the entry certified, appeal to such officer as may be prescribed by the State Government in this behalf and his decision shall be final.

(3) The Deputy Commissioner may, on his own motion or on application of a party, call for and examine any records made under section 127 and section 129 and pass such orders as he may deem fit: Provided that no order shall be passed except after hearing the party who would be adversely affected by such order."

16. Under Rule 20(c) of the Rules, the land may be granted to a statutory Body with the prior approval of the GOK. The said Rule reads as under:

"20. Grant of land to Housing Board, Grama Panchayat, Taluk Panchayat, Zilla Panchayat, Cooperative Societies and other statutory Board - (1) Lands may be granted by the Deputy Commissioner with the prior approval of the State Government under these rules to-

(a) the Karnataka Housing Board, or any Urban Development Authority free of cost for construction of houses under the subsidized rental housing scheme or subsidized industrial housing scheme and on payment of fifty per cent of the market value in all other cases;

(b) Grama Panchayats, Taluk Panchayats and Zilla Panchayats free of cost for construction of schools, hospitals, dispensaries, and public amenities and such other purposes deemed obligatory under the Karnataka Panchayat Raj Act, 1993.

(c) Co-operative Societies and Statutory bodies like the Karnataka State Road Transport Corporation, the Karnataka Power transmission Corporation etc., on collection of 50 per cent of market value to be determined by the Deputy Commissioner.

(d) The Karnataka Industrial Area Development Board, free of cost except the areas in Zone-A notified in G.O. No. CI 167 CP 2001, dated 30th June, 2001, i.e., Bangalore District and Bangalore Rural District excluding Kanakapura and Magadi Taluks.

Provided that where the extent of the land does not exceed four hectares, no such prior approval shall be necessary.

(2) if the lands granted under sub-rule (1)(a) to (d) are not utilized for the purpose for which they are granted, the same shall be resumed by the State Government free from all encumbrances. The State Government shall not be liable to pay any compensation or damages for the lands so resumed."

17. GOK by an order dated 20.10.2005 granted approval to the proposal of KIADB dated 30.05.2005 to allot the schedule land to Joy Ice creams at the rate of Rs. 550/- per square feet for an amount of Rs. 4,28,24,925/- i.e., 50% of the market value of the land. The order reads as under:

"Reference to the above subject and reference the proposal is examined, Bengaluru East Taluk, KR Puram Hobli, Pattandur Village in Survey No. 42 measuring 3 acres 23 guntas of land (subject to the condition of measurement) under Rule 20© of the Karnataka Land Grant Rules, 1969, the market rate @ of Rs. 550.00 per square feet rate (1089 x 143 x 550) total out of Rs. 8,56,49,850.00, at 50% rate i.e., for Rs. 4,28,24,925.00 (four crores twenty eight lakhs twenty four thousand nine hundred and twenty five only), with an intention to allot to M/s. Joy Ice cream Private Limited company Bengaluru, subject to the condition making payment to the KIADB, to hand over from KIADB, Bengaluru, I am directed to state that the Government has granted its prior approval."

18. Thereafter, a memorandum was issued by the Deputy Commissioner. It is pertinent to note that the GOK while according approval for transfer of the land in favour of Joy Ice creams, in its order dated 20.10.2005 did not impose any conditions. However, the Deputy Commissioner while handing over the land to KIADB vide memorandum dated 31.03.2006 imposed certain conditions, the relevant part of the memo is extracted below for facility of reference:

Hence as per the prior approval under the Government letter Ref (1) in Pattandur Agrahara Village, Survey No. 42, measuring 3.23 As. Gs. Of land (subject to the condition of measurement) classified as 'Government Gomala' this land for the purpose of allotment to M/s. Joy Ice Cream Put. Ltd. Company Bengaluru, directions are issued to hand over to the KIADB, Bengaluru by imposing the following conditions:

Handing over to the KIADB Government land or Urban Land one part in future for any Government purpose is necessary should be ready to return back the same.

The sanctioned land other than for industrial purpose, if required for any other purpose, should be ready to return back.

This sanctioned land without government permission either selling, giving on lease, transfer or any other kind of alienations should not be done.

