Facts of the Case

  • The petitioner filed the writ petition challenging the auction notification dated 24.02.2021 concerning Shop No. G2 in the Fish Market Complex, Karwar, and also sought a direction to the Municipal Council to consider his representation dated 27.08.2020.
  • At the hearing, the petitioner informed the Court that he would not press the prayer seeking to quash the auction notification.
  • The Municipal Council submitted a memo explaining that:
    • The petitioner had earlier emerged as the highest bidder for Shop No. F2 at a monthly rent of ₹25,500.
    • The petitioner later requested allotment of Shop No. G2, for which another bidder had quoted ₹50,000 per month.
    • The earlier auction process was cancelled and a fresh notification was issued on 24.02.2021, followed by a fresh auction.
    • The highest bid for the corresponding shop in the fresh auction was ₹20,500 per month plus GST.
    • To avoid further delay and loss of municipal revenue, the Municipal Council expressed its willingness to execute a registered lease deed in favour of the petitioner for Shop No. G2 at the revised rent along with applicable GST.
  • The petitioner accepted the proposal and undertook to pay the security deposit and rent as required.
  • The respondents further agreed that the Earnest Money Deposit (EMD) already paid by the petitioner would be adjusted towards rent.

Issues Involved

  1. Whether the Municipal Council should be directed to consider the petitioner's representation regarding allotment of Shop No. G2.
  2. Whether the dispute could be resolved on the basis of the mutually agreed proposal placed before the Court by the Municipal Council.
  3. Whether the writ petition required further adjudication after both parties accepted the settlement terms.

Petitioner's Arguments

  • The petitioner stated that he was no longer pressing the challenge to the auction notification.
  • He requested consideration of his representation regarding allotment of Shop No. G2.
  • Upon the Municipal Council's proposal, the petitioner agreed:
    • to accept the allotment of Shop No. G2,
    • to pay the prescribed security deposit,
    • to pay monthly rent of ₹20,500 plus applicable GST, and
    • to accept adjustment of the EMD towards rent.

Respondents' Arguments

  • The Municipal Council submitted that:
    • the previous auction process had been cancelled;
    • a fresh auction had already been conducted;
    • issuing another fresh auction notification would cause further delay and financial loss to the Municipal Council;
    • in the interest of public revenue and development works, it was prepared to execute a registered lease deed in favour of the petitioner on payment of ₹20,500 per month plus GST;
    • the EMD amount deposited by the petitioner could be adjusted towards rent.

Court Order / Findings

The Karnataka High Court recorded:

  • the petitioner's decision not to press the challenge to the auction notification;
  • the Municipal Council's undertaking to execute the registered lease deed;
  • the petitioner's acceptance of the proposal and undertaking to comply with the payment conditions; and
  • the respondents' undertaking to adjust the EMD towards rent.

Since the dispute had been resolved by mutual consent and nothing further survived for consideration, the Court disposed of the writ petition in terms of the memo.

 

Important Clarification

  • The Court did not adjudicate the legality of the auction notification, as the petitioner withdrew that challenge.
  • The writ petition was disposed of solely because the parties arrived at an agreed settlement.
  • The registered lease deed was to be executed in favour of the petitioner in accordance with the terms recorded in the respondents' memo.
  • The petitioner agreed to pay the notified rent, applicable GST, and security deposit.
  • The EMD deposited by the petitioner was directed to be adjusted towards rent.

Link to Download the Order

 
https://www.mytaxexpert.co.in/uploads/1785566762_2506compressed.pdf
 

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