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IN THE HIGH COURT OF KARNATAKA
M. Nagaprasanna, J.
RADHIKA BHAT – Appellant
Vs.
MYSORE URBAN DEVELOPMENT AUTHORITY – Respondent
Writ Petition No. 22550 of 2019
Decided On : 20-12-2021
PENALTY - Property Allotment - Karnataka Urban Development Authorities Act, 1987, Rules 19 and 20 - The court discussed Rules 19 and 20 of the Karnataka Urban Development Authorities Act, 1987, which mandate the construction of a building within a specified period and the consequences of failure to do so. The court highlighted that the penalty clause was not in existence at the time of the allotment and restricted imposition of penalty to allotments made after 2001. The court emphasized that even a single rupee of penalty cannot be imposed against a citizen except in accordance with the law, and the communication from the Government cannot permit imposition of penalty contrary to the Rules. The court concluded that the imposition of the penalty was contrary to law and directed the refund of the penalty amount to the petitioner.
Fact of the Case:
The petitioner challenged an endorsement imposing a penalty of Rs.6,60,000.00 for the allotment of a property by the respondent/Mysore Urban Development Authority. The petitioner's predecessors did not construct a house on the allotted site, and the petitioner was asked to pay the penalty for not constructing the house within the stipulated time.
Finding of the Court:
The court found that the imposition of the penalty was contrary to law as the penalty clause was not in existence at the time of the allotment and restricted imposition of penalty to allotments made after 2001. The court directed the refund of the penalty amount to the petitioner.
Issues: The issues involved the imposition of a penalty for not constructing a house on the allotted site within the stipulated time and the legality of the penalty under the Karnataka Urban Development Authorities Act, 1987.
Ratio Decidendi: The court held that the imposition of the penalty was contrary to law as the penalty clause was not in existence at the time of the allotment and restricted imposition of penalty to allotments made after 2001. The court emphasized that even a single rupee of penalty cannot be imposed against a citizen except in accordance with the law.
Final Decision: The writ petition was allowed, and the impugned endorsement imposing the penalty was quashed. The respondent was directed to refund the entire sum of Rs.6,60,000.00 to the petitioner with applicable interest. The amount was to be refunded within eight weeks from the date of the order, failing which the petitioner would become entitled to interest at 12% per annum.
JUDGMENT :
M. Nagaprasanna, J.
1. The petitioner in this writ petition calls in question endorsement dtd. 23/11/2016 insofar as it imposes penalty of Rs.6,60,000.00 against the petitioner towards allotment of site in her favour by the respondent/Mysore Urban Development Authority ('MUDA' for short).
2. Heard Sri K.Arun Kumar, learned Senior Counsel for Sri M.V.Sundararaman, learned counsel for the petitioner and Sri T.P.Vivekananda, learned counsel for the respondent.
3. Brief facts leading to the filing of the present petition, as borne out from the pleadings, are as follows: Karnataka State Group-D Employees House Building Cooperative Society allotted Site No. 7 on 23/12/1988 in favour of late Vishwanath Bhat, father-in-law of the petitioner. Thereafter, the respondent-MUDA executed a lease-cum-sale agreement on 15/11/1991 in favour of the father-in-law of the petitioner. Thereafter, possession of site No. 7 was handed over to the father-in-law of the petitioner on 21/8/1992 by handing over possession certificate of the said date.
4. On 8/11/1998 the father-in-law of the petitioner died and the mother-in-law of the petitioner who succeeded to the property, also died intestate on 21/4/2007 leaving behind her son, the only legal heir, even to site No. 7 that was allotted. Thereafter, the son/husband of the petitioner also died on 19/9/2012 leaving behind him the petitioner and her two children. In respect of properties that stood in the name of the father-in-law and mother-in-law were granted in favour of the petitioner by this Court in Probate Civil Petition No. 12 of 2013. After the petitioner coming to know of the properties applied before the respondent for transfer of khata and execution of registered sale deed of site No. 7 which had come to her name in terms of aforesaid proceedings. In this regard an application was sent on 19/6/2015 to MUDA.
5. In reply, MUDA called upon the petitioner to pay an outstanding amount of Rs.9370.00 as arrears of property tax, interest thereon and transfer fee for allotment of site in favour of the petitioner, which the petitioner complied with and khata of the property stood transferred in favour of the petitioner by an order of the respondent on 3/5/2016. Thereafter i.e., after transfer of khata, the respondent called upon the petitioner to deposit a sum of Rs.6,60,000.00 for execution of sale deed in her favour since the petitioner had succeeded to the property. It was the claim of MUDA that petitioner's predecessor in interest i.e., her father-in-law had failed to construct a house on site No. 7 and therefore, the said amount is towards penalty in terms of the Rules. The petitioner left with no option claims to have paid the said amount of Rs.6,60,000.00 under protest and submitted a representation contending that MUDA has no power to impose any penalty on her under any provision of law, as the petitioner has not sold the property, but has retained it.
6. Since the amount was paid under protest, MUDA executed a sale deed on 14/3/2018 conveying title of site No. 7 in favour of the petitioner. The petitioner after becoming the beneficiary of such execution of sale deed has preferred the subject writ petition calling in question the endorsement of demand of Rs.6,60,000.00 on the score that MUDA is not entitled to impose such penalty and that she has paid the said amount under protest.
7. The learned Senior Counsel appearing for the petitioner would contend that by erroneous interpretation of the Rules, MUDA has charged penalty of 25% of the sital value and such penalty is leviable only if the allottee would sell the site and not retain the site. Insofar as the objection of MUDA, the learned Senior Counsel would point out that after 10 years MUDA has to come forward or execute the sale deed or order cancellation of the allotment. But, no such action is done by MUDA and therefore, it cannot demand penalty from the hands of the petitioner.
8. On the other hand, the learned counsel Sri T.P.Vivekananda
AI
Imposition of penalty must be in accordance with the law, and even a single rupee of penalty cannot be imposed against a citizen except as permitted by law.
Once a sale deed is registered, title transfers to the purchaser and cannot be unilaterally cancelled or altered without court intervention.
The court held that the methodology adopted by the MUDA for determining seniority, which did not consider earlier applications for different measurements, was improper and not supported by the applic....
The automatic cancellation of allotment in case of default in payment and the applicability of Section 34B of the Act only after execution of a lease-cum-sale agreement.
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