Sri N M Bhashyam vs The State Of Karnataka
2023 Latest Caselaw 3837 Kant

                                                         -1-
                                                                  WP No. 15728 of 2012



                                        IN THE HIGH COURT OF KARNATAKA,
                                                DHARWAD BENCH

                                      DATED THIS THE 30TH DAY OF JUNE, 2023

                                                        BEFORE

                                   THE HON'BLE MR JUSTICE S.VISHWAJITH SHETTY

                                      WRIT PETITION NO. 15728 OF 2012 (LR)


                              BETWEEN:

                              SRI. N.M. BHASHYAM
                              S/O N.M. KRISHNA,
                              AGE: MAJOR,
                              R/AT. BASHYAM CHAMBERS,
                              CARANZALEM, GOA-403002.
                                                                         ... PETITIONER

                              (BY SRI. V.M.SHEELVANT, ADVOCATE)


                              AND:

                              1.   THE STATE OF KARNATAKA,
                                   BY ITS SECRETARY,
                                   REVENUE DEPARTMENT,
           Digitally signed
           by RAKESH S
           HARIHAR
RAKESH Location: High
                                   M.S. BUILDING, BANGALORE-560001.
        Court of
S       Karnataka,
HARIHAR Dharwad
        Date:
           2023.07.01
           13:52:37
           +0530              2.   THE DIRECTOR,
                                   MINES AND GEOLOGY,
                                   KHANIJA BHAVAN,
                                   RACE COURSE ROAD,
                                   BANGALORE-560001.

                              3.   THE DEPUTY COMMISSIONER,
                                   GADAG DISTRICT, GADAG.

                              4.   THE SENIOR GEOLOGIST,
                                   DEPARTMENT OF MINES AND
                                   GEOLOGY, DHARWAD.
                             -2-
                                     WP No. 15728 of 2012



5.   THE TAHSILDAR,
     RON TALUK, RON,
     GADAG DISTRICT.

6.   SRI. AMARESHAPPA
     S/O ESHWARAPPA ARALI,
     MAJOR, R/AT. GEJENDRAGAD,
     RON TALUK,
     GADAG DISTRICT.

                                           ... RESPONDENTS

(BY SRI. VINAYK S. KULKARNI, AGA FOR R1 TO R5;
SRI. F.V.PATIL, ADV. FOR R6)


      THIS WRIT PETITION IS FILED UNDER ARTICLES 226

AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO

ISSUE WRIT OF CERTIORARI OR ANY OTHER ORDER OR

DIRECTION IN THE NATURE OF WRIT QUASHING THE SALE

PROCEEDINGS CONDUCTED BY THE RESPONDENT NO.5 ON

05.08.2011 IN RESPECT OF THE LAND BEARING SY. NO.49,

MEASURING 9 ACRES 18 GUNTAS ASSESSED AT RS.3.97 PAISE

SITUATED AT VADEGOLA VILLAGE, NAREGAL HOBLI, RON

TALUK GADAG DISTRICT PRODUCED AS ANNEXURE-H TO THE

WRIT PETITION AND ETC.


      THIS   WRIT   PETITION,   HAVING   BEEN   HEARD   AND

RESERVED FOR ORDERS ON 21.06.2023, THIS DAY, THE

COURT PRONOUNCED THE FOLLOWING:
                             -3-
                                      WP No. 15728 of 2012



                          ORDER

1. The above captioned writ petition is filed under

Articles 226 and 227 of the Constitution of India with the

prayer to quash the sale proceedings conducted by the 5th

respondent dated 05.08.2011 in respect of the land

bearing Sy. No.49 measuring 9 acres 18 guntas situated at

Vadegola Village, Naregal Hobli, Ron Taluk, Gadag District

vide Annexure - H and also to quash the sale certificate

Annexure - K bearing No.RRC / R.9 / CR.01 / 2010-11

dated 24.11.2011 issued by the 3rd respondent.

2. Heard the learned counsel for the parties.

3. Facts leading to filing of this writ petition as

revealed from the records narrated briefly for the purpose

of disposal of this petition are, the petitioner is the

absolute owner in possession of the land bearing Sy.

No.49 of Vadegola Village, Ron Taluk, Gadag District

measuring 9 acres 26 guntas (hereinafter referred to as

"land in question") having purchased the same under a

registered sale deed dated 04.11.1995. The land in

question is a patta land. In the year 1996, a quarry licence

WP No. 15728 of 2012

was issued in favour of the petitioner in respect of 2 acres

in the land in question. On the ground that the petitioner

had not paid the royalty of Rs.1,58,893/- in respect of the

minerals excavated from the quarry, action was taken by

the 4th respondent to auction sale 144.91 cubic metres

pink granite which was excavated from petitioner's quarry

and was available in the quarry.

4. The said auction sale notification dated

26.11.1996 was questioned by the petitioner before this

Court in W.P. No.35254/1996. This Court had quashed the

notification on the ground that prior to bringing the

granites for sale, necessary seizure order as prescribed

under the rules of the Karnataka Minor Mineral Concession

Rules, 1994 (hereinafter referred to as "Rules of 1994")

was not passed and had reserved liberty to pass

appropriate orders under the Rules and then proceed to

dispose of the seized material in accordance with law.

5. The respondents however without proceeding

further as per the directions / observations passed by this

Court in W.P. No.35254/1996 proceeded to bring the land

WP No. 15728 of 2012

in question for sale alongwith the seized granite which was

available in the said land. In the auction proceedings that

was held by the 5th respondent Tahasildar, pursuant to the

auction notification, the 6th respondent's bid for a sum of

Rs.4,92,000/-, being the highest, was accepted.

Thereafter, the said sale was confirmed by the 3rd

respondent Deputy Commissioner vide order Annexure - K

dated 24.11.2011. Being aggrieved by the sale

proceedings that was held by the Tahasildar on

05.08.2011 and the subsequent order of confirmation of

sale dated 24.11.2011 issued by the Deputy

Commissioner, the petitioner is before this Court.

6. Learned counsel for the petitioner submits that

there was no justification on the part of the respondents to

bring the land in question for sale for recovery of the

alleged royalty of Rs.1,58,893/-. He submits that

undisputedly 144.91 cubic metres of pink granite was

available in the land in question and the value of the same

as per schedule 4 of the Rules of 1994 was about Rs.14 to

Rs.15 lakhs at the relevant point of time. He submits that

WP No. 15728 of 2012

when a remedy was available to the 4th respondent under

the special statute governing the business, there was no

necessity to proceed for recovery of the royalty as arrears

of land revenue. He submits that even if the respondents

were required to proceed against the land in question, for

the purpose of recovering an amount of Rs.1,58,893/-,

there was no necessity to bring the entire extent of land in

question for sale which is worth more than a crore. He

submits that the competent authority should have

enquired as to whether sale of a portion of the property

would be sufficient to satisfy the dues. In support of his

contention, he has placed reliance on the judgment of the

Hon'ble Supreme Court in the case of Ambati Narasayya

vs. M.Subba Rao and another reported in 1989 Supp

(2) SCC 693 and in the case of Abdul Kareem @

Mohammed Saleem vs. The Assistant Commissioner,

Puttur and others reported in ILR 2004 KAR 3649.

7. Per contra, learned counsel appearing for the 6th

respondent submits that he is a bona fide purchaser and

therefore, his interest is required to be safeguarded. He

WP No. 15728 of 2012

also submits that the revenue officers have brought the

property for sale on the strength of an order and

certificate received from the 4th respondent with a request

to recover the arrears of royalty of the petitioner, as

arrears of land revenue. He submits that the petitioner is

guilty of suppressing facts and therefore he is not entitled

for any relief at the hands of this Court. The land in

question was attached prior to bringing the same for sale

and said attachment order was questioned by the general

power attorney holder of the petitioner in an appeal before

the Assistant Commissioner and this aspect of the matter

was deliberately suppressed by the petitioner in the

present proceedings. In support of his arguments, he has

placed reliance on the judgment of this Court in the case

of Pramod @ Prashanth vs. Deputy Commissioner

Dakshina Kannada Mangalore reported in 2022 (2)

AKR 677.

