JUDGMENT :- Rule. Rule is made returnable forthwith. Heard finally with consent of the parties. 2. Being aggrieved by the order passed by the Divisional Commissioner under section 39(1) of the Bombay Village Panchayat Act, 1958, this writ petition is preferred. 3. The facts giving rise to the writ petition are as follows Petitioner No. 1 is the Upasarpanch of Village Panchayat, Nanadevi, Tq. Mouda. Distt. Nagpur. Petitioner Nos. 2 to 6 are the members of the said GramPanchayat. They were elected and took charge in the month of November, 2003. They submit that they have been discharging their duties diligently and strictly according to the rules. One Company known as Indian Petro Chemicals Company Ltd. (IPCL) has established an industrial Unit in the Gram-panchayat area of Nanadevi. The said Unit was liable to pay tax to the village Panchayat, Nanadevi. Accordingly, village Panchayat Nanadevi had recovered towards lump sum contribution in lieu of taxes a sum of Rs. 3,00,000/- for the year 1998 to 2000. Similarly, for the year 2002-05, the village Panchayat had recovered from the said company a lump sum contribution in lieu of taxes to the extent of Rs. 3,90,000/-. Gram-panchayat passed a Resolution agreeing to take from the said Company a lump sum contribution in lieu of taxes for the year 2005-08 to the extent of Rs. 5,15,000/-. Thereafter, a complaint came to be made to the concerned authority that the petitioners have acted in breach of . provisions of section 39 of the Bombay Village Panchayat Act, since they have caused financial loss to the said village Panchayat. On 30th July, 2006, the village Panchayat issued a demand bill to the said Company and sought to recover Rs. 27,81,049/- from the said Company towards the taxes. However, on 30th October, 2006 a Resolution was passed in the meeting by the said village Panchayat to grant 50 per cent concession to the said Company and under section 124 of the Village Panchayats Act, they sought to recover Rs. 13,90,525/-. It is alleged that in breach of this, again a meeting was held by the petitioners on 3012-2007 and they agreed to receive a lump sum contribution ofRs. 5,15,000/- in lieu of the taxes. It was alleged by the complainant that the petitioners have by corrupt means reduced the amount of taxes and have thus caused loss to the Gram-panchayat. It is alleged that in breach of this, again a meeting was held by the petitioners on 3012-2007 and they agreed to receive a lump sum contribution ofRs. 5,15,000/- in lieu of the taxes. It was alleged by the complainant that the petitioners have by corrupt means reduced the amount of taxes and have thus caused loss to the Gram-panchayat. It is after receipt of this complaint by the Chief Executive Officer of the Zilla Parishad, forwarded an enquiry report to the Commissioner of Nagpur Division. After receipt of this report, the Commissioner, Nagpur Division found that the resolution that was passed by the petitioners was improper. They have caused financial loss to the Gram-panchayat and therefore, have incurred disqualification. He, therefore, disqualified the petitioners and being aggrieved by that, the petitioners preferred an appeal before the Hon'ble Minister who dismissed the appeal. Being aggrieved by that order, this writ petition is preferred. 4. I have heard the learned counsel for the petitioners and the respondents. 5. Order of the Divisional Commissioner has been confirmed by the Hon'ble Minister. It is held by both the authorities that the act of entering into agreement with a factory to pay lump sum tax under section 125 of the Village Panchayat Act has caused financial loss to the Gram-panchayat and as such the act falls under section 39 of the Village Panchayat Act and therefore, the petitioners were liable to be disqualified. 6. In this context, it would be necessary to look into the contentions raised by the petitioners and the provisions of the Law. The petition discloses that for the year 1998 to 2000, there was an agreement under section 125 of the Act between Gram-panchayat and the factory to pay lump sum tax of Rs. 3,00,000/-. Again for the year 2002-05, there was a similar agreement and lump sum tax contribution was settled at 3,90,000/-. There was thus increase of Rs. 90,000/-. It appears that for the year 2005-08 the Gram-panchayat had decided to accept Rs. 5,15,000/- as lump sum contribution by resolution. This last Resolution and contract is the subject-matter. 7. Smt. Wasnik, the learned counsel for the State submits that the Grampanchayat had initially passed a Resolution dated 30-5-2006 to assess the property at the rate of Rs. 3/- per sq.ft. and as such demand bill at Rs. 27,81,049/was issued. 5,15,000/- as lump sum contribution by resolution. This last Resolution and contract is the subject-matter. 