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Allahabad High Court · body

2021 DIGILAW 200 (ALL)

Ravi Kumar v. State Of U P

2021-02-02

MANOJ MISRA, RAVI NATH TILHARI

body2021
JUDGMENT 1. We have heard Sri Sandeep Kumar for the petitioners; the learned standing counsel for the respondents 1, 2 and 3; and have perused the record. 2. At the outset, Sri Sandeep Kumar, the learned counsel for the petitioners, states that the cause of action to file the present petition is with the second petitioner and, therefore, he prays to withdraw this petition in so far as the petitioner no.1 (Ravi Kumar) is concerned. 3. In view of the above, the petition of petitioner no.1 (Ravi Kumar) is dismissed as withdrawn. The petitioner no.2 (Thagai), for the sake of convenience, would hereinafter be referred to as the petitioner. 4. In brief the facts giving rise to this petition, as could be elicited from the petition, are as follows: The petitioner being member of fishermen community, pursuant to an advertisement inviting bids for settlement of fishery lease of Gaon Sabha ponds for a period of ten years, after depositing security amount of Rs.1.47 lacs, participated in an auction held on 30.09.2020. His bid, amongst four bidders, at Rs.13.40 lacs, was highest for the pond i.e. plot no.421 @ 1.137 hectare. Vide condition no.2 of the advertisement, provisions of sections 189 and 190 of the U.P. Revenue Code, 2006 (for short Code, 2006) were made applicable, which, otherwise also, by virtue of sub-rule (8) of Rule 57 of the U.P. Revenue Code Rules, 2016 (for short Rules, 2016), were to apply. As per those sections, the highest bidder is required to deposit one-fourth of the bid amount on the day of the auction and the balance, three-fourth, within 15 days. On failure to deposit, there are penal consequences including that of forfeiture of the security amount. The condition no.2 of the advertisement reiterates that position. Admittedly, the petitioner could not fulfil the condition of deposit, despite grant of additional time. Accordingly, by the impugned notice dated 19.10.2020, the petitioner was given 3 days time to make deposit of the entire amount or to face forfeiture of the security amount. 5. The condition no.2 of the advertisement reiterates that position. Admittedly, the petitioner could not fulfil the condition of deposit, despite grant of additional time. Accordingly, by the impugned notice dated 19.10.2020, the petitioner was given 3 days time to make deposit of the entire amount or to face forfeiture of the security amount. 5. Through this petition, the petitioner has sought quashing of the forfeiture notice dated 19.10.2020 as well as condition no.2 of the advertisement and has also prayed that the sub-rule (8) of Rule 57 of the Rules, 2016, which provides that the provisions of Sections 189 and 190 of the Code, 2006 shall apply to every auction under that rule, be declared ultra vires Articles 14, 19, 21 and 38 of the Constitution of India as also sub rules (5) and (11) of Rule 57 of the Rules, 2016 and the intention of the legislature reflected from Section 175 of the Code, 2006. 6. Before we proceed to notice and assess the merit of the submissions, it would be apposite to notice the relevant provisions of the Code, 2006 and the Rules, 2016 governing settlement of lease of tanks/ ponds etc. Section 54 of the Code, 2006 declares, inter alia, that all lakes, ponds and tanks, in absence of establishment of right of any person in or over the same, be the property of the State Government. Section 59 of the Code, 2006 empowers the State Government to entrust, inter alia, tanks, ponds etc to a Gram Panchayat for the purposes of superintendence, preservation, management and control in accordance with the provisions of the Code, 2006. Section 61 of the Code, 2006 provides for management of village tanks. It provides that where a tank in a village is entrusted or deemed to be entrusted in any Gram Panchayat under section 59, then, notwithstanding anything contained in any contract or grant or any law for the time being in force, its management by such Gram Panchayat shall be regulated by the following conditions, namely— (a) where the area of the tank measures 0.5 acre or less, it shall be reserved for public use by the inhabitants of the village; (b) where the area of the tank exceeds 0.5 acre, the Bhumi Prabandhak Samiti shall, with the previous approval of the Sub-Divisional Officer, let it out in the manner prescribed. In the Explanation thereof it is provided that for the purpose of the section, the term ‘tank’, includes talab, pond, pokhar and other land covered with water. Section 233 of the Code, 2006 empowers the State Government to make rules for carrying out the purposes of the Code, 2006. Sub-section (2) of section 233 provides that “without generality of the foregoing power, such rules may also provide for— (i) to (viii)......; (ix) the protection, preservation and disposal of properties belonging to or vested in the State Government, Gram Panchayat or other local authority, including determination of compensation for damages misappropriation or wrongful occupation thereof; (xi) to (xiv).....; (xv) the procedure for granting lease by the Collector, cancellation of such lease and eviction of unauthorised occupants from the land belonging to the State Government, Gram Panchayat and local authority; (xvi) to (xix)....; (xx) the regulation of fishing in rivers, lakes, ponds and tanks entrusted to a Gram Panchayat or other local authority; (xxi).....; (xxii) any other matter for which rules are required to be or may be made under the Code, 2006.” 