Allowed

K S Chandrashekara v. the State of Karnataka

Karnataka HC3 Sept 2021WP/3415/2018

Case brief

AI extract

What is this about?

Petitioners challeged the sale of Karnataka Housing Board quarters to government servants via private negotiation without due process. The Court quashed allotment orders, declared transfer deeds null and void, ordered eviction, and refunded sale consideration.

What did the court decide?

Allotment/transfer deeds quashed and declared null and void; occupants ordered to vacate within 60 days; KHB to refund sale proceeds with 12.5% interest; Rs. 1 lakh costs awarded.

K S Chandrashekara Vs the State of Karnataka — Property and Title | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 3^RD DAY OF SEPTEMBER, 2021

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PRESENT

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THE HON'BLE MR.SATISH CHANDRA SHARMA, ACTING CHIEF JUSTICE

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AND

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THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM

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WRIT PETITION NO.3415/2018 (GM-KHB-PIL)

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BETWEEN

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1 . K.S. CHANDRASHEKARA S/O SRINIVASA AGE 52 YEARS, SHIVAMOGGA ROAD, 1^ST WARD, HOSANAGARA SHIVAMOGGA-577 418

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2 . B.RAMESH

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S/O LATE SUBBANNA

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AGE: 52 YEARS, NO.212, S N ROAD, HOSANAGARA SHIVAMOGGA

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KARNATAKA-577 418

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3 . MANJUNATH S/O LATE SANJEEVA AGE: 48 YEARS, NO.674/4, MARIGUDDA ROAD, HOSANAGARA SHIVAMOGGA-577 418

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4 . SURESH B.S.

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S/O B SATHYANARAYANA SHETTY AGE: 49 YEARS NO.872/2, SHIVAMOGGA ROAD,

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HOSANAGARA SHIVAMOGGA-577 418

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... PETITIONERS

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(BY SRI. PRASAD B.S., ADV.)

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AND:

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1 . THE STATE OF KARNATAKA BY ITS SECRETARY DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT DEPARTMENT M.S. BUILDING, BANGALORE-560 001

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2 . THE SECRETARY P.W.D. GOVERNMENT OF KARNATAKA M.S. BUILDING BANGALORE-1

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3 . KARNATAKA HOUSING BOARD CAUVERY BHAVAN BANGALORE-1, BY ITS COMMISSIONER

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4 . THE ASSISTANT EXECUTIVE ENGINEER PWD NO.4, SUB DIVISION HOSANAGARA SHIVAMOGGA-577 418

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5 . TOWN PANCHAYATH HOSANAGARA TOWN HOSANAGARA SHIVAMOGGA DISTRICT-577 418 REPRESENTED BY ITS CEO

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6 . SMT S.V. VINODA BAI AGE 60 YEARS, W/O M.GURURAJ KICHADER R/AT K.H.B. NO.1, OLD SAGARA ROAD, HOSANAGARA TOWN SHIVAMOGGA-577 418

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7 . SRI S.P.SINJAV S/O B.P.SANTHOLIN AGE 52 YEARS,

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R/AT K H B NO.2, OLD SAGARA ROAD, HOSANAGARA TOWN SHIVAMOGGA-577 418

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8 . SRI PUTTASWAMY K.G. AGE 40 YEARS, S/O GUNDAPPA, R/AT K H B NO.3, OLD SAGARA ROAD HOSANAGARA TOWN SHIVAMOGGA-577 418

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9 . SRI MANJUNATHA N.G. AGE 47 YEARS, S/O GAMAPPA R/AT K H B NO.4 OLD SAGARA ROAD, HOSANAGARA TOWN SHIVAMOGGA -577 418

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10 . SRI GANGADHARA B AGED 48 YEARS, S/O BASAPPA, R/AT K.H.B. NO.5, OLD SAGARA ROAD HOSANAGARA TOWN SHIVAMOGGA-577 418

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11 . LEELAVATHI W/O NAGARAJA H AGE 59 YEARS, R/AT K H B NO.6 OLD SAGARA ROAD, HOSANAGARA TOWN SHIVAMOGGA-577 418

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12 . SRI K.M. RAVISHA AGE 55 YEARS, S/O MANJAIAH K R/AT K H B NO.7 OLD SAGARA ROAD HOSANAGARA TOWN SHIVAMOGGA-577 418

