Hubli Forest Contractors & Timber Merchants Association Ltd. v. Hubli Dharwad Municipal Corporation, by its Commissioner
2008-02-13
D.V.SHYLENDRA KUMAR
body2008
DigiLaw.ai
Judgment :- (These Regular Second Appeals are filed under Section 100 of code of civil procedure, against the judgment and decree dated 22-12-2001 passed in RA 154 of 1981, on the file of the addl Civil Judge (Sr DN) at Hubli, allowing the appeal and modifying the judgment and decree dated 31-10-1981, passed in OS No. 503 of 1971, on the file of the 1st Addl Munisiff, Hubli.) These two Regular Second Appeals, filed under Section 100 of Code of Civil Procedure, are by the defendants in OS No 503 of 1971, on the file of first Additional Munsiff, Hubli, to get over the judgment and decree suffered by them before the lower appellate court in the appeal filed by the plaintiff, whose suit for a declaration that certain action of the first defendant – Hubli - Dharwad Municipal Corporation, such as allotment of plots in the timber yard at Unkal in Hubli city, made in favour of second defendant - association – Hubli Forest Contractors and Timber Merchants Association Ltd., - is illegal and unauthorized one and for the consequential relief restraining the first defendant-corporation from handing over the physical possession of the plots to the respective members of the second defendant-association, in whose favour allotment had already made and to set aside the allotment of plots, if any, in the timber yard by the first defendant-corporation, as it was inequitable and arbitrary and also for restraining the first defendant-corporation from executing any legal documents of transfer in respect of the plots to the members of the second defendant-association, had failed before the trial court. 2. The plaintiffs, though were not successful before the trail court in making good their case and the suit had been dismissed as the trial court answered all the issues against the plaintiffs, the first plaintiff, who filed the appeal before the lower appellate court, met with success, as the learned judge of the lower appellate court reversed the judgment and decree passed by the trial court and has decreed the suit as prayed for. 3.
3. Brief facts leading to the above appeals are that: The first defendant-corporation wanted to shift the business activity in timber and relocate the timber yard, which was inside the city of Hubli, known as Torvihakkal and for such purpose, it appears, had acquired some 61 acress of land in Unkal area of Hubli city through land acquisition proceedings and while distributing the land so acquired in favour of timber merchants who were to shift their business from Torvihalla to Unkal area, there has been some malpractice and illegality as well as procedural irregularities committed by the first defendant corporation and the entire allotment of plots in favour of the members of second defendant-association as also the allotment in favour of second defendant-association is bad in law and therefore filed the suit for the prayers as indicated above. 4. It had been pleaded by the plaintiffs that they were not members of the second-defendant association, but were also timber merchants, while had not been given plots or sites in the new timber yard at Unkal, many other persons though were not carrying on business in timber had been allotted sites/plots, only because they are members of the association, which is bad in law and also that the allotments were without any norms nor based on the actual requirements, but only to favour some members of the second defendant-association. 5. It was also pleaded by the plaintiffs that though the first defendant corporation itself and not allotted sites in favour of individual members of the association, the association had to its own whims and fancies allotted sites in the new timber yard in favour of all members of its choice, which was also bad in law, particularly being to the detriment of the genuine timber merchants of Hubli city and who were not members of the second defendant-association. It was further pleaded in the plaint that such allotments were illegal, unauthorized; that the first defendant corporation had colluded with the second defendant-association and its members in making such illegal allotments. .6. Thesuits had been filed initially impleading only the first defendant corporation represented by its commissioner as defendant. The first defendant corporation entered appearance and filed its written statement contesting the suit.
.6. Thesuits had been filed initially impleading only the first defendant corporation represented by its commissioner as defendant. The first defendant corporation entered appearance and filed its written statement contesting the suit. The first defendant corporation also sought for vacating the ex parte ad interim injunction that had been granted earlier on an application under Order XXXIX Rule 1 CPC, by filing an application under Order XXXIX Rule 4 CPC.
