The Karnataka High Court ruled that when the state government permits mortgaging of granted land for house construction loans, banks cannot be prevented from selling the property in cases of loan default, despite non-alienation clauses. This decision was made whilst quashing an endorsement dated July 18, 2023, issued to South Canara District Central Cooperative Bank Ltd.
The endorsement, which denied permission to enforce the mortgage through a property sale, was based on a 25-year alienation restriction in the grant. The court clarified that whilst the state can take action against allottees who misuse the allotment, including blacklisting them from future benefits, they cannot prevent banks from enforcing mortgages.
The case involved Poornima, who received a free site under the Ashraya Yojana and mortgaged it for a bank loan but defaulted on repayments. The court examined Rule 9, which permits such mortgages, acknowledging the scheme’s aim to provide housing to the economically disadvantaged.
The Karnataka High Court has rejected a petition that challenged a government directive regarding the purchase of certified and truthfully labelled (TL) seeds exclusively from government agencies.
The court upheld the government’s exemption, stating it was legally permissible to ensure quality, quantity, and affordable certified seeds for farmers. The petitioners had argued the decision was unlawful and restrictive, affecting their business of producing, processing, and marketing TL seeds.
Upon examining Section 4 of the Karnataka Transparency in Public Procurements Act 1999, the court found the government order neither arbitrary nor biased. The petition was subsequently dismissed.
The Karnataka High Court reserved its verdict regarding a petition challenging the validity of an FIR registered against Union Finance Minister Nirmala Sitharaman and others. The case involves allegations of “extorting” substantial funds from companies through the electoral bond scheme and utilising agencies like the ED.
Following the conclusion of arguments, Justice M Nagaprasanna reserved judgment on the petition submitted by Nalin Kumar Kateel, who previously headed the BJP’s State unit and is listed as the fourth accused in the FIR.
Bengaluru police filed an FIR on September 28 after a complaint alleged Rs 8,000 crore extortion via electoral bonds. The court stayed the investigation, stating the complainant was not a victim.
