- 1 - HC-KAR NC: 2026:KHC:28612 WP No. 8383 of 2017 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF JUNE, 2026 BEFORE THE HON'BLE MR. JUSTICE R. NATARAJ WRIT PETITION NO. 8383 OF 2017 (BDA) BETWEEN: SMT. HARITHA M.J. AGED ABOUT 48 YEARS, NO.66, 2ND CROSS, KAVERI NAGAR, BSK 3RD STAGE, BANGALORE - 560085 …PETITIONER (BY SRI. T.P.VIVEKANANDA, ADVOCATE) AND: 1. THE COMMISSIONER BANGALORE DEVELOPMENT AUTHORITY SANKEY ROAD, KUMARA PARK WEST PALACE GUTTAHALLI BANGALORE - 560020 2. THE MEMBER FINANCE BANGALORE DEVELOPMENT AUTHORITY SANKEY ROAD, KUMARA PARK WEST PALACE GUTTAHALLI BANGALORE - 560020 …RESPONDENTS (BY SRI. AJAY KUMAR M., ADVOCATE FOR RESPONDENT NOS.1 AND 2) THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR RECORDS LEADING TO THE ISSUANCE OF ENDORSEMENT DATED 02.02.2017 BY THE Digitally signed by HEMALATHA J Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:28612 WP No. 8383 of 2017 SECOND RESPONDENT IN NO.BDA/FME-AUC/KLS-1/526/2016-17 IN THE ABOVE CASE (ANNEXURE-J) AND ETC. THIS PETITION, COMING ON FOR HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE R. NATARAJ ORAL ORDER The petitioner is before this Court seeking a writ in the nature of certiorari to quash the endorsement dated 02.02.2017 bearing No.BDA/FM/E-AUC/KLS-1/526/2016-17 issued by respondent No.2 whereby her claim for interest was rejected. She has also sought a writ in the nature of mandamus to direct the respondents to pay interest @ 18% per annum for the first 90 days and @ 21% per annum thereafter till 06.12.2016 i.e., the date on which the petitioner received the refund of the amount deposited. 2. (i) The petitioner contends that she was the successful bidder in an auction held by the respondents in respect of Site No.526, Kumarswamy Layout, 1st stage, measuring 153 square meters. The bid of the petitioner was accepted at a total sale consideration of Rs.2,24,45,100/-. The - 3 - HC-KAR NC: 2026:KHC:28612 WP No. 8383 of 2017 petitioner claims that she paid a sum of Rs.4,00,000/- on 14.01.2016 towards the initial deposit prior to the auction, a further sum of Rs.52,11,275/- on 07.01.2016 and the balance sum of Rs.1,66,09,374/- on 22.03.2016. The auction sale was confirmed by the respondents in terms of a letter dated 03.02.2016, pursuant to which, a draft sale deed was also exchanged between the parties. Subsequently, the petitioner came to know that the auctioned site lay within the buffer zone. She therefore, requested the respondents to either allot an alternative site or refund the consideration paid by her. (ii) The petitioner contends that after inspection of the site, the respondents found that out of the total extent of 153 square meters auctioned only 61.20 square meters was usable as the remaining area fell within the buffer zone. Consequently, the respondents passed an order dated 24.08.2016 directing refund of the entire sale consideration of Rs.2,24,45,100/- The said amount was thereafter refunded to the petitioner, as evidenced by the letter dated 07.12.2016 issued by respondent No.2. Thereafter, the petitioner submitted representations dated 19.12.2016 seeking payment of interest on the amount - 4 - HC-KAR NC: 2026:KHC:28612 WP No. 8383 of 2017 deposited by her. Respondent No.1 rejected the representation on the ground that there is no provision for payment of interest. Aggrieved by the same, the petitioner is before this Court. 3. The learned counsel for the petitioner submitted that the respondents had themselves inspected the auctioned property and found that a larger portion of the site fell within the buffer zone and the usable area was only 61.20 square meters out of 153 square meters. He therefore submits that the respondent No.1 rightly refunded the consideration of Rs.2,24,45,100/- received from the petitioner. He further submitted that this situation had arisen due to the error on the part of the respondents in offering for sale a defective site and, therefore, respondent No.1 is bound to pay interest on the amounts deposited by the petitioner from the respective dates of payment till the date of refund. 4. The learned counsel for the respondents on the other hand submits that the question whether the buffer zone limits are applicable to layouts formed prior to the issuance of the guidelines by the National Green Tribunal came up for - 5 - HC-KAR NC: 2026:KHC:28612 WP No. 8383 of 2017 consideration before a Co-ordinate bench of this Court in W.P. No.20041/2023 and connected petition. He submitted that this Court held that only the reservations mentioned in the revised master plan would apply and that the buffer zone limits prescribed by the National Green Tribunal would not apply to those layouts formed prior to the Revised Master Plan, 2015. He therefore contended that the refund was made solely at the instance of the petitioner and, consequently, the respondents cannot be held liable to pay interest on the amount refunded. 5. I have considered the submissions of the learned counsel for the petitioner and the learned counsel for the respondent Nos.1 and 2. 6. It is not in dispute that the petitioner paid a sum of Rs.4,00,000/- on 14.01.2016 towards the initial deposit, a sum of Rs.52,11,275/- on 07.01.2016 and a sum of Rs.1,66,09,374/- on 22.03.2016 towards the full consideration. The respondents have acknowledged their mistake in offering a defective site for auction, as a substantial portion of the site lay within the buffer zone. This is evident from the letter dated - 6 - HC-KAR NC: 2026:KHC:28612 WP No. 8383 of 2017 07.12.2016 addressed by respondent No.2 to the petitioner, wherein it is stated as follows: "F §UÉÎ PÁAiÀÄð¥Á®PÀ C©üAiÀÄAvÀgÀgÀÄ, zÀQët «¨sÁUÀgÀªÀgÀÄ ¢£ÁAPÀ: 19-9-2016 gÀAzÀÄ "§¥sÀgï eÉÆãï CAvÀgÀªÀ£ÀÄß PÀ¼ÉzÀ £ÀAvÀgÀ ¸ÀzÀj ¤ªÉñÀ£ÀzÀ MlÄÖ «¹ÛÃtðªÀÅ 61.20 ZÀ.«Äà ®¨sÀå«gÀĪÀÅzÁV" ªÀgÀ¢ ¤ÃrgÀÄvÁÛgÉ." 7. The respondent No.1, having noticed that the site could not be put up for auction, refunded the entire sale consideration to the petitioner on 06.12.2016. This clearly indicates that the respondents had auctioned a property which was not fit to be offered for sale. Having acknowledged the mistake and refunded the sale consideration, the respondents cannot avoid their liability to pay interest on the amount retained by them, as payment of interest is necessary to compensate the petitioner for the loss of opportunity that a huge sum of Rs.2,24,45,100/- could have brought. 8. In that view of the matter, the petition is allowed in part and respondent No.1 is directed to pay interest at the rate of 9% per annum from the date of respective deposits till the date of refund. - 7 - HC-KAR NC: 2026:KHC:28612 WP No. 8383 of 2017 9. This shall be complied within a period of three months from the date of receipt of a copy this order. Sd/- (R. NATARAJ) JUDGE HJ List No.: 1 Sl No.: 21