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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 ..... s delivered to him on the same day as per 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 Bangar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed sale deed, conveying right, title 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the particulars obtained by the 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nor the Rules made thereunder 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . On the strength of 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 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. Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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 Board may allot a stray site to a person who is eligible for allotment of a site under Rule 10. 'Stray sit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NATAKA (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 in the rank/ pay scale of a Secretary to the State Government/Government of India or above, Defence Service Officers of the rank of Deputy General or equivalent and above and others who have won gallantry awards, and Judges of the High Court/Supreme Court. 15% D Government of Karnataka/Government of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Category 'C' besides Arts etc., it includes Painting, Sculpture, Music, Dance, Drama, Films, etc. 3. In the case of allotment of stray site to individuals, a stray sites shall be allotted to a personal only if- (i) he is not a minor; (ii) he is domiciled in Karnataka for not less than 10 years immediately prior to the date of his application. (iii) He or any member of his family does not own a site or a house in Bangalore Metropolitan Area and has not been allotted a site or a house by the Bangalore Development Authority or by any other Authority within the Bangalore Metropolitan Area; and (iv) He satisfied the Authority that he or she is in a reasonable position to put up a residential house or other building on the site allotted within a period of three years from the date of handing over possession of the site in question. 4. The requirement of 10 years domicile may be relaxed: (i) in case of persons who are domiciled in the State of Karnataka but are in the Armed Forces of the Union and serving outside the State of Karnataka (ii) in the use of persons who are domiciled in the State of Karnataka but have gone outside the State for employment/busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o lease, sell or otherwise transfer any movable or immovable property, which belongs to it and to appropriate or apply any land vested in or acquired by it for the formation of open spaces or for building purposes or in any other manner for the purpose of any development scheme. Section 38-A of the Act provides for lease/sell or otherwise transfer any area reserved for civic amenities for the purpose for which such area is reserved. Section 38B of the Act empowers authority to make bulk allotment of the lands. Bangalore Development Authority (Bulk Allotment) Rules, 1995 regulates bulk allotment of land under this Section, Section 38-C deals with the power of the authority to re-convey the land. Thus, the lands acquired by the State Government and made over to the BDA has to be allotted/ conveyed/re-conveyed strictly in accordance with the BDA Act and the Rules made therein. It is well established that a public body invested with statutory powers has to take care not to exceed or abuse its powers. It must act within the limits of the authority committed to it. The Act has not conferred upon either the BDA or the State Government any inherent powers much less any discretionary powers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s from different walks of life as also to the Government of Karnataka, Government of India and other charitable associations, societies, trusts, etc. For the first time, the 1997 Circular issued by the State Government provided for allotment of 30% of stray sites to persons in public life as may be directed by the Government. It is true that if a statute gives power to a Government to make Rules to carry out the purposes of the Act, the Rules so framed have the force of the statute and are deemed to be incorporated as a part of the statute. (See Co-Operative Central Bank Ltd. and Ors. etc. v. Additional Industrial Tribunal, Andhra Pradesh, Hyderabad and Ors., etc AIR 1970 SC 245). In the present case, there is no indication whatsoever about the legislative policy to vest the power with the State Government to allot sites belonging to the BDA. It is well established that determination of legislative policy and formulation of rule of conduct are essential legislative functions, which cannot be delegated. What is permissible is to leave the delegated authority the task of implementing the object of the Act after legislature lays down adequate guidelines for the exercise of power. (See ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upplied in the guise of interpretation. The