Facts of the Case

The petitioner, Anthon S/o Vidar Fernandes, approached the Karnataka High Court challenging a notice/order issued by the City Municipal Council, Karwar, relating to the allotment of a municipal shop through auction proceedings. Initially, the petitioner sought quashing of the impugned order and also requested a direction to the authorities to consider his representation by following the principles of natural justice.

During the hearing, the petitioner chose not to press the prayer seeking quashing of the impugned notice and restricted the relief sought to consideration of his representation.

Issues Involved

  1. Whether the petitioner was entitled to a writ directing the municipal authorities to consider his representation.
  2. Whether the dispute relating to the municipal shop auction could be resolved through mutual settlement between the parties.
  3. Whether the High Court should dispose of the writ petition after recording the settlement and undertakings of both parties.

Petitioner's Arguments

  • The petitioner requested the Court to direct the municipal authorities to consider his representation in accordance with the principles of natural justice.
  • During the proceedings, after the municipal authorities proposed execution of the lease deed on revised terms, the petitioner agreed to:
    • Accept the revised monthly rent.
    • Pay the applicable GST.
    • Deposit the required security amount.
  • The petitioner also agreed that the Earnest Money Deposit (EMD) could be adjusted towards the rent payable.

Respondents' Arguments

The municipal authorities submitted that:

  • The petitioner had been the highest bidder for Shop No. F6 in the earlier auction.
  • A fresh auction was subsequently conducted, resulting in a lower highest bid.
  • Issuing another fresh notification would consume considerable time and continue causing revenue loss to the Municipal Council.
  • The shopping complex had already remained unutilized for more than two years, resulting in loss of municipal revenue.
  • Therefore, in the interest of public administration and municipal development, they were willing to execute a registered lease deed in favour of the petitioner subject to:
    • Payment of monthly rent of ₹16,500 plus applicable GST.
    • Payment of the prescribed security deposit.
    • Completion of the lease execution process within three months.
  • The respondents further agreed to adjust the petitioner's EMD towards the rent payable.

Court Order / Findings

The Karnataka High Court observed that:

  • The petitioner accepted the proposal made by the municipal authorities.
  • The respondents agreed to execute the registered lease deed in favour of the petitioner.
  • Both parties consented to adjustment of the EMD towards rent.
  • Since the dispute stood resolved through mutual consent, nothing further survived for adjudication.

Accordingly, the Court disposed of the writ petition in terms of the memo filed before it.

Important Clarification

  • A writ petition may be disposed of when parties amicably resolve the dispute during the pendency of proceedings.
  • The High Court can record undertakings given by both parties and dispose of the matter accordingly.
  • Settlement before the Court avoids prolonged litigation and facilitates speedy implementation of mutually accepted terms.
  • Municipal authorities may enter into such settlements where it serves public interest and prevents continued revenue loss.
  • The Court recognized the consensual arrangement without examining the merits of the original challenge after the petitioner withdrew the prayer for quashing the impugned notice.

Sections  Involved

  • Articles 226 & 227 of the Constitution of India
  • Principles of Natural Justice (as relied upon in the petition)

 Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785566752_2505compressed.pdf  

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