Karnataka High Court
H.L. Shivarame Gowda vs State Of Karnataka on 7 April, 1987
Equivalent citations: ILR1987KAR2033
JUDGMENT Shivashankar Bhat, J.
1. This Writ appeal is filed by the petitioners, whose Writ Petition No. 6916/1979 was dismissed by the Learned Single Judge on 14th September, 1979.
2. Parties are referred hereinafter with reference to their respective rankings in the Writ Petition.
3. Petitioners challenged the action of the third respondent (Town Municipal Council, Bellur Town) auctioning the site in question as also the approval dated 15-5-1979 accorded by the State Government by confirming the said action of the third respondent, under Section 72(2) of the Karnataka Municipalities Act, 1964 ('Act' for short).
4. The subject-matter is Site No, 155-C of Bellur Town in Mandya District. Originally this site was part of Sy. No. 105. In a portion of this Sy. No. 105 the Municipality got constructed four twin-houses for its purposes. It is stated that another portion was set apart, us Site No. 155-C measuring 150' x 150' to locate a touring cinema. The District Magistrate granted 'No Objection Certificate' for the location of touring cinema, on 28-2-1977, on this site. Thereafter the site was leased to a private individual to run the touring cinema. It has come on record that, one Ramachandra Rao was the lessee of the site for eleven months, who was exhibiting cinematograph films in this site.
5. On 20-1-1978 the Municipal Council (the then Administrator) resolved to sell the site to the said Ramachandra Rao, for a sum of Rs. 45,000/- for the construction of a mini cinema theatre. But the Divisional Commissioner, Mysore, objected to the proposal and directed the Municipal Council to sell the site by public auction. On 8-5-1978 the Municipal Council resolved accordingly. After due publication public auction was held on 14-6-1978. The bid of the 4th respondent for Rs. 93,600/- was the highest. It is seen from the material on record that the bid offered by Ramachandra Rao was for Rs. 92,500/-. The same day the Administrator (who was functioning as the Municipal Council) passed a resolution confirming the bid of the 4th respondent. Thereafter the proceedings were sent to the Government for approval under Section 72(2) of the Act. As already stated, the Government granted the approval on 15-5-1979.
6. The petitioners, stated to be the rate payers of Bellur Town, challenged the auction on several grounds. According to them, the Municipality having acquired several parcels of land, formed a layout and transferred the sites to the Karnataka Housing Board in the year 1963. They state that the site in question is bounded on the north and south by two roads and that the width of the site is 80 ft., north to south and not 150 ft., as asserted by the Municipal Council. They further averred that they also objected to the confirmation of the auction by the State Government and in spite of these objections, the Government confirmed the auction proceedings under Section 72(2), They asserted that they will be deprived of the two roads of 30 ft. width each, since, according to them, without inclusion of these two roads the site cannot have the width of 150 ft. They further asserted that the two roads are public streets and such public streets cannot be closed or discontinued without following the provisions of Section 175(1) of the Act. Their another contention was that the Municipal Council had no prior sanction of the State Government under Section 72(2) of the Act to sell the site and therefore, the entire proceedings was void.
7. Statement of objections were filed by the Municipal Council as well as the 4th respondent.
8. The Learned Single Judge on consideration of the entire material on record and after hearing Counsel on both sides negatived the contentions of the petitioners.
9. On the question of the existence of any road on the site in question, findings were as follows:
(i) The best person to say whether the said site includes a public road or not can only be the Municipal Council and it is unlikely that the Municipal Council could grant or Sell a site comprised of any road to the public. The auction proceedings have been approved by the Government by an independent examination of the proceedings. The Municipal Council was being managed by an Administrator. who is an independent Officer, and who initiated these proceedings to auction the site. Therefore, it is unlikely that the sale of site would include the sale of any road.
(ii) The NOC was granted in the year 1978 by the District Magistrate to locate a touring cinema on the site in question. None objected to the NOC. There has been a touring cinema on the site in question. The survey sketch prepared by a qualified surveyor (Ex. R1) also shows that the site does not contain any public road.
(iii) A memo was also filed by respondent-4 on 24- 8-1979 undertaking to accept the site in whatever condition it may be found excluding the public roads, in case there is any public road. The said memo reads thus:
"There is a road of 35 ft. in width to the north of the site in question. This respondent is willing to accept the site with a measurement of 150' or any extent less than 150' north to south from the road margin on the north in the municipal land is available. In the event of reduction in the extent of land north to south this respondent does not seek any abatement in price now offered in proportion to the reduction in extent.
This respondent abides by the above undertaking in the event of finding that the municipal land is not sufficient north to south to leave a margin of 35 ft. road on the north and ear mark the site of 158 ft north to south.
Bangalore, dt : 24-8-79. Sd/- Respondent No. 4."
10. Sri Papanna reiterated before us the same contention and tried to show that the site in question included public roads and the sale of the site to 4th respondent defeats the rights of public to use those roads We find no merit in this contention of the petitioners. The 4th respondent by filing a memo, referred above, has fully safeguarded the interest of the public, in case, there is any doubt on the question of roads being part of the site. In this appeal, the Asst. Executive Engineer, Nagamangala Sub-Division, was appointed a Commissioner who has sent his report dated 27-10-1980 along with a sketch. The Commissioner categorically states that the site measures 150' x 150' and it would not came any encroachment on the road. This opinion is reiterated by him when further information was sought from him as required by the petitioners.
