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2014 DIGILAW 132 (KAR)

N. D. SALI v. KARNATAKA HOUSING BOARD

2014-02-12

H.S.KEMPANNA, S.ABDUL NAZEER

body2014
JUDGMENT 1. This writ appeal under Section 4 of the High Court Act, 1961 is directed against the order in W.P.No.15421/2006 dated 16.2.2009 whereby the learned Single Judge has directed respondent Nos.1 and 2 to allot a new house to the appellant on the same terms and conditions as existed as on the date of initial allotment of the house bearing No.17/C situated at MIG I Extension. II phase, B Tank Bed, Hassan. 2. The appellant was allotted the above house by respondent Nos.1 and 2 on 29.10.1999. A lease-cum sale deed as per Annexure-B dated 29.03.2000 was executed in respect of the said house in his favour subject to the terms and conditions stated therein. Possession of the house was given to the appellant as per the possession memo at Annexure-C dated 13.4.2000. The total value of the house was Rs.3,72,000/. The appellant has deposited a sum of Rs.37,214/- which covers 10% of the value of the house before the date of allotment. It is the case of the appellant that he has spent a sum of Rs.3,00,000/- to make it habitable. He could not pay the installments in accordance with the terms of the lease-cum-sale deed at Annexure-B. He made an application seeking extension of time for payment of balance of the amount and the first respondent as per the letter at Annexure-E dated 1.9.2004. It is contended that respondent No.1 has granted six months time to pay the balance of the amount. A notice at Annexure-F dated 18/19.2.2005 was issued calling upon him to pay the balance of Rs.4,01,130/. He was granted three months further time to pay the balance of the amount as per Annexure ‘G’ dated 14.6.2005. Again, as per the letter dated 22.12.2005 at Annexure-K, he was granted further time of 30 days for payment of balance of the amount of Rs.6,24,500/. It is the case of the appellant that despite the extension of time as above, the first respondent Board cancelled the allotment of the house under Annexure-A order dated 25.5.2005. 3. It is further contended that the first respondent has unilaterally executed a deed of cancellation of lease-cum-sale agreement as per Annexure-H dated 15.6.2006. An absolute sale deed in respect of the said house was executed in favour of the third respondent on 21.6.2006. 3. It is further contended that the first respondent has unilaterally executed a deed of cancellation of lease-cum-sale agreement as per Annexure-H dated 15.6.2006. An absolute sale deed in respect of the said house was executed in favour of the third respondent on 21.6.2006. The allotment of the house in favour of the third respondent is on the basis of an undated letter at Annexure R1 sent by her to the Commissioner of the Housing Board. During the pendency of the writ petition, a resolution was passed by the Board as per Annexure-M dated 23.10.2008 regularizing the allotment of the aforesaid house in favour of the appellant and to allot some other house to the third respondent. 4. Respondent Nos.1 and 2 have filed their statement of objections contending that the appellant has failed to pay the installments in terms of the lease-cum-sale deed. Therefore, they have cancelled the allotment of site and the same has been sold in favour of the third respondent. 5. The third respondent has also filed objections contending that in response to her application at AnnexureR1, the house in question was allotted and the sale deed in respect of the said house was executed in her favour. 6. Learned Single Judge on appreciation of the materials on record has held that cancellation of the house allotted in favour of the appellant was illegal. He has also arrived at a conclusion that the allotment and sale of the house in favour of the third respondent is also contrary to law. Further, the learned Single Judge has held that since the third respondent has been in possession of the house from the date of execution of the sale deed dated 21.6.2006 and even prior to that as a tenant of the appellant, in equity, it would be inappropriate to dispossess her from the said house. The writ petitions were disposed of by directing the Board to allot an alternative house to the appellant. 