Apex Court In Bangalore Development Authority and Ors. v. R. Hanumaiah and Ors. ILR 2005 KAR 5533, has held that the direction issued by the Chief Minister to re-convey the land to the land owner- Respondents are also of no consequence. Power of the Government under Section 65 to issue directions is not unrestricted. Directions have to be to carry out the objective of the Act and not contrary to the provisions of the Act. Directions issued by the Chief Minister would not be to carry out the purpose of the Act rather it would be to destroy the same. Such a direction would not have the sanctity of law. 31. BDA is the custodian of public properties. It is not as free as an individual in selecting the recipients for its largess. For allotment of the properties, a transparent, and objective criteria/procedure has to be evolved based on reason, fair play and non-arbitrariness. In such action, public interest has to be the prime guiding consideration. In Ramana Dayaram Shetty v. The International Airport Authority OF India and Ors. AIR 1979 SC 1628, the Apex Court has held that it must therefore be taken to be the law that even in the matter o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reasons are not based on values but to achieve popular accolade, that decision cannot be allowed to operate. 32. As per the circular, the government can allot the sites to the persons in public life under 'G' category. 'Persons in public life' in the context are those having to do with the public or available to the people as a whole and are those involved in the affairs of the community. Learned AGA has produced one of the files bearing No. (sic) 49 (sic) 07 relating to the allotments made by the State Government under 'G' category. A perusal of the file shows that the State Government has made allotment of sites mostly on the recommendation of the Ministers. The sites have been allotted in an arbitrary manner without considering as to whether the applicants are persons in public life. BDA forms sites of different dimensions. No reasons have been assigned as to why some of the applicants were allotted sites measuring 50 ft. x 80 ft. and some others were allotted sites measuring 40 ft. x 60 ft. or 30 ft. x 40 ft. It is also evident from the file that one T.N. Narayana Gowda, under Secretary to Chief Minister was allotted a site under 'G' category ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut approval of authority it was bifurcated and a new site number was given as 11/A with dimension 15.24 x 24.40 mtrs. Thus, from the particulars obtained by the Respondent, it was clear that irregularities were committed in bifurcating the corner site and allotting the same. On the strength of illegal bifurcation the remaining extent of 6.40 x 24.40 sq. mtr. in site No. 12 was put to auction on 21.11.2007. It is interesting to notice that the Petitioner himself is the auction purchaser of the remaining extent. 5. It is submitted that as the result of irregularities in bifurcating corner site No. 12 as site No. 11/A and 12, sale deed came to be executed in the name of allottee Sri S. Kumar Bangarappa on his paying Rs. 8,58,974/-. It is also be true that the possession certificate etc., were issued to him. But the allegation that on 23.6.2007, the said allottee Sri S. Kumar Bangarappa sold the said site in favour of Sri Madhu Dhondiba Babar for a sum of Rs. 85 lakhs, is not known to this Respondent, since BDA is not a party to this transaction. Similarly, the allegation that on 7.11.2007, the said site was again sold by Madhu Dhondiba Babar for a sum of Rs. 1.20 crore in favour of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 20.12.2004 by the State Government under 'G' category for Rs. 8,58,000/-. The allottee failed to pay the amount to the B.D. A within the prescribed period. Therefore, a show cause notice was issued to him on 19.8.2005. Since he failed to respond to the notice, the allotment of the site was cancelled on 28.3.2006. On 20.2.2007, the allottee wrote a letter to the BDA to allot an alternative site since the site allotted to him earlier has been allotted to some other applicant. In response to the said request, the BDA has allotted the site in question in his favour on 13.6.2007. The sale deed was executed in his favour on 20.6.2007. The allotment price of the site was Rs. 8,58,974/-. The allottee has sold the said site in favour of Madhu Dhondiba Babar by a registered sale deed on 23.6.2007 (i.e. within 3 days from the date of execution of sale deed by the BDA) for a sale consideration of Rs. 85,00,000/-, thus making a profit of more than Rs. 75,00,000/-. In fact, the said site was a comer site bearing site No. 12. It was bifurcated and a new site number was given as 11-A with a dimension 15.24 x 24.40 mtrs. and the remaining extent of site No. 12 was 6.40 x 24.40 mtrs., wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tates that on the expiry of a period of ten years from the date of the lease-cum-sale agreement and if the allotment has not been cancelled or the lease has not been determined, the