8. Learned AGA has argued in support of the

impugned order and submits that the petitioner had failed

to appear before the Tahasildar inspite of notice being

WP No. 15728 of 2012

issued to him prior to sale. The Tahasildar was duly

authorized by the 3rd and 4th respondents for bringing the

land in question for sale and therefore, no fault can be

found either in the sale proceedings or in the order of

confirming the sale. He accordingly prays to dismiss the

writ petition.

9. I have given my anxious considerations to the

arguments addressed on both sides and also perused the

material on record.

10. The petitioner was granted quarry licence in the

year 1996. The petitioner had purchased the land in

question which is a patta land on 04.11.1995 and quarry

licence was issued to him on 14.08.1996 which was with

effect from 20.11.1996. On the ground that the petitioner

was due to pay a sum of Rs.1,58,893/- towards royalty,

action was taken to auction 144.91 cubic metres of pink

granite which was excavated and available in the

petitioner's quarry and an auction sale notification in this

regard was issued on 26.11.1996. The said auction sale

notification was quashed by this Court in W.P.

WP No. 15728 of 2012

No.35254/1996 by order dated 09.07.1999 on the ground

that prior to bringing the seized granite for sale, necessary

orders of seizure was required to be passed by the

competent authority and while disposing of the writ

petition, liberty was reserved to the respondent to pass

appropriate orders under the relevant rules and then

proceed to dispose of the seized materials in accordance

with law.

11. As could be seen from the auction sale notification

dated 26.11.1996, 64 blocks of pink granite were available

in the land in question which totally measures 144.91

cubic metres and as per the minimum rates provided

under Schedule III of the Rules of 1994, the seized

materials were worth about Rs.14 to Rs.15 lakhs. Under

the Rule 36 of the Rules of 1994 provides for payment of

royalty. The holder of a quarrying lease or licence shall

pay royalty at the rates as specified in schedule II,

whether minor mineral is removed or consumed by him or

his agent, manager, employee or contractor.

- 10 -

WP No. 15728 of 2012

12. Section 21 of the Minor and Minerals

(Development and Regulation) Act, 1957 (hereinafter

referred to as "Act of 1957") provides for penalties and

Sections 21(4) and 21(5) of the Act of 1957 provides for

seizure of minerals and the vehicles used for transporting

minerals without any lawful authority which reads as

follows:

     "21(4)        Whenever        any         person      raises,
    transports     or     causes          to   be      raised   or

transported, without any lawful authority, any mineral from any land, and, for that purpose, uses any tool, equipment, vehicle or any other thing, such mineral tool, equipment, vehicle or any other thing shall be liable to be seized by an officer or authority specially empowered in this behalf.

21(5) Whenever any person raises, without any lawful authority, any mineral from any land, the State Government may recover from such person the mineral so raised, or, where such mineral has already been disposed of, the price thereof, and may also recover from such person, rent, royalty or tax, as the case may be, for the period during which the land

- 11 -

WP No. 15728 of 2012

was occupied by such person without any lawful authority.]"

13. Rule 47 of the Rules of 1994 provides for

disposing of the seized minor minerals which includes the

minor minerals seized under sub Section (4) of Section 21

of the Act of 1957 and sub Rule (6) of the Rule 43 of the

Rules 1994 and the minor minerals which are left at the

quarry after the expiry or termination of lease. Rule 47

reads as follows:

47. Procedure for disposing seized minor minerals. - (1) All minor minerals seized under sub-section (4) of section 21 of the Act, sub- rule(6) of rule 44 and minor minerals left at the quarry after the expiry or termination of lease or licence shall be disposed of by public auction by an officer authorised in this behalf (hereinafter referred to as the authorised officer).

(2) The minimum rate per unit volume or weight of any minor mineral which is classified in FORM-0 shall be fixed in accordance with the rate specified in Schedule-3.

- 12 -

WP No. 15728 of 2012

(3) Nothing in this chapter shall apply for disposal of seized or confiscated ordinary sand. The disposal of ordinary sand shall be by local sales in accordance with provisions of sub-rule (3) of Rule 31-U.

