Andhra HC (Pre-Telangana)
Md.Ammanuallah Ghouri vs The Government Of Andhra Pradesh Rep. By ... on 22 January, 2013
Bench: Goda Raghuram, Ramesh Ranganathan
THE HON'BLE SRI JUSTICE GODA RAGHURAM AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION Nos.6814 of 2009 and Batch 22-01-2013 MD.AMMANUALLAH GHOURI THE GOVERNMENT OF ANDHRA PRADESH REP. BY ITS SECRETARY, MUNICIPAL ADMINISTRATION & URBAN DEVELOPMENT DEPARTMENT, SECRETARIAT, HYDERABAD & OTHERS. <GIST >HEAD NOTE: Counsel for Petitioner: Sri N.V.Sumanth Counsel for Respondent: Learned Advocate General ?CASES REFERRED: 1 AIR 1962 SC 1543 2 AIR 1961 SC 1107 3 1974 (1) SCC 596 4 1977 (2) SCC 457 5 1977 (3) SCC 99 6 1978 (2) SCC 144 7 AIR 1980 SC 485 8 AIR 1962 SC 1044 9 AIR 1961 SC 1170 10 (2002) 2 SCC 678 11 (1997) 1 SCC 373 12 2003 (3) SCC 57 13 AIR 1992 SC 81 14 AIR 1992 SC 1789 15 AIR 1958 SC 255 16 AIR 1992 SC 1754 17 AIR 1975 SC 1331 18 2003 (3) SCC 321 19 2008 (7) SCC 738 20 2008 (7) SCC 748 21 AIR 1954 SC 340 22 [1956] 1 All ER 855 23 2007 (5) SCC 211 24 (1991) 4 SCC 1 25 (1985) 3 SCC 267 26 AIR 1987 SC 1109 : (1987) 2 SCC 295 27 (2009) 6 SCC 171 28 (2000) 8 SCC 606 29 (2006) 13 SCC 382 30 2010 (3) ALD 505 (DB) 31 2009 (7) SCC 561 32 359 US 535 33 (1975) 3 SCC 503 34 (1979) 3 SCC 489 35 AIR 1952 SC 16 36 (2004) 4 SCC 281 37 2004 (6) SCC 311 38 (2004) 7 SCC 112 39 (2005) 2 SCC 237) 40 (2005) 3 SCC 409) 41 (1977) 2 SCC 256 42 (1985) 3 SCC 398 43 (1993) 4 SCC 727 44 (2010) 13 SCC 216) 45 (1996) 3 SCC 364 46 (2009) 4 SCC 446 47 (2006) 8 SCC 647 48 (1969) 3 SCC 775 49 (1980) 4 SCC 379 50 (1990) 4 SCC 633 51 (1974) 3 SCC 277 52 (2006) 8 SCC 776 53 (1999) 6 SCC 237 54 (2005) 5 SCC 337 55 1998 (3) ALD 284 56 (1994) 4 SCC 595 57 1989 (3) ALT 677 58 1992 (1) ALT 49 59 (1995) 1 SCC 717 60 2009 (3) ALD 385 61 2009 (2) ALD 444 62 2004 (5) ALD 180 63 AIR 1955 SC 425 64 (1987) 4 SCC 391 65 (1989) 4 SCC 635 66 (1994) 2 SCC 481 67 (2002) 1 SCC 100 68 AIR 1984 SC 1401 69 (2005) 6 SCC 138 70 (2000) 2 SCC 617 71 (1999) 8 SCC 16 72 (2007) 13 SCC 53 73 (2007) 10 SCC 635 74 (2008) 14 SCC 58 75 (1994) 1 SCC 1 76 (2007) 2 SCC 221 77 (1991) 4 SCC 54 78 (1986) 1 SCC 133 79 (1979) 2 SCC 491 80 LR 1904 AC 515 81 1926 Ch 66 82 (1980) 4 SCC 1 83 1914 AC 808 84 AIR 1976 SC 1766 : (1976) 3 SCC 334 85 (1986) 3 SCC 391 86 1988 (1) SCC 166 87 AIR 1980 SC 1382 88 (2011) 6 SCC 508 89 (2011) 9 SCC 354 90 (2005) 8 SCC 202 91 (2004) 6 SCC 765 WRIT PETITION Nos.6814 of 2009; 20453, 25081, 26380, 27874 and 28532 of 2010 AND CONTEMPT CASE No.1455 of 2010 COMMON ORDER:
(per Hon'ble Sri Justice Ramesh Ranganathan) I. W.P. No.6814 of 2009 and C.C. No.1455 of 2010:
W.P. No.6814 of 2009 is filed in public interest, by a councillor of Zaheerabad Municipality, seeking a declaration from this Court that the action of the respondents in allotting and transferring residential plots in IDSMT colony of Zaheerabad town, without following the conditions of allotment stipulated by the first respondent, as illegal, arbitrary and without authority of law. The petitioner seeks a consequential direction to the respondents to set aside the sale of plots, and to re-allot them following the prescribed procedure. The petitioner submits that the municipal chairman's family and relatives were allotted seven plots; the vice-chairman's family and relatives were allotted more than twenty plots, of which seven were registered in the name of his wife, six in the name of his sons, and two in the name of his minor daughters; another councillor, a vocal critic of the chairman, was allotted eleven plots; around eighty plots were allotted in favour of municipal councillors and their family; twenty plots were allotted to media representatives and their relatives to ensure their silence; the land, earmarked for open spaces and for public purposes, was encroached upon, sub-divided into plots, and allotted/transferred to third parties; all these plots were registered by the municipal chairman without the approval of the municipal council; Economically Weaker Sections (EWS) plots were sold at Rs.5,330/- per plot when the registration value for such plots was Rs.79,000/-; Middle Income Group (MIG) plots were sold at Rs.18,600/- each though their registration value was Rs.2,10,000/-; and the municipality suffered heavy losses thereby.