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13 . SMT SHARADAMMA H B AGE 41 YEARS, W/O JAGADEESH K H R/AT K H B NO.8, OLD SAGARA ROAD, HOSANAGARA TOWN SHIVAMOGGA-577 418

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14 . SRI ASHOK GULED AGE 59 YEARS, S/O TUKARAM GULED R/AT K H B NO.9, OLD SAGARA ROAD, HOSANAGARA TOWN SHIVAMOGGA-577 418

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15 . SRI M GANAPATHI AGE 45 YEARS, S/O MANJAPPA, R/AT K H B NO.10, OLD SAGARA ROAD, HOSANAGARA TOWN SHIVAMOGGA-577418

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... RESPONDENTS

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(BY SRI VIJAYAKUMAR A.PATIL, AGA FOR R1, R2 AND R4 SRI S.N.ASHWATHNARAYANA, ADV. FOR R3 SRI M.R.PATIL, ADV. FOR R5 SRI H.DAYANANDA SARASWATHI, ADV. FOR R6 TO R13 SRI.ASHWATH C.M., ADV. FOR R14 AND R15)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE LETTERS DATED 24.07.2017 PASSED BY THE R-3 VIDE ANNEXURES-G, G-1 TO G-9 AND QUASH THE ORDER DATED 15.07.2017 PASSED BY THE R3 VIDE ANNEXURE-H.

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THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING THIS DAY, ACTING CHIEF JUSTICE, MADE THE FOLLOWING:

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ORDER

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The petitioners, being the permanent residents of Hosanagara town, have filed the present public interest

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litigation being aggrieved by the action of the Karnataka Housing Board (hereinafter referred to as 'KHB' for short) in allotting the quarters of KHB and transferring the quarters under the ownership of the KHB to the private respondents i.e. respondent Nos.6 to 15 without following the due process of law as provided under the Karnataka Housing Board Act, 1962 read with Karnataka Housing Board Allotment Regulations, 1983 (hereinafter referred to as 'Allotment Regulations, 1983' for short.

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The facts of the case reveal that respondent Nos.6

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to 15 are the government servants and by virtue of they being the government servants, they were allotted quarters. The Public Works Department has entered into a Memorandum of Understanding for allotting the KHB quarters to the government servants and by virtue of respondent Nos.6 to 15 being the government servants, the houses were allotted to the private respondents. Respondent No.6-S.V. Vinoda Bai was allotted a house on 3.10.1996, respondent No.7-S.P. Sinjav was allotted a house on 25.09.1992, respondent No.8-Puttaswamy was allotted a house on 20.02.2008, respondent No.9-Manjunatha N.G. was allotted a house on 30.08.2005, respondent No.10-

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Gangadhara B. was allotted a house on 01.11.2011, respondent No.11-Leelavathi, wife of H. Nagaraja was allotted a house on 18.05.1995, respondent No.12-K.M. Ravisha was allotted a house on 02.07.2007, respondent No.13-Sharadamma was allotted a house on 08.03.2001, respondent No.14-Ashok Guled was allotted a house on 30.03.1996 and respondent No.15-M. Ganapathi was allotted a house on 15.07.2002.

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The petitioners' contention is that the private respondents i.e. respondent Nos.6 to 15 after their transfer, have either rented out the house to the other private persons or they have not vacated the house and the authorities have not recovered the dues outstanding against them. It has been further stated that the private respondents, though they were allotted quarters being the governments servants and they were under an obligation to vacate the quarters, filed writ petitions before this Court i.e. W.P,. No.15789798/2011 and this Court on 28.06.2013 has simply directed the authorities to decide representations of respondent Nos.6 to 15 herein in accordance with law. The order passed by this Court in the aforesaid writ petitions on 28.6.2013 is reproduced as under:

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"In these writ petitions the petitioners have prayed for a writ of mandamus directing the respondents to consider their representations dated 17.9.2009 and 5.10.2009, Annexures-B and C respectively.

