- 1 - HC-KAR NC: 2025:KHC-D:7558 WP No. 104050 of 2018 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 12TH DAY OF JUNE 2025 BEFORE THE HON'BLE MR. JUSTICE PRADEEP SINGH YERUR WRIT PETITION NO. 104050 OF 2018 (LB-RES) BETWEEN: 1. SUNIL APPASAHEB DEVARASHI, S/O. APPASAHEB DEVARASHI, AGED ABOUT 50 YEARS, OCC: BUSINESS, R/O: SANKESHWAR, TQ: HUKKERI, DIST: BELAGAVI. 2. SHAIK FAREED ABDUL AZEEZ SHAIK, S/O. ABDUL AZZEZ SHAIK, AGED ABOUT 67 YEARS, OCC: BUSINESS, R/O: NADIGALLI, SANKESHWAR, TQ: HUKKERI, DIST: BELAGAVI. 3. KASHINATH BADAKAR, S/O. MAHALING BADAKAR, AGED ABOUT 40 YEARS, OCC: BUSINESS, R/O: ANKALI ROAD, SANKESHWAR, TQ: HUKKERI, DIST: BELAGAVI. 4. RAJENDRA MOKASHI, S/O. TANAJI MOKASHI, AGED ABOUT 49 YEARS, OCC: BUSINESS, R/O: SANKESHWAR, TQ: HUKKERI, DIST: BELAGAVI. …PETITIONERS (BY SRI. RAJASHEKHAR BURJI, ADVOCATE) AND: 1. STATE OF KARNATAKA, DEPARTMENT OF URBAN DEVELOPMENT, VIKASA SOUDHA, BENGLAURU-01, CHANABASAPPA K KALLUR Location: HIGH COURT OF KARNATAKA DHARWAD BENCH - 2 - HC-KAR NC: 2025:KHC-D:7558 WP No. 104050 of 2018 REPRESENTED BY ITS SECRETARY. 2. THE DIRECTOR OF MUNICIPAL ADMINISTRATION, VISHVESHWARAIH TOWER, DR. AMBEDKAR VEEDHI, BENGALURU-1. 3. DEPUTY COMMISSIONER, BELAGAVI DISTRICT, BELAGAVI. 4. TOWN MUNICIPAL COUNCIL, SANKESHWAR, TQ: HUKKERI, DIST: BELAGAVI, REPRESENTED BY CHIEF OFFICER. …RESPONDENTS (BY SRI. M.M. KHANNUR, AGA FOR R1-R3; SRI. DINESH M. KULKARNI, ADVOCATE FOR R4) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF CERTIORARI OR ANY OTHER APPROPRIATE WRIT OR ORDER OR DIRECTION TO a) QUASH THE ORDER DATED 27.03.2018 BEARING NO.BGM:DUDC:5CR:28:2017-18 PASSED BY THE 3RD RESPONDENT, DEPUTY COMMISSIONER PRODUCED AT ANNEXURE-A. b) DIRECT THE 4TH RESPONDENT TO CONTINUE THE PETITIONER’S POSSESSION AND ENJOYMENT OF COMMERCIAL SHOPS NO.1, 2, 3 AND 4 RESPECTIVELY SITUATED NEAR POST OFFICE, SANKESHWAR AND ETC. THIS PETITION COMING ON FOR ORDERS THIS DAY, ORDER WAS MADE THEREIN AS UNDER: - 3 - HC-KAR NC: 2025:KHC-D:7558 WP No. 104050 of 2018 ORAL ORDER (PER: THE HON'BLE MR. JUSTICE PRADEEP SINGH YERUR) 1. Heard learned counsel Sri.Rajashekhar Burji for the petitioners, learned AGA Sri.M.M.Khannur for respondent Nos.1 to 3 and the learned counsel Sri.Dinesh M.Kulkarni for respondent No.4. Registry to delete the names of Sri.Ramesh I Zirali and Sri.Shivaraj S.Ballolli from the cause list. 2. This petition is filed by the petitioners seeking to quash the order dated 27.03.2018 passed by the respondent No.3-Deputy Commissioner. The petitioners were allotted 4 shops by the respondent No.4 and they are in possession and enjoyment of the said commercial shops. The petitioners are in enjoyment of the said shops for last 10 years by paying requisite security deposit and rent as per the instructions and the agreement with respondent No.4. The respondent No.1 issued a circular dated 26.10.2009 describing certain norms and procedures for disposal of commercial premises in cases - 4 - HC-KAR NC: 2025:KHC-D:7558 WP No. 104050 of 2018 where existing leaseholders were allowed to continue in the premises by paying security deposit and fixed rent as per the guidelines issued. The lease period was fixed for period of 12 years with the approval of respondent No.3. Thereafter respondent No.1 issued another notification dated 14.08.2015 modifying certain guidelines as per Section 72 of the Karnataka Municipalities Act, 1964 and Rule 39 of the Karnataka Municipalities (Guidance of Officers, Grant of Copies and Miscellaneous Provisions) Rules, 1966, in which after the completion of the lease allotment agreement, the municipalities are required to allot premises by public auction within 12 years as per local rent fixed as per the guidelines. In pursuance to the said notification dated 14.08.2015, the 4th respondent issued notification calling upon applicants for allotment of commercial premises at various places in the city. It is this notification that was passed calling for fresh allotment of commercial premises. The respondent No.1 following the process of law, conducted auction for allotment of the - 5 - HC-KAR NC: 2025:KHC-D:7558 WP No. 104050 of 2018 shops and allotted the shops by way of public auction to the 3rd parties, which came to be approved by the Deputy Commissioner - respondent No.3. This being the state of affairs, the petitioners submitted representation to the 3rd respondent to continue in the premises on the basis of the lease agreement dated 28.10.2012. The same was not considered by the respondents. Aggrieved by the same, the petitioners have approached the Civil Court by filing original suit calling in question the notice dated 16.01.2018 and seeking permanent injunction order against respondent No.4 not to dispossess the petitioners. This being the state of affairs, the respondent No.4 issued final notice dated 22.05.2018 directing the petitioners to vacate the shop premises. Thereafter, the petitioners came to know of the order passed by the 3rd respondent dated 27.03.2018, allotting commercial shops in favour of the 3rd parties and cancelling the allotment made to the petitioners. Hence being aggrieved by the said order dated - 6 - HC-KAR NC: 2025:KHC-D:7558 WP No. 104050 of 2018 27.03.2018, the petitioners are before this Court questioning the same. 3. It is the grievance of the petitioners that they are initially allotted shop premises by virtue of an auction and an agreement was entered into, based on which, they are in lawful and peaceful possession and enjoyment of the shop premises by paying requisite deposit and the rent amount as per the agreement. It is further contended that the respondents without adverting to due process of law and violation of Article 19(1)(g) of the Constitution of India, issued a notification calling for public auction and cancelled the shop premises and allotted the same to the 3rd party by way of public auction, which is illegal, arbitrary and the same requires to be set aside. It is further contended that due process of law is not followed as contemplated under Section 72 of the Act and Rule 39 of the Rules by the respondent No.3. Hence, seeking to quash Annexure-A passed by the respondent No.3. - 7 - HC-KAR NC: 2025:KHC-D:7558 WP No. 104050 of 2018 4. Per contra, learned counsel representing the respondent No.4 contends that the petition itself is not maintainable. The petitioners were granted allotment of shops by virtue of public auction. The term of said allotment by way of an agreement has already come to an end, the extension granted to the petitioners has also come to an end. So therefore they are now within their legal rights to initially proceed with the public auction of the properties. The petitioners are at liberty to participate in public auction. If they succeed and fulfill the terms and conditions of public auction, they can continue in the premises. Therefore there is no illegality, perversity or arbitrariness in conducting the public auction or in cancelling the allotment of shop premises to 3rd parties, as the public auction was conducted pursuant to the lease term having come to an end. Therefore, the petitioners cannot claim an inherent right to retain possession of the property once the lease terms has come to an end. Under the circumstances, learned counsel for the respondent - 8 - HC-KAR NC: 2025:KHC-D:7558 WP No. 104050 of 2018 No.4 Sri.Dinesh M.Kulkarni submits that the petition be disposed off and the petitioners be directed to vacate the shop premises to facilitate respondent No.4 to conduct a public auction in accordance with law. 5. I have heard the learned counsel for both the parties and perused the records. 6. It is not in dispute that the petitioners were allotted shop premises and they were in possession of the commercial shops based on the agreement entered into by the respondents. In view of the terms having come to an end, the respondents are within their legal rights to conduct public auction and allot the shops. Though the lease terms have came to an end, the petitioners are continuing in the shop premises by virtue of an interim order. 7. Be that as it may. The petitioners cannot have an inherent right in the commercial shops. The respondents shall have the right to cancel the allotment of shops in accordance with law and conduct public auction. - 9 - HC-KAR NC: 2025:KHC-D:7558 WP No. 104050 of 2018 The petitioners are the only lessees. Therefore, they can be permitted to participate in the auction that would be conducted pursuant to the terms having come to an end and while fresh auction is being conducted. If the petitioners succeed in the said auction as successful bidders, the respondents would be legally bound to consider and continue the petitioners in the premises with a fresh terms and conditions so imposed if any. However, since the petitioners continue in the shop premises pursuant to an interim order passed, they are legally bound and liable to pay the agreed rent till date without any default. Under the circumstances, I pass the following: ORDER a. This petition is disposed off. b. The petitioners shall continue in the shop premises till the respondents conduct fresh public auction in accordance with law. c. Upon conducting of the public auction, if the petitioners succeed in the public auction, they - 10 - HC-KAR NC: 2025:KHC-D:7558 WP No. 104050 of 2018 shall continue in the shop premises based on the terms and conditions so applicable to them. d. In case the petitioners do not succeed as successful bidders in the public auction and the 3rd parties is allotted the shop premises, the respondents would be at liberty to take possession forthwith and the petitioners shall vacate the premises without forcing the respondents to initiate any process of eviction and recovery of possession. e. It is made clear that the petitioners shall pay the entire arrears of rent and continue to pay the rent till the public auction is conducted. Sd/- (PRADEEP SINGH YERUR) JUDGE KGK CT-MCK List No.: 1 Sl No.: 12