7. Pursuant to the power conferred by section 233 of the Code, 2006, the State Government notified Rules, 2016. Rules 57 and 58 thereof deal with lease of tanks. Rule 57 deals with lease of smaller tanks, that is where the size of the tank exceeds 0.5 acre but does not exceed 5 acres whereas Rule 58 deals with lease of bigger tanks where the area exceeds 5 acres. 8. As the present case concerns a smaller tank below 5 acres in area, the lease of such tank is to be accorded in accordance with the provisions of Rule 57 of the Rules, 2016. Sub Rule (1) of Rule 57 provides that where the area of a tank exceeds 0.5 acre but does not exceed 5 acres, the Samiti shall let out the same for fishing purposes or for Singhara with the prior approval of the Sub-Divisional Officer in accordance with the procedure prescribed. Sub Rule (2) provides for organisation of a camp at the tehsil level, about which wide publicity is to be made. Sub Rule (4) provides for preparation of a list of eligible persons in accordance with the order of preference specified in sub-rule (5). Sub Rule (2) provides for organisation of a camp at the tehsil level, about which wide publicity is to be made. Sub Rule (4) provides for preparation of a list of eligible persons in accordance with the order of preference specified in sub-rule (5). Sub Rule (5) provides that the eligibility list of prospective lessees shall be prepared in accordance with the following order of preference— (a) Fishermen residing in the concerned Gram Panchayat; (b) Members of the SC, ST Other Backward Classes or persons of General category living below poverty line residing in the Gram Panchayat; (c) Fishermen residing in the concerned Nyaya Panchayat Circle; (d) Fishermen residing in the concerned Development Block. Sub Rule (6) provides that the persons referred to in any of the preceding clause of sub-rule (5) shall be entitled to the lease of such tank to the exclusion of those specified in the succeeding clauses. Sub-Rule (7) provides as follows: “If the list of eligible persons prepared under sub-rule (4) consists of more than one person, then an auction shall be held on the spot in which only those shall be allowed to participate whose names are included in such list. If there is only one person eligible for the lease aforesaid, the lease shall be granted on the annual rent of the amount fixed by the Government from time-to-time which shall not be less than Rs.1000/-and shall not exceed Rs.2000/-per acre.” Sub-Rule (8) provides as follows: “The provisions of Sections 189 and 190 of the Code shall apply to every auction under this rule.” Sub-Rules (9) to (11) is in respect of the formalities required for approval/ execution and registration of the lease. Sub Rule (12) provides that every such lease shall be executed for a period of ten years and the same shall not be renewed or extended. Sub Rules (13) to (15) are not being discussed because they are not relevant for the purposes of deciding this case. Sub Rule (12) provides that every such lease shall be executed for a period of ten years and the same shall not be renewed or extended. Sub Rules (13) to (15) are not being discussed because they are not relevant for the purposes of deciding this case. Section 189 of the Code, 2006 provides as follows: “Deposit by purchaser and re-sale on default.— (1) The person declared to be the purchaser shall be required to deposit immediately twenty-five per cent of the amount of his bid, and in default of such deposit, the property shall be forthwith re-sold, and such person shall be liable for the expenses incurred on the first sale and any deficiency in price occurring on re-sale, and the same may be recovered from him by the Collector as if the same were an arrear of land revenue. (2) A deposit under sub-section (1) may be made either in cash or by a demand draft (issued by a scheduled bank) or partly in cash and partly by such draft. Explanation.— For the purposes of this section, the expression ‘demand draft’ includes a banker’s cheque.” Section 190 of the Code, 2006 reads thus: “Deposit of purchase money.— The balance amount of the purchase money shall be paid by the purchaser on or before the fifteenth day from the date of the sale in the office of the Collector or at the district treasury or sub-treasury, and in case of default— (a) the property shall be re-sold; and (b) the deposit made under section 189 shall be forfeited to the State Government. 