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2. Annexure-B dated 17.9.2009 is addressed to the second respondent. Annexure-C dated 5.10.2009 is addressed to fourth respondent. In these two representations, the petitioners requested respondents 2 and 4 to recommend to the concerned authorities to confirm the ownership in respect of the quarters in their occupation. Since respondents 2 and 4 failed to consider petitioners’ request they are before court. No prejudice will be caused to respondents 2 and 4 if they are directed to consider the petitioners’ representations Annexures- B and C in accordance with law and as expeditiously as possible. Accordingly, the writ petitions are hereby disposed of."

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It has also been brought to the notice of this Court that the other identically placed persons also came up before this Court by filing writ petitions for allotment of quarters on lease/sale belonging to the KHB i.e. W.P.Nos.3878 to 3898/2002 connected with W.P.No.13155/2002 decided on

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24.07.2002. This Court in the aforesaid writ petition has passed the following order:

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"ORDER

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Though the matters are listed in Orders liz.., by consent of the learned Counsels appearing for the parties to the !is, they are taken up for final hearing.

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2. Since common questions of facts and law are involved in all these writ petitions, they are clubbed together, heard and disposed off by this common order.

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3. Petitioners are all Government employees. The houses in their occupation belong to second respondent - Karnataka Housing Board ('Board' for short). The Board had given it to the State Government to allot the same to its employees.

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4. Petitioners are now before this Court interalia calling in question the correctness or otherwise of the notices issued by the 5^th respondent — Asst. Executive Engineer, P.W.D. Sub-Division, Koppal, dated 5.12.2001. By the said notices, the 5^th respondent authority has directed the petitioners to quit and deliver the vacant possession of the premises in question.

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5. The other relief sought for by the petitioners in these writ petitions is to direct the State Government and the second respondent Board to consider the representation of the petitioners and to pass appropriate orders to the effect that petitioners are entitled to continue In the quarters in question.

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6. The allotment of Government Quarter are made under the provisions of the Karnataka Government (Allotment of Government quarters) Rules, 1999 ('Rules' for short). The Rules prescribe the time limit for the employees to stay in the Government allotted quarters. !n case of Group 'A' and 'B' employees, they can continue to occupy the Government quarters for a period of five (5) years from the date of allotment and in case of Group 'C' and 'D' employees, they can continue to occupy the Government quarters for a period of eight (8) years from the date of allotment. Since these petitioners are in occupation of the Government allotted quarters beyond the time prescribed under the Rules, the respondent authorities have now directed the petitioners to quit and deliver the vacant possession of the premises in question. Since the notices issued by the 5^th respondent authority dated 5.12.2001 is in consonance with the provisions of the Rules, I cannot take any

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exception to the impugned notices. Therefore, the first relief sought for by the petitioners in these writ petitions cannot be granted by this Court. Accordingly, it is rejected.

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7. In so far as the second prayer sought for by the petitioners in these writ petitions are concerned, in the joint meeting held by the Government and Other Officers including the Karnataka Housing Board, they have taken a policy decision that the houses under SRHS/RHS of Karnataka Housing Board given to various departments for being used as quarters for their employees would be retained as quarters for government employees. In view of this decision taken by the authorities of the State Government, It may not be proper for this Court at this stage to direct the respondent authorities to consider the request made by the petitioners to allot the Government quarters on lease-cum-sale basis In their favour and further to permit them to continue to be in occupation of the allotted quarters. In that view of the matter, even the second relief sought for by the petitioners in these writ petitions cannot be granted by this Court. Accordingly, it is rejected.

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8. In the result, these writ petitions are rejected. No order as to costs. Ordered accordingly."

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This Court in the aforesaid writ petitions has held that no such request can be allowed for allotting/selling the quarters to the government servant by virtue of government orders, which was allotted to the petitioners.

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The petitioners have further contended that in spite of the fact that the quarters were handed over to the KHB for allotting it to government servants, the KHB has sold quarters to private respondents herein and an order has been passed by the Commissioner of KHB on 24.07.2017 and the order of the Commissioner reflects that the allotment has been made as per the orders of this Court. The order passed by the Commissioner is reproduced as under:

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"No.KHB/Vupravya/Gra.Se.Allotment/Houses (RHS) House/2017-18

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Office of the Commissioner of Housing, Karnataka Housing Board, K.G.Road Bangalore Date: 24/07/2017

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Registration No.:LIG20174122

To,

S.V.VINODABAI

W/O GURURAJ M.K. K.H.B.NO.1 HOUSE NO.329, OLD SAGAR ROAD HOSANAGAR SHIMOGA-577 418

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ALLOTMENT INTIMATION LETTER

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Sub: Allotment Letter of House No.1 (RHS) Ref: 1) Your application No.20174122 2) Hon'ble High Court, Bangalore order W.P.Nos.15789-798/2011 (LB-RES) 2013, Dated 28^th day of June 2013 3) Order of the Hon'ble Commissioner Dated 15.07.2017.

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We, the Karnataka Housing Board are glad to inform you that House No.1. LIG, situated at HOSANAGARA, SHIMOGA DISTRICT (RHS) has been allotted to you on full value basis. The details

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of the house is as under:

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House No.	Categ ory	Area Mtrs	Extent (Sq.mtrs )	Pinth (Sq.mtrs)	Final Value (Rs.)
1	2	3	4	5	6
HOUSE	LIG	16X26.83	429.28	50.92	1455543
NO.1					.00

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Initial Deposit	Balance final value payable	Installment	Amount (in Rs.)	Last date of
Already	(Rs) +	First	364011.00	payment
Paid	Regn.Fee	Second	364011.00
(Rs)	(Rs.500)	Third	364011.00
		Fourth	364011.00
7	8=6-7	9	10	11
-	1547014.00		1456043.00

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Sd/-

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For Housing Commissioner Karnataka Housing Board Bangalore

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INSTRUCTIONS/TERMS AND CONDITIONS

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1. This allotment has been made as per the order of the Hon'ble High Court.

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2. Immediately after receipt of the allotment notice, the balance final value has to be paid in four equal installments as informed above within the stipulated period by way of DD/Bank Challan drawn in favour of HOUSING COMMISSIONER, KARNATAKA HOUSING BOARD, BENGALURU to the Account of the below mentioned Bank without fail. At the time of payment, your Application/Registration Number and allotted property number are to be compulsorily mentioned. CORPORATION BANK, S.C.ROAD BRANCH, BANGALORE A/C NO.014400201003000, (IFSC CODECORP0000144)

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3. This House has been allotted on Out Right Sale basis.

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4. The balance final value amount of the house has to be paid in four equal installments as mentioned above, if not allotment will be cancelled without giving any advance notice and without assigning any reason whatsoever.

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5. If the entire amount has been paid, Absolute Sale Deed will be executed at the time of delivering the possession of the House.

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6. Cess/Maintenance Charges are to be paid separately. The Board reserves all the rights as per the Act, Rules and conditions of the Housing Board.

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7. After obtaining the Absolute Sale Deed after making payment of entire amount of the House to the Board, if the Board has reconsidered any litigation or Court Order, the same is subject to the decision taken by the Board.

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8. The Assistant Executive Engineer is hereby directed to collect the upto date arrears of rent receivable by the Board from the Allottee and after obtaining Affidavit showing that the husband/wife of the allottee is not holding any properties and then to execute the Absolute Sale Deed by imposing the aforesaid conditions.

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9. The said allottee has to keep one copy of all the letter correspondence with him for further reference. Reference Number of the Registration made in Canbank Computer Services Limited and Application Number are to be mentioned at all times.

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10. The allottee may pay the amount by way of RTGS/NEFT or TRANSFER through his Account only.

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But, if the payment is made through the Account of others by way of RTGS/NEFT or TRANSFER such amount will not be credited to the Account of the said Allottee.

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Sd/For Housing Commissioner Karnataka Housing Board Bangalore"

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It is really strange that without there being any order by the High Court for selling the quarters, the Commissioner of KHB, Bengaluru, has issued an order in respect of the respondents for sale of government quarters. The only direction given by this Court was to decide the representation in accordance with law and the aforesaid direction has been treated to be an order for transfer of title and consequential allotment order has been issued by the Commissioner.

