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2008 DIGILAW 1804 (ALL)

KAILASH CHANDRA GOEL v. BOARD OF REVENUE

2008-08-27

ABHINAVA UPADHYA, PRADEEP KANT

body2008
PRADEEP KANT AND ABHINAVA UPADHYA, JJ. These are the two writ petitions, which are being decided by a common order. 2. At the outset it would be appropriate to mention that earlier these writ petitions were allowed by a learned single Judge vide judgment and order dated 25. 5. 2001 against which order, several S. L. Ps. bearing Nos. 3940, 3941 and 3942-3943 of 2003 were filed, wherein the Apex Court set aside the aforesaid order only on the ground that the writ petitions were cognizable by Division Bench and were disposed of by the learned single Judge. The Apex Court thus set aside the order passed by the learned single Judge and directed that the matter be considered by a Division Bench. 3. It is in this light that we proceed to decide the aforesaid writ petitions. 4. These present writ petitions challenge the State Governments order dated 24. 7. 2000 and 27. 9. 2000 by means of which the State Government has refused approval of the auction conducted by the Nagar Nigam, Ghaziabad and also the consequential order passed by the Nagar Nigam requiring the petitioners to take the refund of the amount deposited respectively in respect of the two plots viz. Nos. 419 and No. 420. 5. Writ Petition No. Ill has been filed by Kailash Chandra Goel, challenging the order in respect of plot No. 419 whereas Writ Petition No. 115 has been filed by Sanjeev Goel assailing the aforementioned orders with respect to plot No. 420. 6. In short, the question involved is to the effect that whether the properties which belong to the Nagar Nigam require any approval of the State Government in the matter of sale of such properties in terms of Section 128 of the U. P. Municipalities Corporation Act, 1959 (hereinafter referred to as Act ). 6. In short, the question involved is to the effect that whether the properties which belong to the Nagar Nigam require any approval of the State Government in the matter of sale of such properties in terms of Section 128 of the U. P. Municipalities Corporation Act, 1959 (hereinafter referred to as Act ). The said Section 128 is quoted below : "power to dispose of property.- (1) The Mahapalika shall for the purposes of this Act and subject to the provisions thereof and rules made there under, have power to sell, let on hire, lease, exchange, mortgage, grant or otherwise dispose of any property or any interest therein acquired by or vested in the Mahapalika under this Act : Provided that no property transferred to the Mahapalika by the Government shall be sold, let on hire, exchange or mortgaged or otherwise conveyed in any manner contrary to the terms of the transfer except with the prior sanction of the State Government. " 7. The proviso attached to Section 128 prohibits the corporation from transferring any property which has been transferred to the Mahapalika (now Corporation) by the State Government either by sale or by letting on hire, or lease or exchange or mortgage or grant or otherwise without its prior sanction but if the property, is the own property of the Nagar Mahapalika, it does not require any sanction or approval for sale or transfer in any manner by the State Government and, therefore, such properties of the Corporation can be sold by the Corporation independently without any intervention of the State Government. 8. The Government on considering that various properties, which have lost their utility belonging to the Nagar Nigam are lying unused, decided to allow the sale of such properties and to create Urban Infrastructure Development Fund. This fund was created for its use for the development of areas falling under the Nagar Nigam. In fact, all local authorities were directed to dispose of the non-profitable properties and to deposit the receipts in the said fund. 9. An Office Memorandum dated 27. 7. 1998 was issued by the State Government for creating the Urban Infrastructure Development Fund and also directing that all the proceeds received (i) by the sale of non- profitable/encroached/uneconomic land/house and all such properties, which as per the present plans and as per the future plans be deposited in the said fund. 9. An Office Memorandum dated 27. 7. 1998 was issued by the State Government for creating the Urban Infrastructure Development Fund and also directing that all the proceeds received (i) by the sale of non- profitable/encroached/uneconomic land/house and all such properties, which as per the present plans and as per the future plans be deposited in the said fund. Apart from the said proceeds, there were certain other helps/sources under which the money received was to be placed in the said development fund. 10. The schemes under the aforesaid development fund were to be proposed by the concerned local authorities, which were to be approved by the Commissioner/district Magistrate through a committee constituted by them consisting of the Chairman of the concerned development authority, nominee of the Zila Nagar Vikas Adhikari, Public Works Department and the Chairman of the Jal Nigam concerned. This committee was to approve the expenses which were to be incurred for the implementation of the aforesaid schemes. 