The first defendant corporation entered appearance and filed its written statement contesting the suit. The first defendant corporation also sought for vacating the ex parte ad interim injunction that had been granted earlier on an application under Order XXXIX Rule 1 CPC, by filing an application under Order XXXIX Rule 4 CPC. The first defendant corporation pleaded that the suit was not tenable either in law or on facts; that the suit was without any cause of action; that the suit is a frivolous and false suit; that the suit purported to have been filed in a representative capacity, was not really so; that necessary procedure has not been followed; that the suit is liable to be dismissed for not being in conformity with the requirement of Section 487 of the Bombay Provincial Corporations Act, 1949 [for short, the Act], which governed the functioning of the first defendant corporation at the relevant point of time; that the plaint having recited the cause of action arose in a day in February 1971 and the suit having been filed only during November 1971, it was clearly barred by limitation in terms of Section 487(1)(b) of the Act; that the land having been acquired by the first defendant corporation and it having become its property, the first defendant corporation had full right and competency to dispose of the properties in terms of the provisions of the Act; that there was no obligation on the part of the first defendant corporation to call for tenders for purchase of plots and the action of the first defendant-corporation in allotting the plots in favour of the members of the second defendant association, for whose benefit the land had been acquired, cannot characterized as arbitrary; that the entire cost of acquisition had been met by the second defendant-association, as they had first deposited the estimated cost and later the actual cost of acquisition and also had paid the developmental charges and therefore the members of the second defendant-association were to be given preference in allotment of plots; that as there was no unanimity as to amongst whom the sites were to be allotted, it was decided to allot sites/plots by draw of lots and that it was so done at a public function held on 12-2-1971, which had been attended by the Mayor of the first defendant-corporation and members of the first defendant-corporation and the function had been given wide publicity and all timber merchants including non-members of the second defendant-association attended the function; that the plots had been allotted in favour of individual members on full ownership basis and had been put in possession and enjoyment of the plots; that the plaintiffs cannot level any allegations against either the association or its members without impleading them as parties; that the allotment was neither in derogation of the provisions of the Land Acquisition Act nor the provisions of the Act and therefore prayed for dismissal of the suit.
7. It was also pleaded by first defendant-corporation that as possession [of the plots] had already been handed over in favour of the members of the association, who had been allotted sites/plots, the prayer in this regard has become infructuous. 8. In the light of such pleading, it appears, much later, the plaintiffs came up with an application seeking for impalement of the second defendant-association as well as its members. The trial court, though permitted the plaintiffs to implead the association as second defendant, refused to implead the members of the association numbering 75. In the light of these developments, the first defendant-corporation filed additional written statement and the second defendant-association filed a separate written statement. .9.
The trial court, though permitted the plaintiffs to implead the association as second defendant, refused to implead the members of the association numbering 75. In the light of these developments, the first defendant-corporation filed additional written statement and the second defendant-association filed a separate written statement. .9. The second defendant also contested the suit taking up all possible defences, including the maintainability of the suit as in a representative capacity, on the question of valuation as to the subject matter of the suit, locus of he plaintiffs to file a suit, as by this time, nine other persons have joined as plaintiffs; that the second defendant association is a private limited company registered under the provisions of Companies Act and enjoys the confidence and support of the majority of the timber merchants carrying on timber trade at Hubli; that the association for the benefit of its members and borne the entire cost of acquisition and initially a sum of Rs.2,23,395.64 was paid to the first defendant-corporation and had made the subsequent payments, in all Rs.5,00,000/-, and that amount had been collected from its members proportionate to their requirement of land; that the association had sought for allotment of sites from the first defendant-corporation only to such extent of land as to meet the requirement of its members and not more than this; that the plaintiffs were also at liberty to joint the second defendant-association to reap the benefits available to the members of the association; that the allotments were made in an open, transparent manner and there was no irregularity or arbitrariness, much-less illegality in the action of the defendants; that the members to whom such land had been allotted have shifted their business to the new timber yard area; that the plaintiffs have not come before the court with clean hands and are seeking relief at a very belated stage, as the acquisition was initiated in the year 1958; that the suit was filed on 6-11-1971, which clearly demonstrates lack of bona fides on the part of the plaintiffs; that irreparable loss and hardship would be caused to the members of the association if the allotments were to interfered at this stage and therefore prayed for dismissal of the suit. 10. In the light of such rival pleadings, the trial court framed the following issues and additional issues: 1.