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Another important aspect of the case is that the Government of Karnataka on 06.09.2013 has categorically informed the respondent-KHB, that the allotment on lease or by way of sale of quarters cannot be done as they have to be allotted to the government servants and the Government of Karnataka has taken a decision to retain the quarters with

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the Public Works Department for allotting the quarters to other existing governments servants. The proceedings of the Government of Karnataka dated 06.09.2013 is reproduced as under:

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"GOVERNMENT OF KARNATAKA

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No.PWD 322 BMA 2013

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Karnataka Government Secretariat Vikasasoudha Bangalore, dated 6-9-2013

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From:

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The Principal Secretary to Government Public Works, Port and Inland Water Transport Department Vikasasoudha

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Bangalore

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To:

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The Assistant Executive Engineer Public Works 4^th Sub-Division Hosanagara, Shimoga

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Sir,

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Subject: Providing L.I.G. quarters constructed by the K.H.B. at Halesagara Road, Hosanagar to the present residents as per the order of the High Court of Karnataka- reg.

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Ref: 1) Letter of residents of K.H.B. colony, Hosanagar, Shimoga and order of the Hon'ble High Court dated 28.6.2013.

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1. Proceedings held on 2-7-2013

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under the chairmanship of the Secretary.

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With reference to the abiove subject, the copy of the application and order of the High Court dated 28-6-2013 under ref (1) is enclosed herewith. At the oprder of the Hon'ble High Court it is ordered to examine the applications of the applicants as per rules. But at the proceedings dated 7-2-2013 held in respect of this subject as at ref (2) (Copy enclosed) since the quarters which are in the custody of the Public Works Department are in need for residence of the government employees and hence it is decided to retain the same with P.W.D. Therefore, I am directed to inform you to take steps to give endorsements to the applicants by referring the order of Hon'ble High Court dated 28-06-2013.

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Yours faithfully

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Sd/-xx (K.M.Veeraiah) Under Secretary to Government Public Works, Port and Inland Water Transport Department (Buildings)"

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Meaning thereby, in spite of a categorical stand of the Government of Karnataka that there is an acute shortage of quarters, the quarters came to be allotted by way of sale/lease to private respondents without following the due process of law. The PWD is in need of residence for the government employees. The Commissioner has passed the allotment order in violation of the statutory provisions contained under the KHB Act.

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Learned Counsel for the KHB has vehemently argued before this Court that the allotment has been done keeping in view the proceedings of the Government of Karnataka dated 21.09.1979. It is his contention that a policy decision was taken to allot by transfer of lease/sale the constructed quarters under the Subsidized Industrial Housing Scheme for industrial workers and under Subsidized Rental Housing Scheme for the people of economically weaker section and keeping in view the policy decision on 21.09.1979 and the policy decision as per Annexure-R2 dated 08.11.1984, the allotment by way of lease/sale of quarters has been done.

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This Court has gone through the so called policy decision dated 21.01.1979. The private respondents are certainly not at all the industrial workers in favour of whom the transfer has been made and they are not on par with the class of people mentioned in the executive instruction, which is of the year 1979 vintage under the KHB. Hence, by no stretch of imagination, the KHB could have sold the quarters without following the due process of law to the private respondents. The circular relied upon does not help the KHB in any manner. The statutory provisions governing the field

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under the Act of 1962, deals with the power to dispose of the land by the KHB. Section 38 of the Act of 1962 empowers KHB to dispose of its property and is reproduced as under:

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" 38. Power to dispose of land.—Subject to any rules made by the State Government under this Act, the Board may retain, lease, sell, exchange or otherwise dispose of, any land, building or other property vesting in it and situate in the area comprised in any housing scheme or land development scheme sanctioned under this Act."

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The Regulations framed by the State of Karnataka in exercise of the powers conferred under Section 76 of the Act of 1962 provides for a procedure to make bulk allotment of the property (sale of property).

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Regulations 3 to 9 of the Allotment Regulations,

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1983 read as under:

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"3. Offer of Sites/Houses for allotment.- (1) Whenever the Board has formed sites and constructed houses in pursuance of any scheme, the Board may offer all or any of sites/houses for allotment to person eligible for allotment under these regulations.

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(2) Due publicity shall be given in respect of sites/houses for allotment specifying their location, number of sites/houses, the amount payable as Earnest Money Deposit/Registration Fee and such other particulars as the Board may consider necessary, by:

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a. Affixing Notices:

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i. On the notice Board of the Office of the Karnataka Housing Board;

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ii. On the Notice Board of the Divisional, Sub-Divisional Office(s) of the Karnataka housing Board in whose area the sites/houses are to be allotted;

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iii. On the Notice Board of the Taluk office/Taluk Development Board office in whose area the sites/houses are to be allotted.

