(Prayer: This writ petition is filed under article 226 of the Constitution of India praying to quash the endorsement dated 19/08/2023 in bemapra/uka-3/sir.m.v/2521/23-24 issued by the respondent no.2, vide annexure-f as illegal.

This writ petition is filed under Article 226 of the Constitution of India praying to call for the records relating to issue of the impugned orders bearing no.bem aa pra/oo ka-3/sir.mv/2522/2023-24 dated 19.08.2023 issued by the 2nd respondent (vide annexure-w) and after perusal set aside the same and etc.)

Oral Order:

1. These writ petitions are directed against the endorsement issued by the Bengaluru Development Authority (BDA), calling upon the petitioners to surrender the original documents relating to site Nos.2521 and 2522 situated at Sir M Vishweshwaraiah Layout, 2nd block, Bengaluru on the ground that the said sites are corner sites required to be disposed of only through public auction under the Bengaluru Development Authority (Disposal of Corner Sites and Commercial Sites) Rules, 1984 (‘Rules, 1984’ for short). The petitioners, who are in possession under the registered sale deed executed by BDA in 19.10.2004 and 15.02.2006 respectively, challenged the legality of the said endorsement and the consequential auction proceedings, whereby respondent Nos.3 and 4 have been issued sale deeds and possession certificates.

2. As the issues involved in both petitions arise out of the same layout, same block, adjoining sites and common legal questions, they are heard together and disposed of by this common order.

Brief facts W.P.No.19707/2023:

3. The petitioner was allotted site No.2521, measuring 30x40 feet in 2003 as an intermediate site in Sir M Vishweshwaraiah Layout (Sir M.V.V Layout). A registered sale deed was executed in his favour on 19.10.2004, followed by issuance of possession certificate and katha. The petitioner has been in possession for nearly two decades, paying taxes and maintaining the site. On 19.08.2023, the BDA issued an endorsement directing him to co-operate for cancellation of the sale deed stating that the site was auctioned on 01.06.2023 and respondent Nos.3 and 4 were successful bidders. The petitioner contends that his site was never a corner site and that the BDA has illegally treated his long standing allotment as void after altering the layout and auctioning the site.

Brief facts W.P.No.12656/2023:

4. The petitioner was originally allotted a different site but, after multiple alteration was allotted site No.2522, measuring 9x12 meters by BDA in 2006. A registered sale deed was executed on 15.02.2006, thereafter; possession certificate and katha were issued. It is stated that she has been in lawful possession since then. On 19.08.2023, BDA issued endorsement, asking her to return the original document, stating that the site is a corner site and was wrongly allotted. Meanwhile, the BDA conducted an auction on 10.06.2023, and respondent Nos.3 and 4 became successful bidders and having issued a registered sale deed and possession certificate. The petitioner challenges the endorsement and the auction, contending that the site of the petitioner was never a corner site and that the auction was void.

Objections of respondent Nos.1 and 2 are common in both cases:

5. It is stated that both sites Nos.2521 and 2522 were always corner sites as per the approved layout plan. It is further stated that allotments made in 2004 and 2006 were illegal, contrary to Rule 3 of the Rules, 1984, which mandates that the corner sites can only be disposed by auction. It is further stated that the allotments were made due to oversight, mis-measurement and internal errors and that the petitioners were asked to return the original documents so that an alternative sites could be allotted but instead they have approached this Court. It is the contention of the respondents that impugned endorsement are only a show cause notices and the writ petitions under Article 226 of the Constitution of India are not maintainable. It is further stated that BDA has already lawfully auctioned the corner sites, registered sale deeds in favour of respondent Nos.3 and 4, issued possession certificate and thus cannot reverse the auction. It is denied about any alteration of layout but states that the approved layout always depicted the sites as corner sites.

Objections of respondent Nos.3 and 4 in W.P.No.19707/2023:

6. Respondent Nos.3 and 4 submit that they are lawful auction purchaser, having paid full bid amount after open the auction. The petitioners sale deeds show wrong boundaries and referred to a non-existent subdivision (2521/1) and that the petitioner's possession is not proved and the encumbrance certificate does not reflect the petitioner's name. It is contended that he has constructed a shed, taken electricity, dug bore well and spent huge amount and the petition is a belated attempt to obstruct lawful possession. It is contended that the petitioner cannot take advantage of the BDA's illegal allotment and the corner site must be auctioned and therefore their sale deed alone is valid.