9. The contention of the learned counsel for the petitioner is that the lease of smaller tanks for the purposes of fishing rights as per sub-rules (4) and (5) of Rule 57 of the Rules, 2016 is reserved for the members of fishermen community and members of the SC/ ST or other backward classes or persons of General category living below poverty line, which is to enable marginal sections of the society to earn their livelihood and, therefore, the stringent condition imposed by Sections 189 and 190 of the Code, 2006 read with the Rules, 2016 is ultra vires Article 21 of the Constitution of India and is also arbitrary as it defeats the avowed object of Article 38 of the Constitution of India and as such is violative of Article 14 of the Constitution of India. Further, by placing an onerous condition of making full deposit of the lease rent of ten years, within 15 days of the acceptance of bid, an unreasonable condition is imposed on the fundamental right to carry on trade or business and as such it violates Article 19(1) (g) of the Constitution of India. In addition thereto, it has been argued that as per sub rule (7) of Rule 57 of the Rules, 2016 if there is just a solitary eligible person, annual rent is charged but, interestingly, in the case of settlement by auction the entire money for ten years lease is charged within fifteen days which defies logic and makes the provision completely arbitrary. 10. Per Contra, the learned standing counsel has submitted that the provisions of sections 189 and 190 of the Code, 2006 are backed by sound logic as they serve the public interest at large by ensuring exclusion of non serious bidders so as to make the bidding process meaningful and effective. They do not violate Article 14 of the Constitution as they do not discriminate between members of the same class. Rather they apply universally to a common class of bidders. The provisions are also not onerous because they apply to a situation when more than one eligible person come forward to stake a claim and therefore the bidding is inter se a class of persons to find out the winner. Moreover, a bidder is fully aware of the rigours of the bidding outcome and with open eyes he participates in the bidding process therefore, he cannot complain about the conditions being onerous. In the instant case, there were four persons who participated in the auction. They all participated with open eyes as to the conditions applicable on auction. Under the circumstances, if the petitioner had difficulty in arranging for the funds he should have abstained from bidding. But as he did participate with open eyes he cannot now complain of the conditions being onerous. 11. We have given thoughtful consideration to the rival submissions. Before we proceed to test the merit of the submissions, we would like to put on record that the petitioner has not at all demonstrated that before participating in the bidding process he had registered his protest to the impugned condition of the advertisement. 11. We have given thoughtful consideration to the rival submissions. Before we proceed to test the merit of the submissions, we would like to put on record that the petitioner has not at all demonstrated that before participating in the bidding process he had registered his protest to the impugned condition of the advertisement. It is only after he committed default that he has challenged the impugned condition of the advertisement. 12. It is well settled that vires of a legislation i.e. an Act can be questioned on limited grounds such as legislative incompetence of the legislature to legislate on the subject with which the Act deals or that the Act or its provisions violate the provisions of the Constitution or any of the fundamental rights guaranteed under Part III of the Constitution of India. The vires of a subordinate legislation such as Rules or Regulations in addition to the grounds above, can be questioned on the ground that they are in conflict with the provisions of the parent Act or are beyond the scope of rule making power conferred by the Act. 13. In this case, there is no challenge to the legislative competence of the State legislature or to the rule-making power of the State Government. Moreover, sections 189 and 190 of the Code, 2006 are general provisions applicable to auction sale. The conditions imposed therein on the bidders is based on sound everlasting logic which is to ensure that non serious bidders do not get into the fray and derail the bidding process. They, therefore, by no means can be termed arbitrary or discriminatory more so when they apply equally to the bidder class. Otherwise also, the thrust of the argument is not that sections 189 and 190 are ultra vires per se but that they should not be applied on settlement of fishery lease because such leases are reserved for marginal sections of the society and therefore applying onerous condition laid in Sections 189 and 190 of the Code, 2006, through Rule 57 (8) of the Rules, 2016, for settlement of fishery lease through auction, is arbitrary and as such violative of Articles 14 and 21 of the Constitution of India. 14. 