- 1 - WA NO.200165/2024 C/W CCC NO.200190/2024 IN THE HIGH COURT OF KARNATAKA KALABURAGI BENCH DATED THIS 01ST DAY OF APRIL, 2025 PRESENT THE HON'BLE MR. JUSTICE K NATARAJAN AND THE HON’BLE MR. JUSTICE VIJAYKUMAR A. PATIL WRIT APPEAL NO. 200165 OF 2024 C/W CIVIL CONTEMPT PETITION NO. 200190 OF 2024 IN WA NO.200165/2024: BETWEEN: 1. THE COMMISSIONER KARNATAKA HOUSING BOARD, 1ST AND 3RD FLOOR, CAUVERY BHAVAN, K.G. ROAD, BANGALORE – 560001. 2. THE ASSISTANT EXECUTIVE ENGINEER KARNATAKA HOUSING BOARD, DISTRICT PROJECT OFFICE, NEAR KHARGE PETROL PUMP, RING ROAD, KALABURAGI – 585105. …APPELLANTS (BY SRI MOGHA SUDHAKAR RAO, ADVOCATE) AND: 1. THE PRINCIPAL SECRETARY, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, VIDHAN SOUDHA, AMBEDKAR VEEDHI, BANGALORE – 560001. 2. SHAMSHODDIN S/O MOHAMMED AYUB Digitally signed by RAMESH MATHAPATI Location: HIGH COURT OF KARNATAKA - 2 - WA NO.200165/2024 C/W CCC NO.200190/2024 AGED ABOUT: 39 YEARS, OCC: BUSINESS & AGRL., R/O TAJ NAGAR, MUSLIM COLONY, NEAR NEHRU GUNJ, KALBURAGI – 585101. 3. MOHAMMED AYUB S/O RUKNUDDIN AGED ABOUT: 64 YEARS, OCC: BUSINESS, R/O TAJ NAGAR, MUSLIM COLONY, NEAR NEHRU GUNJ, KALABURAGI – 585101. 4. MOHAMMED AFROZ S/O MOHAMMED AYUB AGED ABOUT: 37 YEARS, OCC: BUSINESS, R/O H.NO:8-1648, FILTERBED ROAD, TAJ NAGAR, KALABURAGI – 585101. 5. PARVEZ AHMED S/O MOHAMMED AYUB AGED ABOUT: 34 YEARS, OCC: BUSINESS, R/O H.NO:8-1671, FILTERBED ROAD, TAJ NAGAR, KALABURAGI – 585101. …RESPONDENTS (BY SRI MALLIKARJUN BASAREDDY, GA FOR R1; SRI VINAYAK APTE, ADV. FOR R2 TO R5) THIS WA IS FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT RULES, PRAYING TO ALLOW THE ABOVE WRIT APPEAL AND SET ASIDE THE ORDER DATED:13.6.2024 PASSED HON’BLE SINGLE JUDGE, HIGH COURT OF KARNATAKA, KALABURAGI BENCH ALLOWING THE WRIT PETITION NO:202162/2018 (GM-RES) AND DISMISS THE WRIT PETITION FILED THE RESPONDENTS NO.2 TO 5 HEREIN. IN CCC NO.200190/2024: BETWEEN: 1. SHAMSHODDIN S/O MOHAMMED AYUB AGED ABOUT: 39 YEARS, OCC: BUSINESS & AGRL., R/O TAJ NAGAR, MUSLIM COLONY, NEAR NEHRU GUNJ, KALBURAGI – 585104. 2. MOHAMMED AYUB S/O RUKNUDDIN AGED ABOUT: 64 YEARS, OCC: BUSINESS, - 3 - WA NO.200165/2024 C/W CCC NO.200190/2024 R/O TAJ NAGAR, MUSLIM COLONY, NEAR NEHRU GUNJ, KALABURAGI – 585104. 3. MOHAMMED AFROZ S/O MOHAMMED AYUB AGED ABOUT: 37 YEARS, OCC: BUSINESS, R/O H.NO:8-1648, FILTERBED ROAD, TAJ NAGAR, KALABURAGI – 585104. 4. PARVEZ AHMED S/O MOHAMMED AYUB AGED ABOUT: 34 YEARS, OCC: BUSINESS, R/O H.NO:8-1671, FILTERBED ROAD, TAJ NAGAR, KALABURAGI – 585104. ...COMPLAINANTS (BY SRI VINAYAK APTE, ADVOCATE) AND: 1. THE PRINCIPAL SECRETARY DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT VIDHAN SOUDHA, AMBEDKAR VEEDHI, BANGALORE – 560001. …PROFORMA PARTY 2. SRI. SHASHIKANT ASSISTANT EXECUTIVE ENGINEER (INCHARGE) KARNATAKA HOUSING BOARD, DISTRICT PROJECT OFFICE, NEAR KHARGE PETROL PUMP, RING ROAD, KALABURAGI – 585105. ...ACCUSED (BY SRI MALLIKARJUN BASAREDDY, GA FOR R1; SRI MOGHA SUDHAKAR RAO, ADV. FOR R2) THIS CCC IS FILED UNDER SECTION 11 & 12 OF THE CONTEMPT OF COURTS ACT, PRAYING TO TAKE COGNIZANCE AND INITIATE PROCEEDINGS UNDER THE CONTEMPT OF COURTS ACT FOR HAVING DISOBEYED THE DIRECTIONS OF THIS HON’BLE COURT DATED 13.6.2024 IN WP NO:202162/2018 PRODUCED AT ANNEXURE-A, PUNISH THE ACCUSED NO.1 AND ISSUE FURTHER DIRECTION TO COMPLY WITH THE ORDER OF THIS HON’BLE COURT. - 4 - WA NO.200165/2024 C/W CCC NO.200190/2024 THIS APPEAL AND PETITION HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 25.03.2025, COMING ON FOR “PRONOUNCEMENT OF JUDGMENT” THIS DAY, THE COURT, PRONOUNCED THE FOLLOWING: CORAM: HON'BLE MR. JUSTICE K NATARAJAN AND HON’BLE MR. JUSTICE VIJAYKUMAR A. PATIL CAV JUDGMENT (PER: HON'BLE MR JUSTICE VIJAYKUMAR A. PATIL) W.A.No.200165/2024 is filed by the appellants- Karnataka Housing Board (KHB) challenging the order of the learned Single Judge dated 13.06.2024 passed in W.P.No.202162/2018 (GM-RES), wherein the writ petition filed by respondent Nos.2 to 5 was allowed. The contempt petition in CCC No.200190/2024 is filed by respondent Nos.2 to 5/original writ petitioners alleging willful disobedience of the order passed by the learned Single Judge. 