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b. Publication in the Karnataka Gazette, and not less than three daily news papers of which one should be a Karnataka Daily having wide circulation in the area in which the sites are formed or houses are constructed, as may from time to time be decided by the Board. Provided that if in response to any earlier notification for allotment of houses/sites in the same area or demand survey notification, adequate application are available for allotment, it shall not be necessary for the Board to give publicity again for such sites/houses.

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Reservation of sites/houses.- (1) The Board may on their own or under directions from Government reserve sites/houses in any area for allotment to any specified class of persons and such class of persons may consist of employees in any office or establishment in the City, Town or other places in which the sites are formed/houses are constructed. There shall be reserved in each area where house/sites are notified a discretionary quota up to 10 per cent in each category of house/sites, subject to a maximum of which may be disposed by the Board at its discretion, with the prior approval of the Government.]

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Where sites/houses are reserved under clause (1) the procedure to be followed for allotment shall be such as may be determined by the Board from time to time or as may be directed by the Government.

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(3) the provisions of Rules 8 and 9 below shall mutatis mutandis be applicable for allotment of sites/houses reserved under clause (1), except for the Board’s discretionary quota.

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[4-A. xxx]1

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Inserted by GSR 64 KGD dated 6.4.94 and omitted by PD.80. w.e.f 25.07.2002.

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Allot tees to be a Lessee.- Allottee of a site/houses notified under these regulations shall be deemed to be lessee of the site/house, until the lease is terminated or the site/house is conveyed to the allottee in accordance with these regulations. During the period of the leases the allottee shall pay the Board a rent of Rs. 10 only per annum at the beginning of each year.

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Application.-(I) Applications for allotment of sites/houses on lease- cum-sale basis by persons belonging to Economically weaker sections, Low Income Group, Middle Income Group and Higher Income Group shall be in the form for the time being approved by the Board which may be obtained from the office of the Board on payment of an amount prescribed by the Board which is not refundable. Application shall be accompanied by.-

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a. Bank Draft for having deposited as Earnest Money Deposit/ Registration Fee a sum of Rs. 1000 in respect of urban Housing EWS and LIG (A) houses and Rs. 2,000 for Urban Housing EWS and LIG (B) houses, a sum of Rs. 5,000/- MIG and a sum of Rs. 10,000 for HIG houses;

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b. When the applicant is an assessee to income tax, an assessment order on the income for the year preceding the year of application.

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c. When the applicant is not an assessee to income tax but a Government servant or an employee in any concern and is not in receipt of income from lands or other sources, a certificate from his official superior about his annual income;

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d. When the applicant is not an assessee to income tax nor is a Government servant or an employee in any concern, but is in receipt of income from lands, a certificate as regards his annual income from lands from a Revenue Officer, not below, the rank of a Tahsildar of a Taluk;

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e. When the applicant is neither an employee of Government nor any concern and he is not in receipt of income from lands, an affidavit as regards his annual income duly sworn to before a judicial Magistrate/notary public;

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f. When the applicant is an employee as well as a recipient of agriculture income, a certificate from the employer as well as certificate from the Tahsildar of the taluk regarding agricultural income.

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Note.-If the wife/husband of the applicant has independent income, then a certificate regarding his/her income duly supported by the income tax assessment order or employer’s certificate or an affidavit as the case may be shall also be produced along with the applications.

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g. When the applicant belongs to scheduled caste, scheduled tribe and Backward tribe, a certificate from an officer of the social welfare Department not below the rank of the District Social Welfare officer or a Tahasildar, or a member of legislature or parliament or from a Gazette Government servant under whom he/she is employed;

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h. When the applicant is a physically handicapped person, a certificate from a Government Doctor, not lower in rank than an Assistant Surgeon.

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(ii) When the applications are invited under regulation 3, the applications shall be presented in person or sent by registered post Acknowledgement due so as to reach the office of the board on or before the date and time fixed for receipt of such applications. Applications received after the date and time so fixed shall be rejected;

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(iii) The Earnest Money Deposit/Registration fee shall be refunded, if no allotment of sites/houses is made to the applicant, only after the allotment of sites/houses is decided by the board.

