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1965 DIGILAW 147 (MP)

Municipal Committee, Raipur v. Kanhaiyalal

1965-11-24

R.J.BHAVE

body1965
JUDGMENT 1. This appeal is by the defendant Municipal Committee, Raipur. 2. The Municipal Committee, Raipur, in its ordinary general meeting held on 20th June 1958 had passed a resolution granting a lease of certain Municipal nazul lands for a period of three years to Ramanand Lal Gupta. The plaintiff Kanhaiyalal, who is a councillor of the defendant Committee, had opposed the said resolution. The plaintiff, therefore, filed the suit for injunction restraining the Municipal Committee from giving effect to the said resolution. According to the plaintiff, the Municipal Committee could grant the lease only by a public auction and not by private treaty. The plaintiff has, for this contention, relied on the Rules framed by the State Government under section 176 read with section 42 of the C.P. and Berar Municipalities Act, 1922 (hereinafter referred to as 'the Municipalities Act'). The plaintiff claims that the land in question is capable of yielding good income; and if the lease is granted by public auction, substantial premium and annual rent is likely to be fetched. The 'action of the Municipal Committee is calculated to favour an individual at the cost of the interests of the Municipal Committee. The' plaintiff in his capacity as a tax payer, therefore, instituted the suit. 3. The defence is that in view of the proviso to section 42 of the Municipalities Act, the Committee was free to let out in any manner the property vested in it for a term not exceeding three years and that the Rules relied on by the plaintiff do not and cannot restrict that right. It is further urged that the Rules, if they prescribe such restrictions, are ultra vires of the rule making power of the State Government, as they are in violation of the provisions of section 42 of the Municipalities Act. 4. The defendant Committee lost in both the Courts below. In this appeal the Committee has reiterated the same contention. 5. In order to appreciate the arguments of the defendant Committee, it is necessary to set out the provisions relied upon by the parties. Section 42 relied on by the defendant is as under: "42. 4. The defendant Committee lost in both the Courts below. In this appeal the Committee has reiterated the same contention. 5. In order to appreciate the arguments of the defendant Committee, it is necessary to set out the provisions relied upon by the parties. Section 42 relied on by the defendant is as under: "42. Subject to such exceptions as the provincial Government may by general or special order direct, no Committee shall transfer any immovable property except in pursuance of a resolution passed at a meeting by a majority of not less than two-thirds or its members and in accordance with rules made under this Act, and no committee shall transfer any property which has been vested in it by the Crown, except with the sanction of the Provincial Government: Provided that nothing in this section shall apply to leases of immoveable property for a term not exceeding three years." The Rules relied on by the plaintiff are in two parts: Rules that govern all transfers including leases for more than three years, and those that govern grant of leases for less than three years. They are: "Rules as to the transfer of immovable property by a Municipal Committee. 1. * * * 2. A committee may transfer by sale, lease, exchange or otherwise, any immoveable property vested in it, if such property is no longer required or is not likely to be required in the near future, for the purpose of the Act, or is such a nature that it is in the interest of the committee to transfer it. 3. A committee may transfer by sale, lease, exchange or otherwise, any immoveable property vested in it, if such property is no longer required or is not likely to be required in the near future, for the purpose of the Act, or is such a nature that it is in the interest of the committee to transfer it. 3. No immovable property which yields or is capable of yielding an income shall be transferred by sale, or lease except to the highest bidder at a public auction: Provided that if the committee is of opinion that it is not desirable to hold a public auction for such transfer it may, with the previous sanction of the State Government effect such transfer without public auction: Provided further that the Committee may, for reasons to be recorded in writing and to be reported to the State Government such immovable property to a bidder other than the highest bidder: Provided further that any such transfer by lease shall reserve a reasonable annual rent which shall be payable during the whole term of the lease." *** ** *** "Rules as to the transfer of immovable property by a municipal committee for a term not exceeding three years' 1. ** ** 2. Subject to such exceptions as the general or special order direct, no yields or is capable of yielding an except by public auction: Provided that the committee may for reasons to be recorded in writing and to be reported to the Deputy Commissioner of the district transfer such immovable property to a bidder other than the highest bidder." 6. The language of section 42 of the Municipalities Act is involved. This section confers on the Committee an express power couched in a negative form. Section 77 of the Hyderabad Municipal an Town Committee Act, 1951. which is in similar terms, came for consideration before the Supreme Court in the case of M. Pentiah and others Vs. Muddala Verramallappa and others (1961) 2 SCR 295 . If section 42 is interpreted in the same manner as was done by the Supreme Court, it may be said that under section 42 the committee shall have power to transfer any immovable property if the conditions laid down are complied with. Muddala Verramallappa and others (1961) 2 SCR 295 . If section 42 is interpreted in the same manner as was done by the Supreme Court, it may be said that under section 42 the committee shall have power to transfer any immovable property if the conditions laid down are complied with. The conditions laid down are : (1) there shall be a resolution passed at the meeting by the