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2025 DIGILAW 1836 (KAR)

Manjunath Basappa Mudaraddy v. State of Karnataka

2025-12-12

ANANT RAMANATH HEGDE

body2025
ORDER : 1. Heard the learned Senior counsel Sri Jayakumar S Patil appearing for the petitioner, Sri Praveen K. Uppar, learned Additional Government Advocate for respondents No.1 to 4 and Sri C S Patil, learned counsel appearing for respondents No.5 and 6. 2. This petition is filed assailing the order dated 09.12.2020, passed by respondent No.2, in Appeal No.2/2017. 3. The petitioner, in the appeal referred to above had questioned the order dated 08.09.2016 passed by respondent No.4-Additional Director of Agricultural Marketing. 4. Learned Senior Counsel appearing for the petitioner would contend that on 30.11.2007, a registered lease-cum-sale agreement was executed in favour of the petitioner by respondent No.5-Committee, which enabled the petitioner to occupy the petition property to carryout certain businesses specified in the said lease-cum-sale agreement. 5. The petitioner sought permission from respondent No.5-Committee (Committee) to lease/rent the part of the petition premises in favour of Andhra Bank. The petitioner urged that to meet the business demands of the people who transact in APMC yard, a banking facility in the APMC yard is required and requested the Committee to permit the petitioner to lease/rent the premises to Andhra Bank. 6. It is stated that the permission was granted by the Committee and thereafter, the petitioner rented half portion of the premises in favour of the Andhra Bank and remaining half portion is used for the purpose of carrying out the business for which the petition property was allotted to the petitioner on lease-cum-sale agreement. 7. It is urged that Committee having as per the resolution dated 08.09.2015, resolved to permit the petitioner to use the part of the premises for banking purpose, sought approval from the Director of Agricultural Marketing. 8. Respondent No.4-Additional Director of Agricultural Marketing has declined to grant approval to the resolution on the premise that the provisions of the Karnataka Agricultural Produce Marketing (Regulation and Development) Act, 1966 (Act, 1966) do not enable such use of the property and also directed the Committee to take further steps in accordance with law to forfeit the premises. 9. Said order is called in question by filing of an appeal. The Appellate Authority has dismissed the appeal in terms of the impugned order and has upheld the order passed by the respondent No.4- Additional Director of Agricultural Marketing directing forfeiture of the property. 10. 9. Said order is called in question by filing of an appeal. The Appellate Authority has dismissed the appeal in terms of the impugned order and has upheld the order passed by the respondent No.4- Additional Director of Agricultural Marketing directing forfeiture of the property. 10. Learned Senior counsel appearing for the petitioner would submit that the petitioner rented the premises to the Andhra Bank after obtaining permission of Committee to rent half portion of the premises and resolution is passed providing for such rent and thereafter, the Andhra Bank is inducted in the half portion of the premises as a tenant and the said bank is carrying on the business for the benefit of all who transact in the APMC yard Hubballi and there is no violation of any provision of law. 11. In addition, learned Senior counsel appearing for the petitioner would also urge that the order for forfeiture is without notice to the petitioner and more than anything else, it was beyond the scope of authority of respondent No.4 who was only required to consider whether the approval sought by the Committee can be granted or not. If the proposal of the Committee is to be rejected then, the petitioner cannot be permitted to rent the premises to the Andhra Bank and there cannot be an order for forfeiture of the premsies. 12. It is also urged that in the impugned order at Annexure-K, reference has been made to a Spot Inspection report and alleged spot inspection is without notice to the petitioner. It is further urged that the finding in the report that the petitioner is also not using the remaining half portion of the premises is erroneous and said finding is based on the report which is submitted without notice to the petitioner. 13. Learned counsel appearing for Committee would urge that the lease-cum-sale agreement is very specific relating to the terms and conditions imposed on the petitioner. Clauses-10 and 14 of the lease-cum-sale agreement would mandate that the premises has to be used only for the purpose for which it is allotted and any deviation would incur consequence. In case of violation, the Committee under law, is enabled to take action for forfeiture. The Committee is justified in passing an order for forfeiture of the property. 14. Clauses-10 and 14 of the lease-cum-sale agreement would mandate that the premises has to be used only for the purpose for which it is allotted and any deviation would incur consequence. In case of violation, the Committee under law, is enabled to take action for forfeiture. The Committee is justified in passing an order for forfeiture of the property. 14. Learned Senior counsel appearing for the petitioner by way of reply would submit that the provisions of Act, 1966 do not provide for any forfeiture of the premises in case of violations of terms and conditions of the lease-cum-sale agreement. 15. The Court has considered the contentions raised at the Bar and perused the records. 