Mehmood Hussain vs Nagar Panchyat Baadi

S.K. Gangele, J.—The Second Appeal No. 54/2006 has been dismissed by order dated 6.5.2014. The Court has passed the following orders:

"Shri A. Usmani, learned counsel for appellants.

Heard on admission.

Plaintiffs call in question the judgment and decree dated 29.10.2005 passed in Regular Civil Appeal No. 20-A/2005 by First Additional District Judge, Raisen, reversing the judgment and decree dated 31.1.2005 passed in Civil Suit No. 7-A/2000 by Civil Judge Class I Bareli District Raisen.

Nagar Panchayat Badi, parallel to National Highway No. 12, constructed 34 shops at Bus Stand Badi of which 14 shops were earmarked for small shopkeepers.

Case of the appellant-plaintiff before trial Court was that Nagar Panchayat Badi after passing the resolution to lease out the shops entertained plaintiff''s application and by letter dated 19.9.2005 informed the plaintiff as to allotment of shop and on application allotted the shop in question on a lease rent of Rs. 300/- per month and deposit of Rs. 30,000/-. That the plaintiff deposited the premium in installment; whereon, it was informed that the shops would be allotted immediately on completion of construction. However, no action was taken. Instead, new resolution was passed on 9.3.2000 that the allotment of shops would be by public auction. Feeling aggrieved, the plaintiff fled the subject civil suit for specific performance of contract and for relief that the resolution dated 9.3.2000 be declared null and void.

Defendants denied the claim contending inter alia that the Municipal Council being incorporated under the Madhya Pradesh Municipalities Act, 1961 (for short ''1961 Act'') is bound by the statutory provisions contained therein and the Rules and Bye-laws made thereunder. It was contended that under Section 323 and 345 of 1961 Act, the control vests with the State Government and the earlier resolution, on the basis whereof, without taking recourse to auction, applications were invited from selected few, was turned down by the State Government; therefore, a decision was taken, vide resolution dated 9.3.2000, to take recourse to public auction. It was contended that plaintiff is at liberty to participate in public auction and can seek withdrawal of amount deposited in lieu of earlier resolution. It was also contended that there does not exist any concluded contract therefore, the case for specific performance is not tenable.

Trial Court framed following issues-

Trial Court construing the deposit of amount by plaintiff in pursuance to order dated 6.3.1996 of creating a vested right in the plaintiff, decreed the suit by judgment and decree dated 31.1.2005. The judgment and decree was however set aside in Appeal by impugned judgment and decree. The appellate Court held that the action of defendant-Municipality being governed by the provisions of 1961 Act and the State Government having turned down the resolution dated 6.3.1996, no right accrued in favour of the plaintiff even if he had deposited the premium amount towards occupancy right.

The appellate court observed-

At this juncture, provisions contained under Section 109 of 1961 Act can be taken into consideration which provides--

"109. Provisions governing the disposal of Municipal property vesting in or under the management of Council.--(1) No streets, land public places, drains or irrigation channels shall be sold, leased or otherwise alienated, save in accordance with such rules as may be made in this behalf.-

(2) Subject to the provisions of sub-section (1),

(a) the Chief Municipal Officer may, in his discretion, grant a lease of any immovable property belonging to the Council, including any right of fishing or of gathering and taking fruits, flowers and then like, of which the premium or rent, or both, as the case may be, does not exceed two hundred and fifty rupees for any period not exceeding twelve months at a time:

Provided that every such lease granted by the Chief Municipal Officer, other than the lease of the class in respect of which the President-in-Council has by resolution exempted the Chief Municipal Officer from compliance with the requirements of this proviso, shall be reported by him to the President-in-Council within fifteen days after the same has been granted.

(b) with the sanction of the President-in-Council, the Chief Municipal Officer may, by sale or otherwise grant a lease of immovable property including any such right as aforesaid for any period not exceeding three years at a time of which the premium, or rent, or both, as the case may be, for any one year does not exceed one thousand five hundred rupees;

(c) with the sanction of the Council, the Chief Municipal Officer may lease, sell or otherwise convey any immovable property belonging to the Council.

(3) The sanction of the President-in-Council or of the Council under sub-section (2) may be given either generally for any class of cases or specially in any particular case:

Provided that-

(i) no property vesting in the Council in trust shall be leased, sold or otherwise conveyed in a manner that is likely to prejudicially effect the purpose of the trust subject to which such property is held;

(ii) no land exceeding fifty thousand rupees in value shall be sold or otherwise conveyed without the previous sanction of the State Government and every sale or other conveyance of property vesting in the Council shall be deemed to be subject to the conditions and limitations imposed by this Act or by any other enactment for the time being in force.

Furthermore, Section 110 of 1961 Act stipulates--

"110. Contracts by or on behalf of the Council.-The contracts by or on behalf of the Council shall be expressed to be made by the Chief Municipal Officer in accordance with the rules made in this behalf."

That, the State Government in exercise of its powers conferred by Section 355 read with Section 109 of 1961 Act has framed Rules, viz. The Madhya Pradesh Municipalities (Transfer of Immovable Property) Rules, 1996 [for brevity ''1996 Act''] brought in vogue vide Notification No. 8-XVIII-III-96 dated 6.2.1996 i.e. prior to 6.3.1996, when the decision was taken by the Council to allot the shops without getting it auctioned.

Rule 3 of 1996 Rules provides--

"3. No immovable property which yields or is capable of yielding an income shall be transferred by sale, or otherwise conveyed except to the highest bidder at a public auction or by inviting offer in a sealed cover:

Provided that if the Council is of the opinion that it is not desirable to hold a public auction or to invite offers in sealed covers for such transfer, the council may, with the previous sanction of the State Government, effect such transfer without public auction or inviting offers in sealed cover:

Provided further that the Council may, for reasons to be recovered in writing, transfer such immovable property to a bidder other than the highest bidder, with the previous sanction of the State Government.

Provided also that in any such transfer by lease, a reasonable premium shall be payable at the time of granting lease and annual rent shall also be payable during the whole term of the lease."

The procedure is laid down under Rule 4 to 7 which reflects that unless the State Government approves the resolution, it does not become final.

In the case at hand, the plaintiff having failed to establish that the procedure as laid down under Section 109 of 1961 Act and 1996 Rules framed thereunder and in absence of a concluded contract, the findings arrived at by the First Appellate Court cannot be faulted with.

In this context, reference can be had of the decisions rendered in Shajuddin and Others Vs. Nagar Palika Parishad and Another, AIR 1985 MP 252 : (1985) JLJ 486 : (1987) 32 MPLJ 470 , wherein it has been observed--

"According to the provisions of Section 110 of M.P. Municipalities Act, 1961 only the Municipal Council is competent to enter into a contract and that too in writing. Nagar Palika is a public body and none except the Council is competent to enter into a contract."

Similar view has been expressed in Hari Ram Vs. Nagar Palika Prashashak, (2001) 4 MPHT 269 : (2002) 2 MPLJ 215 .

The present case when tested on the anvil of the statutory provisions contained under Section 109 of 1961 Act, 1996 Rules and the principles of law laid down in Shajuddin and Hari Ram (supra), no case for interfering with the judgment and decree dated 29.10.2005 is made out.

Since no substantial question of law arises for consideration, appeal fails and is dismissed in limine. No costs."

In the present case, the learned counsel for the appellant fairly admits that the facts of the present case are similar to Second Appeal No. 54/2006.

In this view the matter this appeal is also dismissed on the same reasons as mentioned above in the order passed in Second Appeal No. 54/2006.

Appeal stands dismissed accordingly.