RAVI vs. THE COMMISSIONER,

1 IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH DATED THIS THE 07TH DAY OF APRIL 2017 BEFORE: THE HON’BLE MR. JUSTICE G. NARENDAR W.P. Nos.107823-827/2016 & W.P. Nos.107829-835/2016 C/W W.P. Nos.104800-814/2016 (LB-RES) IN W.P. Nos.107823-827/2016 & W.P. Nos.107829-835/2016 BETWEEN 1. RAVI S/O SADASHIV GAVALI AGE:39 YEARS, OCC:BUSINESS R/O SHOP NO.1, 2. RAMESH S/O KRISHNAJI GODKHINDI AGE:50 YEARS, OCC:BUSINESS R/O SHOP NO.2, 3. NAGARAJ S/O SHATANAPA SABOJI AGE:40 YEARS, OCC:BUSINESS R/O SHOP NO.3, 4. ASHOK S/O GUNDU BORADE AGE:51 YEARS, OCC:BUSINESS R/O SHOP NO.4, 1ST FLOOR PETITIONERS 1 TO 4 ARE R/AT: NEW CHAVADI BUILDING

2 GANDHI CIRCLE, MUDHOL TQ:MUDHOL, DIST:BAGALKOT-587313 5. MAHADEV S/O PANDURANG KHANDOBA AGE:57 YEARS, OCC:BUSINESS R/O SHOP NO.1, 6. HANAMANT S/O MURIGEPPA MADIWAL AGE:68 YEARS, OCC:BUSINESS R/O SHOP NO.2, 7. ARJUN S/O RAMLING TERADAL AGE:52 YEAS, OCC:BUSINESS R/O SHOP NO.3, 8. ABDULRAJAK S/O HUSSAINSAB ATTAR AGE:53 YEARS, OCC:BUSINESS R/O SHOP NO.4, PETITIONERS 5 TO 8 ARE R/AT: NORTHERN CMC COMPLEX NEAR OLD TREASURY OFFICE MUDHOL, TQ:MUDHOL DIST:BAGALKOT-587313 9. NABISAB S/O MAKTUMSAB BUDIHAL AGE:65 YEARS, OCC:BUSINESS R/O SHOP NO.1, 10. CHANDRASHEKHAR S/O BHIMAPPA KULALI AGE:39 YEARS, OCC:BUSINESS R/O SHOP NO.2,

3 11. MAULASAB S/O RAJESAB BUDIHAL AGE:50 YEARS, OCC: BUSINESS R/O SHOP NO.4, PETITIONERS 9 TO 11 ARE R/AT: SOUTHERN CMC COMPLEX NEAR OLD TREASURY OFFICE MUDHOL, TQ:MUDHOL DIST:BAGALKOT-587313 ... PETITIONERS (BY SHRI. GIRISH.A YADAWAD-ADV) AND THE COMMISSIONER CITY MUNICIPAL COUNCIL BUS STAND ROAD, MUDHOL TQ:MUDHOL, DIST:BAGALKOT-587313 … RESPONDENT (BY SHRI. MRUTYUNJAY TATA BANGI-ADV) THESE WPs ARE FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED ENDORSEMENT DATED 30.5.2016 ISSUED BY THE RESPONDENT VIDE ANNEXURES-G1 TO G3, G3A AND G4 TO G6 RESPECTIVELY IN RESPECT OF PETITIONERS NO.2 TO 6 AND 8 AND ALSO SIMILAR ENDORSEMENTS ISSUED IN RESPECT OF PETITIONERS NO.1, 7 AND 9 TO 11 AND ALSO THE IMPUGNED CONSEQUENT FINAL NOTICES DATED: 19.8.2016, ISSUED BY THE RESPONDENT VIDE ANNEXURES-H1 TO H4, H4A AND H5 TO H11 AND TO DIRECT THE RESPONDENT TO RENEW THE LICENSES OF THE PETITIONERS AND TO PERMIT THEM TO CONTINUE THEIR BUSINESS IN THE SHOPS BELONGING TO THE RESPONDENT.

