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TMI Blog2010 (12) TMI 1349X X X X Extracts X X X X X X X X Extracts X X X X ..... the possession certificate at Annexure 'C' He sold the site in favour of Madhu Dhondiba Babar through a sale deed at Annexure 'E' dated 23.6.2007. Madhu Dhondiba Babar sold the said site as per the sale deed at Annexure 'G' dated 7.11.2007 in favour of the Petitioner. Subsequently, katha of the property was transferred in his favour by the Bruhat Bangalore Mahanagara Palike. 3. It is further contended that BDA has advertised in the newspaper announcing the sale of a corner site No. 12 in Sector 5 of HSR layout, which is adjacent to the site purchased by the Petitioner. The Petitioner, who was interested in the adjacent site, participated in the bid. He is the highest bidder and the bid amount was Rs. 1,50,96,640/-. After receiving the entire bid amount, the BDA executed the sale deed dated 2.5.2008 in favour of the Petitioner in respect of the said site. Thus, the Petitioner is the owner of site bearing No. 11A and corner site bearing No. 12 in Sector 5 of HSR Layout. 4. It is further contended that when this is the state of affairs, the Petitioner came to know that a notice was issued by the BDA to S. Kumar Bangarappa informing him that the allotment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and interest, cannot cancel the allotment of the site. 6. In W.P. No. 16954/2009, the Petitioner contends that he is the owner and in possession of the site bearing No. 4HC-201/A situated at East of NGEF Layout, Bangalore. BDA had allotted the site No. 119KG-103 in favour of one James on 15.5.1989. BDA had executed a lease-cum-sale deed on 16.7.1990. Since the BDA could not deliver possession of the site as it was in unauthorised occupation of certain other persons, an alternative site No. 4HC-201/A was allotted in favour of James. BDA had executed a sale deed dated 21.11.2007 in favour of James. Possession certificate in respect of the said site was issued in favour of James on 23.11.2007. Being the owner and in possession, he sold the said property in favour of the Petitioner through a deed of sale dated 11.2.2008. Thereafter, a notice was issued by the BDA to James calling upon him to show cause as to why the allotment of site should not be cancelled. James filed objections to the said notice on 12.5.2009. On enquiry, James came to know that BDA has passed an order on 9.6.2009 cancelling the allotment of site, which has not been communicated to the Petitioner. On further en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent, it was clear that irregularities have been committed in bifurcating the corner site and allotting the same in favour of S. Kumar Bangarappa. On the strength of illegal bifurcation, the remaining extent of 6.40 x 24.40 sq. mtrs. in site No. 12 was put to auction on 21.11.2007. The Petitioner has purchased the corner site in the auction held by the BDA. As a result of the irregularities in bifurcating corner site No. 12 as site Nos. 11 -A and 12, sale deed came to be executed in the name of S. Kumar Bangarappa on his paying Rs. 8,58,974/- and possession certificate was issued to him. It is further contended that BDA is not aware of the subsequent sale by S. Kumar Bangarappa to Madhu Dhondiba Babar and the purchase of the property by the Petitioner from the said Madhu Dhondiba Babar. It is argued that the bifurcation of the corner site was done with an ulterior motive. In order to curb such activities, action was initiated for cancellation of allotment of the said site. Based on the cancellation of the allotment, the original allottee was called upon to surrender necessary documents and he was cautioned that if documents are not surrendered, action will be initiated again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eunder authorise the State Government to allot sites formed by the BDA as per the scheme framed under Section 16 of the BDA Act. It is submitted that the BDA being a creation of the Statute, its powers are circumscribed by the Statute. The Act has not conferred upon the State Government to give directions to the BDA to allot the sites. The allotment of the sites should be made strictly in accordance with the provisions of the BDA Act and the Rules made thereunder. It is argued that while issuing circular under Rule 5 of BDA (Allotment of Sites) Rules, 1984, the Government cannot retain power to allot sites under 'G' category. It is further contended that under 1984 Rules, BDA is not authorised to execute the sale deed immediately after allotment of the site. Rule 13 is applicable to all the categories of allotments under the said Rules. It is further contended that the Petitioner has purchased property from its previous owner as per the sale deed at Annexure 'G' dated 7.11.2007 for a consideration of Rs. 1 crores 20 lakhs. The katha has been transferred by the BBMP in his favour on 18.3.2008. The Petitioner has purchased the said property from Madhu Dhondiba Babar. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the illegal bifurcation, the remaining extent of land 6.40 x 24.40 sq. mtrs. in site No. 12 was put into auction on 21.11.2007 and the Petitioner has purchased the said corner site. It is argued that the layout plan does not disclose the existence of two sites viz., site Nos. 12 and 11-A. Site No. 11-A has been illegally carved out of site No. 12 and allotted in favour of S. Kumar Bangarappa, as an alternative site. The bifurcation was done with an ulterior motive. With a view to curb such illegal activities, action has been initiated for cancellation of the site. In view of the said illegalities, huge financial loss has been caused to the BDA. It is argued that as per the BDA (Disposal of Comers and Commercial Sites) Rules, 1984, it is mandatory to dispose of all comer and commercial sites by public auction. In the case on hand, after illegally bifurcating site No. 12, it was allotted in favour of S. Kumar Bangarappa. 14. Sri B.V. Shankara Narayana Rao, Learned Counsel has supported the action of the BDA in cancelling the sale deed executed in favour of the vendor of the Petitioner in W.R No. 16954/2009. 15. Sri K.M. Nataraj, Learned Addl. Advocate General appearing for Sr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orce. It is an Act to provide for the establishment of a development authority for the development of the City of Bangalore and areas adjacent thereto or for the matters connected therewith. On the issue of Notification under Section 3(i) of the Act, constituting the Bangalore Development Authority, the City of Bangalore Improvement Act, 1945 (Mysore Act 5 of 1945) was repealed. The object of the Authority is to promote and secure the development of Bangalore Metropolitan Area and for that purpose, the Authority has the power to acquire, hold, manage and dispose of movable and immovable property whether within or outside the areas under its jurisdiction, to carry out building, engineering and other operations and generally to do all things necessary or expedient for the purpose of such development and for the purposes incidental thereto. 19. Chapter III of the Act provides for drawing up of development schemes by the Authority for the development of Bangalore Metropolitan Area. Section 16 lays down the particulars to be provided in a development scheme drawn up by the Authority. Section 17 provides for acquisition of lands for the development scheme prepared under Section 16. Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct provides of making the Rules by the State Government to carry out the purposes of the Act, which is as under 69. Power to make Rules:(1) The Government may by Notification make rules to carry out the purposes of this Act. (2) In particular and without prejudice to the generality of the foregoing power such rules may provide for all or any of the following matters, namely: (a) ... (b) ... (c) ... (d) ... (e) ... (f) ... (g) the restrictions, conditions and limitations subject to which the Authority may lease, sell or transfer movable or immovable property; (h) regulating the allotment or sale by auction of sites by the Authority. 22. Before proceeding further, it is also relevant to note that City of Bangalore Improvement Act, 1945, which was repealed by the BDA Act also contained similar provision. The City of Bangalore Improvement (Allotment of Sites) Rules, 1972, was made regulating the allotment of sites. Rule 5 of the said Rules dealt with allotment of stray sites, which is as under: 5. Allotment of stray sites: Notwithstanding anything contained in Rule 3, the Boa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been issued under Rule 5 vide circular No. HUD 616 MNX 89 dated 17.10.1992, which is as under: GOVERNMENT OF KARNATAKA (Housing and Urban Development Department) No: HUD 616 MNX 89 Karnataka Government Secretariat, M.S. Building, Bangalore, Dated 17th October, 1992 CIRCULAR Sub: Revised Guidelines for the allotment of stray sites by the Bangalore Development Authority. Ref: Circular No. HUD 616 MNX 89, Dated 18.9.1989 and 23.9.1989. *** In supersession of Circular No. HUD 616 MNX 86, dated 18.9.1989, the following revised guidelines for the disposal of stray sites are issued as provided under Rule 5 of the Bangalore Development Authority, (Allotment of Sites) Rules, 1984: A Disposal by auction 40% B Persons who have won special recognition in the field of Art, Science, Literature, Sports, Education, Medicine, Social Service and Public Administration at the State/National/ International levels. 20% C Senior officers of the Government of Karnataka/Government of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Auction 30 2. B Persons who have won special recognition in the field of sports at International/ National levels persons of Karnataka Domicile 15 3. C Persons who have won special recognition in the filed of Arts, Science, Literature, Education, Medicine, and Public Administration at the National/ International levels. 