Before constructing the buildings intended in this land, the layout plan and licence/permit etc., should be got approved from the concerned competent authority and later as per the approved plan the building should be constructed.

In the concerned Sub Registrar office the prescribed stamp duty should be paid to the Government, and the sanctioned land should be got registered.

If any of the above conditions are violated, the government is having power to cancel the sanction. Tahsildar, Bengaluru East Taluk, should immediately hand over this land to KIADB subject to the measurement and marking of the boundaries, to take action and immediately it is ordered to submit the report to this authority."

19. Proviso to Rule 28(2) of the Rules provides that where the land is granted to Karnataka Housing Board, any urban Development Authority, KIADB, Gram Panchayat, Taluk Panchayat, Zilla Panchayat, the condition with regard to non alienation of the land shall not be applicable. At this stage, it is apposite to refer to Rule 28(2), which reads as under:

"28. Grantees of land to execute an agreement - (1) Every person who is granted lands for agricultural purposes under these rules shall execute an agreement in Form V:

Provided that where an order of grant is made under the proviso to sub-rule (4) of Rule 8, the agreement shall be executed jointly by the applicant and his wife in Form No. V-A.

(2) Every person who has granted land for non-agricultural purposes under these rules shall execute an agreement in Form VI.

Provided that where the land is granted to the Karnataka Housing Board, any Urban Development Authority, the Industrial Areas Development Board, a Grama Panchayat, Taluk Panchayat or a Zilla Panchayat, the condition that the lands shall not be alienated shall not be applicable."

20. Thus it is evident that the condition with regard to non alienation of the land does not apply in case the land is allotted to KIADB. In the instant case, the land was handed over by the GOK to KIADB. Therefore, in view of proviso to Rule 28(2) of the Rules, the condition with regard to non alienation of the land was not rightly imposed by the GOK, which otherwise could not have been imposed by Deputy Commissioner in the memo dated 31.03.2006.

Even otherwise, it is pertinent to note that GOK by an order dated 29.07.2011 withdrew the condition with regard to non alienation. The relevant extract of the order dated 29.07.2011 reads as under:

"In survey No. 42 measuring 3.23 acres of Agrahara village, KR Pura Hobli, Bengaluru East Taluk is sanctioned to M/s. Joy Ice Cream Pvt. Ltd. through KIADB, and towards the said sanction Rule 28(2) of the Karnataka Land Grant Rules 1969 alienation condition do not apply to KIADB, hence to cancel the said condition, I am directed to state that the Government has granted prior permission for the same."

Thus, the GOK realized that the condition imposed by the Deputy Commissioner is contrary to Rule 28(2) of the Rules and therefore, the condition with regard to non alienation was withdrawn. The special Deputy Commissioner issued a communication dated 02.08.2011 and withdrew all conditions imposed in the memo dated 31.03.2006.

21. The distinction between reference to another document in a contract and incorporation of another document in a contract, by reference is well settled. In first case, the parties intend to adopt only specific portion or part of the referred document for the purposes of contract. In the second case, the parties intend to incorporate the referred document in entirety into the contract. [See: M.R. ENGINEERS AND CONTRACTORS supra]. In the instant case, the relevant extract of the sale deed reads as under:

Xxxxxxxxxxxxxxxxxx

Whereas upon the representation by the purchaser to the Government to transfer the title with possession of 3 acres 23 guntas of Government land in Sy. No. 42 of Pattandur Agrahara Village, K.R. Puram, Hobli, Bangalore East Taluk, and pursuant to proceedings in this behalf the Special Deputy Commissioner vide its letter No. LND/E/CR 24/05-06 dated 31.03.2006 was pleased to order upon certain conditions that 3 acres 23 guntas of Government land in Sy. No. 42 of Pattandur Agrahara Village, K.R. Puram, Hobli, Bangalore East Taluk be transferred to the purchaser subject to the condition that the Purchaser should pay market value of Rs. 4,28,24,925/- (Rupees Four Crores Twenty Eight Lacs Twenty Four Thousand Nine Hundred and Twenty Five Only)

NOW IT IS HEREBY AGREED BETWEEN THE PARTIES AS FOLLOWS:"

22. Thus it is evident that in the sale deed, reference only has been made to the memorandum dated 31.03.2006 and the same has not been incorporated in the sale deed. Therefore, the sale is an absolute sale. Even otherwise, no sanctity can be attached to the condition incorporated in the memo dated 31.03.2006 issued by Deputy Commissioner as the same is contrary to Rule 28(2) of the Rules.

