IN THE HIGH COURT OF KARNATAKA, BANGALORE DATED THIS THE 28™ DAY OF SEPTEMBER, 2010 BEFORE THE HON'BLE MR.JUSTICE RAM MOHAN REDDY WRIT PETITION No. 15963 OF 2010(BDA) BETWEEN: S VENKOJI RAQ S/O. LATE G Ki SHANKAR NARAYANA RAO. AGE 64 YEARS R/AT NO.99, 28D BLOCK 2NP STAGE, WEST OF CHORD ROAD MAHALAKSHMIPURAM, BAGNALORE ~ 86. PETITIONER (BY SRI. R S HEGDE, ADV) AND: THE BANGALORE DEVELOPMENT AUTHORITY, 1 CHOWDAIAH ROAD KUMARA FARK WEST BANGALORE - 20 R#P.BY ITS COMMISSIONER. .. RESPONDENT (BY SRI. M N RAMANJANEYA GOWDA, ADV) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ORDER DATED 28.4,2010 VIDE ANN-N ISSUED BY THE RESPONDENT AS ILLEGAL AND WITHOUT AUTHORITY OF LAW; AND ETC. THIS PETITION COMING ON FOR PRL.HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:ORDER Industrial Site No.80/E, Industriai. Suburb I Stage in the layout formed by the Bangalore Development Authority (for short “BDA), was allotted to one Kulle Gowda, S/o. Yalakki Gowda and put in jon under Possessicn Certificate dated poss 25.02.1981 Annexure: " ona lease for 10 years. It appears that the respondent ~ BDA executed and lodged for registration a conditional deed of sale dated 6.2.1987 Annexure-“B” conveying the property in question to the allottee, for a valuable consideration including the lease reatals for the period 12.01.1981 to 11.01.1991, entitling the allottee to exercise absolute and full ownership rights over the property conveyed, however, with 2 condition to put up construction within the period specified under the lease-cum-sale agreement or such further period as may be allowed by the BDA in terms of the lease-cum-sale agreement dated 12.01.1981. Thereafterwards, one K.T. Gowda, claiming beto be the son of the allottec, executed a sale deed dated 12.02.1987 conveying the property in favour of the petitioner for a valuable consideration: The BDA having accepted the sale deed conveying the preperty in favour of the petitioner, issued a Katha certificate dated 16.03.1991 Annexure-"D" certifying that the katha of the property was changed te the name of the petitioner and thereafterwards issued property tax challans in the name of the petitioner, who paid the taxes. The site having fallen within the territorial jurisdiction of the BBMP, tre petitioner paid taxes as acknowledged by the BBMP. Years rolled by but the industrial building was not erected though a condition in the allotment of the site. The BDA, by show cause notice dated 7.1.2010 Annexure-“M”, proposed cancellation of the site for violation of the condition in not erecting the building within the time stipulated in the lease-cum-sale agreement and sought an explanation within seven days which was promptly responded to by reply dated ba11.01.2010 Annexure-“M1” of the petitioner iieratia contending that though the plan was approved. fer construction of the building, nevertheless, due to inadequate financial support fron: Banks arid ill health, the petitioner again made an unsuccessful attempt in the year 2001 since there was recession and his children were unabie to assist. him as they were pursuing studies, was unable to put up the construction. Jn addition, it was stated that a borewell was installed anda compound wall erected and that Kulle Gowda to whem the notice was addressed, was not the owner. It is also stated that the petitioner's son is returning after having studied abroad and intends to start a design and consultancy business and that a portion of that site is intended to be gifted to a charitable institution for construction of a Prarthana Mandir as the petitioner has promised his Guru and therefore, there is no violation of the conditions of allotment. Lastly it is stated that he has filed an bd5 application for change of land use by which a portion will be put to use for public purpose and the remaining for construction of an office. The BDA did not take kindly to the explanation offered and by order dated 28.04.2010, Annexure-“N", cancelled. the allotment. Hence, this writ petition. 2. Petition is opposed by filing Statement of objections inigratia acinitting the fact of allotment of the sale and that the original allottee Kulle Gowda having violated the conditions of allotment, the notices issued on 21.04.1988 and 20.06.2000 whence no reply was received and therefore, the Commissioner, by order dated 2:1.2010, directed issue of yet another show cause notice to the petitioner on 7.1.2010 for violating the condition of allotment. The failure to put up construction of an industrial building in the industrial suburb is the cause for the cancellation.3, Having heard the learned counsel for the parties and perused the pleadings, the following two questions arise for decision making: (i) (ii) {iii} Whether in the facts ‘ond circumstances, respondent ~ BDA has complied with sub- rule (7) of Ruie 12 of the Bangalore Development Authority (Allotment