Town Municipal Council (earlier Known As Town Panchayath) v. Karnataka Housing Board
2022-05-10
MAHESHAN NAGAPRASANNA
body2022
DigiLaw.ai
JUDGMENT Maheshan Nagaprasanna, J. - The petitioner/Town Panchayat, Arkalgud (for short 'the Panchayat) in W.P. No. 22616/2005, is before this Court seeking the following prayer: "(a) To issue writ of certiorari or any other appropriate writ or order or direction to quash the intimation of allotment of the 1st respondent bearing No. KHB.DC.R /R3/132/2005-06 dated 3-09-2005 respectively issued in favour of respondents 2 to 33 vide Annexures A1 to A32 and (b) To grant all other consequential reliefs including cost deemed fit in the circumstances of the case in the interest of justice and equity. 1. The 1st respondent is the Karnataka Housing Board ('the Board' for short) and respondents 2 to 33 are allottees of plots (referred to as 'occupants' hereafter). 2. Brief facts leading to the filing of the present petition, as borne out from the pleadings, are as follows:- The facts of the case at hand dates back to the year 1965. On 20-03-1965, land measuring 16,399 sq.ft. was granted by the Panchayat to the Board at an upset price of Rs. 9456.50 for the purpose of construction of 16 twin houses to be used under the subsidized rental Housing Scheme ('the Scheme' for short). Pursuant to the said allotment, intimation of allotment is made from the Board to the Panchayat regarding allotment of houses to the Panchayat. On 28-02-1977 lease cum-sale agreement is executed by the Board in respect of 16 twin houses for a period of 29 years beginning from 1-11-1969. On 22-02-1992, on a proposal sent by the Board seeking approval to dispose of 16 blocks or 32 tenements under the Scheme constructed by the Board to the present occupants on lease-cum-sale basis, Government accords sanction in favour of the said occupants. In furtherance of the said sanction so accorded, the Board cancelled the allotment made in favour of the Panchayat earlier and replaced the same with the occupants as was approved by the Government as the new allottees. This was called in question by the residents of Arkalgud Town by way of public interest litigation in Writ Petition No. 38853 of 1993 seeking quashment of the order dated 22-02-1992.
This was called in question by the residents of Arkalgud Town by way of public interest litigation in Writ Petition No. 38853 of 1993 seeking quashment of the order dated 22-02-1992. This writ petition came to be disposed of by an order dated 25-11-1996 quashing the said order dated 22-2-1992 and intimation of allotment made to the private allottees therein reserving liberty in the Government and the Board to consider the same afresh after affording opportunity to all the stake holders. All questions were left open. 3. Pursuant to the order passed by this Court, Panchayat issued notices to the occupants seeking to evict them on the premise that they have not paid the rents. This was called in question by the occupants in Writ Petition Nos. 27823-846 of 1995. This writ petition came to be dismissed by an order dated 11-09-1998 directing appropriate action to be taken against the occupants under the provisions of the Karnataka Public Premises (Eviction of Unauthorised Occupants) Act if really the Panchayat is aggrieved by the non-payment of rent and also to evict the occupants. On this premise, the notices that were issued were not interfered with by this Court. 4. Pursuant to the liberty so reserved to the Panchayat a show cause notice was issued by the Board to the Panchayat calling the Panchayat to make remainder of the payment that was due to it, after which, the Panchayat made a payment of Rs. 3,00,000/- to the Board claiming it to be in full and final settlement of all the claims of stake holders. Pursuant to the settlement so made, the Panchayat demanded that possession that was taken away of the 32 houses be given back to it. When that was not acceded to, the Panchayat filed Writ Petition No. 33117 of 2000 seeking a direction by issuance of writ in the nature of mandamus to the Board for putting the Panchayat back in possession of the houses which were taken away pursuant to the order dated 22-02-1992. The said writ petition came to be disposed of by this Court on 6-10-2003 holding that there was no reason to restore the Panchayat to its original possession as that would be to say that the Panchayat continues to be in possession of the property. A Writ Appeal was filed against the said order in Writ Appeal No. 8037 of 2003 by 15 allottees.
