Karnataka High Court
The Commissioner And Anr vs The Principal Secretary And Ors on 1 April, 2025
Author: K Natarajan
Bench: K Natarajan
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WA NO.200165/2024
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CCC NO.200190/2024
IN THE HIGH COURT OF KARNATAKA
KALABURAGI BENCH
DATED THIS 01ST DAY OF APRIL, 2025
PRESENT
THE HON'BLE MR. JUSTICE K NATARAJAN
AND
THE HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL
WRIT APPEAL NO. 200165 OF 2024
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CIVIL CONTEMPT PETITION NO. 200190 OF 2024
IN WA NO.200165/2024:
BETWEEN:
1. THE COMMISSIONER
KARNATAKA HOUSING BOARD,
Digitally signed
1ST AND 3RD FLOOR, CAUVERY BHAVAN,
by RAMESH K.G. ROAD, BANGALORE - 560001.
MATHAPATI
Location: HIGH
COURT OF 2. THE ASSISTANT EXECUTIVE ENGINEER
KARNATAKA KARNATAKA HOUSING BOARD,
DISTRICT PROJECT OFFICE,
NEAR KHARGE PETROL PUMP,
RING ROAD, KALABURAGI - 585105.
...APPELLANTS
(BY SRI MOGHA SUDHAKAR RAO, ADVOCATE)
AND:
1. THE PRINCIPAL SECRETARY,
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT,
VIDHAN SOUDHA, AMBEDKAR VEEDHI,
BANGALORE - 560001.
2. SHAMSHODDIN S/O MOHAMMED AYUB
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WA NO.200165/2024
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CCC NO.200190/2024
AGED ABOUT: 39 YEARS, OCC: BUSINESS & AGRL.,
R/O TAJ NAGAR, MUSLIM COLONY,
NEAR NEHRU GUNJ, KALBURAGI - 585101.
3. MOHAMMED AYUB S/O RUKNUDDIN
AGED ABOUT: 64 YEARS, OCC: BUSINESS,
R/O TAJ NAGAR, MUSLIM COLONY,
NEAR NEHRU GUNJ, KALABURAGI - 585101.
4. MOHAMMED AFROZ S/O MOHAMMED AYUB
AGED ABOUT: 37 YEARS, OCC: BUSINESS,
R/O H.NO:8-1648, FILTERBED ROAD,
TAJ NAGAR, KALABURAGI - 585101.
5. PARVEZ AHMED S/O MOHAMMED AYUB
AGED ABOUT: 34 YEARS, OCC: BUSINESS,
R/O H.NO:8-1671, FILTERBED ROAD,
TAJ NAGAR, KALABURAGI - 585101.
...RESPONDENTS
(BY SRI MALLIKARJUN BASAREDDY, GA FOR R1;
SRI VINAYAK APTE, ADV. FOR R2 TO R5)
THIS WA IS FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT RULES, PRAYING TO ALLOW THE
ABOVE WRIT APPEAL AND SET ASIDE THE ORDER
DATED:13.6.2024 PASSED HON'BLE SINGLE JUDGE, HIGH
COURT OF KARNATAKA, KALABURAGI BENCH ALLOWING THE
WRIT PETITION NO:202162/2018 (GM-RES) AND DISMISS THE
WRIT PETITION FILED THE RESPONDENTS NO.2 TO 5 HEREIN.
IN CCC NO.200190/2024:
BETWEEN:
1. SHAMSHODDIN S/O MOHAMMED AYUB
AGED ABOUT: 39 YEARS, OCC: BUSINESS & AGRL.,
R/O TAJ NAGAR, MUSLIM COLONY,
NEAR NEHRU GUNJ, KALBURAGI - 585104.
2. MOHAMMED AYUB S/O RUKNUDDIN
AGED ABOUT: 64 YEARS, OCC: BUSINESS,
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WA NO.200165/2024
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CCC NO.200190/2024
R/O TAJ NAGAR, MUSLIM COLONY,
NEAR NEHRU GUNJ, KALABURAGI - 585104.
3. MOHAMMED AFROZ S/O MOHAMMED AYUB
AGED ABOUT: 37 YEARS, OCC: BUSINESS,
R/O H.NO:8-1648, FILTERBED ROAD,
TAJ NAGAR, KALABURAGI - 585104.
4. PARVEZ AHMED S/O MOHAMMED AYUB
AGED ABOUT: 34 YEARS, OCC: BUSINESS,
R/O H.NO:8-1671, FILTERBED ROAD,
TAJ NAGAR, KALABURAGI - 585104.
...COMPLAINANTS
(BY SRI VINAYAK APTE, ADVOCATE)
AND:
1. THE PRINCIPAL SECRETARY
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
VIDHAN SOUDHA, AMBEDKAR VEEDHI,
BANGALORE - 560001.