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(iv) Where the applicant has desired that his application be considered for future schemes to be taken up by the board in the same area and has given his consent for the retention of the Earnest Money Deposit/Registration fee paid by him by the board, such deposits will not be refunded. Such deposits will bear interest after one year from the last date fixed for receipt of applications at the rates to be fixed by the board from time to time.

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(v) The Earnest Money Deposit/Registration Fee paid by other unsuccessful applications will be refunded and they will not be entitled to any interest on the Earnest Money Deposit/Registration Fee.

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Registration Application.- (a) Application for allotment of sites/houses should be registered as and when they are received in a chronological order in a register to be

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prescribed by the Board showing the full details of applications. The applications received will be examined under Rule 8 below and a Registration Certificate issued to all the eligible applicants;

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(b) After the expiry of the last date for receipt of applications, the applications received should be classified according to categories prescribed in Rule 9 below. The classified shall be published in the Notice Board of the Karnataka Housing Board and also in the place where the lots are drawn for allotment of houses/sites.

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Eligibility for Allotment.-No persons shall be eligible for allotment.

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(1) Who is not continuously residing within the limits of the City/Town or other place in which the sites are formed are houses are constructed for a period of 10 years immediately prior to the date of application:

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Provided that the Board may relax this condition, in the case of employees of State Government and other Corporations, Local Bodies or other Institutions owned or controlled by the State Government who are transferable from one place to another, but intend to permanently settle in the City/Town/or other places where sites/houses are applied for.

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(2) Who or whose husband/wife, has been allotted a site/house by the Board or any other authority in the State of Karnataka.

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(3) Who or whose husband/wife/minor children own a house or site in any urban area Municipality in Karnataka State.

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Explanation.- For the purpose of this rule ‘authority’ means the Bangalore Development Authority, City Improvement Boards constituted under the Karnataka Improvement Board Act, 1976 Municipal Corporations, Municipal councils or any other local authority.

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Procedure for Allotment.-All the applications for particular category of house/sites such as Higher Income Group Middle Income Group, Low Income Group of Economically Weaker Section received for allotment of a house/site in each area shall be classified into the following categories;

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a. Scheduled Caste/Schedule Tribe and Backward Tribe;

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b. Defence Personnel/Ex-serviceman;

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c. Physically handicapped persons;

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d. State Government servants (including employees of Local Bodies, Employees of State Government undertakings, University);

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e. Central Government servants (excluding defence personnel but including employees of public sector undertakings, L.I.C., etc.); and f. Others

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The notified houses/sites, after reserving the Boards discretionary quota as specified in Rule 4(1) in each area for each category of house, shall be earmarked to the above categories as follows.-

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(a) Scheduled Caste/Scheduled Tribe/Backward Tribe 18% (b) Defence Personnel including Ex-servicemen 5%

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(b) Defence Personnel including Ex-servicemen 5% (c) Central Government Employees 5% (d) State Government employees 15% (e) Physically handicapped persons 2% (f) Others 55%

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Where the number of applications under each category exceeds the number of house reserved for them as indicated above, the allotment shall be made by drawal of lots in public by the Housing Commissioner or any other Officer authorized by him in this behalf. The manner of drawal of lots will be decided by the Housing Commissioner. If the number of applications received for any category is less than the number of houses earmarked for that category, the number of houses exceeding the number of applications will be included in the quota earmarked for others.-

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(a) the Housing commissioner shall make arrangements for drawal of lots among all the eligible applicants. Notice of not less than 7 days specifying the date, time and venue of the drawal of lots shall be given to all the applicants by publication in the Local News Papers;

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(b) Lots shall be drawn separately for the houses/sites earmarked for each category scheme wise in the Office of the concerned Executive Engineer, Karnataka Housing board Division or any other suitable place, in the presence of eligible applicant s, who may wish to be present at the time of drawal of lots;

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applicants who have succeeded in the lots shall be arranged indicating the house number/site which has been drawn by lots against that applicant;

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(d) After drawal of lots under Clause ‘C’ further lots may be drawn to an extent of 10% of the number of houses/sites available for allotment and selected persons shall be kept under waiting list. Persons kept under waiting list will be allotted house/site, in case the persons selected under clause (c)fail to pay the Initial Deposit or take possession of the house/site as the case may be.