Objections of respondent Nos.3 and 4 in W.P.No.21656/2023:

7. Respondent Nos.3 and 4 contend that the petitioner's document are fabricated, possession certificate and katha was signed before the sale deed registration. That the layout plan never shows any subdivisions such as 2522/1 and that their encumbrance certificate of 2004 to 2023 shows site always stood in BDA's name. They claim to be the bonafide purchasers for value in open auction and they have constructed a shed, taken electricity, paid taxes and amalgamated site Nos.2521 and 2522 with BDA approval.

8. Heard Sri Prakash M.H., learned counsel for the petitioner in W.P.No.19707/2023, Sri Vijaya Kumar, learned counsel for the petitioner in W.P.No.21656/2023, Smt. Deepti Ayathan, learned counsel for respondent Nos.1 and 2 and Sri Irishad Ahmed, learned counsel for respondent Nos.3 and 4 in both the case.

9. Learned counsel for the petitioners contends that they are allotted intermediate sites by the BDA after due process, and the registered sale deeds were executed in their favour in 2004 (site No.2521) and 2006 (site No.2522) respectively. Possession certificates, katha and tax records were issued, and they have been in continuous peaceful possession for nearly two decades. It is argued that their sites were never classified as corner sites in the approved layout at the time of allotment. The presence of subdivisions such as site Nos.2521/1 and 2522/1 in the sale deeds demonstrate that these were intermediate plots, not corner sites. The BDA cannot retrospectively rely on later measurements and altered sketches to reclassify them. Rule 3 of the Bangalore Development Authority (Allotment of Sites) Rules, 1982 (‘Rules, 1982’ for short) was amended only in 2011 and it is submitted that Rule 3, which introduced the distinction between the corner site and intermediate site, came into force only in 2011 long after their allotments and that the BDA cannot apply 2000 Rule retrospectively to undo the settled rights created in 2004 and 2006. They further rely upon Rule 5 of the Rules, 1982.

10. They rely on the Apex Court decision in K. Raju Vs. Bengaluru Development Authority, by its Commissioner (2010 0 Supreme (Kar) 1091) (K. Raju), which holds that once a sale deed is executed, title passes subsequently and the vendor loses all rights. Any cancellation must be made by a competent Civil Court under Section 31 of the Specific Relief Act, 1963 (‘Act, 1963’ for short). It is argued that the BDA acted behind their back by unilaterally declaring the sites as a corner sites, conducting an auction and executing a new sale deeds in favour of respondent Nos.3 and 4 without ever notifying the petitioners and this violates the basic principles of natural justice, fairness and statutory procedure.

11. They also rely upon the decision of the Apex Court in Joint Collector, Ranga Reddy District and Another etc. Vs. D. Narasimh Rao and Others etc. (AIR 2015 Supreme Court 1021) (Ranga Reddy) to contend that even where no limitation is prescribed, administrative powers must be exercised within a reasonable period. Re-opening allotment after 17 to 20 years is an abuse of power amounting to fraud on the statute. The endorsement requires surrender of original sale deed and assert that the sites have already been auctioned. Such notices cause civil consequences and therefore judicial interference is warranted.

Contentions of Respondents Nos.1 and 2:

12. Per contra, it is contended by the BDA that the site Nos.2521 and 2522 were always corner sites in the approved layout. Under Rule 3, corner site cannot be allotted but must be disposed of only by public auction. The earlier allotments were made due to oversight and are therefore illegal. According to respondent Nos.1 and 2, the petitioners cannot take advantage of an illegal allotment, if the sale deeds are executed by mistake, the BDA is entitled to correct such mistake and retrieve the sites. It is argued that the notices merely require the petitioners to submit documents and offer explanation and that the petitions are premature. The auction has been held in 2022-23 lawfully and respondent Nos.3 and 4 came forward as highest bidders.

13. The reliance is placed on the decision of the Apex Court in Bangalore Development Authority Vs. State of Karnataka (C.A.No.7661-7663/2018 D.D 26.10.2021) (BDA) and City Montessori School Vs. State of UP and Others (C.A.No.8355/2024) (City Montessori School) to assert that public property, especially corner site, must be disposed of only through fair and transparent auction. Reliance is also placed on Ramchandra Keshav Adke (dead) by LR’s Vs. Govind Joti Chavare and Others ((1975) 1 SCC 559) (Ramchandra Keshav Adke). It is contended that encumbrance certificate obtained prior to auction showed the sites as still standing in the name of BDA, suggesting that the petitioners’ documents were either irregular or not reflected in revenue records. It is submitted that the BDA has authority to correct misalignment, wrong measurements and erroneous allotments discovered during later scrutiny.

Contentions of respondent Nos.3 and 4- auction purchasers:

14. Learned counsel for respondent Nos.3 and 4 contends that the respondents are lawful highest bidder in a public auction, having paid the full bid amount through transferring process. It is argued that the boundaries mentioned in the petitioners’ sale deeds refer to a non-existent, sub-division such as site Nos.2521/1 and 2522/1, proving the petitioners’ document do not correspond to actual layout. It is contended that the petitioners have not established physical possession, whereas, respondent Nos.3 and 4 have constructed sheds, obtained electricity, dug bore wells, paid taxes and developed the sites.

15. It is further contended that the litigation is motivated and only after the BDA issued them sale deeds, they commenced the work. It is reiterated that BDA mistakenly allotted corner sites to the petitioners and only the auction purchasers have legal right after auction.

16. Having heard the learned counsel for the parties, the point that arises for consideration is:

                  “Whether the BDA, after execution of registered sale deeds in favour of the petitioners in 19.10.2004 and 15.02.2006 and after long settled possession can reclassify site Nos.2521 and 2522 as corner sites and nullify the allotments by invoking Rules, 1984 and further whether the subsequent auction sale in favour of respondent Nos.3 and 4 overrides the petitioners’ prior registered rights?”

17. This Court has given its anxious consideration to the contentions urged and perused the material on record.

Reasons and findings:

18. The central question is whether, after execution and registration of sale deeds in favour of the petitioners on 19.10.2004 and 15.02.2006, the BDA can, nearly two decades later, unilaterally re-categorize the site as “corner sites”, declare the earlier allotments as illegal, and direct surrender of documents and auction the very same properties in favour of respondent Nos.3 and 4. It is well settled that once a sale deed is executed and registered, the title to the property stands absolutely transferred, and the transferor divests itself of all rights. While dealing with a similar issue, the Apex Court in K. Raju's case framed the following points for consideration:

                  “16. Having regard to the contentions urged, the questions for consideration in these Writ Petitions are as under:

                  (i) Whether the State Government has the power to direct the BDA to allot the sites under ‘G’ category as per the circular dated 6.8.1997 to the persons in public life?

                  (ii) Whether the BDA has the power to cancel the sale deeds executed by it earlier in favour of the Petitioners/their vendors?

                  Re. Point No. (i):”

                  and relying upon Binny Mill Labour Welfare House Building Co-operative Society Limited Vs. D.R.Mruthunjaya Aradhya (ILR 2008 KAR 2245) (Binny Mill Labour Welfare House), the Apex Court at paragraph Nos.43 and 44 has held as under:

                  “43. It is clear from the above provision that both void and voidable instruments can be cancelled by the Court. This Court in Binny Mill Labour Welfare House Building Co-Operative Society Limited v. D.R. Mruthyunjaya Aradhya [ LLR 2008 KAR 2245.] was considering a similar case where the vendor of the property had unilaterally cancelled the sale deed. It is held as under:

                  “Unilaterally he cannot execute what is styled as a deed of cancellation, because on the date of execution and registration of the deed of cancellation, the said person has no right or interest in that property. Normally what can be done by a Court can be done by the parties to an instrument by mutual consent. Even otherwise if the parties to a document agree to cancel it by mutual consent for some reason and restore status quo ante, it is possible to execute such a deed. An agreement of sale, lease or mortgage or partition may be cancelled with the consent of the parties thereto. Because in the case of agreement of sale, lease, mortgage or partition, each of the parties to the said document even after the execution and registration of the said deed retains interest in the property and, therefore, it is permissible for them to execute one more document to annul or cancel the earlier deed. However, it would not apply to a case of deed of sale executed and registered. In the case of a sale deed executed and registered, the owner completely loses his right over the property and the purchaser becomes the absolute owner. It cannot be nullified by executing a deed of cancellation because by execution and registration of a sale deed, the properties are being vested in the purchaser and the title cannot be divested by mere execution of a deed of cancellation. Therefore, even by consent or agreement between the purchaser and the vendor, the said sale deed cannot be annulled. If the purchaser wants to give back the property, it has to be by another deed of conveyance. If the deed is vitiated by fraud or other grounds mentioned in the Contract Act, there is no possibility of parties aggreing by mutual consent to cancel the deed. It is only the Court which can cancel the deed duly executed, under the circumstances mentioned in Section 31 and other provisions of the Specific Relief Act, 1963. Therefore, the power to cancel a deed vests with a Court and it cannot be exercised by the vendor of a property.

                  44. It is thus clear that when the sale deed executed and registered, the owner completely loses his right over the property and the purchaser becomes the absolute owner. It cannot be nullified by executing a deed of cancellation because by execution and registration of a sale deed, the properties are being vested in the purchaser and the title cannot be divested by mere execution of a deed of cancellation. Therefore, even by consent or agreement between the purchaser and the vendor, the said sale deed cannot be annulled. If the purchaser wants to give back the property, it has to be by another deed of conveyance. If the deed is vitiated by fraud or other grounds mentioned in the Contract Act, there is no possibility of parties agreeing by mutual consent to cancel the deed. It is only the Court which can cancel the deed duly executed, under the circumstances mentioned in Section 31 and other provisions of the Specific Relief Act, 1963. Therefore, the power to cancel the deed vests with a Court and it cannot be exercised by the vendor of a property. After execution and registration of the sale deed, the BDA cannot determine the validity of the sale deed. It can neither execute a cancellation deed unilaterally. If the BDA is of the view that the sale deed executed by it is contrary to law, it has to approach the Civil Court for its cancellation as provided under Section 31 of the Specific Relief Act, Point No. (ii) is answered accordingly.”

                  Emphasis supplied

19. The Apex Court held that a vendor cannot unilaterally cancel a registered sale deed. On the date of a purported deed of cancellation, the vendor has no right, title or interest left in the property, cancellation of a registered sale deed can be done only by mutual consent of parties or through Competent Civil Court under Section 31 of the Act, 1963. Once a sale deed is executed, the owner completely loses his right and the purchaser becomes absolute owner. The Apex Court observed that if the BDA is of the view that the sale deed executed by it is contrary to law, it has to approach the Civil Court for the cancellation as provided under Section 31 of the Act, 1963 and point No.2 framed was answered accordingly.

20. Applying the above principles, BDA having voluntarily executed and registered sale deeds in favour of the petitioners cannot annul the said sale deeds, treat them as void ab initio and demand surrender of original or auction the very property as if it is still vested in it. The law is explicit, BDA lost title the day it executed the registered sale deeds. If it is believed that the allotment was contrary to the Rules, 1984, the only remedy available was to approach a Civil Court for cancellation of the deeds under Section 31 of the Act, 1963, not to unilaterally undo vested rights.

21. The petitioners' sale deeds were executed in 2004 and 2006. The impugned endorsement was issued in the year 2023, nearly after 17 to 19 years. During this long period, the petitioners were in possession, kathas were issued and taxes were collected by BDA and BBMP and no proceedings were ever initiated questioning the allotments.

22. The Apex Court in Ranga Reddy’s case stated supra has held at paragraph No.24 as under

                  “24. To sum up, delayed exercise of revisional jurisdiction is frowned upon because if actions or transactions were to remain forever open to challenge, it will mean avoidable and endless uncertainty in human affairs, which is not the policy of law. Because, even when there is no period of limitation prescribed for exercise of such powers, the intervening delay, may have led to creation of third-party rights, that cannot be trampled by a belated exercise of a discretionary power especially when no cogent explanation for the delay is in sight. Rule of law it is said must run closely with the rule of life. Even in cases where the orders sought to be revised are fraudulent, the exercise of power must be within a reasonable period of the discovery of fraud. Simply describing an act or transaction to be fraudulent will not extend the time for its correction to infinity; for otherwise the exercise of revisional power would itself be tantamount to a fraud upon the statute that vests such power in an authority.”

23. The Apex Court observed in Ranga Reddy that where no limitation is prescribed, the exercise of such power must still be within a reasonable time, intervening third party rights cannot be trampled by belated exercise of power, merely alleging fraud does not permit the reopening transaction after an indefinite period and delayed exercise of revisional and supervisory jurisdiction amounts to fraud on the statute. Applying these above doctrine, the BDA had no surviving power to revisit the allotments after two decades. The impugned endorsement issued in 2023 are barred by gross and unexplained delay. The settled rights perfected through the registered documents cannot be unsettled by an administrative circulars or internal observation of the layout section. Thus, the long passage of time alone vitiates the impugned action.

24. The petitioners’ consistent case is that they were allotted intermediate sites, Rule 3 of the BDA (Allotment of Sites) Rules 1984, defining and distinguishing intermediate and corner sites was amended only in 2011. The concept of “intermediate site”, did not exist in statutory rules at the time of the allotment in the year 2004 or 2003, therefore applying Rule 3 as amended in 2011 retrospectively, to undo the vested right is legally untenable. This contention merits acceptance. A statutory rule cannot apply retrospectively to reopen concluded transaction. Rule 3 was amended in the year 2011 including the intermediate sites and now cannot be pressed into service to describe long allotted sites as “corner sites”. Any alteration to an approved layout can only take place by following the mandatory process under the BDA Act, which includes publications, objections and sanctions. No such process has been followed.

25. Once the BDA executes a conveyance, it becomes functus officio in respect of that sites. Possession, enjoyment and mutation records vest with the allottee and the BDA cannot unilaterally alter the site boundaries, enlarge or shrink the dimension, merge marginal lands. To recast the site as a corner site or dispossess the allottee. Thus, the endorsement requiring surrender of original documents is wholly without jurisdiction. Respondent Nos.3 and 4 are purchasers in auction. However, the BDA could not have auctioned what it has no longer owned. The auction is built on an illegal foundation. The unilateral administrative reclassification of the petitioners' land. Therefore, the auction notification, auction confirmation, and sale deeds in favour of respondent Nos.3 and 4 cannot override the petitioners’ prior registered sale deeds.

26. The respondents have relied upon the several decisions to contend that site Nos.2521 and 2522 are corner sites which must be mandatorily disposed of only by public auction and not by allotment. However, on careful consideration, this Court finds none of the judgments relied upon by the respondents govern or even contemplate the factual matrix present in this writ petition for the following reasons:

                  i. C.A.No.7661/2018 (BDA) case stated supra, it was held that the corner site must be auctioned. Allotment of corner sites under the allotment rules is impermissible. In that case no register sale deed had been executed in favour of any allottee. Title still vested with BDA. The challenge arose before rights crystallized and before any third party interest had intervened. The issue related to initial disposal of corner sites, not to retrospective re-characterization of sites decades after conveyance. Here the petitioners’ sale deeds were executed in 2004 and 2005, followed by khata, taxes, possession certificate and settled possession for nearly two decades. The threshold question is not whether a corner site must be auctioned, but whether BDA can reopen and annul a registered sale deed after divesting its title, which under similar circumstances has been held in the K. Raju's case stated supra.

                  ii. In City Montessori School’s case, the issue was the transfer of public property must be through a fair and transparent process to maximize value. In the present case, the BDA had already executed absolute sale deed extinguishing their ownership and once the title had passed, the doctrine of transparency in disposal of public property does not resurrect title in the vendor.

                  iii. In Ramchandra Keshav Adke’s case was relied upon for stating that the rule that when law prescribes a mode it must be strictly followed. It is well settled that mandatory statutory procedure which the statute states has to be followed. This decision cannot be stretched to permit the BDA to reopen and invalidate re-conveyances executed long back and the procedure for cancellation of those conveyances. There is a procedure to be followed and not in the manner it is being done. The decision reliance by the respondents do not involve the unilaterally decisions taken by the BDA by auctioning the property to a third party while already there was a re-conveyance and does the authorities placed reliance by the respondents are not applicable to the present facts.