This Court, while admitting the Writ Petition on 22.09.2009, directed the District Collector, Medak to personally enquire into the allotment of residential plots, under the IDSMT scheme, by the Zaheerabad Municipality; and to submit a comprehensive report, including whether any plots were allotted to family members and relatives of the chairman, vice-chairman and councillors of Zaheerabad Municipality, the number of plots so allotted, and whether such allotments were in conformity with the guidelines. This Court observed that the enquiry by the District Collector should also cover areas whether any public and transparent process was followed in calling for applications for the purpose of ensuring equitable allotment of plots.
In his counter affidavit dated 28.10.2009, the Secretary to the Government, Municipal Administration and Urban Development, states that there was no demand for IDSMT plots since the venture was located at a distance of 3 kms from the main town; purchasers of plots had defaulted in instalment payments; the Municipality did not receive any applications during the years 1982 to 1987; 15 applications were received in the year 1987-1988; 114 applications were received in 1988-1989, out of which 104 applicants paid the full amount, and plots were registered in their favour; thereafter the Municipality received, on an average, merely 50 applications each year; the special officer, Zaheerabad Municipality passed a resolution in the year 1994 to re-allot plots only to those who paid the full price; the municipal commissioner, who was the authority designated to implement the scheme, did not follow the prescribed guidelines; he had intimated, vide letter dated 24.10.2009, that 348 plots were allotted after the year 2005 contrary to the guidelines; 14 plots were sub-divided, sold and registered; commercial space, earmarked for public use i.e., for schools and community purposes etc, were also sold without approval of the competent authority; out of 1294 plots, 1115 were sold and registered i.e., 520 plots at Rs.5,330/- each under the EWS category, 260 plots at Rs.14,933/- each under the Lower Income Group (LIG) category, 236 plots at Rs.18,600 each under the MIG category and 63 plots at Rs.21,700/- each under the Higher Income Group (HIG) category.