A Writ Appeal was filed against the said order in Writ Appeal No. 8037 of 2003 by 15 allottees. The said writ appeal came to be disposed of by this Court by an order dated 25-05-2005 directing that the appellants who have been allotted houses earlier shall not be dispossessed. If there is any violation of terms and conditions made to the appellants therein, they shall not resist taking over of the houses by the respondents. Pursuant to the aforesaid order, the Board issued intimation of allotment in favour of the all the occupants on 03.09.2005. It is these allotment letters issued by the Board in favour of the occupants that are called in question in the subject petition by the Arkalgud Town Panchayat. 5. The learned counsel Sri Puttige. R. Ramesh appearing for Arkalgud Town Panchayat would contend that pursuant to orders passed by this Court that there was no necessity for the Panchayat to be put back in possession as it was always in possession would clearly go to establish that the land belonged to the Panchayat and it was only under a Scheme that the Housing Board was given the job of construction of houses on a lease-cum-sale agreement for a period of 29 years. He would submit that allotments of public property are not made in a transparent manner as the Board has allotted them to present occupants at its whim and fancy and no procedure stipulated in law has been followed where the houses become available for allotment to the general public. He would further submit that the Board in terms of law, has a duty to undertake housing scheme and the Board formulated such a Scheme which would not mean that it would take over the land itself. The Panchayat is in legal possession of 32 houses. 6. On the other hand, the learned counsel appearing for the respondents Sri K.V. Narasihman would vehemently refute the submissions and contend that the land was allotted by the Panchayat in favour of the Board on a lease-cum-sale agreement under a Scheme for distribution of houses to the weaker sections of the society and the occupants are in possession of the property for at least 30 years now, pursuant to them being put in possession by the Board.
He would further contend that this Court had clearly indicated that the occupants of houses who had already been put in possession should not be dispossessed. It is in that light Government issued intimation of allotment to all the occupants on 03-09-2005 and therefore, there can be no doubt that the occupants are in legal possession of houses, the land pertaining to which was legally allotted to the Board by way of lease-cum-sale agreement by the Panchayat. He would further submit that the Panchayat cannot claim to be in possession of the property. 7. I have given my anxious consideration to the submissions made by the respective learned counsel and perused the material on record. 8. The afore-narrated facts and genesis of the issue are not in dispute and are, therefore, not reiterated. A lease-cum-sale agreement was entered into on 28-02-1977 between the Board and the then Town Panchayat, Arkalgud, Hassan District presently it is Town Municipal Council. The Board was the lessor and the Town Municipal Council was the lessee/purchaser. The land belonged to the Government in the Housing Board and given on lease-cum-sale agreement to the purchaser - the Panchayat. The land was given for allotment of houses under the subsidized rental housing scheme to the economically weaker sections of the society in terms of prevailing Regulations of 1965. The clauses in the agreement that are germane for consideration of the lis are as follows: "3. The lessee/purchaser hereby put in possession of the property and the lessee/purchaser shall occupy the houses as a lessee thereof for a period of 29 years from 1.11.1969 or in the event of lease being determined earlier till the date of such terminations. All the amounts paid by the lessee/purchaser towards the price of the house shall during the period of the lease be held by the lesser/owner as security for the due performance of the terms and conditions of these presents. ............ 5. The lessee/purchaser shall have no right to alienate the houses or create any encumbrance or charges thereon whatsoever or otherwise dispose of the property during the period of the lease and the lessee/purchaser shall not be entitled to claim title until the full value thereof is paid as hereunder stipulated and the property duly conveyed to him. He may, however, lease it to persons strictly under the subsidized rental housing scheme referred to above. ............ 8.