7. Smt. Wasnik, the learned counsel for the State submits that the Grampanchayat had initially passed a Resolution dated 30-5-2006 to assess the property at the rate of Rs. 3/- per sq.ft. and as such demand bill at Rs. 27,81,049/was issued. She submits that a resolution was again passed on 30-10-2006 and petitioners negotiated with the factory and granted 50% concession. She also submits that in spite of the Resolution dated 30-10-2006 yet another resolution was passed on 30-12-2006 reducing the lump sum contribution of Rs. 5,15,000/and entering into the contract. She submits that this would clearly go to show that by passing such resolution and entering into contract, the petitioners have caused financial loss to the gram-panchayat and the order, therefore, is correct. The material question is whether the passing of such resolution and entering into contract has actually caused loss or not. For that, it is necessary to know the scheme. It would be necessary to look into the provisions of sections 124 and 125 of the Act and the Rules under section 125 of the Act. Particularly Rules No.3, 4, 5, 6 and 7 are very material. As stated earlier, section 124 deals with levy of taxes and fees by Gram-panchayat upon assessment made by it. While section 125 deals with lump sum contribution by factories in lieu of taxes levied by Gram-panchayat. It would be necessary to reproduce Rules 3 to 7 here for deciding the question. 3. Application by occupier of factory. As stated earlier, section 124 deals with levy of taxes and fees by Gram-panchayat upon assessment made by it. While section 125 deals with lump sum contribution by factories in lieu of taxes levied by Gram-panchayat. It would be necessary to reproduce Rules 3 to 7 here for deciding the question. 3. Application by occupier of factory. - An occupier of a factory desiring to arrive at an agreement shall make an application not later than sixty days from the commencement of the financial year or, as the case may be, from the functioning of the factory during any financial year, in writing to the Panchayat stating, (a)(i) the amounts paid by him to the panchayat in respect of each of the taxes levied by the panchayat during the three financial years inmlediately preceding the year, or as the case may be, during the period of less than three years the factory has been functioning immediately preceding the financial year, in which the application is made; (ii) the amount payable by the occupier to the panchayat in respect of all or any of the taxes levied by the panchayat during the financial year in which the application is made (the amount payable in respect of each tax being indicated separately); (b) the details of the amenities provided by the occupier in the factory and which the panchayat provides within the limits of its jurisdiction; (c), the expenditure incurred by the occupier on each of the amenities provided by him during the period referred to in sub-clause (i) of clause (a) up to the date of the application; (d) the lump sum amount which the occupier proposes to pay to the panchayat in lieu of all or any of the taxes levied by the panchayat having regard to the amenities provided by the panchayat. 4. Consideration of application by panchayat. - On receipt of an application under Rule 3, the panchayat shall consider the application and, subject to the provisions of Rules 7 and 8, pass not later than sixty days from the date of receipt thereof, a resolution conveying its decision to the occupier. 5. Execution of agreement between panchayat and occupier and its submission to (Chief Executive Officer). - On receipt of an application under Rule 3, the panchayat shall consider the application and, subject to the provisions of Rules 7 and 8, pass not later than sixty days from the date of receipt thereof, a resolution conveying its decision to the occupier. 5. Execution of agreement between panchayat and occupier and its submission to (Chief Executive Officer). - Where the panchayat agrees to accept the lump sum amount proposed by the occupier under clause (d) of Rule 3, an agreement in Form 'A' appended to these rules shall be executed between the panchayat and the occupier and the panchayat shall (submit to the Chief Executive Officer such agreement within one month from the date of its execution) along with the following documents that is to say :(a) the application submitted by the occupier, (b) the resolution passed by the panchayat. 6. Submission of application by (Chief Executive Officer) to Government. - On receipt of the agreement and the documents specified in Rule 5, the (Chief Executive Officer) shall, within (two months) of their receipt, forward the same (with the remarks of the Standing Committee of Zilla Parishad) to the Commissioner who shall, within fifteen days thereafter, submit the same with the comments to the State Government for its sanction. 