Karnataka HC Upholds Cashew Grantees’ Right to Buy Land at 300 Times Land Revenue, Not Market Price, Where No Breach Was Alleged

The proceedings comprised Writ Appeal No. 1221/2022, challenging an order directing the authorities to accept the prescribed nominal price and issue Permanent Ownership Certificates to the grantees; Writ Appeal No. 107/2022, challenging a separate order in W.P. No. 23608/2018; and a contempt petition alleging non-compliance with the order in W.P. No. 43058/2016, as modified in review

The land at issue had been granted under the South Kanara District Lease of Lands for Cashew Cultivation Rules, 1957, for 30 years. The grant allowed the grantee, after that period, to seek permanent ownership on payment of the land value fixed at the time of grant; the site value was Rs. 25 per acre

The State contended that the market price should be fixed under Rule 17 of the Karnataka Land Grant Rules, 1969

The grant was made under Rule 2 read with Rule 5 of the South Kanara District Lease of Lands for Cashew Cultivation Rules, 1957, which provided for a 30-year temporary occupation and an option to acquire permanent ownership on payment of the land value fixed at the time of grant

Rule 23 of the Karnataka Land Grant Rules, 1969, provides for confirmation of certain pre-existing temporary agricultural leases on payment of the price fixed in accordance with the rules under which the land was leased

The Court followed prior decisions of coordinate Benches, including W.A. No. 5242/2004 and connected cases and W.A. No. 202/2020, holding that the nominal value in the relevant circumstances is 300 times the land revenue payable per acre

Rule 17 of the 1969 Rules concerns fixing the market price for a grant of land; the Court did not treat it as governing the later exercise of an ownership option under the earlier grant

The Court found that the grant expressly allowed the grantee to acquire permanent ownership after 30 years at the land value fixed when the grant was made.

It also noted that the State did not contend that the grantees had breached the grant conditions or failed to use the land for cashew cultivation during the lease period

Applying Rule 23 and the coordinate Bench decisions, the Court held that the price was to be determined under the rules governing the original lease, not by imposing the market-price method in Rule 17 of the 1969 Rules

The cited decision in W.A. No. 417/2025 did not alter that conclusion because it addressed post-grant alienation restrictions, not the adequacy or calculation of the land price

It directed compliance with the Single Judge’s directions within three months of receipt of the judgment

The contempt petition was closed and notice to the accused discharged, with liberty to the complainants to reopen the matter if the directions were not complied with within that period