Only public auction ensures uniformity in allotment of shops: Karnataka HC

The court said the piecemeal auction by the panchayat cannot be accepted

The High Court has said that only a public auction can ensure uniformity in allotment/lease of shops and properties owned by municipal bodies.

Justice M Nagaprasanna observed this in a recent order while directing the Arkalgud town panchayat in Hassan district to put to auction all 112 shops under its control by issuing a fresh notification.

The petitioners, in a batch of petitions, claimed that they had been carrying on business in the shops owned by the panchayat for more than 25 years.

The petitioners had challenged the auction/lease of shops scheduled on October 28, 29 and 30. They also prayed for a direction to consider their representations for the extension of lease up to 2024.

It was informed to the court that in respect of some shops, extension of lease was made by the panchayat on the basis of a circular issued by government on October 26, 2009.

Thus, the occupiers of 51 shops have continued to hold the shops on extended lease on the strength of the circular for a period of another 12 years. The remaining 61 occupiers approached the court, seeking similar extension.

Justice Nagaprasanna noted that when the law was clear way back in 1992 that the properties of municipalities should be parted by way of public auction, the piecemeal auction by the panchayat cannot be accepted.

“There should be uniformity in grant of lease. Such uniformity can come about only when there is transparency in procedure; transparency in procedure can come about only when the properties are put to public auction and every citizen is permitted to participate in the auction. The provisions of the Act and the Rules have to be so construed so as to keep the individuals or a class interest subordinate to larger public interest,” the court said.

The court partly allowed the petitions and directed the panchayat to conduct a public auction of all 112 shops.

The court also set aside the order of extension of lease in respect to 51 shops.

“In the auction, all the present petitioners and the occupiers of shops who are not parties to the lease would become entitled to participate along with general public,” it said.

Watch latest videos by DH here: