Dismissed

M/S P.C. Guddad and Sons v. the Joint Director (Planning)

Karnataka HC8 Dec 2023WP/102613/2015

Case brief

AI extract

What is this about?

The High Court of Karnataka dismissed a writ petition challenging the rejection of a request to convert a leave-and-licence agreement into a lease-cum-sale agreement. Holding that conversion constitutes a fresh allotment subject to Rule 7(2), the Court ruled that an allottee already owning a shop cannot acquire another, thus upholding the procedural impugned order.

What did the court decide?

Petitioner's request for conversion of leave-and-licence agreement into lease-cum-sale agreement for Shop No.41 is denied.

M/S P.C. Guddad and Sons Vs the Joint Director (Planning) — Karnataka HC (2023) — LawSathi Research

¶1

¶2

NC: 2023:KHC-D:14433 WP No. 102613 of 2015

¶3

IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 8^TH DAY OF DECEMBER, 2023 BEFORE

¶4

¶5

THE HON'BLE MR JUSTICE M.I.ARUN WRIT PETITION NO. 102613 OF 2015 (APMC)

¶6

BETWEEN:

¶7

M/S. P.C. GUDDAD & SONS, GENERAL MERCHANTS AND COMMISSION AGENTS, MAHANTASWAMI MARKET, A.P.M.C. YARD, DHARWAD-580 006, BY ITS PARTNER.

¶8

…PETITIONER

¶9

(BY SRI. DINESH M. KULKARNI, ADVOCATE)

¶10

AND:

¶11

THE JOINT DIRECTOR (PLANNING), AGRICULTURAL PRODUCE MARKETING DEPARTMENT, NO.16, II RAJBHAVAN ROAD, BENGALURU-560 001.

¶12

THE AGRICULTURAL PRODUCE MARKETING COMMITTEE, BY ITS SECRETARY, MRUTHUNJAYA MARKET YARD, DHARWAD.

¶13

…RESPONDENTS

¶14

(BY SRI. PRAVEEN UPPAR, AGA FOR R1; SRI. C.V. ANGADI, ADV. FOR R2)

¶15

GIRIJA A BYAHATTI Digitally signed by GIRIJA A BYAHATTI

¶16

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE WRIT OF CERTIORARI OR ANY OTHER WRIT OR ORDER, QUASHING THE RESOLUTION PASSED BY THE 2^ND RESPONDENT DATED 21.01.2015 AT SUBJECT NO.7, VIDE ANNEXURE-H; ISSUE WRIT OF CERTIORARI OR ANY OTHER WRIT, QUASHING THE NOTICE BEARING NO.KruMaE/KruMaSa(Dharwad)/2714/2014-15 DATED 16.02.2015, VIDE ANNEXURE-J, ISSUED BY THE 2^ND RESPONDENT; ISSUE WRIT OF MANDAMUS TO THE RESPONDENT AUTHORITIES TO CONVERT FROM LEAVE AND LICENCE INTO LEASE-CUM-SALE AGREEMENT OF THEIR SHOPS VIDE ANNEXURE-B DATED 02.07.2014 IN FAVOUR OF PETITIONER.

¶17

THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:

¶18

2 - NC: 2023:KHC-D:14433 WP No. 102613 of 2015

¶19

ORDER

¶20

The petitioner is a licensed market functionary and trader and has been allotted shop No.41 in the market yard at Dharwad, on leave and license basis, in the year 1985. Thereafter, he was also allotted shop No.84 in the market yard at Dharwad in the year 1998 on lease-cumsale basis.

¶21

Rule 12(2) of the Karnataka Agricultural Produce Marketing (Regulation of Allotment of Property in Market Yards) Rules, 2004 (hereinafter referred to as ‘the Rules’, for brevity), provides for conversion of shops allotted on leave and license basis to lease-cum-sale agreement, upon satisfaction of certain conditions. The petitioner upon satisfying the said conditions, requested the concerned authorities to convert his leave and license agreement into that of lease-cum-sale agreement in respect of shop No.41. However, the authorities directed him to vacate the said shop and passed an order to that effect. Aggrieved by the same, petitioner preferred

¶22

3 - NC: 2023:KHC-D:14433 WP No. 102613 of 2015

¶23

W.P.No.106875/2014, which was allowed and respondent No.2 herein was directed to consider the case of the petitioner for conversion of leave and license into leasecum-sale agreement. However, respondent Authorities have rejected the request of petitioner on the ground that the petitioner is already owning a shop at No.84 of the market yard and Rule 7(2) of the Rules prohibits the same. Aggrieved by the said order, the present writ petition is filed.