10. In the light of such rival pleadings, the trial court framed the following issues and additional issues: 1. Does plaintiff prove that the allotment of plots in the Timber Yard at Unkal by the defendant is illegal and unauthorized ? 2. Does plaintiff prove that the notice of suit issued to the defendant is legal & valid ? 3. whether Timber Merchants Assocation is a necessary party to this suit ? 4. Whether plaintiff proves that the plots allotted by the defendant are not given the actual possession of the said plots? 5. Does defendant prove that the actual possession of the plots is already given to the allotees on the date of allotment itself ? 6. Where plaintiff is entitled for the declaration sought for ? 7. Whether plaintiff is entitled for the injunctions asked for ? 8. What decree or order ? Additional Issues:- 1. Is the suit in a representative capacity tenable ? 1 (a) Whether the Plaintiffs prove that the suit timber yard is acquired by the defeneant No.1 Corporation for the entire Timber Merchants of Hubli at large? 1 (b) Whether the defendant No.1 Corporation proves that it has made alleged allotment of the plots in the suit timber yard as per Section-79 of the B.P.M.C. Act and r/w provisions of the Land Acquisition Act on 12.1971 ? 2. Has plaintiff satisfied the requirements of Order – 1, Rule-8 and Order-7, Rule-4, Cr.P.C. ? 3. Is not the suit barred by time under Section-487 of B.P.M.C Act ? 4. Is plaintiff estopped by his conduct from disputing the allotment and alleged delivery of possession of plots by defendant to embers of the Timber Merchants Association ? 5. Whether plaintiffs-1 to 10 have got any right to file this suit against defendant-1 ? 5 (a) Whether the defendant No.2 Association proves that the alleged allottees are carrying on their business prior to the institution of this suit and construction of Temporary and Permanent structures in the suit Timber Yard ? 5 (b) Whether the defendant No.1 Corporation is justified in permitting the 2nd defendant Association to carry on the business in the suit Timber Yard after passing of the orders below I.A. Nos. II & IV of this court and further whether defendant-2 is justified in constructing the buildings etc.
5 (b) Whether the defendant No.1 Corporation is justified in permitting the 2nd defendant Association to carry on the business in the suit Timber Yard after passing of the orders below I.A. Nos. II & IV of this court and further whether defendant-2 is justified in constructing the buildings etc. in the suit Timber Yard after filing of this suit and subsequent to the intimation of the order below I.A. No.IV by defendant No.1 Corporation? 6. Whether the suit is hit by the provisions of Section-34 of the Specific Relief Act? 7. Is it proved that the erstwhile Municipality secured land by acquisition for defendant No.2? 8. Whether the amount of acquisition was paid by D2? 9. Whether the plaintiffs have any interest in the suit Unakal Timber Yard? 10. Whether they are entitled to get any plots in the said Timber Yard? 11. Whether the suit is barred by time? 12. Whether the court fee paid is proper and legal? 13. Whether this court has jurisdiction ? 11. In the light of such pleadings and issued framed by the trial Court, the parties went to trail. On behalf of the plaintiffs, five witnesses [PWs 1 to 5] including the first plaintiff have been examined and got marked ExP1 to ExP47. On behalf of the defendants, two witnesses [DWs 1 and 2}, junior engineers of the first respondent-corporation have been examined and documentary evidence at ExD1 to ExD51 were got marked. 12. While the documents marked on behalf of the plaintiffs comprised of developments in the earlier writ petition before this court questioning the acquisition proceedings and pleadings therein, materials showing composition of the timber merchants, as prepared by the first respondent-corporation, legal notice issued by the plaintiffs before filing of the suit, reply by the first respondent-corporation, applications to the first respondent-corporation, for allotment of sites and such other materials constitute the supporting evidence of the plaintiffs’ case. The documents produced on behalf of the defendants mainly comprised of developments leading to the acquisition of land beginning from the resolution dated 14-5-1958 passed by the first respondent-corporation, paper publication dated 16-2-1971, reporting the function held on 12-2-1971, correspondence between the first respondent-corporation and second defendant-association, list of plot holders prepared on 12-2-1971 and such documents constitute the documentary evidence on behalf of the defendants. 13.
13. On appreciation of this evidence, both oral as well as documentary, the learned trial judge answered the issues against the plaintiff and accordingly dismissed the suit with costs. 14. In the appeal preferred only by the first plaintiff in the suit before the lower appellate court, it was contended that the judgment and decree of the trial court was bad in law; that the trial court was in error in understanding that the acquisition of land was for the sole benefit of the second defendant-association; that the stand taken by the defendants was clearly contrary to the affidavits that had been filed before the high court to defend the acquisition proceedings in respect of the very lands; that the second defendant cannot come in the way of first respondent-corporation allotting plots infavour of other timber merchants; that the allotment of plots in favour of members of second defendant was clearly violation of he provisions of the Act and also discriminatory action; that the trial court committed an error in taking the view that compliance with the requirement of Section 79 of the Act is a mere formality and that the provisions was directory and not mandatory; that want of sanction of allotment of plots in favour of the members of second defendant-association through proper resolution passed by the first respondent-corporation has vitiated the allotments and the trial court has failed to recognize this position; that the judgment and decree of trial court is contrary to law declared by the Supreme Court in the case of Poona Municipality Vs Dattatraya ( AIR 1965 SC 555 ) and Firm Surajmal Banshidhar Vs. Ganganagar Municipality ( AIR 1979 SC 246 ), that the trial court also failed to notice the collusion between the defendants. 15. The lower appellate court, in the wake of the contentions raised by the parties, had formulated the following three points for its determination. 1. Whether alleged allotment of entire area of 62 acres of land of Unkal by defendant No.1 in favour of the defendant No.2 on 12.1971 is legal and authorized as required under law? 2. Whether defendant No.2 and its members were in lawful possession of said area on the date of this suit and so also whether defendant No.2 and its members came in possession of said area on 12.1971? 3. Whether present suit is hit by order VII Rule 4 of C.P.C.? 4.