of Sites) Rules, 1984 in the matter of cancellation of the aliotment? Whether the power to cancel the conditional sale deed Annexure-“B” vests with the Court or with the BDA? Whetiver the initiation of suo-moto power to cancel the allotment is within reasonable time? Reg. Point No.1: In the admitted facts the allotment of an industrial site in an industrial suburb, a layout formed by the respondent - BDA, cannot but be for establishing an industry, by industrious entrepreneurs in the State of IshKarnataka. There can be no dispute that the allotment was on the condition that the allettee put up construction of an industrial building within a period of two years, in terms of the lease-cum-sale agreement dated 12.01.1981. So also, it is not in dispute that the allotment was subjected to the City of Bangalore Improvement (Restrictions, Conditions and Limitations as sales of sites} Rules, 1968 as set out in the convenants. in the conditional deed of sale Annexure- “B", although by 6.2,1987, the date of Annexure-“B" conditional saie deed, there was in force the BDA (Allotment of Sites), Rules, 1984 repealing the Bangalore Development Authority (Allotment of Sites) Rules, 1982. The reiévant rule under the City of Bangalore Improvement (Restrictions, Conditions and Limitations as Sales of Sites) Rules, 1968 is not made available to the Court nor is it relied upon by the respondent in the matter of cancellation of the allotment except to contend that the conditional sale deed imposed a condition of bkconstruction of the building within the time stipulated under the lease-cum-sale agreement dated 12.01.1981. 4, In the light of the admitted facts, the allottee having not put up the construction of the building during the period of 10 years iease, the BDA took no action at the earliest over the violation/breach of condition of allotment or terms of the lease-cum-sale agreement. In addition though there was a specific bar not to alienate the industrial site during the lease period, the BDA, for reasons not known, executed a conditional saie deed on 6.2.1987 Annexure-"B”, much after the expiry of the period during which the industrial building had to be constructed. There is no explanation of the BDA as to why such a course of action was taken and why the allotment was not cancelled for violation/breach of the terms of the lease- cum-sale agreement. After the execution of the conditional sale deed, the allottee did not put up baconstruction and the BDA, did not take actior: against the allottee. Significantly, the BDA accepted conveyance of the site under the sale deed dated 12.02.1987 Annexure ~ ‘C’ in favour of the petitioner by the person claiming to be the son of the allottee, as is animated from the Katha Certificate dated 16.03.1991 Annexure-"D". Yet again, the BDA fafied to take action against cither the allottes or the petitioner for violation/kreach of the terms and conditions of the lease-cum-sai# agreement as well as the conditional sale deed. ‘the BDA in fact acquiesced in the right of the petitioner by receiving from him the taxes on the property. 5. When things stood thus, the BDA, without an explanation, issued the show cause notice in the year 2010 alleging violation of terms and conditions of the lease-cum-sale agreement and the condition of sale deed followed by the cancellation of the site by the order I10. impugned. Apparently. as can be gathered from the arguments advanced by the learned counsel for the BDA, what was invoked for the cancellation of. the allotment was sub-rule (7) of Rule 15 of the BDA {Allotment of Sites) Rules, 1984 which reads thus: “13(7) The allotiee shai! construct a building within a period of five years from the sate of execution cf the agreement or such extended period as the Authority may in any specified case by written order permit. If the building is not constructed within the said period the allotment may after reasonable notice to the alllottee be cancelled, the agreement revoked, the lease determined and the allottee evicted from the site by the authority and after forfeiting twelve and half per cent of the value of the site paid by the allottee the authority shall refund the balance to the allottee.” 6. The rule is para materia with sub-rule (6) of Rule 13 as it existed prior to the amendment to the pARules, and interpreted by a learned Singic Judge in SMT. B.K. PARVATHAMMA vs. BANGALORE DEVELOPMENT AUTHORITY, BANGALORE!. In the said decision, the very question as to whether the cancellation of the allotment by the BDA was in accordance with Rute 13(6) of tne Rules, was answered thus: “A perusal of this rule and the term of the agreement per s¢ reveal that cancellation of allotment is not in itself sufficient to deprive the allottee of his right over the property, subject-matter of an agreement of Jease-cum-sale or lease-cum-sale agreement, really, that agreement has to be revoked, the jease had to be determined in accordance with law, terms and conditions of the agreement and possession could only be taken after having paid the balance of amount deposited by the lessee or purchaser to him not in full, but after deduction of 12 and 4%. The remainder of the amount “998 LIST ne42 deposited after deduction of the 12 and 72%, has to be refunded by the authority. to the allottee, then and then only the cancellation could be said to have been effectively done.” 7. In my opinion, applying the eaid observation to the facts of this case, the procedure followed by the respondent - BDA not being consistent with the view taken by this Court, the order dated 28.04.2010 Annexure-"N” must fail. ‘fhe first point is answered accordingly. Reg, Point No. The power to cancel the conditional sale deed Annexure-"B" undoubtedly vests with the Court and cannot be exercised by the BDA in the light of Section 31 of the Specific Relief Act. This Court, claborately considered the applicability of Sec.31, in BINNY MILL LABOUR WELFARE HOUSE BUILDING CO- hu uNOPERATIVE SOCIETY LIMITED vs. MRUTHYUNJAYA ARADHYA?, and obser ed thus: “37, A reading of the aforesaid provision makes it clear that both void and voidable instruments ean be cancelled by the Court. The cause of action for such an action is an apprehension, i such an instrument is left outstanding may cause serious iajury to the person against whom the written instrument 's void or voidable. Such a person has the discretion to approach a competent Civil Court for adjudging the. said instrument to be delivered up and cancelled. Even though in law a void instrument is unenforceable, has no value in the eye of law, void ab initio, the very physical existence of such a document may cause a cloud on the title of the party or cause injury or one can play mischief. Therefore, the law provides for cancellation of such instruments which are also non est. but which are in existence as a fact physically to get over the effect of such TLR 2008 KAR 2245 dwtinstrument. Once such an instrument is registered, the said registration has the effect of informing and giving notice to the World at large that such a document has been executed. Registration of a docuraent is a notice to all the subsequent purci:asers or encumbrances of the same property. The doctrine of construciive notice is attracted Therefore, the effect of registration of an rights of the Parties to the instrument but also affects instrument not only affects it parties. who may clam under them. Therefore, once such an instrument. is ordered to be delivered up and cancelled an obligation is cast upon the Court to send a copy of its decree to the officer in whose office the instrument was registered, so that such an officer shall note on the copy of the instrument contained in his books the fact of its cancellation. Once such an entry is made in the books of the Sub-Registrar about the cancellation of the registered instrument, it also acts as a notice of cancellation to the whole World and it is also a constructive notice of cancellation of the said instrument. Jakds 38. Part X of the Indian Registration Act, 1908 deals with effect of registration and non-registration of an instrument. A combined reading of Sections 47, 48 and 49 makes it clear that an instrumeat which purports to transfer iitle to the property requires to be registered, the title does not pass until registration has been affected. The registration by itself does not create a new title. It only affirms a titie that has been created by the deed. The title is complete and the effect of registration is to make it unquestionable and absolute. Section 47 of the Act makes it clear that a registered document shell operate from the time from which it would have commenced to operate if no registration thereof had been required or made and not from the time of its registration. The Section however does not say when a sale would be deemed to be complete. However, Section 47 of the Registration Act makes it clear that, though a document is registered on a_ particular date, the effective date would be the date on which the said document was executed and J16 not from the date of registration. if the document is not registered but — is compulsorily registerable, though — the document is duly executed, it as no iegai effect and it does not affect the iramevable property comprised in the said document in view of Section 49 of tke Act. The registration of such a duly executed document comes inte operation, the moment is duly registered, not from the date of registration put frem the date of execution of the said document. Section 54 of the Transfer of Property Act, 1882, which deals with sales of immovable property mandates emphatically the transfer of _ tangible immovable property of the value of one hundred rupees and upwards, can