A judicial commission investigating allegations of corruption and maladministration in the Mysore Urban Development Authority (MUDA) has found no wrongdoing in the allocation of 14 developed housing sites to Karnataka Chief Minister Siddaramaiah’s family as compensation for 3.16 acres that were wrongly acquired. However, the panel found large-scale irregularities in the authority’s functioning during the 2020-2024 period.
The commission, headed by retired high court judge Justice P N Desai, has recommended criminal investigations and action against MUDA officials, as well as cancellation of MUDA site allotments under a 50:50 land scheme after March 2023, when the scheme was flagged as violating rules.
The Justice Desai commission report findings add to a Lokayukta police probe report and orders of the Karnataka High Court and the Supreme Court of the absence of evidence to suggest involvement of corruption or money laundering in the MUDA allotments to Siddaramaiah’s family.
Last year, Siddaramaiah’s wife, Parvathi, returned the 14 housing sites allotted to her in 2021 by MUDA under the 50:50 compensation scheme after the controversy was used by the Opposition to target him and the Congress government in Karnataka.
The Justice Desai commission report, which has flagged issues of blatant profiteering in MUDA site allotments by authorities in the 2020-24 period (BJP tenure 2020-23; Congress 2023-24), was tabled and discussed in a state cabinet meeting headed by Siddaramaiah on Thursday.
“In respect of utilisation of denotified land in Sy.No.464 of Kesare Village also, though the land owner insisted for alternative undeveloped land as compensation and although the resolution was also passed in the year 2017, the same was not implemented, but subsequently in the year 2022, sites were allotted at the ratio of 50:50 as per one of the mode of payment of compensation adopted in the same manner as allotted to others,” the Justice Desai commission noted in its findings about the land allotment to Siddaramaiah’s family.
The commission has opined that “the allotment of sites as compensation to the land owners whose lands were de-notified, but utilised by MUDA as narrated supra pertaining to lands in Sy.No.115/22 and 115/42 of Kergalli Village and the land in Sy.No.464 of Kesare Village cannot be said to be illegal” since compensation by way of allocation of sites was done by MUDA.
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“Therefore, the methods followed by the Authority for payment of compensation in the form of sites in case of utilisation of denotified lands cannot be said unlawful, since MUDA does not have any title and legal possession over the denotified lands,” the commission stated.
The 3.16 acres of land at survey number 464 of Kesare village was bought by Siddaramaiah’s brother-in-law, Mallikarjun Swamy, in 2004 after it was dropped from a 1996 MUDA acquisition process. Swamy gifted the land to Siddaramaiah’s wife in 2010.
The land was found to have been wrongly acquired by MUDA in 2014. The civic agency agreed in 2021 to compensate for the acquisition with the allotment of 14 developed MUDA housing sites at a prime location.
Siddaramaiah’s family was accused by RTI activist Snehamayi Krishna and the Opposition BJP and JD(S) of profiting to the tune of ₹ 56 crore through the MUDA award of the 14 alternate sites.
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The Lokayukta police registered a police case after Karnataka Governor Thawarchand Gehlot granted sanction to investigate Siddaramaiah under the Prevention of Corruption Act. The Karnataka High Court upheld the sanction in September 2024. The Lokayukta police probe resulted in a closure report, citing “lack of evidence”, in February 2025.
On March 7 this year, the Karnataka High Court halted the Enforcement Directorate’s (ED’s) money-laundering probe against Parvathi in the MUDA land allotments case after the summons issued by the central agency was challenged. The high court ruled that there was no money laundering in the land compensation award by MUDA, and this was upheld by the Supreme Court in July.
‘Appears to be a scam’: Justice Desai commission findings
One of the key findings of the Justice Desai commission is that the scheme for allotment of alternate sites as compensation for land wrongly acquired by MUDA was filled with loopholes, seemed devised to benefit illegal claimants, and reeked of a scam.
The sudden emergence of demands for alternate sites in the 2020-24 period as compensation for MUDA acquired land “may be with intention to get some better sites of their choice with the help and connivance of MUDA Officers and officials or it appears to be a scam in allotting alternate sites giving untenable reasons”, the commission stated.
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“The alternate sites allotted are contrary to the provisions of allotment of alternate sites as per Rule 16 of 1991 Rules,” the commission added.
Stating that its findings are just the tip of the iceberg on account of delays in file submissions by MUDA and the paucity of time for the commission to investigate all alternate site allotments, the Justice Desai commission has called for a thorough probe into all allotments.