7. Sri. D.S. Ramachandra Reddy learned Counsel for the appellant submits that the lease-cum-sale deed at Annexure-B dated 27.3.2000 provides for payment of interest at 21.5% per annum or at such higher rate of interest as may be fixed by the Board from time to time if there is default in payment of installments or difference of cost. The appellant did not pay the installments regularly. The appellant did not pay the installments regularly. His request for extension of time was favourably considered by the Board on two occasions at AnnexureG dated 14.6.2005 and at Annexure-K dated 22.12.2005. Therefore, question of cancellation of allotment of the house earlier to the said dates as per the impugned order at Annexure-A on 25.5.2005 is clearly illegal. He draws our attention to Section 45 of the Karnataka Housing Board Act, 1962 (for short ‘the Act’) and submits that if any installment is not paid or if the appellant has committed violation of any other conditions, the Board ought to have issued a show cause notice, consider the cause shown and thereafter pass the order. Thus, the order of cancellation at Annexure-A is violative of the principles of natural justice. It is further contended that the third respondent was a tenant under the appellant in respect of the house in question. She had not made any application in the prescribed form for allotment of the house. She had sent an undated letter at AnnexureR1. On the basis of the said letter, sale deed in respect of the house in question has been executed in favour of the appellant. He has taken us through the relevant provisions of the Karnataka Housing Board Regulations, 1983, which provides for allotment of the house. These Regulations have not been followed while allotting the house. Thus, the sale of the house in favour of the third respondent is also illegal. 8. On the other hand, the learned Advocate appearing for the respondents have sought to justify the impugned order. It is submitted that the third respondent has been in possession of the property as a tenant under the appellant earlier to the date of execution of the sale deed at Annexure-J dated 21.6.2006. She has been in possession as the owner of the house after the execution of the said sale deed. If she is dispossessed at this stage, she will be put to untold hardship. The appellant can get an alternative house allotted from the Board in terms of the order impugned. 9. We have carefully considered the arguments of the learned counsel made at the Bar and perused the materials placed on record. 10. It is not in dispute that the house in question was allotted in favour of the appellant on 29.10.1999. The appellant can get an alternative house allotted from the Board in terms of the order impugned. 9. We have carefully considered the arguments of the learned counsel made at the Bar and perused the materials placed on record. 10. It is not in dispute that the house in question was allotted in favour of the appellant on 29.10.1999. The lease/sale deed was executed in his favour at Annexure-B dated 29.3.2000. The total cost of the house was Rs.3,72,000/. The lease-cum-sale deed shows that the appellant has deposited Rs.37,214/- before the allotment of the house. The appellant was put in possession of the house on 13.4.2000 as per Annexure-C. It is also clear that the appellant has made efforts to raise loan from HDFC for payment of the balance of the amount to the Board. He had sent a letter to the Board which is at Annexure-G dated 14.6.2005 seeking extension of time for payment of balance of the amount. It is clear from this document that three months time was granted to avail one time settlement. At the request of the appellant, Board has again extended 30 days time to pay the balance of Rs.6,24,500/, which is clear from Annexure-K dated 22.12.2005. When time has been extended as above, it is un under standable as to how the Board can cancel the allotment of the house on 25.5.2005 itself. The Board has unilaterally executed a deed of cancellation of the lease-cum-sale deed as per Annexure-H on 15.6.2006. 10. Section 45 of the Act provides for the power of the Board to evict certain persons from the Board premises. The relevant provision is Section 45(1)(1a), which states that if the competent authority is satisfied that a person authorised to occupy any Board premises has not paid rent lawfully due from him in respect of such premises for a period of more than two months from the due date, it may, notwithstanding anything contained in any law for the time being in force by notice served by post or by affixing a copy of it on the outer door or some other conspicuous part of such premises as may be prescribed, order that person as well as any other person, who may be in occupation of the whole or any part of the premises vacate them within one month from the date of the service of the notice. The proviso to this provision states that no such order shall be passed unless the person has been afforded an opportunity to show cause why such an order should not be made. It is not in dispute that no show cause notice has been issued before passing the order at Annexure-A. 11. There is a reference to two notices i.e. 19.2.2005 and 18.3.2005 in the order. In these notices, the appellant was called upon to pay balance of arrears of the installments. After issuance of these notices, time was extended to the appellant to pay the balance of the amount. As stated earlier, show cause notice has not been issued for cancellation of the lease-cum-sale deed as provided under Section 45 of the Act. Learned Single Judge has in fact recorded a finding that cancellation of the allotment of the house is illegal. We are in agreement with the said finding of the learned Single Judge. 