2. Whether defendant No.2 and its members were in lawful possession of said area on the date of this suit and so also whether defendant No.2 and its members came in possession of said area on 12.1971? 3. Whether present suit is hit by order VII Rule 4 of C.P.C.? 4. Whether Notice U/Sec.487 of B.P.M.C. Act is legal and valid and whether suit is barred by tme by virtue of Sec.487 of B.P.M.C. Act? 5. Whether plaintiffs have got right and interest to sue this suit? 6. Whether present suit is hit by the principles of res judicata ? 7. Whether plaintiffs are entitled for the relief’s sought ? 8. Whether present appeal by only plaintiff No.1 is tenable in the eye of law? 9. Whether present impugned judgment and decree requires any interference ? 10. What order or decree? 16. All the points were held against the defendants, particularly the fourth point viz., whether notice under Section 487 of the Act is legal and valid and whether suit is barred by time by virtue of Section 487 of the Act, which was held in the affirmative in favour of the plaintiff-appellant to hold that the suit was not barred by time and held that the judgment and decree passed by the trial court was not sustainable and therefore reversed the same and decreed the suit of the plaintiffs. 117.
117. In arriving at such a conclusion, the learned judge of the lower appellant court was of the view that the officials of the first defendant-corporation had thrown to wind all canons and regulations of the Act and the Rules framed there under the bye-laws; that the act of allotment in favour of second defendant association was a scandalous act and it was arbitrary; that the impugned action of the first defendant-corporation being beyond the provisions of the Act and the Rules, the first defendant-corporation could not have taken defence of want of notice in consonance with the provisions of Section 487 of the Act and the ratio of the judgment of the Supreme Court in the case of Poona Municipality [supra] was clearly attracted and therefore there is no requirement of notice being issued under Section 487 of the Act and the conduct and action of the first defendant-corporation being quite contrary to the pleadings and stand taken by it before the high court in the earlier writ proceedings, wherein the first defendant-corporation had taken a specific stand that it was for a public purpose and cause the acquisition proceedings were initiated by first defendant-corporation and the subsequent action, particularly the defence taken in the suit being clearly contrary to this, the first defendant-corporation is estopped from taking such a defence and the allotment being not in order and it was at the cost of several timber merchants in the city who had not been allotted any site at all and therefore the action becomes arbitrary, no proper norms or guidelines have been followed in allotting the sites/plots and the first defendant-corporation conveyed in favour of second defendant-association and therefore the allotments should be set aside and the first defendant-corporation directed to make appropriate allotment after following due procedure. 118. It is aggrieved by this finding recorded by the lower appellate court, the first defendant-corporation has preferred RSA No.359 of 2002 and the second defendant-association has preferred RSA No.343 of 2002. 119. This court while admitting the appeals, formulated the following common substantial questions of law for determination; 1.
118. It is aggrieved by this finding recorded by the lower appellate court, the first defendant-corporation has preferred RSA No.359 of 2002 and the second defendant-association has preferred RSA No.343 of 2002. 119. This court while admitting the appeals, formulated the following common substantial questions of law for determination; 1. Whether the lower appellate court could have reversed the judgment and decree passed by the trial Court when only one of the 10 plaintiffs filed an appeal against the dismissal of the suit and when there is no appeal from the other plaintiffs and when there is a joint decree in favour of all the plaintiffs? 2. Whether the suit is barred by limitation in view of Section 487(3) of the Bombay Provincial Municipal Corporation Act 1949? 20. I have heard Sri D.L.N. Rao, learned senior counsel and Sri Shashidhar, learned counsel for the appellants in RSA No.359 and 343 of 2002 respectively and Sri Ram Bhat, learned Senior Counsel, appearing for Sri C.R. Goulay, argued for the respondent-plaintiff in both the appeals. 21. Sri D.L.N. Rao, learned senior counsel while addressed arguments on both the questions of law, has mainly concentrated on the second question viz., whether the lower appellate court was right in concluding that the suit was not barred by limitation, particularly for not attracting the provisions of Section 487 of the Act and has submitted that the provisions of Section 487 of the Act were necessarily attracted and that the suit if not barred under the provisions of Section 487 (1)(a), but definitely barred under Section 487 (1)(b) of the Act, for the reason that it had been instituted beyond the period of six months from the date of original cause of action as pleaded by the plaintiffs themselves and therefore the lower appellate court should not have disturbed the judgment and decree of the trial court. Submission of Sri. D.L.N. Rao in this regard is that the provisions of the Act particularly Section 487 are automatically attracted whenever a suit is brought in against the first defendant-corporation; that when once a suit against the first defendant-corporation seeking for relief in terms of Section 487 of the Act, requirement of clauses (a) and (b) of sub-section (1) of Section 487 of the Act should necessarily be fulfilled, as otherwise, in view of non-obstant clause with which the section begins, the suit is not maintainable.
Section 487 of the Act reads under: 487 (1) No suit shall be instituted against the Corporation or against the Commissioner, or the Transport Manager, or against any municipal officer or servant, in respect of any act done or purported to be done in pursuance or execution or intended execution of this Act or in respect of any alleged neglect or default in the execution of this Act:- .(a) until the expiration of one month next after notice in writing has been, in the case of the Corporation, left at the chief municipal office and, in the case of the Commissioner or of the Transport Manager or of a municipal officer or servant delivered to him or left at his office or place of abode, stating with reasonable particularity the cause of action and the name and place of abode of the intending plaintiff and of his attorney, advocate, pleader or agent, if any, for the purpose of such suit, nor .(b) unless it is commenced with six months next after the accrual of the cause of action. .(2) At the trial of any such suit- .(a) theplaintiff shall not be permitted to go into evidence of any cause of action except such as is set forth in the notice delivered or left by him as aforesaid; .(b) the claim, if it be for damages, shall be dismissed if tender of sufficient amends shall have been made before the suit was instituted or if, after the institution of the suit, a sufficient sum of money is paid into Court with costs. .(3) Where the defendant in any such suit is a municipal officer or servant, payment of the sum or of any part of any sum payable by him in, or in consequence of the suit, whether in respect of costs, charges, expenses, compensation for damages or otherwise, may be made, with the previous sanction of the Standing Committee or the Transport Committee from the Municipal fund or the Transport Fund, as the case may be. 22. Sri.
22. Sri. D.L.N. Rao submits that the suit was bad for non-compliance with both the clauses (a) and (b) of sub-section (1) of Section 487 of the Act, for the reason that while the suit had been not clearly demonstrated to have instituted after lapse of one month from the date of receipt of notice by the first defendant-corporation, as it is claimed that the corporation received the notice only on 16-10-1971, though the notice itself is shown dated 15-9-1971 and therefore from this date, one month time had not elapsed by 6-11-1971 when the suit was filed. 23. This contention, I am unable to accept for the reason that the first defendat-corporation has neither specifically pleaded that the notice had been received only on 16-10-1971 nor placed any material to support this version. If at all, the notice was dated 15-9-1971, it could have been served on the first defendant-corporation in about a couple of days or within a week, institution of the suit on 6-11-1971 necessarily to be taken as after the expiry of one month and therefore it has to be held, that the provisions of Section 487 (1)(a) of the Act are not applicable. 24. coming to the provisions of Section 487(1)(b) of the Act, what is urged is that the very plaint indicated that the cause of action had arosen some day in the month of February 1971 and the suit instituted on 6-11-1971 is clearly barred. It is submitted that it is also pleaded that there was a further cause of action during a day in August 1971, but it is not as though the subsequent cause of action can result in a fresh period of limitation; that the cause of action as pleaded initially to be on a day in February 1971 continues to be the cause of action and therefore the suit is barred by limitation. 25. To support the argument that the suit is barred by limitation for want of notice under Section 487 (1) of the Act, learned senior counsel appearing for the appellant has placed reliance on the judgment of the Bombay High Court in the case of Transport Manager Vs.