23. The Deputy Commissioner had initiated the proceeding under Section 136(3) of thesuo motu. The aforesaid proceeding was dropped by the Deputy Commissioner by an order dated 15.06.2012. The relevant extract of the order reads as under:

Thus it is clear that the transfer of the land in Sy. No. 42 measuring 3 acres 23 guntas situated at Pattandur Agrahara Village, KRishnarajapuram Hobli, Bangalore East Taluk by M/s. Joy Ice creams (Bangalore) Pvt. Ltd., in favour of M/s. Prestige Estate Projects Ltd., is not in violation of the land grant non alienation and condition under the Sale deed dated 30.08.2006. And that therefore the possession of the land in question held by M/s. Prestige Estate Projects Ltd., as well as the entries reflected in revenue records in its name cannot be held as illegal and based on false and bogus records. They are based on the orders of the competent authorities as well as the registered sale deed etc.

..............Accordingly, these proceedings are dropped.

24. Thus it has been held that transfer of Schedule land in favour of Prestige Estates has not been made in violation of any condition of grant. The aforesaid order has been passed by a quasi judicial authority viz., Deputy Commissioner in exercise of statutory powers under Section 136 of the. The aforesaid order has attained finality and therefore, binds the parties. The aforesaid order cannot be set at naught by a party to the lis viz., GOK by an order dated 06.08.2015.

25. At this stage, we may advert to Rule 25 of the Rules, which reads as under:

"25. Cancellation of grant - (1) Any grant of land made under these rules shall be liable to be cancelled and the land resumed by the authority which granted it, where the grant has been obtained by making false or fraudulent representations or is contrary to these rules.

Provided that no such cancellation shall be made without giving the grantee an opportunity of being heard.

(2) Where any violation of the condition of grant or lease of land comes or is brought to the notice of a Revenue Officer, such officer shall forthwith report the violation to the officer competent to cancel the grant or lease as the case may he. The competent officer shall after giving the grantee or lessee an opportunity to he heard cancel the grant and resume the land to the Government free from all encumbrances."

26. Thus a grant of land made under the Rules is liable to be cancelled, when the same has been obtained by making false and fraudulent representations and has been made in contravention of the Rules. The land in question was allotted to KIADB and its not the case of either the GOK or the Association that the grant of land in favour of KIADB was made by playing fraud or was made in contravention of the Rules. Therefore, there is no justifiable reason in law to cancel the grant of land in question.

27. In view of the findings recorded in order dated 15.06.2012 passed by the Deputy Commissioner, in exercise of powers under Section 136(3) of the Act, the contention of Additional Government Advocate that the schedule land could not have been granted in favor of Joy Ice creams does not deserve acceptance.

28. In the instant case, the land has been allotted to KIADB with the prior approval of the GOK. The contention of the learned Additional Government Advocate that the grant has been made in contravention of Rule 20(1)(c) of the Rules does not deserve acceptance. Similarly, the contention that KIADB had not authority to execute the sale deed in favour of Joy Ice Creams is misconceived as the same is contrary to Rules. Similarly the contention that the order of grant was made in favour of Joy Ice creams for an unauthorized purpose is misconceived. There is no material on record to hold that the land has been either allotted or conveyed in contravention of the Rules and therefore, the contention that Joy Ice creams and Prestige Estates have played fraud with the GOK does not deserve acceptance.

29. So far as the submission that the construction of residential apartments has been made unauthorizedly, suffice it to say, that the construction has been raised after approval of the building plan by the Bangalore Development Authority and after the work order was issued on 19.01.2010 and 20.10.2010 respectively. The aforesaid building plan and the work order issued by the Bangalore Development Authority, which is the planning authority has not been questioned by anyone. Therefore, the contention that the residential apartments have been constructed unauthorizedly does not deserve acceptance. The same is therefore repelled.

In view of preceding analysis, we do not find any merit in these appeals, the same fail and are hereby dismissed.