10 4. D Ex-Military Personnel, Military Personnel, persons of Karnataka domicile 5 5. E Freedom Fighters who are residents of Bangalore for a period of not less than 10 years 5 6. F Dependents of Karnataka Government Servants when the latter dies during the performance of his/her duty 5 7. G Persons in public life as may be directed by Government 30 2. Category 'C' besides Arts etc., it includes Painting, Sculpture, Musi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stray sites may be allotted by a Committee consisting of the Chairman, Bangalore Development Authority, Commissioner, Bangalore City Corporation, and two other members of the Authority. The allotment be subject to final approval of the Authority. 27. It is also relevant to note here that in exercise of the power conferred under Section 69 of the Act, the Government of Karnataka has made Rules for disposal of comer sites and commercial sites known as Bangalore Development Authority (Disposal of Comer Sites and Commercial Sites) Rules, 1984 . Sub-section (d) of Section 2 defines ' comer site' to mean the site at the junction of two roads having more than one side of the site facing the road. A comer site has to be disposed of strictly in accordance with the said Rules. 28. BDA is a body corporate having a perpetual succession and a common seal with power subject to the provisions of the Act to acquire, hold and dispose of the property. From the scheme of the Act, it is clear that the land is acquired by the State Government and made over to the BDA for the purpose of executing a scheme framed under Section 16 of the Act. Section 38 of the Act authorises the Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act authorise the State Government to direct the BDA to allot stray sites. Rule 5 of the City of Bangalore Improvement (Allotment of Site) Rules, 1972 authorised the Board to allot a stray site to a person, who is eligible for allotment of a site under Rule 10. A provision was made in the BDA (Allotment of Sites) Rules, 1982 for disposal of stray sites in accordance with the directions issued by the State Government from time to time. Rule 5 in the said Rules was contrary to the intendment of the Act, which was rightly repealed by the Government. BDA (Allotment of Sites) Rules, 1984, are made by the State Government for disposal of sites by the BDA. There is a marked difference between Rule 5 of the 1982 Rules and 1984 Rules. The 1982 Rules provided for disposal of stray sites as per the directions of the State Government, whereas under the 1984 Rules, stray sites have to be disposed of as per the guidelines issued by the State Government, which is in conformity with the intendment of the Act. Circulars have been issued from time to time for disposal of stray sites. Revised circular of 1992 issued by the State Government under Rule, 5 provided for disposal of stray sites to per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that allotment of sites to the legislators through the society at the instance and under the directions of the Government of Karnataka under Section 65 of the Act is illegal and motivated by extraneous considerations. A Division Bench of this Court in Telecom Employees Co-Operative Housing Society Ltd. 'sense (supra), was considering the case of bulk allotment of lands by the State Government before the insertion of Sections 38-B and C. It has been held that there is no general power for allotment of the sites because Section 38 of the Act would exclude the general power. There is no power to issue directions to make bulk allotment of the land under Section 65 of the Act. It has been held as under Under Section 65, the Government is enabled to give directions to the BDA 'as are necessary or expedient' for carrying out the purposes of the Act. If the power of the Government is available to direct the BDA to carry out the purposes of the Act, certainly a direction in disregard of the statutory provision cannot be issued. Such a direction is not permissible in law. Therefore, the question of good faith does not arise... If the power is wholly unavailable, it c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in governance cannot be put in a straitjacket. Public interest takes into its fold several factors. There cannot be any hard-and-fast rule to determine what is public interest. The circumstances in each case would determine whether government action was taken in public interest or was taken to uphold probity in governance. 36. The role model for governance and decision taken thereof should manifest equity, fair play and justice. The cardinal principle of governance in a civilized society based on rule of law not only has to base a transparency but must create an impression that the decision making was motivated on the consideration of probity. The Government has to rise above the nexus of vested interests and nepotism and eschew window-dressing. The act of governance has to be withstand the test of judiciousness and impartiality and avoid arbitrary or capricious actions. Therefore, the principles of governance has to be tested on the touchstone of justice, equity and fair play and if the decision is not based on justice, equity and fair play and has taken into consideration other matters, though on the face of it, the decision may look legitimate but as a matter of f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, a show cause notice was issued on 19.8.2005. Since no response was received, the Respondent passed an order dated 28.3.2006 cancelling the allotment. The said order was sent to him on 28.3.2006. 