¶24

The case of the petitioner is that, once he has been allotted a shop in the market yard on the basis of leave and license agreement, upon him satisfying the conditions as contemplated under Rule 12(2) of the Rules, automatically he is entitled for conversion of the same into lease-cum-sale agreement, and his request cannot be rejected on the ground that he owns another shop. It is further contended that, as per paragraph No.12 of the order passed in W.P.No.106875/2014, the respondent

¶25

4 - NC: 2023:KHC-D:14433 WP No. 102613 of 2015

¶26

authorities are bound to consider the request of the petitioner positively.

¶27

Per contra, advocate for respondents submit

¶28

that, the Karnataka Agricultural Produce Marketing (Regulation and Development) Act, 1966, is a social welfare legislation and the Rules made there under when read with the Act, make it clear that the same are passed with an intention of providing plots in the market yards for private persons to establish their shops at subsidized rates, so that it benefits the trader or licensed functionaries and also the general public, and that the scheme of Act and the Rules mandates that, one market functionary should be allotted only one plot either on leave and license basis or lease-cum-sale agreement. It is further submitted that, the order passed in W.P.No.106875/2014 has set aside the order of respondent No.2, to have the petitioner evicted, because there were certain errors in it and the order does not mandate that the request of the petitioner for converting

¶29

5 - NC: 2023:KHC-D:14433 WP No. 102613 of 2015

¶30

his leave and license agreement into lease-cum-sale agreement should be considered positively. It is further submitted that the said order does not examine the purpose of the Act and Rules and the question whether a person can be allotted only one plot or more than one plot. It is also submitted that, whether the shop is given to the trader on the basis of lease-cum-sale agreement or leave and license agreement, it has to be considered as an allotment and Rule 7(2) of the Rules prohibits allotment of more than one plot to the same person and Rule 12(2) of the Rules is subject to Rule 7(2) and on the said ground it is prayed that the writ petition be dismissed.

¶31

It is not in dispute that the petitioner has been allotted plot No.84 in the market yard on lease-cum-sale agreement basis and plot No.41 on leave and license basis. It is also not in dispute that the petitioner has fulfilled the required terms and conditions for conversion of leave and license agreement into lease-cum-sale agreement. The question that arises for consideration in

¶32

¶33

NC: 2023:KHC-D:14433 WP No. 102613 of 2015

¶34

the instant writ petition is, whether the petitioner can be permitted to have more than one plot in the market yard

¶35

as per the scheme of the Act and Rules.

¶36

Rule 2(2) of the Rules reads as under:

¶37

Definitions.

¶38

(2) “Allottee” means any person to whom any site, godown, shop, shop-cum-godown, weigh bridges, sundry shops, canteen, tea stalls, plots for setting up of petrol bunk or other building is allotted under these rules.

¶39

Rule 2(8) of the Rules reads as under:

¶40

(8) “Licensed market functionary” means a person holding license as a commission agent, trader, broker, importer, ginner, presser, crusher, stockist, warehousemen, exporter.

¶41

The petitioner admittedly is a licensed market

¶42

functionary and has been an allottee of one shop under lease-cum-sale agreement and another shop on leave and license agreement.

¶43

7 - NC: 2023:KHC-D:14433 WP No. 102613 of 2015

¶44

7. Rule 6(1) of the Rules reads as under:

¶45

Registration:-

¶46

(1) Every licensed market functionary desirous of applying for allotment of a site, shop, godown or shop-cum-godown on lease-cumsale basis or as the case may be, leave and license basis shall apply for registration to the Market Committee in Form I along with a nonrefundable registration fee as specified in the Annexure.

¶47

Rule 3(3) of the Rules reads as under:

¶48

3. Offer of sites, etc, for allotment on lease-cum-sale basis.

¶49

(1) xxxxxxxxxxx

¶50

(2) xxxxxxxxxxx

¶51

(3) Whenever the Market Committee calls for applications in respect of allotment of sites, godowns, shops or shop-cum-godowns on lease-cum-sale basis, any licensed market functionary who is registered under Rule 6 may apply to the market committee in Form III along with an initial deposit which shall not be less than twenty-five percent of the value of the site, godown, shop or shop-cum-godown as the case may be.