2. Brief facts leading to the filing of the appeal are that, the appellants auctioned sites through e-auction as per the notification dated 21.05.2018. The respondent - 5 - WA NO.200165/2024 C/W CCC NO.200190/2024 Nos.2 to 5 were the successful bidders, they have deposited the bid amount, thereafter, the appellants issued confirmation/acceptance letter on 13.06.2018. The respondent Nos.2 to 5 requested the appellants to execute the sale deed, later the appellants cancelled the allotment on the ground that there is a complaint with regard to the process of allotment. Being aggrieved, the respondent Nos.2 to 5 challenged the order dated 07.07.2018 before the learned Single Judge and the learned Single Judge allowed the writ petition. 3. Sri.Mogha Sudhakar Rao, learned counsel appearing for the appellants-KHB submits that one Sri.Dhanaya Swamy Hiremath submitted representation raising objection with regard to allotment of site in favour of respondent Nos.2 to 5 by e-auction. The appellants considered the records and came to know that the price offered by respondent Nos.2 to 5 is on the lower side and only single bidder has participated in respect of plot in question, hence, the authority decided to cancel the - 6 - WA NO.200165/2024 C/W CCC NO.200190/2024 allotment. It is further submitted that the appellants is having right to cancel the bid at any time if there is any violation or misrepresentation found in the online e- proceedings. The bid of respondent Nos.2 to 5 is for Rs.1,350/- per sq.ft. inspite of increase of rate at Rs.600/- per sq.ft for commercial site. It is also submitted that the surrounding area is fully developed and the value of the site is more, hence, the appellants are justified in canceling the bid. Hence, he seeks to allow the appeal by setting aside the order of the learned Single Judge. 4. Per contra, Sri.Vinayak Apte, learned counsel appearing for respondent Nos.2 to 5 supports the order of the learned Single Judge and submits that the appellants cannot turn around and cancel the allotment after the entire process of bid is completed. It is submitted that the bid is accepted by the appellants and respondent Nos.2 to 5 have deposited the entire consideration of the bid amount way back on 17.07.2018 and till date the appellants are denying the execution of sale deed in - 7 - WA NO.200165/2024 C/W CCC NO.200190/2024 favour of the successful bidder. It is further submitted that due to the fault of the appellants, the respondent Nos.2 to 5 are paying huge interest on the amount borrowed by them from the financial institution to pay the bid consideration amount. Hence, he seeks to dismiss the appeal by punishing the appellants for willful disobedience of the order of the learned Single Judge. 5. We have heard the arguments of the learned counsel for the appellants, learned Government Advocate and the learned counsel for respondent Nos.2 to 5 and meticulously perused the materials available on record. We have given our anxious consideration to the submissions advanced and the material available on record. 6. The records available on record indicate that the appellants issued publication for e-auction of site, the notice was published in ‘Prajavani’ ‘Vijayavani’ and ‘Vijaya Karnataka’ Kannada daily newspapers on 21.05.2018. - 8 - WA NO.200165/2024 C/W CCC NO.200190/2024 Respondent Nos.2 to 5 participated in the e-auction proceedings for commercial site No.3 measuring 20309 sq.ft. at Biddapur, Kalaburagi. The reserve price was fixed by the appellants at Rs.1,200/- per sq.ft. Respondent Nos.2 to 5 paid earnest money deposit (EMD) amount of Rs.10,00,000/- through demand draft No.001653 dated 01.06.2018 of Axis Bank, Kalaburagi. The appellants held e-auction of properties on 01.06.2018 and 02.06.2018. In the said e-auction, respondent Nos.2 to 5 quoted bid at Rs.1,350/- per sq.ft for commercial site No.3. The appellants accepted the bid of respondent Nos.2 to 5 on 02.06.2018 as it was the highest bid. 7. The material available on record further indicates that as per the terms of the notification, the respondent Nos.2 to 5 have deposited a sum of Rs.58,84,663/- on 05.06.2018 i.e., within the stipulated time of 15 days. Respondent Nos.2 to 5, in total, deposited Rs.68,84,663/- which is 25% of the bid amount of Rs.2,62,62,900/-. The appellants acknowledged the - 9 - WA NO.200165/2024 C/W CCC NO.200190/2024 receipt of the said amount and issued confirmation letter dated 13.06.2018 and requested respondent Nos.2 to 5 to deposit 75% of the balance amount within the stipulated period of 60 days. The material on record also indicates that respondent Nos.2 to 5 requested the appellants to issue ‘No Objection Certificate’ to obtain the loan to pay the entire bid consideration. The appellants issued ‘No Objection Certificate’ on 13.06.2018 permitting respondent Nos.2 to 5 to raise the loan and accordingly, the respondent Nos.2 to 5 availed the loan from Sri.Chatrapati Shivaji Maharaj Sahakari Bank (N) Kalaburagi and paid the balance 75% i.e., Rs.1,93,78,237, on 17.07.2018. Respondent Nos.2 to 5 have made the entire payment within the stipulated time. Surprisingly, the appellants sent a communication dated 18.07.2018 to respondent Nos.2 to 5 intimating that the allotment made in their favour is cancelled vide order dated 07.07.2018. The communication/order dated 07.07.2018 and 18.07.2018 indicate that one Sri.Dhanaya Swamy V.Hiremath submitted a representation dated 03.07.2018 objecting for - 10 - WA NO.200165/2024 C/W CCC NO.200190/2024 allotment of site in favour of respondent Nos.2 to 5 at the rate of Rs.1,350/- per sq.ft. the impugned order indicates that the site in question fetches more price than the price offered by respondent Nos.2 to 5 and proceeded to cancel the bid. In our considered view, the order dated 07.07.2018 and the communication dated 18.07.2018 are passed in violation of principles of natural justice and in violation of the guidelines. The right to cancel the auction by the appellants is only if there is any violation of the terms of the auction notification dated 21.05.2018 or the conditions at Annexure-A3 and not otherwise. Admittedly, the bid of respondent Nos.2 to 5 was accepted by the appellants on complying with the terms and conditions of the notification and terms and conditions of e-auction at Annexure-A3. The respondent Nos.2 to 5 have paid the entire sale consideration of Rs.2,62,62,900/- by obtaining the loan from the financial institution and now the appellants cannot turn around and cancel the bid based on the alleged complaint of one Sri.Dhanaya Swamy V.Hiremath. The impugned order dated 07.07.2018 and - 11 - WA NO.200165/2024 C/W CCC NO.200190/2024 the communication dated 18.07.2018 does not indicate that there is any violation of the conditions of auction notification or the guidelines issued for conduct of e- auction. The cancellation of bid on the stranger’s objection, that too, after completion of entire auction process is illegal, arbitrary and impermissible. 8. Learned Single Judge has recorded the detailed finding that there is no violation of terms of the sale or the guidelines issued by the appellants. Hence, there is no justification to cancel the bid after confirmation of the sale by the appellants and directed the appellants to issue sale certificate and also to execute the sale deed in respect of site in question. The aforesaid finding of the learned Single Judge is neither perverse nor contrary to law calling for interference in this appeal. 9. For the aforementioned reasons, we proceed to pass the following: - 12 - WA NO.200165/2024 C/W CCC NO.200190/2024 ORDER i) W.A.No.200165/2024 is dismissed. ii) The appellants are directed to take immediate steps to issue sale certificate and also execute registered sale deed conveying the auctioned commercial site No.3 situated at Biddapur, Kalaburagi, in favour of respondent Nos.2 to 5 within a period of thirty (30) days from the date of receipt of copy of this order. iii) CCC No.200190/2024 is closed with the liberty to the respondent Nos.2 to 5/complainants to file the contempt petition, if need arises. iv) No orders to cost. Sd/- (K NATARAJAN) JUDGE Sd/- (VIJAYKUMAR A. PATIL) JUDGE BSR CT: PS