When Court Receiver Auctions Property, Land Tribunal Can't Entertain Application For Grant Of Occupancy Rights: Karnataka High Court

The Karnataka High Court held that the Land Tribunal does not have jurisdiction to entertain an application seeking occupancy rights by a party when the property is sold in auction by the court receiver.

A single judge bench of Justice V Srishananda allowed the petition filed by Sanganagouda Malipatil and others who had questioned the order of the Land Tribunal granting occupancy rights to tenant Bhaghavan Chand and others.

The bench said “It is also pertinent to note that a Court receiver had put petitioner Nos.1 to 6 in possession of the properties, it is to be construed that it is the Court which had put them in possession of the properties. It is crystal clear that the Civil Court is a superior authority than to a Land Tribunal in exercising the right in respect of property, which is the subject matter of the Civil Court in I.C. Case No.1/1961 and therefore, per se the Land Tribunal did not have any jurisdiction to entertain form No.7 (seeking occupancy rights under Karnataka Land Reforms Act) filed by respondent No.1.”

One Trilokchand Bhandari was the owner of the lands in different survey numbers, he had borrowed money from several people and ultimately became bankrupt and had to face insolvency proceedings. The court appointed an advocate as court received. He sought permission of the insolvency Court and auctioned some of the properties belonging to said Trilokchand Bhandari. The petitioners herein participated in the said public auction and purchased the properties as mentioned.

In the said public auction, respondent No.1 – Bhaghavan Chand was also a bidder. Since the petitioners were the highest bidders, their bid was confirmed and with the permission of the insolvency Court, the receiver executed the sale deeds in favour of petitioner Nos.1 to 6 on 31.05.1982, which were registered in the office of the Sub-Registrar, Shahapur. On the day of registration of the sale deeds, the petitioners were also put into actual physical possession of the aforesaid lands. A report was also filed by the receiver to the Court.

Post that, the Tribunal by order dated 10.07.2002 passed an order that respondent No.1 herein was the tenant and is entitled to have occupancy rights to the entire extent of 64 acres 22 guntas as aforesaid and was further directed to surrender the excess land to the Government in terms of Section 63 of the said Act.

The petitioners then approached the High Court which quashed the order and remanded the matter back for fresh consideration. In the second round, the tribunal passed the same order. The petitioners argued that the Land Tribunal failed to understand the application of Section 108 of the Karnataka Land Reforms Act in holding that the land is a tenanted land and sought for allowing the writ petition.

However, the respondents contended that on bear reading of Section 108 of the Karnataka Land Reforms Act, it is only applicable to the case where the minor interest is involved and in the case on hand, just because of the property was in the custody of the receiver, it cannot be construed that there was a bar for the Land Tribunal to exercise its jurisdiction in finding out that respondent No.1 was a tenant of the said land.

The bench noted that it is settled principles of law that a person, who purchases the property in a Court auction would be purchasing such property free from all encumbrances. Noting that respondent No.1. who claims to be the tenant of the lands in question also participated in the auction and by the time, the proceedings before the Land Tribunal had already commenced and he had filed form No.7 as a tenant.

The court said “Respondent No.1 having known that his application before the Land Tribunal to seek for occupancy rights by filing form No.7 has no merits, with open eyes, has participated in the Court auction held by the receiver under the orders of the Court in I.C. Case No.1/1961. Having participated in the auction and making a bid to purchase the property, respondent No.1 would not have further contended that he is the tenant of the properties.”

Observing that the Court auction was confirmed under the orders of the High Court by filing a necessary report, the Bench held that it is settled law that a person before a judicial authority/quasi judicial authority cannot approbate or reprobate with regard to his stand.

Applying the said principles of law to the case on hand, respondent No.1 having participated in the Court auction and is an unsuccessful bidder, could not have further prosecuted the matter before the Land Tribunal as a tenant of the land, the Court said.

Referring to Section 108 of the Karnataka Land Reforms Act, the bench said that two contingencies are made out in the said section to exclude the jurisdiction of the Land Tribunal.

It said that firstly, where in the subject matter of the property minor interest is involved in a petition under the Guardian and Wards Act, the Land Tribunal loses its jurisdiction to entertain form No.7, and secondly the contingency where the exclusion of Land Tribunal is that where the property in question is the subject matter of civil proceedings and is in the custody of Civil Court or Criminal Court as the case may be even preferably, then the jurisdiction of the Land Tribunal is excluded in entertaining form No.7 or applicability of any other provisions of the Karnataka Land Reforms Act.

Accordingy, the Court said, “When the Act is crystal clear in excluding such positions, the Land Tribunal ought not to have ventured upon adjudicating the matter with regard to form No.7 filed by respondent No.1 especially as he himself has participated in the auction held by the receiver appointed by the Civil Court in I.C. Case No.1/1961.”

“Since the property vested in the custody of the Court, as it is the property of Trilokchand Bhandari, which was taken over temporarily by the Court receiver in pursuance of the Court order, respondent No.1 could not have been termed as a deemed tenant even for the purpose of considering form No.7 before the Land Tribunal," it added.

Finally, it said that since respondent No.6 had sold the property in favour of petitioner Nos.7 to 9 under a further registered sale deed in the year 1998. the aforesaid properties would not be subject matter for enforcing the provisions of the Karnataka Land Reforms Act.

Accordingly, it allowed the petition and quashed the order of the tribunal.

Appearance: Advocate R S Sidhapurkar for Petitioners

Advocate Shantha B Mullur For R1(A) TO R1(C).

HCGP Veeranagouda Malipatil FOR R2 & R5.

Advocate Ravi B Patil for R4.

Citation No: 2024 LiveLaw (Kar) 183

Case Title: Sanganagouda s/o Basanagouda Malipatil & others and Bhaghavan Chand s/o Himmat Mal & others

Case No: WRIT PETITION NO.206098 OF 2015

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