Karnataka HC halts Athani municipal shop auction a day before bidding, says evict under PP Act first
Justice T.M. Nadaf at the Dharwad Bench quashed the Town Municipal Council auction notification of 6 October 2026 so far as 11 petitioners shops are concerned, holding that a municipality cannot sidestep the Public Premises Act by auctioning premises still occupied by its old licensees. The shopkeepers must clear their rent within two weeks or lose the order.
Shopkeepers in two municipal commercial complexes near Dr Ambedkar Circle in Athani, Belagavi district, have stopped an auction of their premises that was to begin the next morning. On 28 October 2026 Justice T.M. Nadaf of the Karnataka High Court, sitting at Dharwad, quashed the Town Municipal Council’s auction notification of 6 October 2026 insofar as it covered the shops of 11 petitioners, holding that the council had skipped the one step the law requires before it can put occupied premises to auction: eviction under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971.
Leases that ended in 2010, suits that are still pending, and a second auction notice
The petitioners, led by Shivkumar Vasant Umarani of Shop No. 1, Nehru Commercial Complex, hold shops in the Nehru and Basava commercial complexes as licensees of the municipality. One petitioner is Arudha Jyoti Urban Co-operative Bank, which occupies Shops 11 and 12. By their own account the leases expired in 2010; they stayed on, paying rent, as tenants holding over. Each has filed a civil suit for a permanent injunction against dispossession without due process. Those suits are pending, and no interim order has been granted in any of them.
The council first tried to auction the shops by a notification of 3 July 2025. The shopkeepers came to the High Court, a coordinate bench granted an interim order, and the petitions were later disposed of on the footing that the notification had spent itself by efflux of time. On 6 October 2026 the council issued a fresh notification, published in the Kannada daily Vijayawani on 9 October 2026, proposing to auction 39 shops, including those in the petitioners’ possession, on 29 and 30 October 2026. The 12 petitions, filed under Articles 226 and 227, sought certiorari to quash that notification and mandamus to continue the leases.
Both sides, and the precedent that decided it
Advocate Sangram S. Kulkarni, for the petitioners, argued that the council is bound to follow the PP Act to evict them, which is the due process of law, and that an auction of occupied premises is an indirect route to dispossession the law does not permit. He relied on two coordinate-bench decisions of the Karnataka High Court: K.T. Suresh v. State of Karnataka, W.P. No. 12105 of 2022 and connected matters, decided on 24 January 2024, and D. Rajshekar v. State of Karnataka, W.P. No. 6296 of 2024 with W.P. No. 1200 of 2024, decided on 25 March 2024.
Advocate Aravind D. Kulkarni, for the council, said the lease period ended in 2010 and the petitioners had hung on under one pretext or another. Under the law a lease or licence of municipal premises cannot exceed five years, and under the Karnataka Municipalities Act and Government circulars of 19 July 2019 and 16 October 2026 municipal property must be allotted by public auction. The petitioners’ continuation, he said, was detrimental to the municipality’s development and interests, and the auction gave them a preferential right to bid. To the claim that they paid rent regularly, he replied that the rent was not being paid into the municipality’s account.
Justice Nadaf found the question already answered. In D. Rajshekar the coordinate bench had quashed a tender notification issued without recourse to the PP Act, following its own earlier order of 28 February 2024 in W.P. No. 4750 of 2024 and the decision in K.T. Suresh. The judgment reproduced those passages at length. K.T. Suresh had asked whether a corporation or municipality can forcibly vacate occupants of its shops when a lease or licence expires, and answered that it cannot: once the lease ends, the only options are eviction under the Transfer of Property Act or under the Public Premises Act, and the authorities must obtain a judicial or quasi-judicial order before enforcing it. The bench there had also relied on K. Manjunath v. Bangalore Development Authority, W.P. No. 25075 of 2016, decided on 30 January 2019, which applied the Supreme Court’s ruling in Meghmala v. G. Narasimha Reddy, (2010) 8 SCC 383, that even a trespasser in settled possession cannot be thrown out by the State except by a course of action in accordance with law, and the Division Bench decision in Patil Exhibitors (Pvt) Ltd. v. Corporation of the City of Bangalore, ILR 1985 KAR 3700, that no claim to dispossess by force without recourse to legal procedure is recognised by courts. D. Rajshekar had also addressed the municipality’s argument that licensees stand differently from lessees and enjoy no protection under either statute, holding that the coordinate-bench rulings made those authorities inapplicable.
Order
Applying that law, the court recorded that no exercise under the PP Act had been undertaken; instead a public auction notification had been issued by newspaper publication for premises in which the petitioners were licensees and continue in occupation, with the auction fixed for 29 and 30 October 2026. That course, the judge held, was against the norms of law, and the same relief granted in the earlier judgments was appropriate here.
The writ petitions were allowed in part. The auction notification of 6 October 2026 stands quashed so far as the petitioners’ shops are concerned. Liberty is reserved to the Town Municipal Council, Athani, to follow the procedure under the Public Premises Act, 1971 and then, after evicting the petitioners by due process, to auction the shops under the Karnataka Municipalities Act, 1964 in accordance with law. The petitioners must pay rent up to date, and make good any arrears, within two weeks of the order; if any petitioner fails to do so, the order in that petitioner’s favour automatically stands recalled. The auction of the remaining shops in the two complexes was not touched by the order.