16. The fact that the property in question is allotted to the petitioner is not in dispute. Under the Act, 1966, and the Karnataka Agricultural Produce Marketing (Regulation of Allotment of Property in Market Yards) Rules, 2004 (Rules, 2004), allotment of site to an applicant is regulated by the Provisions and the Rules. 17. Under the Act, 1966 and Rules, 2004, there is no provision which would enable the allottee to whom the site is allotted, to use the premises for banking purpose. The reason is under the Act, 1966 and Rules, 2004, the site is allotted to carry out the activity related to agriculture. The provisions of the Act and Rules also do not enable the Market Committee or any other authority to permit deviation in the use of the property as sought by the petitioner. 18. It is not in dispute that the petition property is allotted to the petitioner under the applicable Rules, 2004. The lease-cum-sale agreement was executed on 30.11.2007 incorporating the conditions for allotment. Conditions No.10, 14 and 15 are relevant for adjudication of this case. Those conditions read as under: “10. The allottee shall not use the site and/or the building put up thereon for any other purpose except for Ryoth Equipments business. 14. The business or Trade to be done by the allottee in Schedule property will be confined and restricted to Ryoth Equipments business. Those conditions read as under: “10. The allottee shall not use the site and/or the building put up thereon for any other purpose except for Ryoth Equipments business. 14. The business or Trade to be done by the allottee in Schedule property will be confined and restricted to Ryoth Equipments business. In case the allottee commits the breach of this term in the agreement, the committee shall have the right to issue him notice and direct him to carry on Ryoth Equipments business only and in default thereof the committee shall be entitled to exercise the right to take over the building and the site and to allot to any other person to conduct Ryoth Equipments business or any licensee of the committee and in such event the allottee is entitled to be paid only the amount at paid to the site and not any other compensation. 15. The allottee shall not make any alterations or additions to the premises either externally or internally without obtaining written permission of the committee.” 19. Condition No.10 would stipulate that the allottee shall not use the site/building put up thereon for any other purpose except for Ryoth Equipments business. Condition No.14 would also reiterate the said condition and it again specifies that the use shall be confined and restricted to the Ryoth Equipments businesses. 20. As per condition No.14 in case, the allottee commits the breach of the terms in the agreement, the Committee shall have the right to issue him notice and direct him to carry on Ryoth Equipments businesses only and in default thereof, the Committee shall be entitled to exercise the right to take over the building and the site and to allot any other person to conduct Ryoth Equipments businesses and in such event, the allottee is entitled to be paid only the amount paid to the site and not any other compensation. 21. Condition No.15 prohibits the allottee from either externally or internally altering the premises without the permission of the Committee. 22. It is required to be noticed that the allotment by way of lease-cum-sale in the year 2017 is governed by Rule 10 and Rule 20 of Rules, 2004. Rule 10(vi) prohibits alienation within 10 years from the date of allotment except by way of mortgage subject to the terms and conditions imposed by the Market Committee. 23. 22. It is required to be noticed that the allotment by way of lease-cum-sale in the year 2017 is governed by Rule 10 and Rule 20 of Rules, 2004. Rule 10(vi) prohibits alienation within 10 years from the date of allotment except by way of mortgage subject to the terms and conditions imposed by the Market Committee. 23. Rule 20 provides for procedure for cancelling the allotment in case of violation. 24. Since the provisions of Act, 1966, and the Rules, 2004 do not enable the Committee to permit the violator to rectify the violation, Clause No.14 in the lease cum sale agreement which permits rectification of violation should be construed as an arrangement which enables the Committee to put the allottee on notice about the minor violation, though such power is not expressly provided in the Rules. 25. Though, it is true that the Committee resolved to permit the petitioner for leasing the premises to Andhra Bank, what is required to be noticed is the resolution was subject to the approval of the Director of Agricultural Marketing. The petitioner before the said approval of Agricultural Marketing ventured to rent the premise to Andhra Bank and it is an admitted fact that the Bank is functioning in the said premises without there being an approval for such use. 26. It is apparent from the records that though the Committee passed the resolution approving lease of the premises, subject to approval by Director of Marketing, even before the approval was granted by the Director, the petitioner transferred the half portion of the property by renting it to Andhra Bank. This being the position, there is no difficulty in holding that the terms and conditions of the lease cum sale agreement have been violated. 27. Nevertheless, it is noticed that the decision to cancel the allotment is not taken by the Committee. 