25. To support the argument that the suit is barred by limitation for want of notice under Section 487 (1) of the Act, learned senior counsel appearing for the appellant has placed reliance on the judgment of the Bombay High Court in the case of Transport Manager Vs. Maharashtra State Transport Corporation [29 (1967) Bombay Law Journal 869] and submits that though it had not been held in this case that a suit has to be filed on the question of non-issue of notice under Section 487 of the Act itself, the suit required to be filed within six months from the date of accrual of the cause of action is also discussed as part of the judgment and therefore in the present case, admittedly the suit not having instituted within six months from a day in February 1971, the suit has to be failed. .26. Sri D.L.N. Rao, has also sought to distinguish the judgment of the Supreme Court in the case of Poona Municipality [supra], by pointing out, that was a case where the court took the view that .Section 487 of the Act was not attracted and intact the entire Act was not applicable to the situation, inasmuch as the action complained was one outside the scope of the Act and therefore quite naturally, Section 487 of the Act also did not apply. Elaborating, Sri Rao submits that in the present case, the action complained of is one committed by the first defendant-corporation while functioning under the provisions of the Act and therefore Section 487 is attracted and non-compliance is fatal to the maintainability of the suit. 27. Adverting to the second question of law, submission of the learned senior counsel appearing for the appellant is that the plaintiffs though had been permitted to be prosecuted in a representative capacity, when once the suit is dismissed and the plaintiffs had suffered an adverse decree, unless all the plaintiffs join by way of appellants in the appeal before the lower appellate court, the appeal itself is not tenable; that at the instance of one of the plaintiffs, judgment and decree which all other plaintiffs had suffered cannot be set aside and they cannot be given any benefit when they were not appellants.
It is also submitted that the very fact that other plaintiffs have not joined in filing the first appeal also belies the claim that it was a suit in the representative capacity and the fact that the other plaintiffs have not prosecuted the appeal should be taken as an indication of the no-dissatisfaction amongst the other timber merchants of the area and the suit being admittedly in a representative capacity, if only one person has agitated and all other plaintiffs kept quiet, there should not be any variation of the judgment and decree of the trial court at the instance of only one such person and therefore the lower appellate court should not have varied the judgment and decree of the trial court. 28. In so far as this submission is concerned, I am unable to accept the argument on behalf of the appellants for the reason that when once the court permitted a suit being prosecuted in a representative capacity, it is settled law that any one person can represent a class of like persons. if one person can secure a decree and if it can ensure to the benefit of all others whom the person is representing, the same logic should hold good even in the appeal and even if one person has prosecuted and the prosecution being nevertheless in representative capacity, it should be taken that the appeal is by the community of persons whose interest the single appellant represents and therefore the appeal was very much tenable and if the learned judge of the lower appellate court found merit in the appeal can certainly reverse the decision of the trial court, even if all the plaintiffs have not joined as appellants. Therefore, this question is necessarily answered against the appellants. 29. In so far as the question of limitation in concerned, Sri Ram Bhat, learned senior counsel appearing for the respondent-plaintiff, has submitted that firstly it cannot be said that the suit is barred by limitation, inasmuch as in the very plaint, it is pleaded that the cause of action arose during a day in August 1971 also and reckoning from this day, the suit filed on 6-11-1971 is well within the period of six months and therefore Section 487 of the Act did not act as a bar. 30.
30. In the alternative, it is submitted that the requirement of Section 487 to be complied with is not necessary and superfluous for the reason that the action complained of is an illegal act on the part of first defendant-corporation, particularly the commissioner having acted on behalf of the first defendant-corporation to make allotment of plots in favour of the second defendant association and its members by not following the requirement of Section 79 of the Act, particularly clause-(a) of Section 79. What is submitted is that the first defendant-corporation did not being on record any material to support the legality of the allotment by placing before the court either any prior approval of the standing committee or a resolution of the first defendant-corporation to support the allotment. It is pointed out that the allotment being of immovable property of the first defendant-corporation, value of which is more than Rs.5,000/-, it could have been only after proper resolution approving the action and not otherwise. 6.31. In this regard, attention is also drawn to the provisions of Section 73 of the Act to contend that when any contract, which is required to be entered into by the first defendant-corporation should be in writing and should be under the hand and seal of the commissioner of first defendant-corporation and in the absence of any such contract having been executed in favour of either the second defendant association or its members, the allotments are all vitiated and that first defendant-corporation and the commissioner not having followed the requirement of issue of notice under Section 487 of the Act and in support of this submission, Sri Ram Bhat, learned senior counsel, has relied upon the decision of the Supreme Court in the case of Poona Municipality [supra] and also the decision of the Supreme court in the case of Firm Surajmal Banshidhar [supra], wherein the Supreme Court followed its earlier decision in Poona Municipality’s case and also the subsequent decision of the Supreme Court in the case of J.N. Ganatra Vs Morvi Municipality [ AIR 1976 SC 2520 ], wherein the Supreme Court had occasion to interpret the provisions of Section 253(1)(a) of the Gujarat Municipalities Act, 1964, said to be in pari material with the provisions of Section 487 of the Act and purporting to follow the earlier decision of the Supreme Court referred to above. 7.32.