14. From the aforesaid provisions of law, it is evident

that the arrears of royalty, if any, could be recovered by

the competent authority under the provisions of the Act of

1957 and Rule of 1994 by bringing the seized minor

minerals for sale in accordance with law. Though action

was initially taken by the respondents for auction, sale of

the seized granite in the present case, after disposal of

W.P. No.35254/1996, where a direction was issued to the

competent authority to take action for auction sale of the

seized granite after passing appropriate seizure under the

relevant Rules. As could be read from Rule 47(2) of the

Rules, the minimum rate per unit volume or weight of

minor mineral seized which is being brought to sale has to

be fixed at the rate specified in schedule - 3. As stated

herein above, the minimum value of the seized mineral at

the rate specified in schedule - 3 would have been Rs.14

- 13 -

WP No. 15728 of 2012

lakhs. For the reasons best known to the competent

authority, no further action was taken to auction sale the

granite which was very much available in the land in

question. On the other hand, the authorities concerned

proceeded to bring in the land in question for sale though

the alleged arrears of royalty was only a sum of

Rs.1,58,893/-. The land in question which totally

measures 9 acres 18 guntas which includes 2 acres of

quarrying area alongwith 144.91 cubic metres of pink

granite was brought for sale.

15. The material on record would go to show that in

compliance of the statutory requirement, paper publication

for sale was taken in Navodaya Patrike which is said to be

printed and published at Gadag. Though Rule 124 of the

Karnataka Land Revenue Rules, 1966 provides that paper

publication is required to be taken in a vernacular

newspaper having wide circulation in the locality, it

appears that the said requirement of law was also not

deliberately complied with and a publication was issued in

a newspaper having limited circulation in the locality.

- 14 -

WP No. 15728 of 2012

16. The Hon'ble Supreme Court in the case of Ambati

Narasayya, in paragraph Nos.6 and 7 has held as follows:

"6. The principal question that has been highlighted before us relates to the legality of the sale of 10 acres of land without considering whether a portion of the land could have been sold to satisfy the decree. It is said that the total sum claimed in the execution was Rs.2,395.50. The relevant provision which has a bearing on the question is Rule 64 Order XXI of the Code of Civil Procedure and it reads as follows:

"Order XXI Rule 64: Power to order property attached to be sold and proceeds to be paid to persons entitled. - Any Court executing a decree may order that any property attached by it and liable to sale, or such portion thereof as may seem necessary to satisfy the decree, shall be sold, and that the proceeds of such sale, or a sufficient portion thereof, shall be paid to the party entitled under the decree to receive the same."

7. It is of importance to note from this provision that in all execution proceedings, the Court has to first decide whether it is necessary to bring the entire attached proper- ty to sale or such portion thereof as may seem necessary

- 15 -

WP No. 15728 of 2012

to satisfy the decree. If the property is large and the decree to be satisfied is small, the Court must bring only such portion of the property, the proceeds of which would be sufficient to satisfy the claim of the decree holder. It is immaterial whether the property is one or several. Even if the property is one, if a separate portion could be sold without violating any provision of law only such portion of the property should be sold. This, in our opinion, is not just a discretion, but an obligation imposed on the Court. Care must be taken to put only such portion of the property to sale the consideration of which is sufficient to meet the claim in the execution petition. The sale held without examining this aspect and not in conformity with this requirement would be illegal and without jurisdiction."

17. In the case of Abdul Kareem, this Court after

referring to the judgment in the case of Ambati

Narasayya, at para 10 has observed as follows:

"10. In the instant case, in the impugned auction notification dated 6th February 2002 vide Annexure A, the schedule is shown as Sy.No. 196/3A2 measuring 29 cents. But, the

- 16 -

WP No. 15728 of 2012

said Notification does not contain the ground reality of the said land. As a matter of fact, the land in question also consists of a residential house abutting the vacant land and the said Notification also does not disclose the boundary of the said land. This fact proves beyond all reasonable doubts that, the authorities have proceeded without proper application of mind as to whether sale of part of the property would satisfy the decree debt, which is a material irregularity doing substantial injustice to the petitioner. Therefore, it very much violates the mandatory provisions of Order 21 Rule 90 CPC.

As rightly held by the Apex Court, as stated supra, in either case, the sale is liable to vitiate. In the instant case, the respondents have committed material irregularity and therefore, this Court is satisfied that, on account thereof, substantial injury is sustained by the petitioner and even, the authority has failed to take the report from the competent authority regarding the total value of the land in question measuring 29 cents including the residential house. Therefore, in my considered view, at any stretch, the entire proceedings initiated and concluded by the authorities cannot be

- 17 -

WP No. 15728 of 2012

sustained. Hence, they are liable to be set aside."