4. On 20.2.2007, Sri S. Kumar Bangarappa submitted a letter stating that he could not pay the sital value within the time provided and requested for allotment of another site since the site already allotted had been registered in favour of other party. On 13.6.2007, allotment letter was issued to him allotting site No. 11-A, HSR Layout, Sector-5, measuring 50 x 80 ft. at allotment price of Rs. 8,58,500 + Rs. 50/- as site exchange charges. On 31.7.2007, the said allotment was confirmed by the Alternative Sites Allotment Committee. On the basis of the correct measurement correct received from the Engineering Section on 15.6.2007, an absolute sale deed was executed on 20.6.2007 and possession certificate was also given. It is submitted that on the directions of the Respondent, the Executive Engineer, East Division, BDA, Bangalore held spot inspection of site No. 12 on 28.7.2008. He submitted a report that as per the plan site No. 12, Sector 5, HSR Layout is a corner site. It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sposal of corner and commercial sites) Rules, 1984, it is mandatory to dispose of all corner and commercial sites by public auction. Whereas in the case on hand, after illegally bifurcating site No. 12, it was allotted in favour of Sri S. Kumar Bangarappa. The sale deeds executed by the said allottee and the one executed in favour of the Petitioner as per Annexures 'E' 'G' show that it was disposed of at a very high price immediately after allotment. By virtue of illegal formation of the site, BDA was made to suffer loss of crores of rupees at the behest of some unscrupulous elements. After noticing the same and after obtaining necessary report, the Respondent has taken steps to cancel the illegal allotment. It may be stated here that the BDA is the custodian of public property and cannot close its eyes to such illegal activities and instances of causing financial loss. But decision to cancel the allotment has been taken for valid and legal reasons. Cancellation of allotment was necessary in public interest and also since the site bearing part of site No. 12 was meant for public auction. 34. It is thus clear that a site measuring 50 ft. x 80 ft. situated at OMB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the ground of mala fide but you cannot hold me personally liable . No public servant can arrogate to himself the power to act in a manner, which is arbitrary. Therefore, action has to be initiated against the officials of the BDA, who were responsible for illegally bifurcating the site resulting in huge loss to the BDA. 35. Rule 5 of BDA (Allotment of sites) Rules, 1984 provides for disposal of stray sites in accordance with the guidelines issued by the Government. Rule 8 provides for registration for allotment of the sites. Rule 9 lays down the procedure for making an application for allotment of the site. Rule 10 provides for the eligibility criteria for allotment of the sites. Rule 11 lays down the principles of selection of applicants for allotment of sites and reservation of sites. Rule 13 provides the conditions of allotment and sale of sites. Sub-rule (2) of Rule 13 states that after payment under Sub-rule (1) is made, the authority shall call upon the allottee to execute a lease-cum-sale agreement in Form IE. Sub-rule (3) of Rule 13 states that every allottee shall construct a building on the site so allotted in accordance with the plans and designs approved by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sites, sites bigger in dimension than the sites originally allotted shall not be considered for allotment. However, an alternative site up-to ten percent over and above the area of the originally allotted site may be allotted and in such cases for the extra sital area involved, additional sital value applicable in that layout for that site shall be collected by the Authority in addition to the difference in sital value to be collected: (v) Provided that extension of time of three months may be given to collect additional sital value in cases where it is applicable. (vi) While allotting alternative sites eligibility of the applicant shall be verified in accordance with these Rules. 37. It is clear from the above Rules that an alternative site has to be allotted only where the mistake was on the part of the Authority while making the allotment of site or where the possession of the sites allotted originally could not be given to the allottee due to stay orders of the Courts or due to other disputes. Alternative site has to be allotted by the Authority in the same layout in which sites were originally allotted or in the layouts formed by the Authority subsequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statute such as the preamble, the scheme or even the very subject matter of the statute. If guidance there is, wherever it may be found, the delegation is valid. This decision does not help the State in any manner. What is permissible is to leave the delegated authority the task of implementing the object of the Act. Neither the Act nor the Rules made therein authorise the State Government to issue directions to allot the sites to the persons of its choice. Therefore, under the guise of a circular, the State Government cannot direct the BDA to allot the sites. In the second decision, the Hon'ble Supreme Court has held that the guidelines need not be found in the impugned provision. The same may be collected from the setting in which the provision is placed, the purpose for which the Act is enacted and even the preamble of the statute in which the provision is incorporated. This decision also does not help the State in any manner. The Act does not envisage the State Government to direct the BDA, which is a body corporate having the perpetual succession and common seal with power to acquire, hold and dispose of the property, for allotment of sites to the persons of its choice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nusuyamma was an applicant for allotment of the site. The site was allotted on 9.3.1989. Before the expiry of the lease period, Anusuyamma had died bequeathing the said site in favour of the second Petitioner. The BDA allotted an alternative site to the second Petitioner and a sale deed was executed in his favour on 19.4.2007. The second Petitioner sold the said site to the first Petitioner on 4.8.2007. In W.P. No. 16954/2007, the BDA had allotted a site in favour of one Jameson 15.5.1989. However, an alternative site was allotted to him and a sale deed was executed in his favour on 21.11.2007. James sold the said property through a sale deed dated 11.2.2008 in favour of the Petitioner in the said writ petition. The question for consideration is, having executed the sale deeds by the BDA as above, whether it can pass an order cancelling the said deeds or execute the deed of cancellation? 41. It is not in dispute that the BDA was the owner of the properties in question. It has executed sale deeds in respect of the said properties in favour of the allottees. Section 54 of the Transfer of Property Act defines 'sale' as under: Sale is a transfer of ownership in exchan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reto. Because in the case of agreement of sale, lease, mortgage or partition, each of the parties to the said document even after the execution and registration of the said deed retains interest in the property and, therefore, it is permissible for them to execute one more document to annul or cancel the earlier deed. However, it would not apply to a case of deed of sale executed and registered. In the case of a sale deed executed and registered, the owner completely loses his right over the property and the purchaser becomes the absolute owner. It cannot be nullified by executing a deed of cancellation because by execution and registration of a sale deed, the properties are being vested in the purchaser and the title cannot be divested by mere execution of a deed of cancellation. Therefore, even by consent or agreement between the purchaser and the vendor, the said sale deed cannot be annulled. If the purchaser wants to give back the property, it has to be by another deed of conveyance. If the deed is vitiated by fraud or other grounds mentioned in the Contract Act there is no possibility of parties agreeing by mutual consent to cancel the deed. It is only the Court which can canc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o applicable to the sites allotted by the BDA under Rule 5 of the BDA (Allotment of Sites) Rules, 1984. (iii) The Commissioner, Bangalore Development Authority, is directed to initiate action against its officers who were responsible for illegally bifurcating civic amenity site No. 12 in Sector 5 of HSR layout (iv) The notice at Annexure 'N' dated 7.8.2008 and the order dated 31.7.2008 passed by the Commissioner, BDA, in W.P. No. 11102/2008 are hereby quashed. (v) The order passed by the Commissioner, BDA dated 9.6.2009, the notice at Annexure 'G' dated 11.6.2009 and the deed of cancellation at Annexure 'H' dated 11.6.2009 in W.P. No. 16954/2009 are hereby quashed. (vi) The order at Annexure 'A' dated 12.6.2009 passed by the Commissioner, BDA, in W.P. No. 16147/2009 is hereby quashed. (vii) Liberty is reserved to the Bangalore Development Authority to seek cancellation of the sale deeds executed by it in favour of the allottees of the sites in the above writ petitions by filing suits before the competent Civil Court. (viii) Writ Petitions are disposed of in the aforesaid terms. No costs. - - TaxTMI - TMIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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