He may, however, lease it to persons strictly under the subsidized rental housing scheme referred to above. ............ 8. The price of the schedule house as now fixed is 1,73,863.75 (Rupees one lakh seventy three thousand eight hundred and sixty three and paise seventy five only) and the balance due after deducting the sum of Rs. 27,643.75 (Rupees twenty seven thousand four hundred and sixty three and paise seventy five only) paid by the Town Municipal Council, Arkalgud and subsidy 73,200/- (Rupees seventy three thousand and two hundred only) and the balance of price is Rs. 73,200/- (Rupees seven three thousand and two hundred only) which is payable by the lessee. The price may be altered by the Board and the lessee/purchaser binds himself to accept such price and the annual equated installments based on the altered price. ............ 11. The lessee/purchaser having already paid the lessor/owner Rs. 27,463.75 ID + 73,200/- subsidy (Rs. 1,00,663.75) (Rupees one lakh six hundred sixty three and paise seventy five only) towards the price of the house in accordance with the allotment of house regulations framed under the Karnataka Housing Board Act, 1962, clause 15(1) the lessee/purchaser shall pay the balance of the price of scheduled houses of Rs. 73,200/- (Rupees seventy three thousand two hundred only) together with interest thereon at 61/4% per annum or at such other higher rate of interest as the lessor/owner may fix from time to time under clause 15(11) of the Regulations in 29 (twenty nine) annual equated installments. ............ 14. If the lessee/purchaser commits default in payment of any installment he shall be liable to pay penal interest on the overdue installments at 101/4% per annum (ten and a quarter percent) or at such higher rate of interest as may be fixed by the Board and the lessor/owner shall also be entitled to cancel this agreement and evict the lessee/purchaser from the house under Section 45 of the Karnataka Housing Board Act, 1962 and all the amounts paid by him forfeited to the Board. After taking possession of the house the lessor/owner may deal with it as he may deem fit. ............ 21. The lessee/purchaser shall be bound by the provisions of the Karnataka Housing Board Act and Rules and Regulations there under the those that may be framed from time to time. 22.
After taking possession of the house the lessor/owner may deal with it as he may deem fit. ............ 21. The lessee/purchaser shall be bound by the provisions of the Karnataka Housing Board Act and Rules and Regulations there under the those that may be framed from time to time. 22. In the event of lessee/purchaser committing default in payment of rent or in paying the installments in accordance with the terms and conditions of this agreement, the lessor/owner may without prejudice to the remedies open to him under the Karnataka Housing Board Act, 1962 determine the tenancy at any time after giving the lessee/purchaser one month's notice ending with the months of the tenancy and take possession of the property. The lessor/purchaser may also forfeit the amount treated as security under clause (3) of this agreement and the subsidy allowed will also become recoverable forthwith along with interest at 9 percent. 23. The scheduled houses shall not be conveyed by the lessor/owner to the lessee/purchaser till the entire price thereof together with interest is paid. Where such amount is paid before the expiry of 29 years from the date of these presents, notwithstanding such payment the house shall not be conveyed to him during the period of the said 29 years and the lessee/purchaser shall be deemed to be a tenant of the house during the said period. 24. If the lessee/purchaser has performed all the conditions mentioned herein and committed no breach thereof and has paid the full price of the house, the lessor/vendor shall execute a sale deed in his favour. The lessee/purchaser shall pay all the expenses in connection with the sale such as stamp duty, registration charges etc." (Emphasis Supplied) Clauses 23 and 24 (supra) of the agreement speak that the schedule houses shall not be conveyed by the lessor/owner to the purchaser till the entire price thereof together with interest is paid. Where such amount is paid before the expiry of 29 years, after the lessee/purchaser has performed all the conditions mentioned in the agreement and has committed no breach thereof and has paid the full price of the house, the lessor shall execute a sale deed in its favour.
Where such amount is paid before the expiry of 29 years, after the lessee/purchaser has performed all the conditions mentioned in the agreement and has committed no breach thereof and has paid the full price of the house, the lessor shall execute a sale deed in its favour. The schedule of the property is germane to be noticed and it reads as follows: "16 blocks or 32 tenements constructed at Arkalgud by the Karnataka Housing Board under subsidized Rental Housing Scheme with boundaries noted below:......" (Emphasis Added) The agreement would clearly reveal that the Town Panchayat will get a hold of the property only after it fulfills the entire conditions stipulated in the agreement. Till such time, no sale deed would be executed in its favour. As a matter of fact, no sale deed even as on date is executed in favour of the Panchayat in terms of the agreement. Since the land belonged to the Housing Board, the Government in the Department of Housing and Urban Development approved the proposal submitted by the Commissioner, Housing, to accord sanction to dispose of 32 houses under the Scheme to the present occupants at Arkalgud in terms of several Government orders obtaining at the relevant point in time. The preamble to Government order according approval and the order reads as follows: "PREAMBLE: The Housing Commissioner has sent the proposal cited at (i) above for according approval to dispose of 16 blocks or 32 tenements under SRHS houses constructed by Karnataka Housing Board to the present occupants on lease-cum-sale basis at Arkalgud. These houses were allotted to the then Municipality, Arkalgud and these houses were constructed by obtaining subsidy from Government of India as it has been done in the case of SIHS houses. Arkalgud Municipality (now interim Mandal Panchayat) has not paid the annual installments to the Karnataka Housing Board, regularly for the houses allotted to them, even though the occupants paid the rent regularly. As a result of this Rs. 1,58,487.04 is outstanding to Karnataka Housing Board. Instead of paying the arrears of huge amount to the Mandal Panchayat have resolved to allot these houses to the present 32 occupants on lease-cum-sale basis and recommended the same to Housing Commissioner, Karnataka Housing Board, Bangalore.