18. When the statue itself provided a mechanism for

the authorities to recover the arrears of royalty by

bringing the seized granite for sale, without proceeding to

take such action, when undisputedly seized granite

measuring 144.91 cubic metres was available in the land

in question, the respondents for extraneous reasons

proceeded to bring the land in question for sale. When the

valued of the excavated granite from the quarry

measuring 2 acres itself was worth about Rs.14 to Rs.15

lakhs, the total value of the land in question would be

much more and therefore, as rightly contended by the

learned counsel for the petitioner and also in the

background of the law laid down in the case of Ambati

Narasayya and Abdul Kareem, it was totally

unnecessary and unjustified for the respondents to bring

the entire extent in the land in question for sale for

recovery of an amount of Rs.1,58,893/-.

- 18 -

WP No. 15728 of 2012

19. Though the 6th respondent claims to be a bona

fide purchaser, considering the facts and circumstances of

the case, it becomes highly doubtful regarding the

genuineness of such claim made by him. The land in

question which totally measures 9 acres 18 guntas which

is inclusive of a quarrying area measuring 2 acres,

alongwith excavated granite measuring 144.91 cubic

metres worth about Rs.14 to Rs.15 lakhs has been

purchased by the 6th respondent for a paltry amount of

Rs.4,92,000/-. Only bona fide purchaser for true value is

entitled for protection and not otherwise. The general rule

that bona fide purchaser of stolen goods cannot keep the

goods against the true owner is required to be kept in

mind, while considering the case of bona fide purchaser

who has not paid the true value of the property. Under the

circumstances, the judgment in the case of Pramod @

Prashanth cannot be made applicable to the facts and

circumstances of the present case.

20. The learned AGA and the learned counsel

appearing for the 6th respondent have not disputed that

- 19 -

WP No. 15728 of 2012

the seized granites were very much available in the land in

question. This Court while issuing rule in this matter after

hearing the learned AGA and the learned counsel

appearing for the 6th respondent had directed both the

parties to maintain status quo with regard to the nature of

the land in question and also in respect of the granite

blocks lying in the land in question. Therefore, it is evident

that possession of the land and the granite blocks has

remained with the petitioner.

21. Though learned counsel for the 6th respondent has

raised a contention that the petitioner has suppressed

material fact regarding his knowledge about the

attachment of the land in question prior to bringing the

same for sale, satisfactory explanation has been offered by

the petitioner to said aspect of the matter by filing

separate affidavit of himself and his General Power of

Attorney and therefore, I am of the view since material

injustice has been caused to the petitioner by the

respondents by bringing the entire extent of the land in

question alongwith the seized granite for sale for recovery

- 20 -

WP No. 15728 of 2012

of royalty amount of Rs.1,58,893/-, on technical ground,

the relief which the petitioner is otherwise entitled for,

cannot be denied.

22. In cases where correction of error caused by state

authorities results with loss or hardship to bona fide

purchaser, the proportionality test become applicable and

given the facts and circumstances of the case, it

completely leans to the side of petitioner. In such

circumstances, bona fide purchasers may be required to

initiate separate proceedings to obtain compensation for

the loss as a result of the authorities mistake.

23. The practice of bringing the entire extent of land

for sale for recovery of dues which would be otherwise

recovered by selling a portion of the property has been

deprecated by this Court as well as by the Hon'ble

Supreme Court repeatedly. Inspite of the same, the said

practice has continued and this case is a classic example

for the highhanded action of the authorities. Therefore, the

impugned sale proceedings and the consequent order of

- 21 -

WP No. 15728 of 2012

confirmation of sale cannot be sustained. Accordingly, the

following:

ORDER

The writ petition is allowed. The sale proceedings

conducted by the 5th respondent dated 05.08.2011 vide

Annexure - H and the sale certificate Annexure - K bearing

No.RRC / R.9 / CR.01 / 2010-11 dated 24.11.2011 issued

by the 3rd respondent are quashed.

Sd/-

JUDGE Rsh/Ct:Bck List No.: 1 Sl No.: