Bangalore Palace grounds dispute: Supreme Court refers Karnataka’s plea on Rs 3,000 crore TDR to CJI

The three-judge bench, in the course of adjudicating contempt petitions filed by the royals against the non-payment of TDR by the Karnataka government, directed the state on December 10, 2024, to deposit TDR for the portions of the Bangalore Palace grounds that were sought to be acquired for road development by the Bruhat Bengaluru Mahanagara Palike (BBMP) in 2014.

Earlier this month, the Karnataka government filed an application before the three-judge bench, stating that the TDR deposited by the state in compliance with the orders in the contempt petition must not be released to the former royals until the disposal of the civil appeals pending before the Supreme Court.

The state also argued that review petitions had been filed for review of the Supreme Court orders that directed the Karnataka government to make the TDR payments to the former royals.

On May 22, Justice Aravind Kumar ruled on behalf of the three-judge bench that the state government’s fear of not being able to recover TDR if the civil dispute over the takeover of the Bangalore Palace land by the state is decided in favour of the government was “not a genuine apprehension”.

The Supreme Court ruled on May 22 that the state’s apprehensions “cannot be imported to the orders which have been wilfully disobeyed by contemnors, and conditions if any now imposed, for the issuance of TDRs”.

On December 10, 2024, the Supreme Court directed the state to pay compensation in the form of TDR at the prevailing market value to the erstwhile royal family as agreed by the state and ordered by the apex court in November 2014 for the acquisition of a 15.36-acre portion out of the 472 acres of the disputed Bangalore palace property for a road widening project.

The Supreme Court order came in response to contempt of court petitions filed by the late Srikantadatta Wadiyar, the erstwhile Maharaja of Mysore, his wife, Pramoda Devi Wadiyar, and others, regarding the delay in the state’s payment of compensation.

With the market value of the land sought to be acquired for road work assessed to be in the range of Rs 3,014 crore at present, the Congress government in Karnataka introduced an ordinance on January 29 to withdraw the TDR offer for the Bangalore Palace land.

“We are trying to safeguard the interest of the state and the property of the state, and we have already stated in great detail that the cost under discussion of somewhere around Rs 3,000 crore is not acceptable and we have now introduced the ordinance keeping all this in view,” Law Minister H K Patil said in February.

The ordinance states that the “financial effect of the judgement of the Hon’ble Supreme Court will be grave on the exchequer of the state of Karnataka, and upon the urban planning of the city of Bengaluru”.

The Supreme Court, however, rejected the Karnataka government’s effort to counter the compensation payment and indicated on February 13 that the December 10, 2024, order by a three-judge bench in the contempt pleas was not negotiable.

The Bangalore Palace grounds case timeline

The Bangalore Palace grounds, spanning 472 acres of land, were acquired by the Karnataka government through the passage of the Mysore Palace Transfer and Acquisition Act of 1996, which received the President’s assent and came into force on November 18, 1996.

In 1996, the state was to pay Rs 11 crore as compensation for the entire land at the rate of Rs 2.30 lakh per acre.

However, the acquisition by the state has remained in limbo since the royal family challenged the validity of the acquisition law in the Supreme Court after the Karnataka High Court upheld the law on March 31, 1997.

Subsequently, the Karnataka government attempted to acquire 15.36 acres of the palace land for the widening of Jayamahal Road and Palace Road in central Bengaluru, spanning a 2-km stretch, and a TDR compensation provision was provided for the acquisition.

The TDR to be paid to the royal family for the acquisition of 15.36 acres of land, equivalent to 13,91,742 sq ft, at the prevailing guidance value of Rs 2.70 lakh per sq metre, will amount to Rs 200 crore per acre, totalling Rs 3,014 crore, the state has argued.

“Once TDR is paid, it cannot be regained. It would affect the state’s economy.  We have decided not to pay the TDR. Since it is under litigation, there are a lot of complications. The ordinance will empower us to keep control over the land. The appropriate decision on compensation will be taken at the right time,” Patil stated.