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The lists as per lots drawn up shall be placed before the Board and the Board shall approve the same. The approved list shall be published at the Office of the board or such other places as may be specified by the board."

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The Regulations make it very clear that no property of the Housing Board can be allotted by private negotiation and it has to be allotted by following the transparent procedure. Meaning thereby, by issuing a tender, the houses are to be reserved for various categories such as Schedule Caste/Schedule Tribe and Backward Tribe, Defence Personnel/Ex-serviceman, Physically handicapped persons, the State Government servants (including employees of Local Bodies, Employees of State Government undertakings, University) and the Central Government servants (excluding defence personnel but including employees of public sector undertakings, L.I.C., etc.) and Others. It is also provided that where the number of applications under each category exceeds the number of house reserved for them, the

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allotment shall be made by drawal of lottery in public by the Housing Commissioner or any other Officer authorized by him in this behalf. The provision makes it very clear that the property of the Housing Board cannot be allotted (sold/leased out) at the whims and fancies by the Commissioner.

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This Court while hearing the matter on 18.02.2020 has observed that KHB has erroneously allotted (sold/leased out) quarters under the impression that there was an order by the High Court and the learned Counsel for KHB was granted time to seek instruction in the matter. Learned Counsel for the KHB, on instructions, has expressed his inability to withdraw the order of allotment (sale/lease) and therefore, we are passing the final order in the present case.

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Transfer of properties in the present case belonging to the KHB is certainly contrary to the statutory provisions as contained under the Act of 1962 read with Allotment Regulations, 1983. It is nobody's case that the respondents were the industrial workers for whom the houses were constructed under the aforesaid Scheme. The respondents before this Court were the government

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employees who were allotted quarters of PWD as the quarters were under the control of PWD only because they were the government servants and posted at the relevant places at the relevant point of time. In case such a practice is permitted to be carried out, the KHB, which deals with transfer of government property, will start allotting quarters by way of lease/sale to the government servant or who is a retired government servant. Resultantly, this Court left with no other choice except to declare all the allotment / transfer deeds as null and void and to quash all the transfer deeds which were executed in favour of respondent Nos.6 to 15. it is ordered accordingly.

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It is further made clear that in case any further transfer has been made by respondent Nos.6 to 15 in favour of any other persons, the said action is also declared as null and void and the subsequent transfers by respondent Nos.6 to 15 shall be treated as null and void. Respondent Nos.6 to 15 shall hand over the vacant possession of quarters in question and they shall vacate the premises in question positively within sixty days from today failing which the KHB shall evict them by following the procedure prescribed under

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the Karnataka Public Premises (Eviction of Unauthorised Occupants) Act, 1974.

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It is further made clear that the KHB in case, wants to dispose of the quarters in future, they are free to do the same by following the procedure prescribed under the Act of 1962 read with Allotment Regulations, 1983. The KHB shall refund the entire amount collected from the private respondents Nos.6 to 15 as sale consideration along with interest at 12.5% p.a. from the date the amount has been received till it is paid back to the aforesaid respondents.

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Another important aspect of the case is that the government has taken a stand in the matter that the houses are required by the State Government for its employees and there is an acute shortage of houses in the State of Karnataka. The shortage of houses has been witnessed by even the Hon'ble Judges as large number of Judges and staff of the High Court are residing in private quarters. The State Government is not able to provide quarters to all class-I to class-IV employees and in spite of there being a categorical stand by the State Government on 06.09.2013 informing the respondent-KHB, that the sale of quarters cannot be done as

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they have to be allotted to the government servants, the KHB has sold the quarters to respondent Nos.6 to 15. Therefore, action of the KHB deserves to be quashed and is accordingly quashed. It is made clear that in future also, the KHB shall not allot/sale or lease out any property under its ownership to any persons, without following the procedures prescribed under the Act of 1962 read with Allotment Regulations, 1983.

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Resultantly, writ petition is allowed with cost of Rs.1.00 lakh to be payable by the Karnataka Housing Board, Bangalore, to the Karnataka State Legal Services Authority.

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SD/ACTING CHIEF JUSTICE

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K S Chandrashekara v. the State of Karnataka

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K S Chandrashekara v. the State of Karnataka

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