authority shall by notice call upon the allottee to get the sale deed of the site executed at his own cost within the time specified in the notice. The conditions of allotment of sites under Rules 7 and 13 are applicable to all the sites allotted under 1984 Rules including the allotments made under Rule 5 because Rules 7 and 13 start with the words "the sites allotted under these Rules". Therefore, BDA should not have executed the sale deed in favour of the allottee immediately after allotment of the site. 36. In W.P. Nos. 16147/2009 and 16954/2009, BDA has taken a contention that it should not have allotted an alternative site in a layout formed prior to the layout in which site was originally allotted to the applicants therein. After insertion of Rule 11A of the BDA (Allotment of Sites) Rules, 1980, by Notification No. UDD.246.MNJ. 2003 dated 27.9.2003, which has come into effect from 29.9.2003, the allotment of alternative sites are regulated as under: 11-A: Allotment of alternative site ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative sites shall not be allotted in layouts formed prior to the layout in which sites were originally allotted, even if sites are physically available in the layout/s formed prior to the layout in which original allotment was made. While allotting alternative sites, sites bigger in dimension than the sites originally allotted shall not be considered for allotment. The exception to this Rule is that 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 38. Learned Addl. Advocate General has relied on certain decisions including (i) The Registrar of Co-Operative Societies, Trivandrum and Anr. v. K. Kunjabmu and Ors.: (1980) 1 SCC 340"; (ii) State of Mysore, Etc. v. M.L. Nagade & Gadag and Ors. AIR 1983 SC 762; (iii) Consumer Action Group and Anr. v. State of Tamil Nadu and Ors.: AIR 2000 SC 3060; and (iv) People's Union For Civil Liberties and Anr. v. Union of India and Ors. (2004) 2 SCC 476. In the first de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to allot the sites vested with the BDA. The Act does not spell out either directly or impliedly legislative policy empowering the State Government to allot the property vested with the BDA. In the third decision, the Apex Court has held that in spite of very wide power being conferred on delegatee such a Section would still not be ultra vires, if guideline could be gathered from the Preamble, Object and Reasons and other provisions of the Act and the Rules. Neither the preamble nor the objects and reasons of the Act suggest the legislative policy, authorising the State Government to direct allotment of the sites. In the fourth decision, the Hon'ble Supreme Court was considering the validity of Section 18 of the Atomic Energy Act, 1962. It has been held that the question as to whether a statute is ultra vires the Constitution having conferred unguided, uncanalised or wide power cannot be determined in vacuum. It has to be considered having regard to the text and context of the statute as also the character thereof. The guidelines for enacting the said provision must be found out from the subject matter covering the field. For the said purpose, even the preamble of the Act may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nveys the property to a purchaser under a written document and gets the same registered, the right, title and interest in the said property is transferred from the owner to the purchaser on registration of the said document. Thus, once such sale takes places, transfer is complete, the vendor of the property ceases to be the owner of the property. The effect of registration of an instrument not only affects the rights of the parties to the instrument but also affects parties, who may claim under them. Section 31 of the Specific Relief Act provides for cancellation of the written instruments, which is as under: 31. When cancellation may be ordered: (1) Any person against whom a written instrument is void or voidable, and who has reasonable apprehension that such instrument, if left outstanding may cause him serious injury, may sue to have it adjudged void or voidable; and the Court may, in its discretion, so adjudge it and order it to be delivered up and cancelled. (2) If the instrument has been registered under the Indian Registration Act, 1908 (16 of 1908), the Court shall also send a copy of its decree to the officer in whose office the instrument has been so registered; and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the power to cancel a deed vests with a Court and it cannot be exercised by the vendor of a property. (Emphasis supplied by me) 44. It is thus clear that when the 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 cancel the deed duly executed, under the circumstances mentioned in Section 31 and other provisions of the Specific Relief Act, 1963. Therefore, the power to cancel the deed vests with a Court and it cannot be exercised by the vendor of a property. Aft ..... X X X X Extracts X X X X X X X X Extracts X X X X
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