Absence Of Prior Approval By State Government Before Executing The Sale Deed Would Vitiate And Invalidate The Document: Karnataka High Court

A single Judge bench of Justice S.R.Krishna Kumar quashed the sale deed executed by the father of petitioner Kadasiddeshwara S/O Gurunath Byakodi with the Board on August 23, 2006. "Absence/lack/want of previous/prior approval by the State Government before executing the impugned Sale Deed dated 23.08.2006 would vitiate and invalidate the said document and mere ex-post facto approval dated 10.04.2013 would not have the effect of ratifying or validating the Sale Deed due to the inherent lacuna / defect in the document at the time of its execution," the Court said.

Case Background:

The petitioners father had moved the high court court claiming that on account of fraud and misrepresentation by KHB in collusion with real estate brokers, the KHB obtained a Sale Deed dated 23.08.2006 from the petitioner's father by falsely representing to him that the subject land was included in the scheme of acquisition by the KHB and that the KHB had obtained prior permission from the State Government.

However, the petition came to be rejected on the ground that the legality, validity and correctness of the said Sale Deed cannot be examined by this Court in the exercise of its jurisdiction under Articles 226 and 227 of the Constitution of India. An appeal filed against the order also came to be rejected. However,this Court reserved liberty in favour of the petitioner' father to either challenge the Sale Deed before the competent Civil Court or agitate his rights and seek all reliefs to which he is entitled to and that the dismissal of the petition and the appeal would not come in the way of the petitioner getting the benefit, if available in law.

Aggrieved by the said order the petitioner's father approached the Supreme Court which also was dismissed in the year 2014. The petitioner's father then instituted a suit before the civil court seeking cancellation of the sale deed entered between him and KHB. The same was rejected in 2015 and the appeal against the rejection order is pending before the high court. The present petition was filed seeking to quash the sale deed. Pending the petition the father expired and the legal heir (petitioner) was added as the petitioner.

Meanwhile, the son (petitioner) had instituted a suit against the father for partition of the said property. The same came to be rejected and a revision first appeal was also dismissed after an amicable settlement between the parties. The present petition was filed seeking to quash the sale deed entered into by the deceased father of the petition with KHB.

Petitioners Submissions:

Senior Advocate Gurudas Kannur appearing for the petitioner contended that since obtaining of prior approval from the State Government is a mandatory pre-condition / condition precedent / statutory requirement under Section 33 (1) of the KHB Act, in the absence of any such prior approval being obtained by the KHB before obtaining the Sale Deed dated 23.08.2006 from the petitioner's father, the said Sale Deed is illegal and invalid and consequently, the impugned Sale Deed also deserves to be quashed."

KHB Opposed the plea:

It was said "Even prior to the Sale Deed, the petitioner's father had given his consent to sell the subject land in favour of the KHB and in pursuance thereof, the petitioner's father executed a proper and valid Sale Deed in favour of the KHB for the purpose of its housing scheme; after receiving the entire sale consideration.

Further it was argued that "In view of the earlier round of litigation which culminated against the petitioner and in favour of the KHB, the present petition is hit by the principles of res judicata and estoppel."

Court findings:

The court went through Section 33 of the Karnataka Housing Board Act 1962 and said, "A plain reading of the aforesaid provision will clearly indicate that prior to execution of any Sale Deed by a person in favour of the KHB, in respect of any property, having a value of more than Rs.10 lakhs, prior approval of the State Government is essential. A perusal of the said Sale Deed dated 23.08.2006 will indicate that the total value of the sale consideration stated in the said Sale Deed is Rs.2,07,64,000, it is there clear that before the Sale Deed was executed, prior approval of the State Government was essential in terms of Section 33(1) of the KHB Act."

As regards the contention of KHB regarding res-judicata, the court noted that, "There is no gainsaying the fact that in order to attract the bar of res judicata, the issue involved in the subsequent proceedings should have been directly and substantially in issue in the previous proceeding and the said issue should have been heard and finally decided. In the instant case, in order to attract the bar of res judicata, it is essential that the issue with regard to the legality and validity of the impugned Sale Deed qua Section 33(1) of the KHB Act should have been heard and rejected finally in the previous proceeding."

Going through the records of the previous judicial proceedings, the court observed that, "The issue of the validity of the Sale Deed qua Section 33(1) having not been adjudicated in the previous proceedings coupled with the express liberty / permission / leave granted by this Court. I am of the considered opinion that it cannot be said that the present petition is barred by res judicata and consequently, the said contention of the learned counsel for the respondent -KHB cannot be accepted."

The court also considered the submission of the petitioner that he would only avail the remedy of challenging the Sale Deed on the ground of violation of Section 33(1) and withdrawing / abandoning the petitioner's claim for cancellation of the Sale Deed on the grounds of fraud and misrepresentation. The court observed that, "I am of the considered opinion that the present petition is not barred by res judicata."

Following which the court held that, "The impugned Sale Deed dated 23.08.2006 executed by the petitioner's father in favour of the respondent- KHB is hereby declared as null and void and directed to be cancelled. Subject to the condition that the petitioner pays a sum of Rs.1,07,64,000/- together with interest at 6% p.a. From 23.08.2006 till the date of payment to the Respondent-KHB within a period of three months."

Case Title: Kadasiddeshwara S/O Gurunath Byakod v. The Principal Secretary

Case No: Writ Petition No.101046 of 2021

Date Of Order: 8th Day of October 2021

Appearance: Senior Advocate Gurudas Kannur, A/W Advocate C.S.Patil For Petitioner; Advocate V.S.Kalasurmath, For R1; Advocate Basavaraj Sabarad, Advocate H.M.Patil Advocate H.R.Gundappa, For R2 To R4

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