Abdul Kareem Fathemulla vs The Deputy Commissioner

Anand Byrareddy, J.—Heard the learned counsel for the petitioners and the learned Additional Government Advocate as also the counsel appearing for respondent No. 3.

The petitioners are father and son. It is stated that the properties bearing TPC Nos. 2119 and 2120 measuring 300780'' and 45740'' respectively situated at Jalalpur road, Raibag was a property belonging to respondent No. 3-Town Municipal Council, Raibag taluk. The said properties were adjacent to each other and were open sites. A resolution dated 06/12/1994 is said to have been passed by the Town Municipal council to auction the said properties. The auction was accordingly held on 14/11/1994 in which said properties were sold to Bhimsen Sadashiv Bhimsen Sadashiv Bhovi for Rs. 50,000/- and Rs. 5,000/- respectively and the sale deeds dated 29/12/1994 were executed.

It then transpires that Bhimsen Sadashiv Bhovi sold the property bearing No. 2120 measuring 45740'' in favour of the petitioner No. 1 for a consideration of Rs. 1,70,000/-. Similarly, he also sold property bearing No. 2119 measuring 300780'' in favour of petitioner No. 2 for sale consideration of Rs. 3,20,000/- dated 27/11/1995. The names of the petitioners were duly entered in the revenue records of the Town Municipal Council. The petitioners having taken possession of the properties have also obtained sanction plan for construction over the said property which has been granted by respondent No. 3 and have accordingly put up construction.

It is stated that, thereafter, on 03/12/1997, respondent No. 1 is said to have initiated steps to have the resolution dated 06/12/1994 cancelled on the ground that the properties were sold at a price which was very low and which was not in public interest and this order dated 03/12/1997 is said to have been passed without notice to the petitioners and without hearing them.

The said order, therefore, was challenged before this Court by way of a petition in Writ Petition No. 19008/1998. The said writ petition was allowed and the order passed by respondent No. 1 was quashed and the matter was remanded to respondent No. 1 to pass appropriate orders after hearing the petitioners. On remand, respondent No. 2 is said to have issued notices to the petitioners which were in turn challenged by the petitioners in Writ Petition Nos. 27135/2003 and 27136/2003, which notices were again quashed, as being without jurisdiction, respondent No. 1 was thereafter directed to initiate fresh action, if at all, after affording opportunity to the petitioners.

It then transpires that an enquiry was conducted on 18/05/2006 and the petitioners had filed their objections and had taken up a contention as regards the invalidity of such proceedings. However, respondent No. 1 having passed an order suspending the resolution passed earlier and holding that under Section 72(2) of the Karnataka Municipalities Act, 1964(hereinafter referred as the "K.M. Act", for brevity), prior permission of the Government was necessary before proceeding to bring the properties to sale and in the absence of any such sanction, the resolution and the sale were invalid and non-est in the eye of law. It is that order which is sought to be challenged by the petitioners herein.

The learned counsel for the petitioners would submit that it may be provided in terms of Section 72(2) of the K.M. Act that the Municipality would not have the power to bring to sale any property which is valued at more than Rs. 25,000/- without prior sanction of the State Government. However, cancellation of the resolution is by virtue of Section 306 of the K.M. Act and it is pointed out that the Deputy Commissioner is conferred the power to suspend the execution of any order or the resolution of the Town Municipal Council, if, by virtue of such an order any action of the Municipality Council is either found illegal or is likely to cause injury or annoyance to the public or may lead to a breach of peace. In all such events it enables the Deputy Commissioner to suspend the execution of such an order or resolution pursuant to which any action is about to be done or is being done.

The effect of the present impugned order is to nullify not only the sale deeds that were executed in favour of Bhimsen Sadashiv Bhovi, the vendor of the petitioners, but also the sale deeds executed in favour of the petitioners, which would be impermissible, as the section only confers powers for suspension of the resolution which is yet to be executed and would not affect the resolution which has been acted upon as under Section 306, registered transfer of property could not be affected. Hence, would seek that the impugned order be set at naught.

The learned Additional Government Advocate would contend that it is not in dispute, if the property belonging the Municipality is worth over Rs. 25,000/-, it cannot be sold by the Municipal Council without prior sanction of the State Government. Therefore, in the absence of a prior sanction of the State Government, the execution of the sale deeds either in favour of Bovi or the subsequent sale transactions in favour of the petitioners, is a nullity in the eye of law and is non-est. Hence, the order impugned merely recognizes this position and it is formally held that the resolution passed permitting auction sale was invalid and therefore the learned Additional Government Advocate would insist that no title would pass either to Bovi or the petitioners when there is an invalid resolution pursuant to which the sale deeds have been executed and the contract would be void for want of authority and title.

The learned counsel for respondent No. 3, apart from merely reiterating that the resolution passed was without prior sanction of the State Government and that the sale price was also low, does not offer any explanation as to how the Municipality had proceeded to sell the properties without prior sanction and at a low rate.

In the above circumstance of the case, the question before this Court would be whether the sale transactions in favour of the vendor of the petitioners and in turn the further sale transactions in favour of the petitioners would be invalid by virtue of the absence of prior sanction in the Municipality Council passing a resolution and bringing the properties to sale in the first instance.

The Municipal Council having taken a decision and having passed a resolution to bring the properties to sale and holding the auction and conveying the properties in favour of the vendor of the petitioners being invalid, is only within the knowledge of the Municipal Council, which is otherwise, capable of conveying the properties in favour of the third parties. Prior sanction of the State Government being necessary is a matter which the Council would necessarily have to obtain, which cannot be presumed by a person participating at the auction, as the Municipality Council is a public body, which is expected to follow the law. Therefore, the sale transaction having been completed under a registered document, the consideration being inconsistent or opposed to public interest, is not on the ground that the Sub-Registrar had taken an objection as to the property being under valued. It is, however, to be found that this opinion is formed by the 1st respondent that the property had been sold for a very low price. However, the contention that the sale is void from the inception cannot be accepted for it is always open to the State to even grant permission, retrospectively, if otherwise the transaction was legal and valid. The properties have been transferred in the manner known to law insofar as the purchaser is concerned, as a registered sale deed has been executed in his favour. It was quite possible for the Deputy Commissioner to have suspended the resolution before it was implemented by the execution of a sale deed. Since not only was the sale deed executed by the Municipal Council in favour of the vendor of the petitioners, the vendor had then sold the properties to the respective petitioners subsequently and the petitioners had also obtained sanction of plan to put up construction obtained from the very Municipal Council and it is only after much lapse of time that the first respondent has formed an opinion, in retrospect, that the properties in question had been sold for a low price which was opposed to public interest. Therefore the invocation of power under Section 306 of the K.M. Act was not effective and could not be brought into play, as the Section would not apply to a situation where the Municipal Council had acted pursuant to the resolution passed. It is only in a situation where the Municipality is yet to act upon its orders or resolution that the power is conferred on the Deputy Commissioner to suspend the execution or proposed doing of any act. Hence, the impugned order is ineffective and would not have a bearing on the sale deeds in favour of the petitioners. Appropriate remedy for the State is to apply the general law and seek an appropriate remedy, if the law so permits.

The summary manner in which the sale transactions are sought to be set at naught are impermissible. The petition is accordingly allowed and the impugned order stands quashed.