majority of not less than two third of the whole number of members of the Committee ; (2) it shall be in accordance with the rules made under the Act (3) in the case of property vested in it by the Government, the transfer can be made only with the sanction of the Government; and (4) the rule is no exempted by the Government, by general or special order, from the operation of section 42 of the Municipalities Act, It is clear that subject to the four conditions, narrated above, the authority of the Municipal Committee to transfer the property is absolute. When the legislature purports to confer power subject to specific conditions it is plain that no further conditions can be imposed in exercise of rule making power by a delegate. Second condition included is section 42, no doubt, empowers the State Government to make rules. But the matter does not rest there. The proviso to section 42 further adds that nothing contained, in the section shall apply to leases of immovable property for a term not exceeding three years. In other words, the effect of the proviso is that in the case of a lease for a period not exceeding three years, none of the four conditions, narrated above. is attracted. It is, therefore, plain that in the case of a lease for a period not exceeding three years, it need not be in accordance with the rules made under the Act. The contention of Shri Jakatdar; learned counsel for the appellant, that the Rules relied on by the plaintiff are in excess of the rule making power of the State Governments to the extent they purport to prescribe any particular procedure for leases for a period not exceeding three years appears to be sound. 7. The contention of Shri Jakatdar; learned counsel for the appellant, that the Rules relied on by the plaintiff are in excess of the rule making power of the State Governments to the extent they purport to prescribe any particular procedure for leases for a period not exceeding three years appears to be sound. 7. Shri Choubey, learned counsel for the plaintiff, asserted that neither the provisions of section 42 nor those of the proviso underneath it take away or limit the authority of the State Government to frame rules under section 176 of the Municipalities Act prescribing additional condition. The condition that the lease should be given only by resorting to the method of public auction even in the case of a lease for a term not exceeding three years is not a condition which is in conflict with the provisions of section 42 and the proviso to it Shri Choubey urged that it is in public interest that favouritism should be checked and that the rule in question was in furtherance of the purposes of the Act. He relied on a decision of this Court in Municipal Committee, Seoni Vs. State of M. P. and others 1961 MPLJ 667 in support of his contention. In that case, the Municipal Committee, Seoni, had issued a proclamation to the effect that Kothas and Chabutaras lacated in the market sites would be leased out by public auction. The Collector, in exercise of powers under section 53 of the Municipalities Act, stayed any further action by the Municipal Committee in the matter and sent a report to the Government recommending that the order passed by him staying the auction be continued. That action of the Collector was challenged before the High Court in a petition under Article 226 of the Constitution. On behalf of the Collector, relience was placed on bye-law No.3 (b) which enabled the Municipal Committee to give the shops, stalls, Chabutaras etc., on rent either by public auction or on a temporary lease. That action of the Collector was challenged before the High Court in a petition under Article 226 of the Constitution. On behalf of the Collector, relience was placed on bye-law No.3 (b) which enabled the Municipal Committee to give the shops, stalls, Chabutaras etc., on rent either by public auction or on a temporary lease. It was, therefore, asserted on behalf of the Collector that the Municipal Committee had the power to lease out the property by a private treaty also and as this method was being followed for a longtime, the switch over to the method of public auction was, likely to cause injury to the holder of the stalls and cause them annoyance and, that the Collector had the requisite authority to act under section 53 of the Municipalities Act. While considering this argument, their Lordships of the Division Bench referred to the Rules framed under section 176, quoted above, and observed that the bye-law, which was contrary to the provisions of section 42 and the rules framed under section 176, was invalid and could not be relied upon. In that case, the validity of the rules framed under section 176 did not come for consideration nor was the effect of the proviso underneath section 42 considered. The observations in that case, therefore, cannot advance the plaintiff's case any further. 8. I am of the view that section 42 of the Municipalities Act positively confers power on the Municipal Committee of disposal of property vested in it subject to the specified conditions. Under the rule making power that authority cannot be further' curtailed. In' the case of leases not exceeding three years the power of disposal is absolute, as none of the four conditions specified in section 42 is attracted. The rules framed by the State Government, to the extent they purport to prescribe conditions in the matter of grant of leases for a period not exceeding three years are in excess of the rule making power, I therefore, hold that the Municipal Committee had the necessary authority to grant the lease in question without holding a public auction. 9. The counsel for the appellant did not press other objections raised before the Courts below. On the view I have taken, the judgment and decree of the lower appellate Court confirming the decree of the trial Court cannot be sustained. It is set aside. 9. The counsel for the appellant did not press other objections raised before the Courts below. On the view I have taken, the judgment and decree of the lower appellate Court confirming the decree of the trial Court cannot be sustained. It is set aside. The plaintiff's suit shall stand dismissed with costs throughout.