be made only by a registered instrument. Thus, without registration there is no transfer of ownership of the property. Therefore, it is clear that the act of registration in the scheme of things is not a mere instance of the State collecting some registration fee and providing authenticity to a written instrument. It is by the act of registration, Inkat the title in the property passes to the transferor, from the date of execution of the deed of transfer. Once such sale takes place, transfer is complete, the vendor of the Property ceases to be the owner of the Property. Thereafter if ne executes one more sale deed in respect of tie same property or a cancellation deed in respect of the property already sold, in faw it has no value, and it in no way affects the sale deed already executed. It is invalid, void, and non-est.” 8. Having regard to the covenants in the conditional sale deed Annexure-“B” that Kulle Gowda, the allottee is entitled to exercise absolute and full ewnership rights in the property conveyed, the respondent —- BDA the cancellation of the conditional sale deed without taking recourse to the provisions of the Specific Relief Act, is illegal. The second point is answered accordingly.8 9. All that can be said in this case is that the BDA instead of initiating action at the earli st opportunity against the allottee Kulle Gowda in accordance with the allotment rules as in force en the date when the Gefault was committed, for whatsoever reasons. assisted Kulle Gowda by executing < conditicna! sale deed covenanting that he was entitled to exercise absolute rights over the property. ‘The failure on the part of the BDA to ensure strict cempliarice witit the terms of the allotment to put up the construction within the time stipulated, is inaction on the part of the BDA, for various reasons. The Board of the BDA is instrumental in assisting the ailottee who had committed breach of the terms of the agreement, are guilty of mal-administration. The non- exercise of statutory duty invested in the respondent — BDA has resulted in the petitioner not otherwise entitled to the public property in question by purchasing the same within the period of non-alienation did flout rule of law. There is an imminent need to take action btagainst the officers concerned after holding an enquiry and ensure that such conduct by either the officers or the Board of the BDA is not repeated in future. Reg. Point N 10. In the backdrop of admitted facts, the allotment in the year 198i coupled with delivery of possession and the execution of the lease-cum-sale agreemeni, the corditional sale deed, and the sale of the site by the allottee acqiiesced in by the BDA, the action of the respondent — BDA proposing cancellation of the allotment, after expiry of 29 years, smacks of abuse of power. A Division Bench of this Court in the case of BANGALORE DEVELOPMENT AUTHORITY REP. BY iTS COMMISSIONER vs. SMT. SUMITRADEVI? while invalidating an action of cancellation of allotment initiated after a long gap of 18 years held thus: “There can be no doubt that where no power of limitation is prescribed by an Act or the Rules made thereunder for the exercise MILR 2004 KAR 1386 It20 of suo moto statutory power, the exercise of that power cannot be impugned on the ground that it is barred by limitation. No period of limitation can be — imposed otherwise than by statute or the rules made thereunder. But, nonetheless, the power vested in an authority to revise the orders of the subordinate authorities er to take any adverse action against a person suo moto, has to be exercised within a reasonable time. In our view, in cases where no period of limitation is prescribed under the Statute or the Ruics made thereunder for exercise of powers suo moto, the question for consideration is not whether the exercise of the power is barred by limitation for in the absence of a period of limitation prescribed under the Act, the question of bar of jimitation cannot arise, but it is a question of reasonable period within which that power should be exercised. What is reasonable period within which the statutory suo moto power could be exercised would undoubtedly be dependent upon the facts and circumstances of each case.” bh2b 11. In the light of the observations and the fact that a long period of 29 years having rolled by, it is needless to state that the initiation of proceeding by the BDA was unreasonableness, unfairness and arbitrary, and hence unsustainable. Point No.3 is answered accordingly, 12. In the result the writ petition is allowed. The show cause aotice dated 7.1.2010 Annexure-“M" and the order 28.04.2010 Apnexure-“N" are quashed. The Commissioner, BDA is directed to hold an enquiry into the mal-administration noticed supra and to take action, in accordance with law and submit a report to the Registrar General within six months. Sd/- Judge KS