11. In what manner the scheme should be implemented and how the money should be spent, was provided in the aforesaid office memorandum laying down that all works which were to be got done from the aforesaid development fund should be done by giving preference, which will result into a regular income to the Nagar Nigam. Apart from this, as per the necessity, the work of roads, street light, water outlet can also be got done from this fund. It was clarified that the proceeds received on the implementation of the aforesaid works under the scheme shall be deposited in the development fund and that the income deposited in the fund should not be used or spent for any other purpose. 12. Nagar Nigarm, Gaziabad following the directives of the aforesaid Office Memorandum dated 27. 7. 1998 proceeded to auction its property, namely, plot Nos. 419 and 420 situate in village Jagola, Pargana Loni, District Gaziabad and after making due publicity the auction was conducted. 13. It appears that initially the auction could not take place despite publication being made in the newspapers. Thereafter in the year 1999 on extending the date of tender from 25. 2. 1999 to 5. 3. 1999, the tenders were invited, in which the petitioners also participated with respect to plot Nos. 419 and 420 respectively.- 14. 13. It appears that initially the auction could not take place despite publication being made in the newspapers. Thereafter in the year 1999 on extending the date of tender from 25. 2. 1999 to 5. 3. 1999, the tenders were invited, in which the petitioners also participated with respect to plot Nos. 419 and 420 respectively.- 14. It is also the case of the petitioners that as per the term of the tender notice, the petitioners of both the writ petitions deposited the entire amount, vide resolution dated 14. 5. 1999, the bids of the petitioners were approved by the Nagar Nigam. However, thereafter the Nagar Nigam forwarded all the papers for seeking approval of the State Government. The State Government asked for certain clarifications from the Nagar Nigam regarding the mode and manner in which the properties were disposed of, which report was also submitted by the Nagar Nigam on 5. 7. 1999, but the State Government vide impugned orders refused to grant sanction for sale. 15. The bid of Kailash Chandra Goel was higher by 175 per cent than the circle rate as determined by the District Magistrate and that of Sanjeev Goel was higher by 150 per cent. 16. The State Government thus vide the impugned orders passed separately, challenged in both the writ petitions though of the same date, refused to grant approval to the auction held and approved by the Nagar Nigam. 17. The State Government though refused approval but did not give any reason for the same in the impugned orders nor in the counter-affidavit any reason has come forward but for the only defence that unless approval was granted by the State Government the bids could not have been approved nor the sale can be said to be completed. In support of the aforesaid plea the State counsel has relied upon the proviso of Section 128 as well as on the contents of the Office Memorandum dated 27. 7. 1998. 18. Learned counsel for the State mainly relied upon the Office Memorandum dated 27. 7. In support of the aforesaid plea the State counsel has relied upon the proviso of Section 128 as well as on the contents of the Office Memorandum dated 27. 7. 1998. 18. Learned counsel for the State mainly relied upon the Office Memorandum dated 27. 7. 1998 saying that all the schemes under the aforesaid Government order were to be approved by a committee to be constituted by the Commissioner/district Magistrate consisting of the persons named therein and all these schemes were to be implemented/executed under their supervision by such committee and therefore, the sale of the immovable property of Nagar Nigam was also to be approved by the State Government and also because the proceeds were to be deposited in the development fund created for the purpose, the approval from the State Government was necessary. 19. The plea aforesaid has been strongly refuted by the learned counsel for the petitioners saying that Section 128 permits the sale of immovable property which belongs to the Corporation and which has not been acquired by transfer made by the State Government and that the property in question being the own property of the Nagar Nigam which was not transferred to the Nagar Nigam by the State Government, the proviso of Section 128 is not at all applicable for such a property. 20. The State counsel could not justify the action of the State Government on the strength of the proviso to Section 128 of the Act nor has been able to indicate any other provision under the aforesaid Act which requires the Nagar Nigam to obtain approval for sale conducted by it, in respect of its own properties, which have not been acquired nor have been transferred to it by the State Government. 21. A bare perusal of the aforesaid provision makes it clear that the restriction on alienation or transfer of any property which was transferred to the Corporation by the State Government finds mention in the proviso. Sub-section (1) which is the main and substantive provision, nowhere speaks about any such restriction on sale or transfer with respect to the properties which are owned by the Nagar Nigam. 