7.32. Placing reliance on these decisions, what is vehemently urged is that the act on the part of the first defendant-corporation in allotting sites in favour of all the members of the second defendant association or even second defendant association is a totally illegal act not following any procedure or provisions of the Act and therefore should be taken to be an act outside the scope of the provisions of the Act and the suit is held to be not affected by Section 487 of the Act. 8.33. Though the learned judge of the lower appellate court has given many other reasons to reverse the judgment and decree of the trial court and to grant relief to the plaintiff, having regard to the questions of law that are framed for examination by this court at the time of admission and the other questions having been answered against the appellants, only other question is pertaining to limitation and as to whether Section 487 of the Act is attracted and if so, to what result? 9.34. Sri D.L.N. Rao, learned senior counsel appearing for the appellant has yet another question of law, which, according to the learned senior counsel, arose in the course of judgment i.e. as to whether the courts-below were right in holding that the suit is not bad for non-joinder of necessary parties, in the sense that not impleading the individual members of second defendant-association in whose favour allotments have been made, being not made as parties would be fatal to the suit and the relief claimed in the suit. 10.35. In so far as the additional question of law raised at the time of argument by Sri D.L.N. Rao, Sri Ram Bhat, learned senior counsel appearing for the respondent-plaintiff submits that this question cannot be agitated now, particularly, as the plaintiff in fact had filed an application for impleading such members of the second defendant association also as party defendants to the suit by filing IAXXII and XXIV; that while IA-XXIII for impleading the second defendant association was allowed, IAXXIV for impleading the individual members having been rejected by the trial court, the question cannot be permitted to be re-agitated in the second appeal when that order has become final. 11.36.
11.36. In so far as this question of law, which is sought to be raised now, is concerned, I find that while it is a fact that IA-XXIV for impleading the individual members was rejected by the trial court, whether rightly or wrongly, the court having taken the view that the association being a party, it was not necessary to implead all individual members, it becomes necessary for the plaintiffs even if the plaintiffs succeed to work out the relief only through the association and no proceedings against the individual members and therefore I do not propose to examine this question any further, as it is a well settled proposition of law that no judgment or decree binds on a non-party. If at all the plaintiffs had to workout their decree, it will be against the parties to the judgment and proceedings and not otherwise. .37. Be that as it may, on the question of applicability of Section 487 of the Act etc., I am of the view that in the present situation, the provisions of Section 487 of the Act is attracted to the case and it is not as though the plaintiffs could wriggle out of the obligation of Section 487 of the Act. I say so for more than one reason. Firstly, in the understanding of the plaintiffs themselves, the section was attracted and they caused legal notice under the very section. It is only during the course of the arguments, when it was pointed out that the suit is bad for non-compliance with the requirement of Section 487 of the Act, the argument was advanced that the very section is not attracted, particularly in the light of the law as has been developed and declared by the Supreme Court starting from the case of Poona Municipality [supra] and the subsequent development of law in this regard is not in any doubt, and the consistent ratio is if an act which is complained of and in respect of which the action is brought against the municipality, is an action totally outside the purview of the action or acts contemplated under the very Act, then, Section 487 is not attracted and issue of notice or non-issue of notice is of no consequence.
If complained of is one purporting to be an act under the provisions .of the Act, but at variance or contrary etc., the action complained of has to be necessarily tested on the touchstone of the provisions of the Act. Whether the action is one totally beyond the competence of the first defendant-corporation and its officers or whether it has a collusion of the authority and the power under the provisions of the Act, is a question that has to be examined on the facts and circumstance of each case and to be answered. 12.38. Inthis case, the complaint is that while the act under the provisions of the Act i.e. by allotting plots in favour of second defendant-association or its members, the first defendant-corporation or the commissioner of the first defendant-corporation has allotted the property of the first defendant-corporation has allotted the property of the first defendant-corporation in a manner not elicited under the provisions of the Act or the Rules framed thereunder. Even on a principle, if such is the contravention, then, the action becomes contrary to the provisions of the Act, though while the functioning under the scope of the act. If so, the provisions of section 487 of the Act are necessarily attracted. If it is to be understood that even the action/functioning within the scope of the Act, if it is clearly contrary or at variance with any of the provisions, of the Act, then, it amounts that Section 487 of the Act is not attracted. In a situation where it could be demonstrated that any action of the first defendant-corporation or its officers are in any way at variance with any of the provisions of the Act, if the actions are not at all at variance of the provisions of the Act, then, there is no question of challenging that action as illegal or irregular or contrary to the very provisions, and an understanding of this nature will virtually render otiose the very provision of Section 487 of the Act, as in such a situation, there is illegality or irregularity or non-compliance of the requirement of the provision of the Act and if such a suit is brought, the first defendant-corporation can plead the defence available under Section 487 of the Act.
