The Secretary Vs Shri. Vinayak Yallappa Hongekar

(BY SRI V.P. KULKARNI, ADVOCATE FOR R1; SRI KESHAV REDDY, ADDITIONAL ADVOCATE GENERAL A/W SRI V.S. KALASURMATH, ADDITIONAL GOVERNMENT ADVOCATE FOR R2.)

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THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF KARNATAKA HIGH COURT ACT, 1961, PRAYING TO SET ASIDE THE ORDER DATED 11.06.2024, IN WRIT PETITION NO.103307/2015 PASSED BY THE SINGLE JUDGE BY ALLOWING THE WRIT APPEAL BY QUASHING THE ORDER IN WRIT PETITION, IN THE INTEREST OF JUSTICE AND EQUITY.

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THIS WRIT APPEAL HAVING BEEN HEARD AND RESERVED ON 17.03.2025 AND COMING ON FOR PRONOUNCEMENT OF JUDGMENT THIS DAY, C.M. POONACHA, J., DELIVERED THE FOLLOWING:

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NC: 2025:KHC-D:6000-DB WA No. 100552 of 2024

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CORAM: THE HON'BLE MR. JUSTICE S G PANDIT AND THE HON'BLE MR. JUSTICE C.M. POONACHA

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CAV JUDGMENT

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(PER: THE HON'BLE MR. JUSTICE C.M. POONACHA)

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The present intra-Court appeal is filed under Section 4 of the Karnataka High Court Act, 1961, by the Agricultural Produce Marketing Committee¹ calling in question the order dated 11.06.2024, passed by the learned single Judge in W.P.No.103307/2015, wherein the learned single Judge has allowed the writ petition filed by the respondent/writ petitioner.

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The parties will be referred to as per their ranking before the learned single Judge, for the sake of convenience.

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The factual matrix in a nutshell leading to the present appeal are that the petitioner was allotted a shop cum godown bearing No.3/3 measuring 2370 sq.feet, vide certificate of allotment dated 16.05.2001 and the petitioner is carrying on his business in the allotted premises on leave

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1 Hereinafter referred to as ‘APMC’.

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and licence basis. The period of leave and licence was for 11 months, renewable after every 11 months subject to the maximum of 55 months. Accordingly the petitioner was carrying on business in the allotted premises on a licence fee of ₹1,450/- per month. The licence fee was to be revised after every 33 months.

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It is the case of the petitioner that the licence fee of ₹1,450/- was enhanced to ₹1,764/- per month as on 01.12.2013. The petitioner having completed the maximum period of 55 months under the leave and licence agreement, vide letter dated 25.02.2008, requested the allotted premises to be given to the petitioner on lease cum sale basis. Thereafter the petitioner continued in occupation of the allotted premises. The 1^st respondent/APMC issued notice dated 16.03.2014 calling upon the petitioner to pay additional revised licence fee of ₹1,02,960/- for the period from 01.01.2014 to 31.05.2014 @ ₹17,160/- per month. Further, vide the said notice, it was further notified to the petitioner that if he fails to pay the enhanced licence fee, the premises would be taken back. The petitioner by

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communication dated 21.05.2014, sought for cancellation of enhancement of rent. However the same was not considered. A show cause notice dated 28.07.2014 was issued by the APMC directing payment of ₹2,92,400/-, failing which further steps would be taken. The petitioner preferred an appeal before the Adhyaksha, APMC, Belagavi, under section 137-A of the Karnataka Agricultural Produces Marketing (Regulation) Act, 1966 and vide order dated 21.01.2015, it was held that the appeal was not maintainable since the enhancement of rent was made on the approval accorded by the 2^nd respondent-Director, Agricultural Produce Marketing. Thereafter another notice dated 18.12.2014 was issued to the petitioner to deposit the renewed licence fee for the period from 01.12.2013 to 30.04.2015 @ ₹17,200/- per month. Being aggrieved, the petitioner preferred the writ petition seeking for various reliefs.

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The learned single Judge vide impugned order has held that the enhancement/revision of licence fee has not been done in accordance with Rule 16(4) of the Karnataka Agricultural Produce Marketing (Regulation of

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Allotment of property in Market Yards) Rules, 2004² . It was further held that the petitioner is entitled to seek conversion of leave and licence to lease cum sale agreement. Hence, the writ petition filed by the petitioner was allowed and the following order was passed.

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“ORDER

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i. The writ petition is allowed.