“Therefore, a thorough investigation needs to be made by the Government of Karnataka by constituting a technical team consisting of the high ranking officers from the Urban Development Department, Town Planning Department, Chief Engineer, the Director of Land Records and other officers with technical know how to verify all such illegal allotment in violation of Rule 16 of KUDA Rules and the persons who are responsible for such allotments shall be dealt sternly by initiating both civil and criminal proceedings and also the action under Service Rules, so that the message should go to the society and other authorities not to make allotment in violation of Rules,” the commission has stated.
“The Commission, after examining the files, has suggested to cancel allotment of such illegal sites and also cancel the sites which are allotted after the Government Order dated 14.3.2023, directing the Commissioner, MUDA, not to make any such allotments based on such resolutions till the guidelines are framed by the Government,” it added.
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“The then Commissioner, defying the directions of the Government, went on allotting the sites. Therefore, such allotments are in violation of Government Order, which also needs to be cancelled,” it has stated.
“The government shall also take appropriate steps to restore such sites to MUDA by initiating necessary judicial proceedings and suggested to take action against the erring officers and officials of MUDA and other persons who have colluded with them in getting the sites illegally allotted by filing appropriate civil and criminal proceedings against them in addition to taking departmental action against the concerned officers and officials, so that the message should go to the society as well as persons indulging in such activities,” it said.
The commission has said in its findings that “corruption in public life cannot be tolerated at any cost and the corrupt persons shall be dealt with iron hand”.
“It is common experience that it will be very difficult for a common man to get even a single site allotted through such public authorities. But there are cases wherein sites numbering 30 to 40 were allotted illegally to a single person who has no right for compensation,” Justice Desai has stated.
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The commission has called for drawing up of clear guidelines for land allotments if a scheme of alternate site allotments are to be followed by civic agencies for land acquisition, creation of high level committee to oversee the activities of agencies like MUDA which has now become the Mysore Development Agency (MDA), and the use of modern technology like electronic and computers systems for transparency and to prevent blatant rigging of housing sector systems.
“The Commission has observed that the sites allotted by MUDA in lieu of compensation for the lands utilised without acquisition are sold by the said allottees on the same day or within a week of registration of the sale deed in their favour. It is also noticed from the records that such subsequent purchaser has again sold the said property for higher consideration,” the commission has noted in a reference to profiteering by real estate operators through MUDA.
The Commission has come across instances where, within a short period of three months of allotment of alternate sites by the MUDA Commissioner, “there are three sale deeds each time showing higher consideration with a difference of more than 10-15 lakhs”.
“This is also one of the circumstances to show that the sites are allotted as compensation illegally by the then Commissioners working from May 2020 to June 2024 and other officials and officers of MUDA in collusion with the land grabbers,” the commission has stated.
MUDA’s 50:50 alternate site allotment scheme
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MUDA is a body created under the Urban Development Authority Act of 1987. The 50:50 alternative land allotment scheme was introduced in 2020 under the Karnataka Urban Development Authorities (Disposal of Plots in Lieu of Compensation for Land Acquisition) Rules, 1991, instead of a previously existing land for land scheme.
After a resolution in October 2020, MUDA members, including the chairman and commissioner, drafted the alternate site scheme on November 20, 2020, to distribute sites to land losers on a 50:50 ratio basis—50 per cent of a developed area in exchange for 50 per cent of the land acquired by MUDA.
The state urban development department warned MUDA against implementing the scheme on May 4, 2021, and March 14, 2023.
The resolution passed by MUDA on October 13, 2020, is an illegal resolution under Section 67 of the Karnataka Urban Development Authorities Act-1987, urban development officials have stated.
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According to the state urban development department, 1,328 alternate sites were given as compensation under the 50:50 scheme since 2020. There are 125 allotments in the 50:50 scheme in the same Vijayanagar area where Siddaramaiah’s wife, Parvathi, received an allotment.
There are allegations that people who did not lose land in Mysuru were also given high-value alternate sites under the scheme after it began being abused by realtors and politicians.
Last year, the ED provisionally attached 142 properties worth Rs 300 crore in connection with its investigation into alleged large-scale irregularities in the allotment of housing sites by MUDA in the light of allegations against the Karnataka chief minister’s family. The properties of Siddaramaiah’s family, however, were not attached by the ED.