...PROFORMA PARTY
2. SRI. SHASHIKANT
ASSISTANT EXECUTIVE ENGINEER (INCHARGE)
KARNATAKA HOUSING BOARD,
DISTRICT PROJECT OFFICE,
NEAR KHARGE PETROL PUMP,
RING ROAD, KALABURAGI - 585105.
...ACCUSED
(BY SRI MALLIKARJUN BASAREDDY, GA FOR R1;
SRI MOGHA SUDHAKAR RAO, ADV. FOR R2)
THIS CCC IS FILED UNDER SECTION 11 & 12 OF THE
CONTEMPT OF COURTS ACT, PRAYING TO TAKE COGNIZANCE
AND INITIATE PROCEEDINGS UNDER THE CONTEMPT OF
COURTS ACT FOR HAVING DISOBEYED THE DIRECTIONS OF
THIS HON'BLE COURT DATED 13.6.2024 IN WP
NO:202162/2018 PRODUCED AT ANNEXURE-A, PUNISH THE
ACCUSED NO.1 AND ISSUE FURTHER DIRECTION TO COMPLY
WITH THE ORDER OF THIS HON'BLE COURT.
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WA NO.200165/2024
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CCC NO.200190/2024
THIS APPEAL AND PETITION HAVING BEEN HEARD AND
RESERVED FOR JUDGMENT ON 25.03.2025, COMING ON FOR
"PRONOUNCEMENT OF JUDGMENT" THIS DAY, THE COURT,
PRONOUNCED THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE K NATARAJAN
AND
HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL
CAV JUDGMENT
(PER: HON'BLE MR JUSTICE VIJAYKUMAR A. PATIL)
W.A.No.200165/2024 is filed by the appellants-
Karnataka Housing Board (KHB) challenging the order of
the learned Single Judge dated 13.06.2024 passed in
W.P.No.202162/2018 (GM-RES), wherein the writ petition
filed by respondent Nos.2 to 5 was allowed.
The contempt petition in CCC No.200190/2024 is
filed by respondent Nos.2 to 5/original writ petitioners
alleging willful disobedience of the order passed by the
learned Single Judge.
2. Brief facts leading to the filing of the appeal are
that, the appellants auctioned sites through e-auction as
per the notification dated 21.05.2018. The respondent
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Nos.2 to 5 were the successful bidders, they have
deposited the bid amount, thereafter, the appellants
issued confirmation/acceptance letter on 13.06.2018. The
respondent Nos.2 to 5 requested the appellants to execute
the sale deed, later the appellants cancelled the allotment
on the ground that there is a complaint with regard to the
process of allotment. Being aggrieved, the respondent
Nos.2 to 5 challenged the order dated 07.07.2018 before
the learned Single Judge and the learned Single Judge
allowed the writ petition.
3. Sri.Mogha Sudhakar Rao, learned counsel
appearing for the appellants-KHB submits that one
Sri.Dhanaya Swamy Hiremath submitted representation
raising objection with regard to allotment of site in favour
of respondent Nos.2 to 5 by e-auction. The appellants
considered the records and came to know that the price
offered by respondent Nos.2 to 5 is on the lower side and
only single bidder has participated in respect of plot in
question, hence, the authority decided to cancel the
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allotment. It is further submitted that the appellants is
having right to cancel the bid at any time if there is any
violation or misrepresentation found in the online e-
proceedings. The bid of respondent Nos.2 to 5 is for
Rs.1,350/- per sq.ft. inspite of increase of rate at Rs.600/-
per sq.ft for commercial site. It is also submitted that the
surrounding area is fully developed and the value of the
site is more, hence, the appellants are justified in
canceling the bid. Hence, he seeks to allow the appeal by
setting aside the order of the learned Single Judge.
4. Per contra, Sri.Vinayak Apte, learned counsel
appearing for respondent Nos.2 to 5 supports the order of
the learned Single Judge and submits that the appellants
cannot turn around and cancel the allotment after the
entire process of bid is completed. It is submitted that the
bid is accepted by the appellants and respondent Nos.2 to
5 have deposited the entire consideration of the bid
amount way back on 17.07.2018 and till date the
appellants are denying the execution of sale deed in
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favour of the successful bidder. It is further submitted that
due to the fault of the appellants, the respondent Nos.2 to
5 are paying huge interest on the amount borrowed by
them from the financial institution to pay the bid
consideration amount. Hence, he seeks to dismiss the
appeal by punishing the appellants for willful disobedience
of the order of the learned Single Judge.
5. We have heard the arguments of the learned
counsel for the appellants, learned Government Advocate
and the learned counsel for respondent Nos.2 to 5 and
meticulously perused the materials available on record.
We have given our anxious consideration to the
submissions advanced and the material available on
record.
6. The records available on record indicate that
the appellants issued publication for e-auction of site, the
notice was published in 'Prajavani' 'Vijayavani' and 'Vijaya
Karnataka' Kannada daily newspapers on 21.05.2018.
