[Public Trust Doctrine] Kar HC | State largesse should not be marred by any arbitrariness while dealing with alienation of natural resources

Karnataka High Court: A Division Bench of Satish Chandra Sharma CJ and Sachin Shankar Magadum J allowed the petition, quashed the initial allotment of the site to respondent 3 and sets aside the allotment order made in favour of respondent 3.

The facts of the case are such that PIL was filed on the ground that a civic amenity site No. 35, situated at 5th phase, Yelahanka New Town, Bengaluru, was allotted by the Karnataka Housing Board (KHB) to  Murthy Charitable Trust respondent 3, and there were specific conditions like the allottee was required to construct a building suitable for Education and public service within a period of two years and that the Housing Board shall be entitled to cancel the allotment without issuing any notice after expiry of five years. As no construction was carried out, KHB then executed an absolute sale deed in favour of respondent 3 for a sum of Rs 3,87,000/-. The value of the land is more than 10 Crores and an additional amount was received by KHB i.e., Rs 18, 00,000/- for additional area allotted to respondent No.3. Undisputedly, at no point of time, the procedure provided under the Karnataka Housing Board (allotment) Regulations, 1983 was followed.

Counsel for KHB submitted that PIL is not maintainable in the facts and circumstances of the case and the petitioner cannot seek cancellation of a registered document in exercise of writ jurisdiction under Article 226 of the Constitution of India and the petitioner has to take shelter of the provisions of the Specific Relief Act.

The Court observed that “The most shocking aspect of the case is that an instrumentality of the State i.e., KHB has allotted the site in question without following the allotment regulations. There is a detailed procedure provided under the KHB Regulations for allotment of sites and the procedure has not been followed at all especially when the site was reserved as a Civic Amenity Site.” 

The Court further observed that the provisions of KHB Act of 1962 and KHB (Allotment) Regulations, 1983 makes it very clear that a site can be allotted / can be sold only through a transparent process that too after wide publicity through tender notice/auction notice.

The Court observed that State largesse should not be marred by any arbitrariness. Fairness, in the action of the State or local bodies or instrumentalities of the State while leasing out / disposing any public property is a sine qua non. The State and the instrumentality of the State are required to follow a transparent procedure. The statutory provisions as contained under the Act and the Regulations are required to be followed. However, in the present case favoritism has been done by respondent 2 to respondent 3 without following the prescribed procedure.

The Court held that in the present case, the land has been allotted by the KHB without following a transparent procedure. Therefore, “the allotment order, as well as the subsequent sale deed in favour of respondent No.3, deserves to be quashed.”

[Adinarayan Shetty v. Principal Secretary, Writ Petition 9616 of 2020, decided on 30-09-2021]


Arunima Bose, Editorial Assistant has reported this brief.


Appearances

For petitioners: Mr Sunil Kumar H.

For respondents: Mr Vijayakumar Patil, Mr B J Mahesh, Mr Chandrashekhar, and Mr H S Prashanth

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