This Court, by order dated 05.11.2009, directed the state government (first respondent) to forthwith cause an enquiry by the Director-General (Vigilance and Enforcement), duly ensuring that the said report was obtained within thirty days. The District Collector was directed to seize the entire records relating to assignment of land, approval of layout, receipt of applications, allotment and registration of plots, and any other records relating to the decision making process involved in the IDSMT scheme, from the relevant authorities including the Zaheerabad municipal officer, and to retain such records in his custody until further orders. By its order dated 09.11.2009, this Court directed that the Writ Petition be listed on 07.12.2009 for submission of the report of the Director General (Vigilance and Enforcement). Further time of 45 days was granted, by order dated 08.12.2009, for submission of the said report, and for an action taken report to be filed by the 1st respondent regarding resumption of those plots which were illegally appropriated by elected officials of the Zaheerabad Municipality; and whether the Government had applied its mind to the fact that such conduct might constitute offences under the Indian Penal Code; and for launching prosecution if that be so. In its order dated 20.01.2010, this Court noted that a copy of the vigilance report had been placed before it. As the action taken report was not submitted by the 1st respondent, one week's time was granted. C.C. No.1455 of 2010 was filed thereafter, by the petitioner in W.P. No.6814 of 2009, alleging violation of the orders of this Court dated 22.09.2009, 05.11.2009, 09.11.2009, 08.12.2009 and 20.01.2010. The first respondent, in its affidavits dated 09.02.2010, 02.12.2010, 25.02.2011 and 10.03.2011, stated that instructions were issued in G.O.Ms. No.1183 dated 09.11.1981, and GO.Ms. No.898 dated 23.10.1982, for allotment of plots and houses by urban development authorities; paper notification was issued in January, 1989 inviting applications for allotment of plots, developed under the IDSMT scheme, in Zaheerabad; out of the 1508 applications sold, only 83 were received by the extended cut-off date of 28.02.1989; no notification was issued thereafter; subsequently lots were drawn for allotment of plots; 505 plots were allotted during the years 1989 to 1991; the Commissioner and Director of Municipal Administration/DT & CP had been directed, by memo dated 09.02.2010, to take action to cancel the illegally allotted plots after giving notices to the affected persons; to resume the plots thereafter; to take criminal action, against the ex-chairpersons, by filing FIRs in the concerned police station under Sections 405 and 409 IPC; out of the illegally allotted 95 plots, stay orders were granted in respect of 67 plots; registration was cancelled for the remaining 28, and the plots were resumed; notices were issued by the municipal commissioner, (also published in the newspapers on 30.07.2010), for cancellation of 202 registered sale deeds; out of the total 1115 plots registered under the IDSMT scheme, 202 were identified by the vigilance and enforcement department to have been irregularly allotted; 24 plots were found to be repeated in the report or allotted as per norms or to be unregistered; irregular plots were thus 178 in number; the plots covered under stay orders were 88; the plots cancelled, and resumed, were 90; criminal cases were registered, under Sections 405 and 409 IPC, against the ex-chairperson; thereafter a charge-sheet was filed in C.C. No.468 of 2010 dated 28.06.2010 against the ex-chairmen viz. Sri M. Subhash and Sri A. Narsimulu, and C.C. No.101 of 2010 dated 16.12.2010 was filed against the ex-chairperson Sri M. Murali Krishna Goud, in the Court of the Judicial Magistrate of First Class, Zaheerabad; the Commissioner and Director of Municipal Administration, Hyderabad and the Commissioner, Zaheerabad Municipality were requested, vide memo dated 05.03.2011, to verify and file criminal cases against those vice-chairmen who were involved in irregular allotment of plots in Zaheerabad Municipality, as was done in the case of ex- chairmen and the existing chairperson; the State intends to take action against the officials of Zaheerabad Municipality under the Prevention of Corruption Act, 1988; and Crime No.54 of 2011 was registered against Mohd Nazeer Ahmed, Sri Ashok Shery, Sri Mohd Luqman, Sri Mohd Tanzeem and Sri Mohd Khaja, ex-vice- chairmen of Zaheerabad Municipality, on the file of the station house officer, Zaheerabad.
II. W.P. Nos.20453, 25081, 26380, 27874 and 28532 of 2010:
The petitioners, in the aforesaid Writ Petitions, have invoked the jurisdiction of this Court aggrieved by the action of the Commissioner, Zaheerabad municipality in cancelling (i) the allotment of plots, and (ii) the registered sale deeds, made and executed in their favour earlier; and in seeking to resume the plots in their possession.
In W.P. No.20453 of 2012, the application for allotment of an LIG plot was submitted when the petitioner was, admittedly, a minor. The petitioner claims that his father made an application on fulfilling all the conditions stipulated in the guidelines; neither he nor his father had furnished false information; the second respondent, represented by its authorised officer i.e., the chairman, had executed the registered sale deed dated 20.02.1992 in his favour; he was in uninterrupted possession of the plot ever since 1992; as the sale deed itself records that he was a minor at that time, the allotment ought not to have been cancelled or the plot resumed; and, since the petitioner did not object to his father's actions after obtaining majority, the contract is valid and has attained finality.
In W.P. No.25081 of 2010 the petitioners are 29 in number. The writ affidavit itself details the number of plots allotted to them. Petitioner No.1 was allotted 6 plots; petitioner No.2 was allotted 4 plots; petitioner Nos.3 and 4 were allotted 2 plots each; petitioner No.5 was allotted 3 plots; petitioner No.6 was allotted 2 plots; petitioner Nos.7 and 8 were allotted 3 plots each; petitioner No.9 was allotted 4 plots; petitioner Nos.10 and 11 were allotted 2 plots each; petitioner Nos.12 and 13 were allotted 3 plots each; petitioner Nos.14, 15 and 16 were allotted 2 plots each; petitioner No.17 was allotted 3 plots; petitioner Nos.18 and 19 were allotted 2 plots each; petitioner No.20 was allotted 8 plots; petitioner Nos.22, 23 and 24 were allotted 2 plots each; petitioner Nos.26, 27, 28 and 29 were allotted 2 plots each; and both petitioner Nos.21 and 25, who were allotted one plot each, were minors when the applications, for allotment of plots, were submitted.
In W.P. No.26380 of 2010, the petitioners are 10 in number. They admit that petitioners 1 to 7 were allotted two or three plots each under the MIGH category; petitioner Nos.8 and 9 were minors; and petitioner No.10 was allotted a plot without even obtaining an affidavit from him that he did not own any other house/plot. In W.P. No.27874 of 2010, the petitioners are 9 in number. Petitioner Nos.3 and 5 were minors at the time of submission of applications for allotment; petitioners Nos.2, 4, 7 and 8 were allotted more than one plot; and petitioner Nos.1, 6 and 9 were allotted plots in areas earmarked for open spaces. In W.P. No.28532 of 2010, the petitioners are two in number. The notice dated 13.07.2010, issued to the first petitioner, shows that he was allotted three plots i.e., plot No.266, 258 and 267 under the LIG category. Copies of the sale deeds, enclosed along with the said Writ Petition, show that plot Nos.266 and 277 were registered jointly in the names of both the petitioners; plot No.258 was allotted, in the year 2007, in favour of the first petitioner; and all the sale deeds were executed not by the commissioner, but by the chairperson of the municipality.
In the counter affidavits, filed on behalf of the first respondent, it is stated that the Director-General of Vigilance and Enforcement had conducted a detailed enquiry, and had submitted a report recommending that suitable steps be taken against the erstwhile municipal chairman as per law, stringent action be initiated against four officers of the municipality, and irregular allotments be examined and action taken as per law; after memo dated 09.02.2010 was issued to the Commissioner and Director of Municipal Administration, the Commissioner, Zaheerabad Municipality issued notices in July, 2010 for cancellation of the irregularly allotted plots; all ineligible plots, except those under stay orders of this Court, had been cancelled, and the plots resumed; and the action taken in terms of the vigilance report, for cancellation of the illegal allotments, cannot be faulted.
In his counter affidavits, the Municipal Commissioner submits that no resolution was passed by the municipality relaxing any of the conditions of the IDSMT, nor did it have any power to do so; pursuant to the order of this Court in W.P. No.6814 of 2009 dated 08.02.2009, the vigilance and enforcement report dated 18.01.2009, and the government Memo dated 09.02.2010, notices were issued in July, 2010 calling upon the allottees to show cause why the plots allotted to them should not be cancelled; individual notices were issued furnishing reasons for cancellation of allotment of plots; pursuant to the instructions of the government, he had cancelled the allotments; cancellation of allotment was intimated to all the petitioners and notified in the newspapers; cancellation of these allotments was legal, proper and justified; some of the petitioners were near relatives of the then elected members of the council; such illegal allotments and registration by the chairman conferred no right or interest on the allottees or their subsequent purchasers, and no title or ownership was conveyed thereby.
As noted hereinabove, during the pendency of W.P. No.6814 of 2009, the Commissioner, Zaheerabad Municipality cancelled the illegal allotments and, except in cases where this Court granted stay, also resumed the subject plots. When C.C. No.1455 of 2010 came up for hearing on 10.06.2011, this Court considered it appropriate that the Contempt Case be heard along with W.P. No.6814 of 2009 and W.P. Nos.20453, 25081, 26380, 27874 and 28532 of 2010. The registry was directed to place the papers before the Hon'ble the Chief Justice. Thereafter, by order of the Hon'ble the Chief Justice dated 15.07.2011, all these Writ Petitions were posted along with C.C. No.1455 of 2010 before us. III. THE INTEGRATED DEVELOPMENT OF SMALL AND MEDIUM TOWN SCHEME AND INSTRUCTIONS ISSUED BY THE STATE GOVERNMENT IN G.O.MS.NO.1001 DATED 22.11.1982:
Before examining the rival submissions, it is useful to refer to the contents of the Integrated Development of Small and Medium Towns Scheme, and the instructions issued by the State Government in G.O.Ms. No.1001 dated 22.11.1982 (hereinafter called the "instructions").
The Central Government introduced an Integrated Development of Small and Medium Towns Scheme (hereinafter called, the "IDSMT Scheme") in the year 1982 with the intention of providing/developing houses in small and medium towns. The state government, thereafter, issued the "instructions" approving the Zaheerabad project which included a housing scheme and a commercial complex. The housing scheme, which was intended to come up over more than hundred acres of land, contemplated development of land, laying roads, and its subdivision into plots; the lay-out was approved by the Director of town and country planning in L.P.No.159 of 1989; the entire area was developed with water supply, drainage etc., as envisaged in the approved lay out plan; 76 plots of 45 X 70 feet each were earmarked for HIG; 264 plots of 45 X 60 feet each were earmarked for MIG; 305 plots of 40 X 60 feet each were earmarked for LIG; 649 plots of 25 X 40 feet each were earmarked for EWS; and the general public were notified that plots would be allotted by drawal of lots.
The "instructions" disabled any person from submitting more than one application; minors were not eligible to apply; those who owned a house or a plot in his/her name, or in the name of his wife/her husband or his/her dependent children, within the limits of Zaheerabad municipality, were not eligible for allotment; plots were to be allotted by drawal of lots on a date to be notified on the notice board in the office of the Zaheerabad municipality, and published in the newspapers; possession of the plot was required to be handed over only after the entire cost of the plot was paid by the allottee; conveyance or registration charges were to be borne by the allottee; orders of allotment were required to be published on the notice board of the Municipal Council, and communicated to the address of the successful applicant; the allottee was required to build a house in the plot allotted to him within two years from the date of taking possession, and to complete construction within the stipulated period, failing which the allotment was liable to be cancelled; applicants, who did not fall within the income range specified for each category, were not to be considered for allotment; the number, size and price of the plots, notified for allotment, were to be subjected to such variations as may be found necessary by the authority; and allotment of plots was subject to reservation in favour of the scheduled castes, scheduled tribes, backward classes, government servants, M.L.As, physically handicapped, freedom fighters etc. Clause 28 of the aforesaid "instructions" stipulated that where there were no applicants, or the number of applications received in response to the notice against each category of plots was less than the number of available plots, the Municipal Council could re-notify the remaining plots or prescribe any other mode for allotment. Clause 33 stipulated that the monthly income of applicants under the EWS category should be below Rs.700/- p.m and the tentative estimated cost of such a plot was Rs.5,330/-; for the LIG category the prescribed monthly income of the applicants was between Rs.701/- and Rs.1,500/-, and the tentative estimated cost of each plot was Rs.14,993/-; for the MIG category the stipulated monthly income was between Rs.1,501/- and Rs.2,500/-, and the tentative estimated cost of each plot was Rs.18,600/-; and, under the HIG category, the monthly income of the applicant was stipulated as above Rs.2,500/-, and the tentative estimated cost of each plot as Rs.21,700/-. The guidelines made it clear that the estimated cost was purely tentative, and the final figure may vary considerably as per the calculations made from time to time.
The State Government has been issuing instructions, from time to time, regarding allotment of developed plots by urban development authorities. G.O.Ms.No.1183, M.A. dated 09.11.1981, read with G.O.Ms.No.301, M.A dated 15.04.1981, stipulated that all developed plots, in any housing scheme, should be notified to the public in newspapers; all plots, including those for EWS and LIG, shall be allotted only through drawal of lots; plots, intended for MIG and HIG, are to be allotted by auction; and the bidders for the auction shall consist only of such eligible persons, for allotment of particular types of plots, with reference to their income and the social and professional group to which they belong.
Though the IDSMT scheme was introduced in the year 1982, the first plot was registered only in the year 1989. The public demand for these plots is said to have increased only from the year 2005. In terms of the guidelines prescribed by the State government, the Zaheerabad Municipality was required to re-notify the remaining plots, and publish the date of drawal of lots in the newspapers, to enable the general public to apply. Without re-notifying the plots, the chairman and the Commissioner, Zaheerabad Municipality started allotting plots - a substantial number in favour of the kith and kin of those in the helm of affairs at Zaheerabad Municipality. The governing body of the municipality, which took charge in the year 2005, is said to have allotted/sold around 400 plots without following any of the conditions stipulated in the "instructions". It is convenient to examine the rival contentions under different sub-heads.
IV. DOES THE MUNICIPAL CHAIRMAN HAVE THE POWER TO MAKE OR SANCTION CONTRACTS, OR EXECUTE SALE DEEDS, ON BEHALF OF THE MUNICIPAL COUNCIL?
After the earlier allotment of plots, sale deeds were executed and registered, on behalf of Zaheerabad Municipality, by its chairman. Section 43 of the A.P. Municipalities Act, 1965 (hereinafter called the "Act") relates to the authority to contract. Sub-section (1) of Section 43 was substituted initially by A.P. Act 5 of 1971, thereafter by A.P. Act No.29 of 1978, and again by A.P. Act 3 of 1994 with effect from 01.03.1994. After its substitution by A.P. Act No.29 of 1978, Section 43(1) conferred the power of making on behalf of the council any contract, where the value did not exceed the monetary limits specified in column (2) of the table, on the authority specified in column (3) thereof. In second or third grade municipalities the power to make contracts, not exceeding Rs.3,000/-, was conferred on the chairman; and the power to make contracts exceeding Rs.3,000/-, but not exceeding Rs.10,000/-, was conferred on the committee consisting of the chairman, the commissioner and not less than three but not more than seven councillors, chosen in this behalf by the council from among its elected councillors. In other municipalities the power to make contracts, not exceeding Rs.5,000/-, was conferred on the chairman; and, where the value of the contracts exceeded Rs.5,000/- but did not exceed Rs.20,000/-, the power to make contracts was conferred on the committee consisting of the chairman, the commissioner and not less than three but not more than seven councillors, chosen in this behalf by the council from among its elected councillors.
Section 43(1) was again substituted, by A.P. Act No.3 of 1994 with effect from 15.01.1994, conferring the power of making on behalf of the council any contract, where the value did not exceed the monetary limits specified in column (2) of the table furnished in the said Section, on the authority specified in column (3) of the said table. In second or third grade municipalities the power to make contracts on behalf of the Municipal Council, for a sum not exceeding Rs.5,000/-, is conferred on the commissioner; and, where the monetary limit of the contract exceeds Rs.5,000/- but does not exceed Rs.20,000/-, the competent authority in column (3) is specified to be the committee consisting of the chairperson, the commissioner, and not less than three but not more than seven members chosen in his behalf by the council. In first grade municipalities where the monetary limit of the contract does not exceed Rs.10,000/- the power to make the contract is conferred on the commissioner, and where the monetary limits of the contract exceeds Rs.10,000/- but does not exceed Rs.50,000/- the competent authority is the committee consisting of the chairperson, the commissioner, and not less than three but not more than seven members chosen in this behalf by the council. Section 43(2) requires the power of making every contract, where the value exceeds the monetary limits mentioned in sub-section (1), to be exercised by the council.
Section 44 stipulates that the power conferred by Section 43 to make or sanction contracts shall be subject to such rules as may be prescribed in regard to the conditions on which, and the mode in which, contracts may be made or sanctioned by or on behalf of the council. The Rules referred to in Section 44 are the Andhra Pradesh Municipalities (Acquisition and Transfer of Immovable Properties) Rules, 1967 notified in G.O.Ms. No.661 dated 27.10.1967 (hereinafter called the "Rules"). The Rules were published in the Andhra Pradesh Gazette on 12.07.1973. Rule 3(1) of the Rules stipulates that immovable property vesting in, but not belonging to, the municipal council shall not be transferred or charged in contravention of the conditions subject to which such property became vested in the council. Rule 3(2) stipulates that the deed of transfer of immovable property shall be in the appropriate form in Schedule II appended to the Rules with such variations which the circumstances may require. Rule 4(1) disables the municipal council, without the previous sanction of the Collector of the District, from making or sanctioning any transfer of immovable property belonging to it, or create or sanction the creation of any charge upon any such property. Rule 4(2) stipulates that the deed of transfer of immovable property shall be in the appropriate form in Schedule II appended to the Rules with such variations as the circumstances may require. Under Rule 8(1), in every case of transfer falling under Rule 3, the municipal council shall publish a notice of the proposed transfer giving full particulars of the property to be transferred, the name of the proposed transferee, and the consideration for the transfer (a) in the District Gazette, if the consideration for the transfer exceeds Rs.1,000/-; and
(b) by affixation in a conspicuous position, including in the office of the municipal council, the office of the Collector of the District and the Revenue Divisional Officer, the Taluk Officer, the village chavadi of the Village in which the property is situated, and on the property to be transferred. Sub-rule (3) stipulates that, in every case where such transfer or lease is to be made by public auction, a notice of the proposed transfer in Form A, appended to the Rules, with full particulars of the property to be transferred or leased shall be published in the manner specified therein. Form II(a), in Schedule II, is the form for transfer by sale and requires the sale deed to be affixed with the common seal of the Municipal Council of the municipality, and the chairman to affix his hand and seal on the said transfer deed.