11. We find no justification to depart from the findings of fact recorded by the Learned Single Judge and accordingly reject this contention of Mr. Papanna.
12. The next contention of the Counsel pertains to the construction of Section 72(2) of the Act which reads as follows:
"No free grant of immovable property whatever may be its value, no grant for an upset price and no lease for a term exceeding five years, and no sale or other transfer of immovable property exceeding twenty-five thousand rupees value, shall be valid unless the previous sanction of the Government is obtained."
13. According to the Counsel, it is necessary for the Municipal Council to obtain the sanction of the Government before any property is put up for auction. According to him, the very auction is the 'sale'. Therefore, if the auction is conducted without the prior sanction of the Government, it will be contrary to the aforesaid provisions of law. In this case the Municipal Council obtained the sanction of the Government after the highest bid was accepted by the administrator. It was argued that the sanction of the Government is a condition precedent for the valid sale and if the sanction is granted after the sale, the sale will not satisfy the requirement of law.
14. This contention was controverted by Mr. M.R Achar, learned Government Advocate as well as Mr. Vasudeva Reddy appearing for respondent 4. It was urged by them that the sale takes place only when the deed of sale is properly executed. According to them when a bid is accepted and confirmed, it may result in an agreement and not in conveyance. Therefore, the stage at which the sanction of the Government has to be obtained is only after the auction takes place It was pointed out that the requirement of previous sanction of the Government was enacted in the larger interest of the public, so that an independent authority like the Government may examine the nature of the entire transaction and either approve or disapprove the same.
15. It is necessary to examine the intention behind Section 72(2) of the Act. No doubt, the sanction of the Government is a condition precedent. The entire question will be the stage at which the Governmental sanction will have to be obtained. This can be answered if the purpose for which Section 72(2) is enacted, can be gathered. Intention of Section 72(2) obviously is to impose fetters on the powers of the Municipal Council in the matter of alienating its property either by way of free grant or grant for an upset price or by way of lease exceeding a period of five years or by way of sale etc. It is possible that the members of the municipality may use their position to alienate the property of the municipality to favour themselves or some one in whom they are interested; such alienation may be prejudicial to the interest of the public. In the case of a lease, a low rent may be fixed; in the case of a sale the consideration may be far below the market rate; there may be other terms of lease or grant which are normally imposed to safeguard the interests of the municipality and of the public, which may not be incorporated in a particular transaction. These and other vitiating factors can be prevented if a high and independent authority like the Government can scrutinise the transation in its entirity before the transaction is finalised. In the case of sale of a property, one important factor is the consideration for which the property is to be sold. In the case of an auction sale the price at which the property is to be sold, will be known only after the bid is confirmed. It is only thereafter all the details of the transaction will be available to the Government for consideration. The interest of the public can be safeguarded only if all the details of the transactions are available to the Government at the time of granting or rejecting the sanction.
16. Having regard to the purpose behind Section 72(2) we are of the view that the stage at which the Government has to exercise its power of granting or witholding the sanction is the stage after the auction takes place and all the terms of the sale are available. A general sanction by the Government permitting the sale of any property or any particular piece of land will not satisfy the requirements of Section 72(2). This idea his been neatly stated while considering the provisions of Section 72(2) by a Bench of this Court in R. Rama Jois & Ors. v. State of Karnataka & Ors., ILR (Karnataka) 1978 (2) 982 at 992 wherein it has been laid down thus:
"The power to lease or sell by the Municipal Council is subject to the conditions and restrictions contained in Subsection (2) to (9) and such other restrictions and conditions as the Government may by general or special orders specify. But it is clear that according of sanction by the government is in regard to the particular transaction proposed to be entered into by the Municipal Council."
(Underlining is ours) Thus it is clear that the particular transaction will have to be before the Government, before the sanction is accorded.
17. In view of the above, it is not necessary for us to go into any other question raised on the construction of Section 72(2). Government Advocate also brought to our notice that one of the conditions of the auction was that it was subject to the sanction being given by the Government after the auction. He then read out conditions stated in the auction notification to the effect that the said auction was subject to the approval of the Government and that the successful bidder has to produce the necessary stamp paper etc., for the purpose of issuing sale certificate only after the approval of the Government is received. He also cited a few decisions, as to the effect of auction of an immovable property, without the same being sanctioned by the higher authority thereafter. We do not think it necessary for us to go into these questions since the controversy involved in this case can be resolved by reference to the object behind Section 72(2) of the Act.
18. For the same reason, it is not necessary for us to go into the question as to whether the statutory formalities stated in other sub-sections of Section 72(2) are to be completed before the transaction results in a sale as contended by Mr. Vasudeva Reddy.
19. No other question survives for our consideration.
In the result, for the reasons stated above, this appeal fails and is dismissed, but without an order as to costs.