4 IN W.P. Nos.104800-814/2016 BETWEEN 1. MARUTI S/O HANAMANT JADHAV AGE:38 YEARS, OCC:BUSINESS R/O SHOP NO.1, 2. VISHWANATH S/O BHIMAPPA HANDRAL AGE:64 YEARS, OCC:BUSINESS R/O SHOP NO.2, 3. MEHBOOBSAB S/O SAYYADSAB SHERPYADE AGE:66 YEARS, OCC:BUSINESS R/O SHOP NO.3, 4. BABURAO S/O SANTHAPPA JADHAV GE:63 YEARS, OCC:BUSINESS R/O SHOP NO.4, 5. SHIVANAND S/O CHANNAMALLAPPA MAHALINGESHWARMATH AGE:55 YEARS, OCC:BUSINESS R/O SHOP NO.5, 6. SANGRAMSINGH S/O BHIMASINGA RAJPUT AGE:47 YEARS, OCC:BUSINESS R/O SHOP NO.6, 7. SANGAMESH S/O SIDDAYYA HIREMATH AGE:41 YEARS, OCC: BUSINESS R/O SHOP NO.7,

5 8. RACHAPPA V. KAREHONNA AGE:60 YEARS, OCC:BUSINESS R/O SHOP NO.8 9. BHIMAPPA S/O SAIDAPPA GHORPADE AGE:43 YEARS, OCC:BUSINESS R/O SHOP NO.9 10. PANCHAYYA S/O NANDAYYA PANCHAKATTIMATH AGE:58 YEARS, OCC:BUSINESS R/O SHOP NO.10 11. RATAN S/O KUPPAJI CHOWDHARY AGE:44 YEARS, OCC:BUSINESS R/O SHOP NO.11 12. DANESH S/O IRAPPA TADASLUR AGE:45 YEARS, OCC:BUSINESS R/O SHOP NO.12 13. SHANTAWWA W/O THOTANAGOUD BILEBAL AGE:44 YEARS, OCC:BUSINESS R/O SHOP NO.13 14. MALLAPPA S/O MAGEPPA MASARADI AGE:64, OCC:BUSINESS R/O SHOP NO.14 15. KEVALRAM S/O SAVALRAM CHOWDHARY @ SOLANKI AGE:36 YEARS, OCC:BUSINESS R/O SHOP NO.15

6 ALL ARE RESIDING AT: BASAVA SANKEERNA MEVIN BAZAAR, MUDHOL TQ:MUDHOL DIST:BAGALKOT-587313. … PETITIONERS (BY SHRI. GIRISH.A YADAWAD-ADV) AND THE COMMISSIONER CITY MUNICIPAL COUNCIL BUS STAND ROAD, MUDHOL TQ:MUDHOL, DIST:BAGALKOT-587313 … RESPONDENT (BY SHRI. MRUTYUNJAY TATA BANGI-ADV) THESE WPs ARE FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED ENDORSEMENT DATED 30.5.2016 ISSUED BY THE RESPONDENT VIDE ANNEXURES-L1 TO L10 IN RESPECT OF AND ALSO PETITIONER NO.3 TO 5 AND 7 TO 13 SIMILAR ENDORSEMENT ISSUED IN RESPECT OF PETITIONERS NO.1, 2, 6, 14 AND 15 AND TO DIRECT THE RESPONDENT TO RENEW THE LICENSES OF THE PETITIONERS AND TO PERMIT THEM TO CONTINUE THEIR BUSINESS IN THE SHOPS BELONGING TO THE RESPONDENT. THESE WPs HAVING BEEN HEARD AND RESERVED FOR ORDERS, THIS DAY THE COURT PRONOUNCED THE FOLLOWING: DATE OF RESERVING THE ORDER : 21.03.2017 DATE OF PRONOUNCING THE ORDER : 07.04.2017

7 ORDER Heard the learned counsel for the petitioners in W.P. Nos.107823-27/2016 and W.P. Nos.107829- 35/2016 and connected W.P. Nos.104800-14/2016. 2. Both the petitions involve common questions of facts and law and hence are taken up for disposal by this common judgment. 3. Heard the learned counsel for the petitioners and learned counsel for the respondent. 4. The facts in brief are that the petitioners are all businessmen carrying on their business in the premises rented out to them under licences issued by the respondent-Municipality. The petitioners in the first writ petition claim that they have been inducted into the premises between the period 1997 to 1999. The petitioners in the second writ petition claim that they

8 were inducted into the shop premises during the period 2001 to 2002. It is not in dispute that the petitioners are in possession of the premises allotted to them as on the date of the writ petition. 5. It is contended by the petitioners that the licences came to be renewed from time to time and that in respect of the petitioners in the first noted writ petition, the licence was extended till 30.06.2014 and the tenure of the licence in respect of the second batch of petitions was renewed in 2009 and similarly came to an end on 30.06.2014. That on request from the petitioners, the elected council of the Municipality passed a resolution whereby it was resolved to renew the licences of the petitioners. It is contended that on 14.12.2015 the respondent got issued notices to the petitioners calling upon them to vacate the shops within three days after the receipt of the said notice. The respondent once again renewed its demand by notice