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ii. The impugned notices issued by respondent No.1 vide Annexures-M, R and W dated 11.06.2014, 28.07.2014 and 18.12.2014, respectively, are hereby quashed.

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iii. The impugned fixation of revised fees of leave and licence as per Annexure-Q adopting the value proposed by the Assistant Executive Engineer, vide Annexure-G are hereby quashed.

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iv. Respondent No.1 shall re-fix the enhanced licence fees strictly in terms of Rule 16(4) of the Allotment Rules, 2004 and shall reimburse the excess amount collected after deducting Rs.7,04,075/-.

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v. Respondents 1 and 2 are hereby directed to consider the representations submitted by the petitioner strictly in terms of Rule 12(2) of the Allotment Rules, 2004 and also by adhering to the observations made by this Court.

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2 Hereinafter referred to as ‘Allotment Rules’.

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vi. This exercise shall be completed within a period of ten weeks from the date of receipt of certified copy of this order.”

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Being aggrieved, the APMC who was arrayed as

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the 1^st respondent in the writ proceedings has filed the above appeal.

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It is the vehement contention of the learned Senior Counsel Sri G.R.Gurumath, appearing along with learned counsel Sri K.Anandkumar for the appellant that the APMC is entitled to enhance the licence fee as has been done. It is further contended that reliance placed by the petitioner on the communication dated 15.02.2011 (Annexure-F to the writ petition) was with regard to different premises and not the premises of the petitioner. That the writ petitioner having deposited the enhanced licence fee, it is not open for the petitioner to question the same in the writ proceedings. That the direction issued by the learned single Judge is erroneous and liable to be interfered with.

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Per contra, learned counsel Sri V.P.Kulkarni, appearing along with learned counsel Sri Ramesh Misale, for the 1^st respondent/petitioner justifies the order passed by

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the learned single Judge and contends that the enhancement of licence fee being contrary to the Allotment Rules, 2016, the same was rightly set aside. It is further contented that the petitioner having completed occupation of the allotment of premises for 55 months was entitled to seek for issuance of lease cum sale agreement in respect of the same. That the learned Single Judge, considering the factual matrix and the relevant rules has rightly allowed the writ petition. Hence the learned counsel seeks for dismissal of the writ appeal.

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The submissions of the learned counsels have been considered and the writ appeal papers have been perused. The question that arises for consideration is, “whether the order passed by the learned single Judge is liable to be interfered with?”

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The relevant factual matrix is undisputed in as much as the petitioner was allotted the shop premises bearing No.3/3 at APMC Yard, Belagavi, on 16.05.2001 on leave and licence basis which was for a period of 11 months subject to the maximum period of 55 months. Admittedly the said period of 55 months having been completed, the

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petitioner requested for allotment of premises on lease cum sale basis on 25.02.2008.

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At this juncture it is relevant to notice that under Rule 13(7) of the Allotment Rules 2004, the initial allotment is stipulated to be for a period of 11 months which may be renewed every 11 months subject to a maximum of 55 months. Further, Rule 16(4) of the Allotment Rules stipulates that the licence fee shall be liable to be enhanced @ 5% of the licence fee once in 33 months.

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Rule 12(2) of the Allotment Rules 2004, which entitles the allottee of a shop to seek for conversion of the leave and licence into the lease cum sale agreement, reads as follows:

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“(2) Where any market functionary who has been allotted a shop or godown, shopcum-godown or other building on lease and licence basis under Rule 13 is continued in occupation of the same for a minimum period of 55 months and request to convert the said leave and licence 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-

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godown shall be determined by taking into consideration the following factors namely.-

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(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;

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(ii) The building value to be fixed by the Engineering Cell of the Department after considering the depreciation of the building;

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(iii) Any other expenditure incurred by the market committee on the site or building.”

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It is clear from the aforementioned that the

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licence fee is liable to be enhanced @ 5% of the licence fee once in 33 months and after allotment of the shop on leave and licence basis for the maximum period of 55 months, the allottee is entitled to seek for conversion of leave and licence into lease cum sale agreement, in terms of Rule 12(2) of the Allotment Rules.

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The learned single Judge noticing that the demand made by the APMC of enhanced licence fee is contrary to Rule 16(4), has quashed the same and ordered

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that the respondents are entitled to demanded enhancement strictly in terms of Rule 16(4) of the Allotment Rules. The learned single Judge has further directed that the representation of the petitioner for conversion from leave and licence basis to lease cum sale basis be considered in terms of Rule 12(2) of the Allotment Rules.

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The contention of the appellant that reliance is placed by the petitioner on the order dated 15.02.2012 (Annexure-F to the writ petition) is erroneous and pertains to a different property, would not be a ground to interfere with the directions issued by the learned single Judge. The directions are issued in terms of the stipulations contained under the Allotment Rules 2004.

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The vehement contention of the learned Senior Counsel appearing on behalf of the appellant that APMC is entitled to demand enhanced licence fee notwithstanding the stipulation contained under Rule 16(4) of the Allotment Rules 2004 is ex-facie untenable and liable to be rejected having regard to the fact that when Rule 16(4) of the Allotment Rules specifically stipulates that the licence fee is liable to be

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enhanced @ 5% once in 33 months, the question of APMC demanding enhanced licence fee contrary to the said rule does not arise. The appellant has not placed any material to indicate the basis/rationale of its contention that it is entitled to fix the licence fee contrary to Rule 16(4) of the Allotment Rules.

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It is the vehement contention of the learned counsel for respondent that the persons similarly placed as the petitioner have been executed with lease cum sale agreements consequent to the period of leave and licence having been completed and the petitioner has been singled out.

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At this juncture it is relevant to notice that although the initial period of leave and licence having been completed and the petitioner having submitted an application on 25.02.2008 for the execution of lease cum sale agreement in respect of the allotted premises having been made, the APMC for the reasons best known to it have not considered the same in accordance with law. In this context it is relevant to notice that the direction issued by the

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learned single Judge has adequately addressed the aspect with regard to fixing of the enhanced licence fee as well as consideration of the representation of the petitioner for execution of lease cum sale agreement in respect of the allotted premises.

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It is relevant to notice here that, this Court, vide order dated 10.03.2025, directed the appellant/APMC to, inter alia , file an affidavit as to the execution of lease cum Sale Deeds during the year 2015 in the APMC market yard, Belagavi, pursuant to which, the affidavit of Sri.K.H.Guruprasad, Secretary of APMC, Belagavi was filed, wherein, it has been placed on record that in the year 2015 five persons have been executed with lease cum sale agreements. In view of the same, the APMC has failed to place any material on record as to the reason for the request of the petitioner for execution of the lease cum sale agreement not having been acceded to till this date.

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The contention of the appellant in the present appeal that the writ petitioner has paid enhanced licence fee demanded and in view of the same, it is not open to the writ

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petitioner to challenge the enhancement of the licence fee in

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the writ petition is untenable and liable to be rejected, having regard to the fact that, the appellant has not filed any statement of objections in the writ proceedings, placing on record the details of payment of the enhanced licence fee by the petitioner and while making payment of the same, the enhancement of licence fee made by the appellant/APMC has been accepted by the petitioner. Even in the memorandum of writ appeal, there is no averment with regard to requisite particulars as to the deposit having been made in terms of the enhancement and no document is also produced by the appellant to demonstrate that the petitioner has accepted to the enhancement made by the APMC. In any event, it is not open to the APMC to enhance the licence fee contrary to Rule 16(4) of the Allotment Rules, 2004.

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The contention of the appellant that beyond the

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period of 55 months, the renewal of lease is with new terms and conditions and Rule 13(7) of the allotment Rules prevails over Rule 16(4) of the allotment Rules is ex facie untenable and liable to be rejected, in view of the fact that, Rule 13(7)

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pertains to initial allotments and admittedly the writ petitioner has continued carrying on his business beyond the leave and licence period of 55 months and the request of the petitioner for execution of the lease cum sale agreement consequent to the expiry of the said 55 months has admittedly not been considered by the APMC.

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In view of the aforementioned, the appellant has failed in demonstrating that the order passed by the learned single Judge is erroneous and liable to be interfered with. The appellant has also failed to demonstrate that directions issued by the learned single Judge are erroneous and contrary to law. Hence, the question framed for consideration is answered in the ‘negative’.

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In view of the aforementioned, the above writ appeal is dismissed as being devoid of merit.

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Sd/(S G PANDIT) JUDGE

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Sd/(C.M. POONACHA) JUDGE

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MRK, CT: UMD, List No.: 1 Sl No.: 3

The Secretary v. Shri. Vinayak Yallappa Hongekar

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The Secretary v. Shri. Vinayak Yallappa Hongekar

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