Section 45 relates to the mode of executing contracts and, under subsection (1) thereof, every contract made by or on behalf of a council, where the value or the amount exceeds Rs.1,000/-, shall be in writing and, except in the case of contracts made under the provisions of sub-section (3) of Section 43, shall be signed by the Commissioner. Sub-section (3) of Section 43 relates to the work executed by a person appointed by the government and, as such, has no application. Section 45(2) renders the contract, executed or made otherwise than in conformity with the provisions of Section 45, or of Section 43 and of the Rules referred to in Section 44, not binding on the council. Sections 43, 44 and 45 of the Act must be harmoniously read so as to give effect to all of them. These provisions must be construed together "each portion throwing light, if need be, on the rest", and must be read as parts of an integral whole, and as being inter-dependent. An attempt should be made to reconcile them, if it is reasonably possible to do so, and to avoid repugnancy. (Madanlal Fakirchand Dudhediya v. Shree Changdeo Sugar Mills Ltd.1). This rule of construction which is also spoken of as "ex visceribus actus" helps in avoiding inconsistency between different sections or provisions of the same statute. It is the duty of the courts to avoid a head-on clash between different sections of the Act, and to construe the provisions which appear to be in conflict with each other in such a manner as to harmonise them. Two conflicting provisions in an Act should be so interpreted that, if possible, effect should be given to both. This is the essence of the rule of "harmonious construction". An interpretation which reduces one of the provisions to a "dead letter" or "useless lumber" is not harmonious construction. To harmonise is not to destroy any statutory provision or to render it otiose. (M. Pentiah v. Muddala Veeramallappa2; Gammon India Ltd. v. Union of India3; Mysore SRTC v. Mirja Khasim Ali Beg4; V.Tulasamma v. Sesha Reddy5; Punjab Beverages (P) Ltd. v. Suresh Chand6; CIT v. National Taj Traders7; Calcutta Gas Co. (Proprietary) Ltd. v. State of West Bengal8, J.K. Cotton Spg. & Wvg. Mills Co. Ltd. v. State of U.P9; Kailash Chandra v. Mukundi Lal10; Sultana Begum v. Prem Chand Jain11; Commissioner of Income Tax v. M/s. Hindustan Bulk Carriers12; R.S. Raghunath v. State of Karnataka13; Krishan Kumar v. State of Rajasthan14; Venkataramana Devaru v. State of Mysore15; and State of Rajasthan v. Gopi Kishan Sen16). The power to make or sanction contracts under Section 43 is made subject to the rules made under Section 44. The scope of the Rules made under Section 44 of the Act is limited only to the manner in which contracts should be made or sanctioned, and cannot extend to the manner in which such contracts should be executed. The power to make subordinate legislation is derived from the enabling Act, and it is fundamental that the delegate on whom such a power is conferred has to act within the limits of the authority conferred by the Act. Rules can be made to supplement and not supplant the provisions of the enabling Act. What is permitted is the delegation of ancillary or subordinate legislative functions, or what is fictionally called a power to fill up details. The legislature may, after laying down the legislative policy, confer discretion on an administrative agency as to the execution of the policy and leave it to the agency to work out the details within the frame work of the policy. Rules and Regulations, made under power conferred by the Statute, are supporting legislation and have force and effect, if validly made, as the Act passed by the competent legislature. (Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi17 and St. Johns Teachers Training Institute v. Regional Director, National Council for Teacher Education18).
While Sections 43 and 44 of the Act relate to the exercise of power to make or sanction a contract on behalf of the Municipal Council, Section 45 relates to its execution. The contract to be executed under Section 45 is after it is made or sanctioned by, or on behalf of, the Council. While the authorities specified in Section 43, or in the Rules made under Section 44, are empowered to make or sanction a contract, Section 45(1) requires execution of the contract, made or sanctioned by or on behalf of the council where the value exceeds Rs.1,000/-, to be signed only by the Commissioner. In the affidavit dated 31.03.2012 filed on behalf of the first respondent it is submitted that, under Section 45 of the Act, the authority competent to execute a contract of sale is the Municipal Commissioner. In the present case the contracts were not made by the Municipal Commissioner or the committee of the Municipal Council under Section 43(1), or the Council under Section 43(2). The sale deeds were also not executed by the Commissioner, but were signed by the chairman, Zaheerabad Municipality. Form II (a), in the Schedule II to the Rules, also forms part of the Rules, and cannot be so read as to contravene Sections 43 and 45 of the Act. The Rules were made on 27.10.1967, and notified on 12.07.1973. While Section 43(1), prior to its amendment by A.P. Act 3 of 1994 with effect from 01.03.1994, conferred power on the