9 dated 23.12.2015 and called upon the petitioners to vacate and hand over possession. 6. It is further contended that upon a representation by the petitioners and persons similarly situated, the respondent vide letter dated 30.05.2016 intimated the petitioners that in view of the circular dated 14.08.2015 issued by the department of Urban Development the State has resolved as a matter of policy to alienate, by way of lease or licence, the commercial buildings belonging to local authorities by way of public auction only. Thereafter, the respondent once again issued a notice titled as ‘Final Notice’ dated 19.08.2016, stating that despite the notices dated 14.12.2015 and 23.12.2015 the possession has not been handed over and if possession is not handed over, the respondent would invoke the provisions of the Karnataka Public Premises (Eviction of Unauthorised Occupants) Act, 1974 (Karnataka Act No.32/1974) to

10 evict the petitioners and take possession of the premises in their possession. 7. The writ petition came to be resisted by the respondent-authority and have preferred a detailed statement of objection. It is contended by the respondent that the petition lacks bonafides and deserves to be dismissed in limine. It is contended that the period of licence having expired the petitioners cannot cling on to the shop by claiming violation of Article 300 (A) of Constitution and that the status of the petitioners is one of illegal occupants as they have failed to vacate and hand over possession pursuant to the notice issued by the respondent to evict and hand over possession. It is further contended that it is settled law that the public largesse ought to be distributed only by way of public auction in order to enable the Government to maximize the revenue and that even such successful bidder would be bound by the provisions of the

11 Karnataka Municipalities Act, Rules, Notifications and the Circulars/Instructions issued by the Government from time to time and also such amendments and modification to the above. 8. It is further contended that the petitioners cannot be permitted to agitate, the grant of lease in a particular manner only or the extension of lease in the manner of their choice more so, in the absence of challenge to the notification issued in the year 2015 produced at Annexure-K in the amended writ petition. 9. It is contended that the local authorities i.e. the Municipality is bound by the Government notification dated 14.08.2015 and is required to act in furtherance of the said notification. It is further contended that the claim that the petitioners are entitled for lease on account of the resolution of the Municipality is misplaced, as every resolution has to be approved by the Deputy Commissioner and the said

12 resolution has not been approved by the Deputy Commissioner and that the approval has not been accorded in view of the Government notification dated 14.08.2015, which is not called in question in the writ petition and hence, the claim that they are entitled for extension of the licence or for grant of lease in view of the resolution is baseless. 10. That the petitioners have no right to remain in possession or to challenge the issue of the notice, calling upon them to hand over possession, which was issued as early as in December 2015. That no right is vested in the petitioners to deny the right of the respondent to distribute the largesse by way of public auction. 11. It is contended by the learned counsel for the petitioners that no challenge is laid to the Government notification dated 14.08.2015 in view of the fact that the said notification has no retrospective effect.

13 This is the sole legal contention canvassed on behalf of the petitioners. That apart, it is contended by the learned counsel that equity and the interest of justice demands that the right of the petitioners to remain in occupation and lawful possession ought to be recognized by the Municipality. He would contend that the petitioners are covered by the earlier notification dated 26.10.2009 and do not come within the purview of the latter notification dated 14.08.2015. The learned counsel for the petitioners would fairly admit that the settled law is that State largesse has to be distributed by public auction only, but he would endeavor to draw a distinction by contending that the law as settled by the Hon’ble Apex Court is applicable only prospectively and has no retrospective application. He would submit that the lessee is inducted into possession much prior to the circular/Government circular dated 14.08.2015. That the petitioners are entitled to the benefit under the earlier circular dated 26.10.2009 and that their

14 occupation was continued under the said circular dated 26.10.2009 and their licences were renewed under the said circular dated 26.10.2009 and hence the terms and conditions as stipulated under the said circular alone is applicable to them. In this regard the learned counsel for the petitioner would rely on two rulings of the Hon’ble Apex Court. In the case of Income Tax Officer, Alleppy Vs. M.C. Ponnoose. The said case involves a challenge by the petitioners calling in question the jurisdiction of the Tahsildar to act as a Tax Recovery Officer. It was held that the exercise of power under Sub-Clause (ii) and Sub-Clause (ii) of Clause (44) of Section 2 of the Act is more of an Executive than a Legislative Act and was therefore invalid in the absence of any power conferred by the aforesaid provision to so perform it as to give it retrospective operation. In the instant case the petitioners have not called in question the validity of any statute or provision. The said ruling is inapplicable to the said facts of the case. In the

15 second ruling the Hon’ble Apex Court was dealing with the issue as to whether the Board’s Circular F.No.32/8/94-CX (S. 37B Order) dated 14.07.2004 which has clarified that the Single Panel Circuit Breakers as classified under Chapter 85.37, has retrospective effect. The said ruling arises in a case under the indirect taxes and was dealing with the validity of the action of the respondents in trying to retrospectively classify goods by placing reliance on a letter circular and thereby levying a higher rate of duty, retrospectively. It is settled law that levy of tax can only be by legislation and retrospective application is permissible only if specifically permitted by the legislation. The facts of the present case cannot be equated with the facts of the said case. The Hon’ble Apex Court held that reclassification under latter circular can only be with prospective effect. By placing reliance on the aforesaid rulings the counsel for the petitioners would venture to contend that the rights of

16 the petitioners cannot be affected by the Government Circular of 2015 and that the rights of the petitioners are governed by the Circular of 2009 and hence as provided under the earlier circular 09 the licence/lease required to be executed in their favour for a period of twelve years. 12. Per contra, the learned counsel for the respondent authority would submit that the circular has no retrospective application is baseless. He would contend that the authority can act only in consonance with the provisions of Section 72 of the Karnataka Municipalities Act, 1964 (Hereinafter referred to as the ‘Act’). He would contend that a mere resolution by the elected members will not suffice to invest the petitioners with any right to seek for renewal of their licences without the same being approved by the competent authority. He would further draw the attention of this court to the provisions of Sub-Clause 2 of Section 72 of

17 the Act and contend that no lease beyond a term or exceeding five years could be executed by the Municipality unless the previous sanction of the Government is obtained. He would submit that in the instant case there is no such sanction obtained by the authorities. He would also contend that the petitioners have not laid any challenge to the Government circular under the present writ petition and that they have merely called in question the notices calling upon them to quit and hand over possession and the endorsement issued by the respondent. He would submit that the challenge to the said notice calling upon them to hand over possession in view of the expiry of the licence is not maintainable. He would further submit that the writ petition preferred by the petitioners calling in question the endorsement without impugning the Government circular is not maintainable. It is apparent that the endorsements have been issued based on the circular of the Government dated 14.08.2015. He would contend

18 that the rulings relied upon by the petitioners does not have any relevance to the facts of the case on hand. He would further contend that the writ petition is devoid of any cause of action and that the mere notice calling upon them to vacate nor the endorsement intimating the policy of the Government creates a lis calling for adjudication by this court. 13. In view of the above contention the points for consideration are as follows: (i) Whether the petitioners have demonstrated any right which entitles them for grant of reliefs as prayed for in the petition? (ii) Whether the endorsement and the notices in the absence of any coercive action would suffice to sustain the above writ petition? Or Given a cause of action to maintain the above writ petition.

19 14. An answer to both the points lies in the law laid down by the Division Bench of this court rendered in the case of Mohan P. Sonu Vs. State of Karnataka reported in I.L.R.1992 Karnataka 1219 wherein the Division Bench has interpreted the provisions of Sub- Section 2 of Section 72 of the Act and also the object and purport of Rule 39 of the Karnataka Municipalities (Guidance of Officers, Grant of Copies and Miscellaneous Provisions) Rules, 1966. “The object of Rule 39 has been stated in the Judgment of the learned single Judge of this Court in JAICHAND Vs TOWN MUNICIPALITY, ROBERTSONPET & ORS wherein agreement with the view there expressed. The object of giving due publicity to the proposal to dispose of rights in respect of a property belonging to a local authority before it is so disposed of is quite obvious. The

20 publication is necessary in order to realize the highest possible income and to prevent persons in-charge of the Municipal Council from disposing of the rights in favour of persons in whom they are interested. Disobedience of the provisions of Rule 39 cannot be overlooked. It is a mandatory rule intended to protect public revenue. Matters relating to public revenue cannot be dealt with arbitrarily and in the secrecy of an office. Whatever done in that regard should be done in accordance with law, which, in the instant case, requires due publicity to be given to dispose of the property in the prescribed manner. 5. Section 72 is a further safeguard. Publicity given to the proposal of a Municipal Council to dispose of property rights under Rule 39 would attract offers from persons