Of course, there may be a situation where the first defendant-corporation is sued for violation of an undertaking or contract or such other situation and in such situation, the action being brought against the first defendant-corporation under Section 487 of the Act is attracted and only in such situations and actions Section 487 is attracted. But, on a reading of the provisions of Section 487, I am of unable to persuade my self to this line of thinking, as the language shows that in respect of any suit instituted against the first defendant-corporation or against the commissioner, or in respect of any alleged neglect or default in the execution of an act very clearly indicates that the officers are necessarily acting in contravention of the provisions of the Act and the action is in violation of the provisions of the Act, otherwise, there will not be any cause of action for bringing a suit against the first defendant-corporation or its officers. .39. I am unable to see any statutory violation demonstrated on the part of the plaintiffs to contend that the act complained of is in violation of any statutory provision. Though Sri Ram Bhat, learned senior counsel has drawn attention to Sections 79 and 73 of the Act, I find that the provisions of Section 79 will be attracted only if it relates to an act of the Commissioner [of the first defendant-corporation], which he performs in his discretion in the matter of transfer of any movable or immovable of the corporation and such a situation depending upon the value being below Rs.3,000/- .or above Rs.3,000/-, prior sanction form the standing committee or the first defendant-corporation being required. In the pleading of the plaintiffs, the action complained of is only against that of the first defendant-corporation and not that of the Commissioner. If it is the action of the first defendant-corporation, then the provisions of Section 79(f) is not attracted, as it is not the case of the plaintiffs that any one of the sub-clauses (a) to (e) of Section 79 is attracted. Clauses (a) to (c) attract the actions of the Commissioner by himself without the supporting act of the standing committee or the corporation, or clause (d), which operates when the value is less than the current market value and such is not the case of the plaintiffs. 13.40.
Clauses (a) to (c) attract the actions of the Commissioner by himself without the supporting act of the standing committee or the corporation, or clause (d), which operates when the value is less than the current market value and such is not the case of the plaintiffs. 13.40. In so far as the reference to Section 73 of the Act is concerned, here again I do not find any violation pleaded in the plaint in respect of the action of the corporation. Section 73 speaks of contracts including the contract relating to acquisition and disposal of properties. 14.41. The plaintiffs have not placed before the court any contract, which is said to have been entered into in violation of the provisions of Section 73 of the Act. That apart, if a contract is not in consonance with the requirement of Section 73, the effect of such contract is statutorily indicated in the section itself and can have a bearing on the contract. It is for such purpose, as and when occasion arises, to take up this mater and as of now when the plaintiffs have not either pleaded or shown any such non-compliance of requirement of Section 73, it cannot be presumed that mere allotment of sites was an act in violation of Section 73 or of non-compliance with the requirement of Section 73 of the Act. 15.42. As the plaintiffs have not been able to establish that there was any specific violation of any provisions of the Act or the Rules, the argument that in terms of the ratio as declared by the Supreme Court in the case of Poona Municipality [supra] section 487 was not applicable to the suit also fails, as the plaintiffs have not established the particular illegality committed by the first defendant-corporation because of which it can be sued. .43.
.43. Viewed from either angle, it has to be answered that the Section 487 of the Act is not only attracted to the present situation, but there is also non-compliance with the requirement of the Section and that for the reason that the argument of subsequent cause of action as indicated in the plaint to have arisen during the month of August 1971 and therefore the suit is within six months from that day, cannot stand scrutiny in law for the reason that it is a well accepted principle of law of limitation that once the limitation begins to run, it is not arrested by any subsequent act. If the plaintiffs themselves assert that the cause of action arose during a day in February 1971, there is no question of such a cause of action getting arrested or fresh cause of action beginning from August 1971. The arguments of recurring cause of action should have been confined to the subsequent date with reference to which alone the relief should have been sought for. The relief being one related to the earlier cause of action, not independent of it, i.e. the cause of action arose as understood by the .plaintiff during a day in February 1971, the suit to be tenable in terms of Section 487(1)(b) of the Act, should have been necessarily brought in within six months and that having not been done, the suit is bad and therefore fails. 16.44. Inthe result, these appeals are allowed and the impugned judgment and decree passed by the first appellate court is set aside and the suit of the plaintiffs is dismissed. 17.45. Parties to their own costs.