The Commissioner and Anr. Vs the Principal Secretary and… — Contempt of Court | Karnataka HC (2025)

The Commissioner and Anr. Vs the Principal Secretary and… — Contempt of Court | Karnataka HC (2025)

What the court decided

AI extract

Outcome

W.A.No.200165/2024 dismissed; appellants directed to take immediate steps to issue sale certificate and execute registered sale deed conveying auctioned commercial site No.3 at Biddapur, Kalaburagi in favour of respondent Nos.2 to 5 within thirty (30) days; CCC No.200190/2024 closed with liberty to the complainants to file a contempt petition if need arises; no orders as to costs.

Issue for consideration

Whether the Karnataka Housing Board was entitled to cancel the accepted e-auction bid/allotment of commercial site No.3 after the entire sale consideration was deposited, on the objection of a third party, absent any violation of the auction notification dated 21.05.2018 or the Annexure-A3 conditions. +1 more

Court's answer

The cancellation order dated 07.07.2018 and the communication dated 18.07.2018 were passed in violation of principles of natural justice and in violation of the guidelines; the Board's right to cancel the auction exists only if there is violation of the terms of the auction notification dated 21.05.2018 or the Annexure-A3 conditions, and the bid having been accepted on compliance with those terms after payment of the entire sale consideration, the Board cannot turn around and cancel the bid on the alleged complaint of a stranger.

Ratio / Principle

Cancellation of the bid on a stranger's objection, after completion of the entire auction process and without any indicated violation of the auction notification conditions or e-auction guidelines, is illegal, arbitrary and impermissible.

Key takeaways

The learned Single Judge's detailed finding that there was no violation of the terms of sale or the guidelines issued by the appellants is neither perverse nor contrary to law, and calls for no interference in the writ appeal.ratio¶90

Detailed headnote1 paragraphs

High Court of Karnataka, Kalaburagi Bench (01.04.2025; Division Bench of K Natarajan and Vijaykumar A. Patil JJ., CAV judgment per Vijaykumar A. Patil J) — W.A.No.200165/2024 by Karnataka Housing Board (Commissioner and Assistant Executive Engineer) against the Single Judge's order dated 13.06.2024 in W.P.No.202162/2018 (GM-RES), heard with CCC No.200190/2024 alleging willful disobedience of that order. Commercial site No.3 measuring 20309 sq.ft at Biddapur, Kalaburagi was e-auctioned pursuant to notification dated 21.05.2018 (published in Prajavani, Vijayavani and Vijaya Karnataka); respondent Nos.2 to 5 were the highest bidders at Rs.1,350/- per sq.ft; bid accepted 02.06.2018; confirmation letter issued 13.06.2018; entire sale consideration of Rs.2,62,62,900/- (25% totalling Rs.68,84,663/- plus balance 75% of Rs.1,93,78,237/- via bank loan) was paid by 17.07.2018. The allotment was nevertheless cancelled vide order dated 07.07.2018 (communicated 18.07.2018) on the representation dated 03.07.2018 of a stranger, Sri Dhanaya Swamy V.Hiremath, that the site would fetch a higher price. Held (per the Court): (i) the cancellation order and communication were passed in violation of principles of natural justice and of the guidelines; the right to cancel the auction exists only on violation of the auction notification dated 21.05.2018 or the Annexure-A3 conditions; (ii) cancellation of the bid on a stranger's objection after completion of the entire auction process, without any such violation, is illegal, arbitrary and impermissible; (iii) the Single Judge's finding is neither perverse nor contrary to law. Writ appeal dismissed; Board directed to issue sale certificate and execute registered sale deed in favour of respondent Nos.2 to 5 within thirty days; CCC closed with liberty to file contempt if need arises; no costs.