22. Sub-section (1) which is the main and substantive provision, nowhere speaks about any such restriction on sale or transfer with respect to the properties which are owned by the Nagar Nigam. 22. Sub-section (1) says that subject to the provisions of the Act and the Rules, made there under the Mahapalika shall have power to sell, let on hire, lease, exchange, mortgage or otherwise dispose of any property or any interest therein acquired by or vested in the Corporation, under this Act. 23. The language used aforesaid leaves no ambiguity that the property or the interest therein acquired by or vested in the Corporation under this Act can be transferred by any of the recognised modes of transfer by the Corporation unless of course some restriction finds mention in the Act or in the rules framed under the Act, the compliance of which need be made before making such a transfer. 24. The restriction, which has been imposed in the proviso is only relatable to the properties which have been acquired by the Corporation through the State or which have been transferred by the State Government to the Corporation. The requirement of seeking approval before finalizing any transfer with respect to the properties, which have been transferred by the State Government to the Corporation appears to have been introduced for the reason that the States property, which has been transferred to the Nagar Nigam should not be allowed to be misutilized and should not be squandered and, therefore, such a check, which is reasonable also, has been placed. So far the own properties of the Nagar Nigam is concerned, which vest in the Nagar Nigam of its own and have not been transferred by the State Government, the State Government has not been conferred with any authority to grant prior approval, in the matter of sale or transfer of such property. If the Nagar Nigam is misutilizing its own property or is selling or transferring it on unreasonable price or for illegal gains, against the interest of the Corporation other appropriate action as might be provided in law can be taken against the erring office bearers or the officers and the authorities. 25. The alternative argument of the State counsel that in terms of the Government order dated 27. 7. 25. The alternative argument of the State counsel that in terms of the Government order dated 27. 7. 1998, the State Government was fully competent to look into the validity of the auction and that of the adequacy of bid as the Nagar Nigam has sold the plots to the petitioners, deriving authority under the said Government order is to be considered in the light of the terms and conditions laid down in the aforesaid Government order. 26. The Government order dated 27. 7. 1998 nowhere says nor learned counsel for the State is able to show any such clause in the said order which puts any condition of prior approval in selling or transferring any property which vests in the Corporation having been acquired of its own. What has been provided in the Government order is only regarding the creation of the development fund and the manner in which it is to be created and utilized. 27. The committee constituted under the Government order is responsible for the right implementation of the schemes as may be formulated by the Nagar Nigam. Such schemes are to be approved and implemented in their true spirit for the benefit of the Nagar Nigam and its functioning. It also prescribes the source from which the funds may be had for the aforesaid development fund including the proceeds which are received by such auction of unused/non-profitable properties of Nagar Nigam. The function of the committee is to see that the fund or the development fund is utilized or used for the purpose for which it has been created. 28. In what manner the development fund would be created and how the schemes would be drawn and approved, the implementation thereof, are such few reasonable checks, have been provided for avoiding misuse of the funds under the development fund but that would not mean that while selling the property of the Nagar Nigam, the approval of the Commissioner/collector or the Committee constituted under the Office Memorandum or by the State Government would be necessary. 29. 29. In the instant case it is not being disputed by the respondents that the plots in question never belonged to the State Government at any point of time nor there is any dispute that it was ever transferred to the Nagar Nigam by the State Government and rather it is the admitted case of the respondents that the property in question belongs to the Nagar Nigam, that being so, we are of the considered opinion that the State Government had no role to play in the matter of sale of said plots. 30. The attention is also drawn to the Government order dated 6. 11. 1979 which specifically permits the Nagar Nigam to dispose of its property by public auction or by tender. 31. We thus hold that the impugned orders dated 24. 7. 2000, 27. 9. 2000 and 17. 10. 2000 contained as Annexures-15, 16 and 17 respectively in Writ Petition Nos. Ill (M/b) of 2001 and 115 (M/b) of 2001 cannot be sustained in law and are liable to be quashed. 32. The orders aforesaid are, therefore, quashed. The Nagar Nigam is directed to proceed further in the matter of sale of the plots in question in accordance with Rules, without any further delay. .