A nationalized bank challenged a municipal endorsement demanding stallage fees calculated at a unilateral 40% enhancement for a lease dating to 1966. The court held the demand exorbitant and unsupported by guidelines or rules, quashed the endorsement, and permitted fresh determination per the Government circular.
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NC: 2024:KHC-D:9578 WP No. 103305 of 2018
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 10TH DAY OF JULY, 2024
BEFORE
THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM
WRIT PETITION NO.103305 OF 2018 (LB-RES)
BETWEEN:
VIJAYA BANK , (A GOVERNMENT OF INDIA UNDERTAKING), HEAD OFFICE AT M.G. ROAD, BENGALURU-560001, HAVING A BRANCH AT BROADWAY, HUBBALLI, DISTRICT: DHARWAD, BY ITS CHIEF MANAGER.
…PETITIONER
(BY SRI. MALLIKARJUNSWAMY B. HIREMATH, ADVOCATE)
AND:
YASHAVANT NARAYANKAR Location: HIGH COURT OF KARNATAKA, DHARWAD BENCH
…RESPONDENTS
(BY SRI. G.K. HIREGOUDAR, ADV. FOR R1 & R2)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF CERTIORARI QUASHING THE IMPUGNED ENDORSEMENT DATED:16.03.2018 ISSUED BY THE 2ND RESPONDENT BEARING NO.HDMC/30/14/MKT/2017-18 WHICH IS PRODUCED AT ANNEXURE"N", IN THE INTEREST OF JUSTICE AND EQUITY.
THIS PETITION IS COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
The captioned writ petition is filed assailing the impugned endorsement dated 16.03.2018 issued by respondent No.2 vide Annexure-N overruling the objections tendered by petitioner/Bank and justifying the recovery of stallage indicated at Annexures-F and G.
The petitioner is a nationalized bank. The respondent/ Corporation leased the property bearing Block No.B-1, Stall No.9-FF in the year 1966. The petitioner/Bank claims that it has been promptly paying rents as fixed by the respondents. The respondent/Corporation issued a demand notice towards collection of rent as stallage fees in the year 2015 based on a resolution passed by the respondent/Corporation resolving to collect the stallage fees at the rate of 40%.
fees for the year 2016-2017 for an amount of Rs.17,95,278/-. The respondent/Corporation demanded the said amount as arrears of rent from 2009 to 2015. A second challan was issued by the respondent/Corporation calling upon petitioner/Bank to deposit Rs.32,35,051/- as stallage fees for the year 2016-2017 and 2017-2018.
Government circular provides for 15% hike as evident from Annexure-P, the respondent/Corporation officials have determined the stallage fees by placing reliance on a resolution passed by the respondent/Corporation bank on the 20.09.2016, thereby resolving to enhance stallage rent at the rate of 40%.
this Court has noticed that there are conflicting claims made by respondent/Corporation. Even on this count, the impugned endorsement vide Annexure-N is not sustainable. For the reason stated supra, this Court passes the following:
ORDER
iii) The respondent/Corporation is reserved with liberty to determine the stallage fees strictly adhering to the circular issued by the Government subject to its applicability to the property owned by the Corporation. It is open for the petitioner to submit a detail representation and furnish the documents to any demand raised by the respondent/Corporation.
iv) After hearing the petitioner/Bank,
respondent/Corporation shall pass appropriate
orders in accordance with law.
Sd/-
JUDGE
AM List No.: 1 Sl No.: 46
1 issue framed by the court
Whether the stallage fees determined by the Corporation at a 40% enhancement via its own resolution, overriding the Government circular providing a 15% hike, was arbitrary and unsustainable.
1 provisions across 1 enactments
Vijaya Bank
Hubballi Dharwad Municipal Corporation, Hubballi, by its Commissioner
Yashavant Narayankar
The Assistant Commissioner (Revenue), Hubballi Dharwad Municipal Corporation, Market Division, Hubballi
Sachin Shankar Magadum
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