21 interested in acquiring such rights and these offers would enable the State Government. to decide whether the sanction of the State Government that is contemplated by Section 72 should or should not be given. Rule 39 is therefore, complementary to Section 72 and both operate together.” 15. The Division Bench having held as above was pleased to uphold the judgment of the learned single judge in concluding that alienation of the property without following the proper procedure as set out in Rule 39 was bad in law. The law as laid down by the Division Bench continues to hold the field even as on today. The Government circular dated 14.08.2015 has exactly sought to implement the law as laid down by this court. In that view of the matter, the contention canvassed on behalf of the petitioners that the Government circular dated 14.08.2015 attempts to

22 operate retrospectively is baseless since in this regard, law has been laid down by this court as way back as in 1992 and even as per the pleadings, the petitioners have been put in possession only in the year 1996-97 onwards. Hence, the contention that the condition is sought to be retrospectively applied must necessarily fail. 16. The petitioners have neither pleaded nor placed on record any material to demonstrate that any right of renewal has been vested in them. It is also not placed on record, either by the petitioners or the respondent, as to whether the provisions of Section 72(2) and Rule 39 have been observed in letter and spirit while alienating the premises to the petitioners. The failure of the petitioners to place such material before this court constrains this court to adversely infer against the petitioners. Though it is pleaded that they are entitled to a right of renewal, neither any licence nor

23 lease deed nor any other document is placed on record to demonstrate the same. If the respondents have not followed the procedure as mandated by the Act and by this court, then the very induction of the petitioners into the premises is characterized by illegality. The petitioners have merely placed on record certain receipts as Annexure-A series which they claim to be deposit receipts.

Further, the Annexures produced as Annexure-B series are purported to be rent receipts. A perusal of the same would disclose that the petitioners are paying rents in the lump sum and not on a monthly basis. No material is placed on record to demonstrate that the petitioners are not required to pay rents on a monthly basis. 17. In view of the above, the considered opinion of this court is that unless and until a legal right has been vested in the petitioners to seek renewal, the contention of the petitioners that the terms and

24 conditions of allotment of public property or State largesse, as envisaged under the Government circular dated 14.08.2015, are being applied retrospectively must fail and accordingly the said contention stands rejected in view of the fact that the terms and conditions as envisaged under the Government circular dated 14.08.2015 is the law since the date of enactment of the Act and Rules and as interpreted and laid down by this court since 1992. Hence, the contention that the circular is being applied retrospectively deserves to be rejected and is accordingly rejected. 18. In view of the above, the first point for consideration requires to be answered against the petitioners and is accordingly held so. 19. As regards the second point for consideration, it is seen that the law in this regard has been interpreted and laid down by this court since 1992. The petitioners apparently have not called in

25 question the Government circular dated 14.08.2015 whereby the Government has sought to implement the law as laid down by this court in the case of Mohan P. Sonu Vs. State of Karnataka and have merely called in question the consequential action of the respondents. In the opinion of this court the writ petition, without laying challenge to the Government circular and merely calling in question the notice and the endorsement is not maintainable. Neither the notice nor the endorsement determines any right of the petitioners. In the absence of determination of any such right, there is no lis to be adjudicated nor a cause of action for the above writ petitions. More so, this court is constrained to hold as above in view of the fact that the respondent has not resorted to any coercive action to evict the petitioners and in fact the notices themselves have stated that if possession is not handed over, action would be initiated under the relevant law i.e. the Karnataka Public Premises (Eviction of Unauthorised Occupants) Act,

26 1974. The intimation to initiate lawful action or an act by the State or its agencies indicating initiation of legal proceedings cannot be a ground to maintain a writ petition or invoke the jurisdiction of this court under Article 226 of Constitution. The petitioners have not placed on record any material which would lead a prudent person to apprehend any coercive action which is perse illegal. Hence, this court is of the considered opinion, the writ petitions itself are not maintainable. The writ petitions directed against the notices and endorsement is unsustainable and deserves to be rejected and accordingly, the second point for consideration is held against the petitioners. 20. This court is of the considered opinion that even otherwise the writ petition is wholly devoid of merits and nothing but a dilatory tactics adopted by the petitioners to preempt legal action by the respondent. In fact, the conduct of the respondent also does not

27 appear to be above board. Though notices were issued as early as in December 2015 it is not stated as to what prevented them from initiating measures as stipulated under law. It is also not known if any attempt has been made to recover rents at current rates. It is apparent that the present writ petition is a speculative one and deserves no consideration at the hands of this court. In the above circumstances, the writ petitions stand dismissed.

Sd/- JUDGE SS-CT Chs