27. As the present case concerns, “what BDA can or cannot do after it had already disposed of the property through a registered sale deeds”. On this precise question, the binding law is not the decision relied by the respondents but the Apex Court's judgment relied on by the petitioners in K. Raju, Binny Mill Labour Welfare House, and Ranga Reddy, which all held that a registered sale deed cannot be unilaterally cancelled, title once transferred cannot be reopened administratively. Merely asserting, “mistake or fraud”, does not revive extinguished ownership.

28. Though the respondents claim that the impugned endorsement is only a show cause notice, this Court cannot accept such characterization in the factual context of the present case. The endorsement does not merely call for an explanation, it categorically directs the petitioners to surrender the original registered sale deeds executed in their favour, solely on the assertion that the very same property has since been allotted to a third party. A notice which presupposes illegality, demands the return of title documents, and asserts that the property already stand conveyed to auction purchasers, cannot be treated as a mere preliminary communication. When the authority has already acted upon its assumption of ownership by proceeding to auction the property and execute a sale deed in favour of third parties, the so-called show cause notice becomes illusory, as a foundation of decision making is already concluded.

29. This Court cannot lose sight of the fact that the respondents had gone far beyond their authority by conducting the auction without putting the petitioners on notice, without declaring the site as a corner site at an earlier point, and without affording even a minimal opportunity to the petitioners to contest such re-classification. Once a registered sale deeds have been executed by authority years ago, the petitioners stood vested with indefensible title, therefore any notice of calling for surrender of that deeds and simultaneously asserting that the sites are now sold to auction purchasers ceases to be a preliminary steps and becomes a substantive encroachment upon the vested property rights.

30. In such circumstances, the petitioners cannot be expected to “keep quiet” or wait for further coercive steps, when the respondent-authority had already divested the petitioners of the property in the internal records and had conveyed the same to third parties. This Court is, therefore, fully justified in exercising its writ jurisdiction to interfere with and restrain such overreach, or for allowing the process to continue would amount to permitting the authority to perpetuate an illegality under the pretext of issuing a show cause notice. Accordingly, the objection that the writ petitions are premature or directed against a show cause notice is rejected.

31. For the foregoing reasons, the point framed for consideration is answered accordingly and this Court pass the following:

                  ORDER

                  i. Both the writ petitions are allowed.

                  ii. The impugned endorsement issued by respondent No.2 dated 19.08.2023 is hereby quashed as being without jurisdiction and contrary to law.

                  iii. It is declared that the petitioners are lawful allottees and owners of site Nos.2521 and 2522 respectively in terms of the registered sale deeds executed in their favour in 19.10.2004 and 15.02.2006 and all consequential rights for flowing thereof shall stand protected.

                  iv. The subsequent e-auction proceedings held on 11.02.2022 and 10.06.2023, the auction confirmation, possession certificate and the registered sale deeds executed in favour of respondent Nos.3 and 4 on 11.06.2023 in respect of the schedule properties are declared void ab initio, non est and not binding on the petitioners as the BDA had no subsisting legal right to convey.

                  v. Liberty is reserved to the BDA to take recourse to appropriate proceedings before the Competent Civil Court for cancellation of such sale deeds, if required under Section 31 of the Specific Relief Act, 1963.

                  vi. Respondents Nos.1 and 2-BDA shall restore the revenue and municipal entries including katha, tax records and possession certificates in favour of the petitioners within a period of six weeks from the date of receipt of the certified copy of this order and shall not interfere with the petitioners’ peaceful possession and enjoyment of the petitioners’ schedule properties.

                  vii. It is open for respondent Nos.3 and 4 to seek refund, the auction amount and any consequential dues from the BDA and that the BDA shall consider such requests expeditiously in accordance with law.