- 1 - HC-KAR NC: 2025:KHC:45936-DB WA No. 444 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF NOVEMBER, 2025 PRESENT THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE AND THE HON'BLE MR. JUSTICE C.M. POONACHA WRIT APPEAL NO. 444 OF 2025 (KLR-LG) BETWEEN: 1. THE STATE OF KARNATAKA DEPARTMENT OF REVENUE REPRESENTED BY ITS SECRETARY VIDHANA SOUDHA BENGALURU-560 001. 2. THE DEPUTY COMMISSIONER DAKSHINA KANNADA DISTRICT DISTRICT COMMISSIONER'S OFFICE STATE BANK ROAD, MANGALURU-575 001. 3. THE TAHSILDAR OFFICE OF THE TAHSILDAR ULLALA TALUK, DAKSHINA KANNADA DISTRICT-576 101. …APPELLANTS (BY SMT NAMITHA MAHESH B G, AGA ) AND: 1. MR. RAMANATHA SHETTY S/O KRISHNA SHETTY AGED ABOUT 63 YEARS RESIDENT OF KAKKEMAJALU HOUSE DARALAKATTE POST, MANGALURU-574 199. …RESPONDENT Digitally signed by PRABHAKAR SWETHA KRISHNAN Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:45936-DB WA No. 444 of 2025 THIS WRIT APPEAL FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO ALLOW THE WRIT APPEAL BY SETTING ASIDE THE ORDER DATED 11/09/2024 PASSED IN WP NO.14790/2024 AND ETC. THIS APPEAL, COMING ON FOR PRELIMINARY HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE and HON'BLE MR. JUSTICE C.M. POONACHA ORAL JUDGMENT (PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE) 1. For the reasons stated in the application―I.A.No.1/2025, the same is allowed. The delay of 158 days in filing the appeal is condoned. 2. The appellants have filed the present appeal impugning an order dated 11.09.2024 passed by the learned Single Judge of this Court in W.P.No.14790/2024 (KLR/LG). 3. The respondent had filed the said petition impugning Condition No.2 as imposed by appellant No.2 in the order of grant dated 17.09.2022 as well as Condition Nos.4 and 7 as imposed by appellant No.3 in the grant certificate dated 17.09.2022. - 3 - HC-KAR NC: 2025:KHC:45936-DB WA No. 444 of 2025 4. Briefly stated, the facts are that one Sri K. Mundappa Shetty had applied for grant of land falling in Survey No.1-1B, measuring 5 acres situated at Konaje Village, Mangaluru Taluk for the purpose of cashew cultivation [subject land]. The Tahsildar, Mangaluru passed an order dated 02.01.1962 granting the subject land under Rule 3(i) of the South Kanara District Lease of Lands for Cashewnut Cultivation Rules, 1957 [hereafter, 'the Rules']. Rule 3(i) of the Rules is set out below: "Land shall be granted on a thirty year lease with option to the lessee for its renewal on the expiry of the thirty year period in respect of those lessee who fulfil the terms and conditions of the grant satisfactorily. The lessee shall also be given the option to acquire permanent ownership of land on the expiry of thirty years on payment of the value of the land fixed at the time of the grant itself. 5. In terms of the Rules, the land was granted for a period of 30 years with an option to the lessee to renew on expiry of 30 years. Further, those lessees who fulfil the terms and conditions of the grant satisfactorily, would also be entitled to acquire permanent ownership of the land on payment of the value of the land fixed at the time of the grant. The said terms were also incorporated in the - 4 - HC-KAR NC: 2025:KHC:45936-DB WA No. 444 of 2025 grant order dated 30.12.1961 in favour of Sri K. Mundappa Shetty. Paragraph 2 of the grant order is set out below: "The grantee has the option for the renewal of the lease on the expiry of the thirty year period if he has fulfilled the terms and conditions of the grant satisfactorily. The grantee shall also have the option to acquire permanent ownership of the land on the expiry of thirty years on payment of the value of the land fixed at the time of the grant itself." 6. There is no allegation that Sri K. Mundappa Shetty did not comply with the terms of the grant order dated 30.12.1961 or any of the terms and conditions as required in law. 7. Sri K. Mundappa Shetty was survived by his daughter, Kalyani alias Prema Shetty. After the completion of the lease period, she submitted a representation for grant of ownership of the subject property. Thereafter, the Assistant Commissioner, Mangaluru had recommended the transfer of ownership of the subject land on collecting value of Rs.40,000/- per acre. The said proposal was forwarded to appellant No.2 on 05.02.2005. 8. It is material to note that in the earlier round of litigation, the principal controversy involved was with regard to the value of the land. The said issue has been the subject matter of several writ - 5 - HC-KAR NC: 2025:KHC:45936-DB WA No. 444 of 2025 petitions and writ appeals before this Court. In terms of paragraph 2 of the grant order, the grantee is entitled to acquire ownership of the granted land on payment of the value fixed at the time of the grant. However, in several such cases, the authorities had demanded a value, which was alleged to be far in excess of the market value of the land at the time of the grant. In one such petition being W.P.No.23692/2012, this Court, by an order dated 23.07.2012 had directed the authorities to transfer ownership by collecting 300 times of the land revenue per acre. This Court is informed that the said order came to be accepted by the concerned authorities. 9. In the aforesaid backdrop, the legal heir, Kalyani alias Prema Shetty, daughter of Sri K. Mundappa Shetty had made a representation for transfer of ownership of the subject land. The same was rejected by an endorsement dated 18.04.2015. The respondent challenged the said endorsement by filing a W.P.No.30532/2015, which was allowed by an order dated 19.01.2017. In conformity with the other orders passed by the Co-ordinate Bench of this Court in W.P.No.23692/2012, this court directed appellant No.2 to collect a price computed at 300 times the - 6 - HC-KAR NC: 2025:KHC:45936-DB WA No. 444 of 2025 land revenue payable per acre and issue a grant certificate in favour of the petitioner. 10. On 17.09.2022, appellant No.2 passed a grant order. However, the same included a condition (Condition No.2) imposing restriction on the respondent, not to alienate the subject property for a period of 25 years from the date of issue of Saguvali Chit. On the same day, appellant No.3 also issued the grant certificate imposing the condition that the subject land shall not be alienated for a period of 25 years (Condition No.7) as well as the condition that the subject land shall not be used for non-agricultural purposes during the said term of 25 years (Condition No.4). These conditions were challenged by the respondent (being in W.P.No.14790/2024 (KLR-LG). The said writ petition has been allowed in terms of the impugned order. The learned Single Judge found that the conditions for non-alienation of the subject land was contrary to the Rules as well as paragraph 2 of the grant order dated 30.12.1961. 11. Aggrieved by the impugned order, the appellants have filed the present appeal. - 7 - HC-KAR NC: 2025:KHC:45936-DB WA No. 444 of 2025 12. The learned Additional Government Advocate appearing for the appellants fairly states that the issues sought to be raised is covered by a decision of a Co-ordinate Bench of this Court in State of Karnataka and others v. Shalini B. Hegde :NC:2025:KHC:41815-DB. In the said case, this Court had examined the conditions as set out in paragraph 2 of the grant order and had held that the expression 'permanent ownership of land' would not accommodate a condition of non-alienation of the grant land. 13. The relevant extract of the said order is set out in paragraphs 11 and 12: "11. Section 54 of the Transfer of Property Act, 1882 defines 'Sale', which means ”a transfer of ownership in exchange for a price paid or promised or part paid and part promised." If the ownership is transferred then all the rights, title and interest get transferred. Transferee will not have any right to put any condition on a transfer of the immovable properties on sale, after the transferee has paid the consideration. Further, the condition of non alienation for a period 25 years is against explicit provision of the lease of the grant, as clause (2) of the grant explicitly provides that after expiry of 30 years, the grantee would be entitled to acquire permanent ownership over the land on payment of the value of the land. - 8 - HC-KAR NC: 2025:KHC:45936-DB WA No. 444 of 2025 12. Once the grantee has opted to become the permanent owner of the land, granted in his favour on payment of the market value of the land, which was determined to be Rs.2,10,000/- per acre way back in the year 2012 and the grantee having paid the said consideration, imposition of condition for non alienation of the land for a further period of 25 years is not only against the grant condition but also against Rule 23(1) of the Karnataka Land Grant Rules, 1969, which has been extracted herein above." 14. In the view of the above, the present appeal is unmerited and dismissed. Sd/- (VIBHU BAKHRU) CHIEF JUSTICE Sd/- (C.M. POONACHA) JUDGE KPS, List No.: 2 Sl No.: 16