14. No doubt, at first blush, it may appear that the impugned condition of the advertisement is quite harsh, particularly, when we notice it from the point of view of those who are eligible to bid. But then it applies equally to all within the same class of persons and comes into play only when there are more claimants than one in that class. More over, it serves the object of generating a fair competition within that class to secure more revenue for the State. At this stage, we may notice the observations made by Hon’ble B. K. Mukherjea, J. while authoring his opinion separately, though concurring with the majority view, in the landmark seven judges Bench decision of the Apex Court in State of West Bengal versus Anwar Ali Sarkar, AIR 1952 SC 75 , on the underlying principle enshrined in Article 14 of the Constitution. His Lordship observed: “It can be taken to be well settled that the principle underlying the guarantee in Article 14 is not that the same rules of law should be applicable to all persons within the Indian territory or that the same remedies should be made available to them irrespective of differences of circumstances. It only means that all persons similarly circumstanced shall be treated alike both in privileges conferred and liabilities imposed. Equal laws would have to be applied to all in the same situation, and there should be no discrimination between one person and another if as regards the subject matter of the legislation their position is substantially the same.” When we test the impugned condition no.2 of the advertisement on the anvil of the legal principle noticed above, we find that the impugned condition applies only in a situation where settlement of the fishery lease is through an auction which is when there are more than one claimants in that class of claimants and it applies equally to all in that class. Therefore, when members of that particular class submit their bid with prior knowledge of what they would require to meet, their financial bids would logically be as per their financial capacity. Hence, the impugned condition cannot be termed arbitrary or discriminatory or in any way violative of Article 14 of the Constitution of India. In fact, the provisions of Rule 57 of the Rules, 2016 when read as a whole would reflect that they do a balancing act. Hence, the impugned condition cannot be termed arbitrary or discriminatory or in any way violative of Article 14 of the Constitution of India. In fact, the provisions of Rule 57 of the Rules, 2016 when read as a whole would reflect that they do a balancing act. On the one hand they provide a list of persons eligible to participate in the process of grant of fishery lease and thereby subserve the avowed object of Article 38 of the Constitution and, on the other, by making the provisions of Sections 189 and 190 of the Code, 2006 applicable, by virtue of sub-rule (8) of Rule 57 of the Rules, 2016, they seek to serve the larger public interest of securing higher revenue for the State. We are therefore of the considered view that neither Section 189 or Section 190 of the Code, 2006 nor Rule 57 (8) of Rules, 2016 is ultra vires Article 14 of the Constitution of India. For the same reasons, the condition no.2 of the advertisement, which seeks to apply sub-rule (8) of Rule 57 of the Rules, 2016, is not arbitrary or in any manner violative of Article 14 of the Constitution. 15. In so far as the submission that the provisions of Rule 57(8) of the Rules, 2016 are ultra vires Article 21 of the Constitution is concerned, that is completely misconceived because fishery lease is obtained not merely to earn a livelihood for survival but for profits, inasmuch as it has a commercial value. The commercial value of the fishery lease cannot be denied and the mere fact that there are more claimants than one for the lease in issue lends credence to its commercial potential. The bidding process commences only when there are more eligible claimants than one. As the bidders are all of the same class, and they bid keeping in mind the commercial interest that the proposed lease would serve, they are free to submit their bids as per their financial capacity. Hence, we are of the considered view that neither the impugned Rule nor the impugned Section(s) or the impugned condition of the advertisement violates Article 21 of the Constitution of India. 16. Hence, we are of the considered view that neither the impugned Rule nor the impugned Section(s) or the impugned condition of the advertisement violates Article 21 of the Constitution of India. 16. The challenge laid to the impugned provisions on the ground that they violate Article 19 (1) (g) of the Constitution is equally misconceived as they do not place unreasonable restriction on the right to carry on any business, trade or occupation. They only put a procedure in place for acquiring a business interest from the State which by no means can be termed arbitrary or unreasonable. 17. A feeble attempt was made by the learned counsel for the petitioner to demonstrate that the onerous condition defeats the very purpose enshrined in sub-rule (5) of Rule 57 of the Rules, 2006 but as we have noticed that the impugned condition applies only when there is settlement by auction when there are more claimants than one in the same class, it cannot be said that the impugned condition defeats the object set out by sub-rule (5) of Rule 57 of the Rules, 2016. 18. For all the reasons stated above and by keeping in mind that the petitioner participated in the bidding process without a demur, we are of the considered view that the petitioner has not made out a case for interference. The petition lacks merit and is hereby dismissed.