28. Though learned Senior counsel would urge that the matter has to be remanded for considering the question relating to alleged violation, the Court is of the view that since the transfer of property by way of rent is very much admitted and established, there cannot be any further enquiry as to whether the property is transferred or not. 28. Though learned Senior counsel would urge that the matter has to be remanded for considering the question relating to alleged violation, the Court is of the view that since the transfer of property by way of rent is very much admitted and established, there cannot be any further enquiry as to whether the property is transferred or not. However, there can be an enquiry under Rule 20 of Rules, 2004, for a limited purpose as to whether there has to be the cancellation of the lease cum sale or there can be any other order. 29. Since it is urged that the finding is recorded holding that petitioner has let out the remaining half portion of the property (other than the portion which is the subject matter of the resolution and occupied by Andhra Bank) on the basis of a spot inspection said to have been taken place without notice to the petitioner, there has to be an enquiry in this behalf under Rule 20 of the Rules, 2004. 30. Under these circumstances, the Committee is directed to take steps as provided under Rule 20 of Rules, 2004, to hold enquiry relating to alleged illegal transfer/use contrary to the terms and conditions of the lease cum sale agreement, of remaining portion i.e., the portion other than what is let out to Andhra Bank. 31. The petitioner should be given an opportunity to show cause to the notice under Rule 20 of the Rules, 2004, to consider whether there can be any order other than cancellation of allotment of site for having transferred the portion of the property to Andhra Bank and also for allegedly violating the lease cum sale agreement in respect of remaining portion other than what is let out to Andhra Bank. 32. It is to be noticed that the petitioner has taken undue advantage of his violation (in respect of transfer of property by way of rent to Andhra Bank) and earning rent from the Andhra Bank. The petitioner cannot be permitted to take advantage of his own violation. 33. Hence, the petitioner shall credit every month’s rent received from Andhra Bank to the account of respondent No.5 APMC, Hubballi. 34. In addition, the petitioner shall also credit the entire rent amount received from the date of lease till today, to the account of respondent No.5, within 60 days from today. 35. 33. Hence, the petitioner shall credit every month’s rent received from Andhra Bank to the account of respondent No.5 APMC, Hubballi. 34. In addition, the petitioner shall also credit the entire rent amount received from the date of lease till today, to the account of respondent No.5, within 60 days from today. 35. It is submitted by the learned counsel for the respondent-Committee that the petitioner has also let out the portion of the premises to Milk Vending Booth of Karnataka Co-operative Milk Producers’ Federation Limited (KMF). In case, the property is let out to such a Milk Vending Booth, the petitioner is also required to deposit the rent which he has received from the date of such rent and shall also continue to deposit the rental amount till that occupier is vacated from the premises. 36. Hence, the following: ORDER i. The petition is allowed in part. ii. The impugned order passed by the respondent No.4 directing forfeiture of the petitioner’s property is set-aside. The order passed by respondent No.4 denying approval to the resolution passed by respondent No.5-Committee is confirmed. iii. Respondent No.5-Committee shall issue notice to the petitioner under Rule 20 of Rules, 2004 and thereafter pass appropriate orders as contemplated in law in the light of the observations made above where the Court has already held that the transfer of property by way of rent to Andhra Bank amounts to violation of the terms and conditions of lease cum sale agreement. iv. The Committee shall hold enquiry under Rule 20 of Rules, 2004 for alleged violation of the terms and conditions of the lease cum sale agreement in respect of remaining half portion other than what is let out to Andhra Bank. v. Since it is admitted that the petitioner has let out the premises to Andhra Bank, the petitioner shall deposit the rental amount received from Andhra Bank and rental amount to be received from Andhra Bank, till the Andhra Bank is evicted from the petitioner’s property. vi. Two months’ time is granted to the petitioner to deposit the rental amount before respondent No.5-Committee which the petitioner has received so far from Andhra Bank, Milk Vending Booth of Karnataka Co- operative Milk Producers’ Federation Limited (KMF) from the date of lease till date. vii. vi. Two months’ time is granted to the petitioner to deposit the rental amount before respondent No.5-Committee which the petitioner has received so far from Andhra Bank, Milk Vending Booth of Karnataka Co- operative Milk Producers’ Federation Limited (KMF) from the date of lease till date. vii. It is also open to respondent No.5-Committee to serve the copy of this order on Andhra Bank which admittedly is said to be in possession of portion of the property, and Milk Vending Booth of Karnataka Co-operative Milk Producers’ Federation Limited (KMF) to deposit the rent as referred to above. If such copy is served on Andhra Bank and Milk Vending Booth of Karnataka Co-operative Milk Producers’ Federation Limited (KMF), the amount shall be credited to the account of respondent No.5, which shall be a valid discharge of Andhra Bank and Milk Vending Booth of Karnataka Co-operative Milk Producers’ Federation Limited (KMF) insofar as the rent payable in favour of the petitioner.