As a result of this Rs. 1,58,487.04 is outstanding to Karnataka Housing Board. Instead of paying the arrears of huge amount to the Mandal Panchayat have resolved to allot these houses to the present 32 occupants on lease-cum-sale basis and recommended the same to Housing Commissioner, Karnataka Housing Board, Bangalore. The Karnataka Housing Board in its, Board resolution on 17.05.1991 recommended to dispose of the 32 houses constructed by the Karnataka Housing Board, under SRHS at Arkalgud to the present occupants in accordance with the terms and conditions laid down in Government Order NJo.HUD 5 HIS 78, dated 21/24-09-1979. Guidelines of Government of India, has relaxed to eligibility for purchasing SIHS (Read ii & iii) and Government has also revised the cost of the houses with 100 times penalty on the cost of the houses (read v). The occupants of the said houses are also requesting the Government to dispose of these houses on lease-cum-sale basis to them, since no maintenance of the houses have done either by the Municipality or by the Karnataka Housing Board. The houses are in a dilapidated condition. After the disposal of houses the occupants may get repair the houses for the living conditions. GOVERNMENT ORDER NO. HUD 116 KHB 90 BANGALORE, DATED 22-02-1992. In the circumstances stated above sanction is accorded to dispose of the 32 SRHS house to the present occupants at Arkalgud in terms of Government Order No. HUD 5 HIS 78 dated 24-09-1979 and No. HUD 44 KHB 91 dated 18-07-1991. This order issues with the concurrence of Finance Department vide its No. FD 2127 Exp-3/91 dated 5.02.1992." (Emphasis Supplied) The Commissioner, Housing clearly indicates that Arkalgud Municipality has not paid annual installments to the Housing Board in terms of the agreement regularly, for the houses to be allotted to it notwithstanding the fact that the occupants have been paying rent regularly. The outstanding amount as on that date was Rs. 1,58,487/- to the Board from the Panchayat. Owing to that circumstance the Government in the Department of Housing accords approval to dispose of 32 houses in favour of the present occupants. 9.
The outstanding amount as on that date was Rs. 1,58,487/- to the Board from the Panchayat. Owing to that circumstance the Government in the Department of Housing accords approval to dispose of 32 houses in favour of the present occupants. 9. The residents of Arkalgud Town, Hassan District called in question this Government order dated 22-02-1992 in a public interest litigation in Writ Petition No. 38853 of 1993 on the ground that the Panchayat was not heard while passing the order dated 22-02-1992, in terms of which, the land which ought to have belonged to the Panchayat was given to the occupants. A learned single Judge of this Court by his order dated 25.11.1996 allowed the writ petition observing as follows: "11. In view of the contentions raised by the parties as to the genuineness of the resolution, as to the competency of the State Government to allot the houses and also as to the want of an opportunity to the Mandal Panchayat before cancelling the allotment, I am of the view that the matter requires consideration by the Government. 12. In the result, this petition is allowed. Rule made absolute. The orders dated February 22, 1992, passed by the Government in HUD 116 IHB 80 vide Annexure-B and the order dated March 10, 1992 passed by the Karnataka Housing Board, in No. KHB.REV.SRHS. 32/91-92, Annexure-C, are hereby quashed, the intimation of allotment issued to respondents 5 to 33 also stands cancelled leaving liberty to the first and the second respondents to consider the same afresh and to make appropriate orders after providing opportunity to all the parties concerned including respondents 5 to 33. All questions are left open." The order dated 22-02-1992 passed by the Government was quashed, as also, the intimation of allotments issued to the residents therein, the occupants, were also cancelled reserving liberty to the Government and the Board to consider those orders afresh after hearing all the parties including the occupants. All the issues were kept open. 10. Pursuant to the order of this Court (supra) notice of eviction was issued by the Panchayat upon the occupants. This was called in question in Writ Petition Nos. 27823-846 of 1995. This was dismissed reserving liberty to the respondent/Panchayat to initiate appropriate proceedings under the Karnataka Public Premises (Eviction of Unauthorised Occupants) Act. 11.