¶52

8 - NC: 2023:KHC-D:14433 WP No. 102613 of 2015

¶53

Rule 10(1)(vii) reads as under:

¶54

Conditions of allotment of site, shop, godown or shop-cum-godown on Leasecum-Sale:-

¶55

(1) Allotment of a site, including a corner site, sites or vacant space for setting up of petrol bunk, godown, shop or shop-cum-godown made by the market committee on lease-cumsale shall be subject to the approval of the Director of Agricultural Marketing and shall also be subject to the following conditions namely:-

(i) xxxxxxxxxxx

(ii) xxxxxxxxxxx

(iii) xxxxxxxxxxx

(iv) xxxxxxxxxxx

(v) xxxxxxxxxxxx

(vi)

(vii) On the expiry of the period of ten years from the date of execution of lease-cum-sale agreement and if the allotment has not been cancelled or the lease is not determined, the Market Committee shall by notice, call upon the allottee to get the sale deed executed at his own cost within the time specified in the said notice.

¶63

xxxxxxxxxxxxxxxx

¶64

9 - NC: 2023:KHC-D:14433 WP No. 102613 of 2015

¶65

The aforementioned Rules pertain to allotment

¶66

of plots on lease-cum-sale basis and sale of the said plot in favour of the allottee subject to allottees fulfilling certain terms and conditions as contemplated in the Rules. In the instant case, it is submitted that the allotment

¶67

made in favour of the petitioner on lease-cum-sale agreement of plot No.84 has resulted in the sale.

¶68

Rule 13(1) of the Rules reads as under:

¶69

13. Allotment of shop, shop-cum-godown

¶70

or godown on leave and license basis:-

¶71

(1) Notwithstanding anything contained in Rule 3, the market committee may, offer shop, shop-cum-godown or godown in a market yard for allotment on leave and license basis.

¶72

Rule 12(2) of the Rules reads as under:

¶73

12. Restriction on transfer:-

¶74

(1) xxxxxxxxxxxx

¶75

(2) Where any market functionary who has been allotted a shop or godown, shop-cumgodown or other building on leave and license basis under Rule 13 is continued in occupation of the same for a minimum period of 55

¶76

10 -

¶77

NC: 2023:KHC-D:14433 WP No. 102613 of 2015

¶78

months and requests to convert the said leave and license into lease-cum-sale basis may be considered with prior approval of the Director of Agricultural Marketing and the value of the site, shop, godown or shop-cum-godown shall be determined by taking into consideration the following factors namely.-

¶79

(i) site value at 40% of the guidance value determined under the Karnataka Stamp Act 1957, and rules made thereby under or the value of the site approved by the Director of Agricultural Marketing under Rule 5, whichever is higher.

¶80

(ii) The building value to be fixed by the Engineering Cell of the Department after considering the depreciation of the building. (iii) Any other expenditure incurred by the market committee on the site or building.

¶81

The aforementioned Rules pertain to allotment

¶82

of plots on leave and license basis and subsequent conversion of the same into lease-cum-sale agreement upon the allottee fulfilling certain terms and conditions.

¶83

Rule 7(1) and (2) of the Rules reads as under:

¶84

11 -

¶85

NC: 2023:KHC-D:14433 WP No. 102613 of 2015

¶86

Eligibility:- (1) No site, shop, godown or shop-cum-godown, in the market yard shall be allotted either on lease-cum-sale basis or leave and license basis to a person or an institution or organization, Farmer-Producer Organization registered under Section 581-A of the Companies Act, 1956 (Central Act 1 of 1956) or under first proviso to sub-section (1) of Section 465 of the Companies Act, 2013 who is not a licensed market functionary and who is a defaulter in payment of any dues either to the Seller or to the Market Committee and not engaged either in the marketing of notified agricultural produces or the allied activities connected with Agriculture, Horticulture or Animal Husbandry except the State or Central Warehousing Corporation, Service institutions, registered associations of market functionaries or Banks or for setting up of petrol bunk or site measuring 10x10 for establishing only STD booths or milk parlors or for construction of common amenities for the market users.

¶87

(2) Allotment under these rules shall not be made to a licensed market functionary who already owns a site, shop, godown or shopcum-godown or other building in the market yard either in his name or in the name of the firm in which he is a partner.

¶88

12 - NC: 2023:KHC-D:14433 WP No. 102613 of 2015

¶89

Thus, Rule 7 speaks about, as to the eligibility criteria for allotment of plots in the market yard either on lease-cum-sale basis or leave and license basis. Thus, a person will not be entitled to apply either on the basis of lease-cum-sale agreement or leave and license agreement, if he already owns a plot, shop or godown, or shop-cum-godown or other building in the market yard either in his name or in the name of the firm in which he is a partner. The purpose of such a restriction is to see to it that as many market functionaries as possible are accommodated in the market yard and one person should not be allowed to have monopoly or greater control over the market yard and the property should not be owned by a person for speculative purposes.

¶90

The petitioner has contended that, once the property is allotted on leave and license agreement basis, conversion of the same into lease-cum-sale agreement cannot be considered as a fresh allotment and the process has to be adopted as is mentioned in Rules 12(2) of the

¶91

13 - NC: 2023:KHC-D:14433 WP No. 102613 of 2015

¶92

Rules and Rule 7(2) of the Rules has no application at all and reliance is also placed upon paragraph No.12 of the order passed in W.P.No.106875/2014, which reads as under:

¶93

“12. It is not in dispute that petitioner has been in possession of the said shop for more than 55 months on leave and licence basis. Therefore, his application seeking conversion of the said leave and licence into lease-cum-sale basis was perfectly maintainable. In the circumstances, respondent No.2 has to consider the said application with prior approval of the Director of Agricultural Marketing. In case the second respondent decides not to convert the leave and licence into lease-cum-sale basis, then it is permissible for respondent No.2 to evict the petitioner from the said shop in accordance with law.”

¶94

The said contention of the petitioner is not

¶95

applicable in the instant case. As stated earlier, the compound reading of the Act and Rules reveal that the intention of the legislature is to prevent an allottee possessing more than one plot or land in the market yard.

¶96

14 - NC: 2023:KHC-D:14433 WP No. 102613 of 2015

¶97

Normally, the words of a provision of a Statute or Rule is required to be understood in the natural ordinary senses. Phrases and sentences must be construed according to their grammatical meaning, unless that leads to some absurdity or unless there is something in the context, or in the object of the statute to suggest the contrary. If attributing the natural meaning of the words would lead to absurdity and defeats the purpose of statute, then the words have to be attributed to the meaning in the context or purpose of the statute and that which is appropriate in relation to the immediately obvious and unresearched context and purpose in and for which they are used.

¶98

The purpose of Rule 7(2) of the Rules is to prevent an allottee possessing more than one plot. Thus, to hold that, just because an allottee has been allotted a plot on leave and license agreement or on lease-cum-sale agreement, which is not yet culminated in sale, thereby meaning that he does not own a plot in the market yard

¶99

15 - NC: 2023:KHC-D:14433 WP No. 102613 of 2015

¶100

and for that reason, holding that he would be entitled for allotment of a new plot on the basis of lease-cum-sale agreement or leave and license agreement, will amount to absurdity and defeats the purpose of the scheme of the Act and Rules made therein, more so, the restriction contemplated in Rule 7(2) of the Rules. The word ‘own’ in Rule 7(2) of the Rules is required to be read as ‘possess’. If that is considered, the petitioner will not be entitled to plots in the market yard at Dharwad.

¶101

Further, Rule 12(2) of the Rules cannot be read in isolation. Rule 12(2) of the Rules merely contemplates conversion of allotment made under leave and license agreement into lease-cum-sale agreement, and that conversion under the scheme of the Act and Rules from leave and license to lease-cum-sale will have to be considered as a fresh allotment itself, because the said lease-cum-sale agreement is again subject to the same conditions that fresh lease-cum-sale agreements are subjected to, and thereby any conversion

¶102

16 - NC: 2023:KHC-D:14433 WP No. 102613 of 2015

¶103

Rule 12(2) of the Rules has to be made subject to Rule

¶104

7(2) of the Rules.

¶105

For the aforementioned reasons, writ petition is

¶106

hereby dismissed.

¶107

Sd/JUDGE

¶108

gab Ct-mck List No.: 1 Sl No.: 33

M/S P.C. Guddad and Sons v. the Joint Director (Planning)

Case brief

What is this about?

What did the court decide?

M/S P.C. Guddad and Sons v. the Joint Director (Planning)

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Giriyappa Mallappa Magi, Vs the State of Karnataka

Ningappa Neelakanthappa Uppal Vs the State of Karnataka

Shri Totaba S/O. Appasab Ingle Vs Shri Balu S/O. Khandu Bhojane

Mr. Mukesh Harjivandas Patadia Vs Induslnd Bank Ltd. Ltd.

Mallappa S/O Siddappa Hanchinal Since Deceased by His Lrs Vs Shri Shivaputra S/O Halappa Hanchinal

Basappa B Yattinagudda Vs the State of Karnataka