The Supreme Court confirmed that Ved Vignan Maha Vidya Peeth (VVMVP) trustee misrepresented his role during a 2003 land auction in Bengaluru. The trust must pay Rs 25 lakh per acre as additional consideration, while the sale itself remains valid.
New Delhi: The Supreme Court of India has recently upheld the Karnataka High Court’s ruling in the long-standing case involving Ved Vignan Maha Vidya Peeth (VVMVP), a charitable trust established by Sri Sri Ravi Shankar’s Art of Living.
The case, Sri R Raghu v. Sri GM Krishna & Anr, revolves around allegations of misrepresentation during the purchase of agricultural land through a court auction in 2003.
A Bench comprising Justices Vikram Nath and PB Varale confirmed that while the trustee of VVMVP, R Raghu, misrepresented his role during the auction, reopening the sale at this stage would not be justified.
The Court agreed with the High Court’s findings and directed the trust to pay Rs 25 lakh per acre as additional consideration to the original landowner. Furthermore, it ordered a proper survey to determine the exact boundaries of the land in question.
The dispute dates back to 2003, when 5.5 acres of agricultural land in Agara village, Bengaluru, were put up for sale by the Karnataka State Financial Corporation to recover dues from a defaulting borrower.
R Raghu, a trustee of VVMVP, won the auction by presenting himself as an individual agriculturist. At the time, the Karnataka Land Reforms Act prohibited trusts from purchasing agricultural land.
After the auction was confirmed and a sale certificate issued in 2005, Raghu later claimed that he had purchased the land on behalf of the trust. The original landowner, GM Krishna, challenged this, stating that the court had been misled into approving a transaction that was illegal.
The district court agreed with Krishna and in 2015 set aside the auction sale, finding that Raghu had committed fraud by taking inconsistent positions. However, in 2023, the Karnataka High Court partially reversed this decision.
While it confirmed that fraud had occurred, it noted that the law preventing trusts from acquiring agricultural land had been repealed in 2020, with retrospective effect from 1974.
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Considering this, the High Court chose not to cancel the auction, but instead directed the trust to pay additional compensation of Rs 25 lakh per acre and ordered a fresh survey to establish the correct boundaries.
The High Court’s judgment was sharply critical of VVMVP and its trustee. It stated,
“Therefore, the Trust played fraud on the Court by setting up its trustee, who until the sale was declared, claimed that he was the purchaser but later he claimed that the Trust was the purchaser. The contention…that a Trust has no legal existence and is represented by its trustees…is thoroughly misplaced.”
The Court further clarified,
“The petitioner did play fraud upon the Court and the Court was unknowingly made a party to an illegality and to a benami transaction.”
It made it clear that the property had been purchased by the trust, not by Raghu personally.
The Supreme Court endorsed this reasoning and praised the High Court’s handling of the case, stating,
“At the outset, we record our appreciation that the learned Single Judge of the High Court has carefully considered the long-drawn litigation, involving several rounds inter se the parties, as well as the various contentions raised and the conduct of the parties throughout. The learned Single Judge has rendered a just and equitable judgment by taking into account both the mitigating and aggravating aspects of their conduct.”
The Bench also emphasized that the trust could not claim any land beyond what was auctioned.
“In the garb of boundaries being mentioned, the appellant auction purchaser cannot claim any more area than what was put up for auction and thereafter purchased by him,” the Court said.
Regarding compensation, the Supreme Court stated that the High Court had correctly balanced the equities involved.
“Insofar as the direction for payment of Rs.25 lakhs per acre as additional sale consideration to the respondent is concerned, we do not wish to interfere with the same, considering the conduct of the appellant, whose dual role casts doubt on the entire proceedings.”
Finally, the Supreme Court dismissed both appeals filed by R Raghu and the original landowner and also closed the contempt proceedings related to this matter.
In the case, the appellants were represented by Senior Advocate Gopal Sankaranarayanan along with Advocates Sajal Jain, Trisha Chandran, Sonakshi Malhan, and Shashank Shekhar.
The respondents were represented by Senior Advocate Kiran Suri along with Advocates SJ Amith, Aishwarya Kumar, and Vipin Gupta.
This judgment highlights the importance of transparency in property transactions and reinforces that misrepresentation, even by a trustee of a charitable organization, will be scrutinized by courts, but remedies must be proportionate to the circumstances, especially when laws change retrospectively.
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