10. Pursuant to the order of this Court (supra) notice of eviction was issued by the Panchayat upon the occupants. This was called in question in Writ Petition Nos. 27823-846 of 1995. This was dismissed reserving liberty to the respondent/Panchayat to initiate appropriate proceedings under the Karnataka Public Premises (Eviction of Unauthorised Occupants) Act. 11. In the meantime, since the Panchayat was in huge arrears and in breach of agreement, the Government in the Department of Housing issued a final notice to the Panchayat to pay arrears in their entirety which then had mounted to Rs. 3 lakhs. It is only then the Panchayat on 05-05-2000 paid the amount of Rs. 3/- lakhs to the Government and claimed that it is in full and final settlement in terms of the agreement. Even as on that date, there was no sale deed issued in favour of the Panchayat by the Department of Housing and the Panchayat was not put back in possession of these 32 houses which were allotted in favour of the occupants in the year 1992 and though they were cancelled by an order of this Court, in the light of all the issues kept open to be considered after hearing all the parties. 12. The Panchayat being aggrieved by not putting it back in possession of 32 houses despite its representation approached this Court yet again in Writ Petition No. 33117 of 2000. This is disposed of by an order dated 06-10-2003 by observing as follows: "The petitioner in this petition has sought for a direction to the Housing Board to put the petitioner in possession of 32 houses constructed by it at Arkalgud, Hassan District, under the subsidized rental housing scheme and for other reliefs. 2. The facts in this case are as follows: The respondent Housing Board constructed 32 houses and allotted the same in favour of the petitioner Town Panchayat. After the allotment of the said houses, the petitioner and the Housing Board entered into a lease cum sale agreement dated 28-02-1977 under which the petitioner was put in possession of all these 32 houses. As the petitioner Panchayat committed default in payment of the installment to the Housing Board, the Housing Board cancelled the allotment of these houses made in favour of the petitioner Panchayat. This was challenged by the public in Writ Petition No. 38853 of 1993.
As the petitioner Panchayat committed default in payment of the installment to the Housing Board, the Housing Board cancelled the allotment of these houses made in favour of the petitioner Panchayat. This was challenged by the public in Writ Petition No. 38853 of 1993. The said writ petition came to be disposed of on 25-11-1996 quashing the cancellation of the allotment of houses and also Government order dated 22-02-1992 allotting the said houses in favour of respondents 5 to 33 in the said writ petition and some of them are before this Court in this petition. However, this Court also reserved liberty to both the Housing Board and Government to reconsider the matter afresh. The result of the above writ petition is to restore the Town Panchayat to its original position, that is, to say Panchayat continues to be in possession of the property as it was already put in possession under the lease cum-sale deed. If that is so, there is no reason for this Court to issue any such direction to the Housing Board to put the petitioner in possession as the petitioner was deemed to be in possession of the above said quarters. Therefore, it is open for the petitioner to take appropriate action as against respondents 2 to 17 if they are in possession of the quarters belonging to it. 3. With the above observation, writ petition is disposed of." (Emphasis Supplied) The Court clearly observed that the petitioner-Panchayat had committed default in payment of installments to the Housing Board and the Board had cancelled the allotment of houses made in favour of the petitioner-Panchayat. 13. Therefore, one factor that becomes clear is that the Panchayat had defaulted in making payment. Taking note from the earlier order, the Court observed that the result of Writ Petition No. 38853 of 1993 was that the Town Panchayat had been back into its position under the lease-cum-sale agreement and there was no reason for this Court to issue any direction to the Housing Board to put the petitioner in possession, as the petitioner was deemed to be in possession of the above said quarters. This order is challenged by the occupants before the Division Bench in Writ Appeal No. 8037 of 2003. The Division Bench disposed of the Writ Appeal observing as follows: "7.