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Respondent Nos.2 to 5 participated in the e-auction
proceedings for commercial site No.3 measuring 20309
sq.ft. at Biddapur, Kalaburagi. The reserve price was fixed
by the appellants at Rs.1,200/- per sq.ft. Respondent
Nos.2 to 5 paid earnest money deposit (EMD) amount of
Rs.10,00,000/- through demand draft No.001653 dated
01.06.2018 of Axis Bank, Kalaburagi. The appellants held
e-auction of properties on 01.06.2018 and 02.06.2018. In
the said e-auction, respondent Nos.2 to 5 quoted bid at
Rs.1,350/- per sq.ft for commercial site No.3. The
appellants accepted the bid of respondent Nos.2 to 5 on
02.06.2018 as it was the highest bid.
7. The material available on record further
indicates that as per the terms of the notification, the
respondent Nos.2 to 5 have deposited a sum of
Rs.58,84,663/- on 05.06.2018 i.e., within the stipulated
time of 15 days. Respondent Nos.2 to 5, in total,
deposited Rs.68,84,663/- which is 25% of the bid amount
of Rs.2,62,62,900/-. The appellants acknowledged the
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receipt of the said amount and issued confirmation letter
dated 13.06.2018 and requested respondent Nos.2 to 5 to
deposit 75% of the balance amount within the stipulated
period of 60 days. The material on record also indicates
that respondent Nos.2 to 5 requested the appellants to
issue 'No Objection Certificate' to obtain the loan to pay
the entire bid consideration. The appellants issued 'No
Objection Certificate' on 13.06.2018 permitting respondent
Nos.2 to 5 to raise the loan and accordingly, the
respondent Nos.2 to 5 availed the loan from Sri.Chatrapati
Shivaji Maharaj Sahakari Bank (N) Kalaburagi and paid the
balance 75% i.e., Rs.1,93,78,237, on 17.07.2018.
Respondent Nos.2 to 5 have made the entire payment
within the stipulated time. Surprisingly, the appellants
sent a communication dated 18.07.2018 to respondent
Nos.2 to 5 intimating that the allotment made in their
favour is cancelled vide order dated 07.07.2018. The
communication/order dated 07.07.2018 and 18.07.2018
indicate that one Sri.Dhanaya Swamy V.Hiremath
submitted a representation dated 03.07.2018 objecting for
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allotment of site in favour of respondent Nos.2 to 5 at the
rate of Rs.1,350/- per sq.ft. the impugned order indicates
that the site in question fetches more price than the price
offered by respondent Nos.2 to 5 and proceeded to cancel
the bid. In our considered view, the order dated
07.07.2018 and the communication dated 18.07.2018 are
passed in violation of principles of natural justice and in
violation of the guidelines. The right to cancel the auction
by the appellants is only if there is any violation of the
terms of the auction notification dated 21.05.2018 or the
conditions at Annexure-A3 and not otherwise. Admittedly,
the bid of respondent Nos.2 to 5 was accepted by the
appellants on complying with the terms and conditions of
the notification and terms and conditions of e-auction at
Annexure-A3. The respondent Nos.2 to 5 have paid the
entire sale consideration of Rs.2,62,62,900/- by obtaining
the loan from the financial institution and now the
appellants cannot turn around and cancel the bid based on
the alleged complaint of one Sri.Dhanaya Swamy
V.Hiremath. The impugned order dated 07.07.2018 and
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the communication dated 18.07.2018 does not indicate
that there is any violation of the conditions of auction
notification or the guidelines issued for conduct of e-
auction. The cancellation of bid on the stranger's
objection, that too, after completion of entire auction
process is illegal, arbitrary and impermissible.
8. Learned Single Judge has recorded the detailed
finding that there is no violation of terms of the sale or the
guidelines issued by the appellants. Hence, there is no
justification to cancel the bid after confirmation of the sale
by the appellants and directed the appellants to issue sale
certificate and also to execute the sale deed in respect of
site in question. The aforesaid finding of the learned Single
Judge is neither perverse nor contrary to law calling for
interference in this appeal.
9. For the aforementioned reasons, we proceed to
pass the following:
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ORDER
i) W.A.No.200165/2024 is dismissed.
ii) The appellants are directed to take immediate
steps to issue sale certificate and also execute
registered sale deed conveying the auctioned
commercial site No.3 situated at Biddapur,
within a period of thirty (30) days from the date
of receipt of copy of this order.
iii) CCC No.200190/2024 is closed with the liberty
to the respondent Nos.2 to 5/complainants to
file the contempt petition, if need arises.
iv) No orders to cost.
Sd/-
(K NATARAJAN)
JUDGE
Sd/-
(VIJAYKUMAR A. PATIL)
JUDGE
BSR
CT: PS