7. Limitation for arriving at agreement. - The amount of lump sum contribution may not be disproportionately less than the amount receivable by the panchayat in respect of taxes levied by it at the normal rate during the financial year in which the application is made and shall be - (a) not less than 70 per cent of the average amount recovered from levy of octroi for the last three years (or for the period during which the factory was functioning up to the date of application, whichever is less), immediately preceding the financial year in which the application is made. (b) not less than 30 per cent of the amount receivable by the panchayat from levy of the following taxes, that is to say : (i) general sanitary cess, (ii) general water rate, and (c) not less than 50 per cent of the amount receivable by the panchayat from the levy of taxes other than those specified in clauses (a) and (b) : (Provided that, in case of factories which are principally engaged in the production of aircraft for defence purposes, the State Government may, having regard to the amenities provided by such factories in the factory area as compared with the amenities provided by the panchayat in the other areas within its jurisdiction, and the amount spent by the factories on such amenities and also having regard to the nature of the public interest served by the factories, relax the rates aforesaid, in consultation with the panchayat and the factory concerned.) 8. To my mind, the material question that needs to be decided is whether such mere passing of resolution and entering into contract has resulted into loss and whether such contract even if entered is final and binding. Rule 3 of the Maharashtra Village Panchayats Act (Payment of Lump Sum Contribution by Factories) Rules, 1961 says that the factory desirous to avail the benefit of section 125 has to apply to the village Panchayat. The village Panchayat has to consider the application bearing in mind Rule 7 and pass a resolution within 60 days. Rule 7 puts certain restrictions including restriction that the lump sum contribution should not be proportionately less and in any case not less than 50% of the average amount recoverable. It speaks of percentage of octroi and sanitary and water taxes. Rule 8 says that the agreement shall be valid only for period of three years. Subject to these restrictions, the gram-panchayat has to pass a resolution under section 4. The next step is that after the resolution is passed the gram-panchayat has to enter into the agreement and the said agreement together with resolution and the application is required to be sent to the Chief Executive Officer of Zilla Parishad. Under Rule 6, the Chief Executive Officer is supposed to forward the documents to the Commissioner and the Conmlissioner in turn is supposed to forward this to the Government along with his comments for according sanction. Under Rule 6, the Chief Executive Officer is supposed to forward the documents to the Commissioner and the Conmlissioner in turn is supposed to forward this to the Government along with his comments for according sanction. Thus, what Commissioner is supposed to do is to forward the proposal, the agreement, the resolution and the application with his conm1ents to the Government. The word used is 'comments '. It must, therefore, be assumed that the Comnlissioner is supposed to apply llis nlind and opine whether the proposal of the Gram-panchayat should or should not be accepted. If he finds that it will not be in the interest of the gram-panchayat, he has a right to opine that it should not be accepted. The Government is supposed to consider the proposal of Gram-panchayat along with the comments of the Commissioner. The rule says that the Government has to then accord the sanction. The fact that it is to be sent to the Government for sanction presupposes that the Government has to take final decision on the proposal. The right to grant sanction includes a right to refuse sanction. The Govenm1ent, therefore, has a right to refuse the sanction if it finds that the proposal is not in the best interest of the Gram-panchayat. It is, therefore, obvious that the agreement entered into between the factory and the Grampanchayat would always be subject to sanction of the Government. There could, therefore, be no concluded contract between the factory and the Gram-panchayat which either party can enforce. The contract does not assume finality and the Gram-panchayat is not bound to act upon it, nor can the factory enforce it. The Government had every right to refuse sanction which would have rendered resolution and the agreement non est. If the Government has not as yet accorded sanction, the agreement as well as the Resolution have no efficacy. If the agreement has not become enforceable, the lump sum contribution cannot be said to be finally decided at all. The Gram-panchayat is still at liberty now to act under section 124 of the Act if it so desires and the Government and the Commissioner has a right to direct the gram-panchayat to act under section 124 if it deems so fit. Hence, in no case, it could be said that due to this resolution and execution of the agreement any loss is caused to the Gram-panchayat. Hence, in no case, it could be said that due to this resolution and execution of the agreement any loss is caused to the Gram-panchayat. Grampanchayat can still proceed under section 124 of the Act as said earlier. In the circumstances, it cannot be said that the petitioners have caused any loss to the village Panchayat. If they have not actually caused loss to the Gram-panchayat, they have not committed any misconduct. As such they could not, therefore, incur any disqualification under section 39 of the Act. The petition therefore succeeds. The orders of the Hon'ble Minister as well as the Commissioner are set aside and quashed. No order as to costs. Order accordingly.