This order is challenged by the occupants before the Division Bench in Writ Appeal No. 8037 of 2003. The Division Bench disposed of the Writ Appeal observing as follows: "7. There appears to be much force in the submission made by the learned counsel appearing for the appellants. Despite notice to the respondents, they have remained absent and unrepresented. We have gone through the entire materials on record and also the facts and circumstances of the case. We are of the view that the order passed by the learned single Judge requires to be modified and it is accordingly modified. There shall be a direction that pending consideration of allotment of the houses, the appellants who have been allotted earlier, shall not be dispossessed. If there is any violation of the terms and conditions of the allotment or if the allotment is not made to any of the appellants, the appellants shall not resist taking over of the houses by the respondents. Writ Appeal accordingly disposed of." The Division Bench clearly observes that there was much force in the submission made by the counsel appearing for the appellants therein. The respondent/Board and the Panchayat were unrepresented despite being served with notices in the writ appeal. On going through the entire material on record, the Division Bench modified the order of the learned single Judge issuing a direction that pending consideration of allotment of houses, the appellants/occupants who have been allotted earlier shall not be dispossessed. If there is any violation of the terms and conditions of allotment or if the allotment is not made to any of the appellants, the appellants shall not resist taking over houses by the respondents. 14. What becomes unmistakably clear by the order of the Division Bench (supra) is that the order of the learned single Judge in Writ Petition No. 33117 of 2000 was modified. The order of the learned single Judge was that the Panchayat continued in possession. The Division Bench modified it as extracted hereinabove. Therefore, the Panchayat cannot now claim that it is deemed to be in possession of the property in terms of the lease-cum-sale agreement that was executed in the year 1977, for a period of 29 years. After execution of the lease-cum-sale agreement there was no sale deed executed in favour of the Panchayat.
Therefore, the Panchayat cannot now claim that it is deemed to be in possession of the property in terms of the lease-cum-sale agreement that was executed in the year 1977, for a period of 29 years. After execution of the lease-cum-sale agreement there was no sale deed executed in favour of the Panchayat. The conditions extracted (supra) in the lease-cum-sale agreement have been completely violated by the Panchayat and it was fulfilled only in the year 2000 after 31 years of the effect of lease-cum-sale agreement, as lease-cum-sale agreement was effective from 01.11.1969 for a period of 29 years which came to an end in the year 1998. Therefore, the Panchayat had been in default of payment and in blatant breach of agreement throughout 29 years of subsistence of the lease-cum-sale agreement. 15. The issue now remains is, whether the Panchayat has right over the property in which the occupants are in possession right from 1992, now close to 30 years. The right of the Panchayat is yet to be crystallized by execution of a deed by the Housing Board in favour of the Panchayat, as it is not in dispute that the land belonged to the Department of Housing and was given in agreement/lease-cum-sale agreement with conditions stipulated therein, in favour of the Panchayat. The Government has issued letters of allotment or intimation of allotment earlier were set aside, but have later issued further letters of allotment on 03.09.2005. Therefore, it is now for the Government to determine the right of the Panchayat over the houses constructed in the land belonging to the Government as also, the fate of the occupants who have been allotted houses by the Government 30 years ago. Finding no right of the Panchayat over the houses so allotted to the occupants, I decline to interfere with the intimation of allotments challenged in this petition as the right of the petitioner itself is inchoate as on date. 16. For the aforesaid reasons, I make the following: ORDER (i) Writ Petition No. 22616/2005 is disposed of. (ii) Government in the Department of Housing is directed to determine the right of the Panchayat with regard to 16 twin houses in the aforesaid land. (iii) Government also shall decide on the right of the occupants to continue in those houses pursuant to the letters of allotment 03.09.2005, which are challenged in this case.
(ii) Government in the Department of Housing is directed to determine the right of the Panchayat with regard to 16 twin houses in the aforesaid land. (iii) Government also shall decide on the right of the occupants to continue in those houses pursuant to the letters of allotment 03.09.2005, which are challenged in this case. (iv) Till such determination happens at the hands of the Department of Housing, the occupants who are in possession of houses in the subject land shall not be dispossessed. The occupants shall also maintain status quo. (iv) In the light of the reasons rendered hereinabove, the companion writ petitions viz., W.P. No. 22774 of 2005 and W.P. No. 22776 of 2005 are rendered infructuous and accordingly, stand disposed of, as having become infructuous.