12. Karnataka Housing Board Regulations, 1983, have been made under Section 76 of the Act. These Regulations provide for allotment of the houses/sites made by the Board. Regulation 3 provides for offer of Sites/houses for allotment. Regulation 4 provides for reservation of sites/houses. Regulation 6 lays down the procedure for filing of an application in response to the notifications for allotment of houses/sites for persons belonging to Economically Weaker Sections, Low Income Group, Middle Income Group and Higher Income Group in the form prescribed by the Board. Regulation 7 provides for registration of the application and Regulation 8 provides for eligibility for allotment and Regulation 9 lays down the procedure for allotment. 13. It is not the case of the Board that the procedure prescribed in the aforesaid Regulations have been followed before allotment/sale of the house in question in favour of the third respondent. Learned Single Judge has therefore rightly come to the conclusion that the sale of the house in favour of the third respondent is also illegal. 14. Having opined as above, the question for consideration is whether the learned Single Judge is right in holding that in equity, it would be inappropriate to dispossess the third respondent from the house in question? 15. The Housing Board is the custodian of public properties. It is not as free as an individual in selecting the recipients for its largess. Having opined as above, the question for consideration is whether the learned Single Judge is right in holding that in equity, it would be inappropriate to dispossess the third respondent from the house in question? 15. The Housing Board 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 site/house, a transparent method has been provided under the Regulations. The Regulations made under the Act regulates allotment and sale of the site/house belonging to it. The Housing Board has to allot/sell the house/sites strictly in accordance with the said Regulations. 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 and the Regulations has not conferred with the Housing Board any inherent powers much less discretionary powers to allot/sell its property. The Regulations made under Section 76 of the Act have the force of the statute and are deemed to be incorporated as part of the statute. The sale of the house by the Board in her favour is clearly illegal. She cannot be permitted to retain the said house under any circumstances. 16. In the light of the above discussions, we pass the following: ORDER (i) The writ appeal succeeds and it is accordingly allowed. (ii) The order of the learned Single Judge in W.P.No.15441/2006 dated 16.2.2009 in so far as permitting the 3rd respondent to retain the house and directing the Board to allot a house in favour of the petitioner/appellant is concerned is quashed. (iii) The sale deed at Annexure ‘J’ dated 21.6.2006 executed by the Board in favour of the third respondent is also quashed. (iv) Registry is directed to send a copy of this order to the Sub-Registrar, Hassan, in whose office the sale deed dated 21.6.2006 in favour of the third respondent has been registered to enable him to make suitable entries relating to cancellation of the said sale deed. (v) The appellant is directed to deposit the balance of the sale consideration in respect of the house in question with the second respondent along with admissible interest within a period of five months from the date of receipt of a copy of this order. (v) The appellant is directed to deposit the balance of the sale consideration in respect of the house in question with the second respondent along with admissible interest within a period of five months from the date of receipt of a copy of this order. (vi) On such deposit, respondent Nos.1 and 2 are directed to execute the sale deed in respect of the said house in his favour in terms of the resolution at Annexure ‘M’ dated 23.10.2008. (vii) Respondent Nos.1 and 2 may consider allotment of a house in favour of the 3rd respondent strictly in accordance with Karnataka Housing Board Regulations, 1983. (viii) In view of the disposal of the appeal as above, Misc.W.No.3892/2009, I.A.Nos.1/2013 and 2/2013 do not survive for consideration. They are accordingly disposed of. No costs.