chairman to make or sanction contracts upto a value of Rs.3,000/- or Rs.5,000/-; the power to make or sanction contracts even for a value of less than Rs.3000/- has, by A.P. Act 3 of 1994, now been conferred only on the Commissioner, and not on the chairman. Under the IDSMT scheme formulated in the year 1982, and in terms of the "instructions", the tentative estimated cost of a plot under the EWS category was Rs.5330/-. The estimated cost of plots in LIG, MIG and HIG categories were Rs.14993/-, Rs.18600/- and Rs.21,700/- respectively. As the cost of each plot, even under the EWS category, was more than the limit prescribed of Rs.3000/- or Rs.5,000/-, the Chairman, Zaheerabad Municipality did not have the power, either before or after A.P. Act 3 of 1994 came into force, to make or sanction the contract of allotment of plots. In compliance with Sections 43 and 44 allotment of plots, and the terms and conditions of each such allotment, could only have been approved, for a value exceeding Rs.3000/- or Rs.5,000/-, by the Commissioner, or the committee of the Council, or the Council itself, and not by the Chairman alone. It is only after the contract is so approved, does the question of executing a contract under Section 45 arise. Section 45 empowers only the Commissioner, and not the Chairman, to execute the sale deed. Any construction which would render Section 45 otiose must be avoided. Rules, made under an "Act", cannot be interpreted in such a manner as to render any provision of the parent Act redundant. Form II(a) notwithstanding, any contract made or sanctioned by or on behalf of the Council can only be executed by the Commissioner and none else. Both Rules 3(2) and 4(2) permit variation of the deed of transfer of immovable property as the circumstances may require. In view of the amendment to Section 43 (1), by A.P. Act 29 of 1978 and thereafter by A.P. Act 3 of 1994, and in terms of Section 45 of the Act, the deed of transfer of immovable property, in Form II (a) to Schedule II of the Rules, should have been varied, and it is the Commissioner who should have affixed his hand and seal on the said transfer deed. After allotment of plots, and prior to execution of the sale deeds, Rule 8(1) requires the notice of the proposed transfer to be published in the District Gazette and in other conspicuous places. No such publication was caused by the Zaheerabad Municipality. In any event as Form-II(a) in Schedule II to the Rules can only supplement and not supplant statutory provisions, and since the power to execute contracts on behalf of the Municipal Council has been conferred by Section 45 of the Act exclusively on the Commissioner, registration of the sale deeds by the Chairman is illegal and void; and, as stipulated under Section 45(2), would not bind the Council. The Municipal Chairman lacks jurisdiction to execute a sale deed on behalf of the Municipal Council.
An order passed without authority of law is of no effect. It does not create any right in favour of a party for whom such an order is made. If the officer could not have passed the order, all actions taken in pursuance thereof would be of no consequence. (M.V.Janardhan Reddy v. Vijaya Bank19). Where an authority making the order lacks inherent jurisdiction, such order would be null, non est and void ab initio, as a defect in the jurisdiction of an authority goes to the root of the matter and strikes at its very authority to pass the order. (Deepak Agro Foods v. State of Rajasthan20; Kiran Singh v. Chaman Paswan21). Even though the impugned order is without jurisdiction it is still required to be set aside. An order, even if not made in good faith, is still an act capable of legal consequences. It bears no brand of invalidity on its forehead. Unless the necessary proceedings are taken at law to establish the cause of invalidity, and to get it quashed or otherwise upset, it will remain as effective for its ostensible purpose as the most impeccable of orders. (Smith v. East Elloe Rural District Council22; Pune Municipal Corporation v. State of Maharashtra23). No order can be ignored unless a finding is recorded that it is illegal, void or not in consonance with the law. This principle is equally true even where the 'brand of invalidity' is plainly visible: for there also the order can effectively be resisted in law only by obtaining the decision of the court. (Pune Municipal Corporation23). If an order is void or ultra vires it is enough for the court to declare it so and it collapses automatically. A declaration merely declares the existing state of affairs and does not 'quash' so as to produce a new state of affairs. (Pune Municipal Corporation23; and State of Punjab v. Gurdev Singh24). The earlier order of allotment, and the registered sale deeds executed by the Chairman, Zaheerabad Municipality, are null and void, and are declared as such. As void orders are a nullity, and are non-est, the subsequent cancellation by the Municipal Commissioner, of both the allotment and the registration of sale deeds, is merely a formal recognition of their invalidity.
V. INSTRUCTIONS ISSUED BY THE GOVERNMENT, IN G.O.MS.NO.1001 DATED 22.11.1982, IS BINDING ON THE ZAHEERABAD MUNICIPALITY:
It is contended on behalf of the petitioners that, as there were no willing purchasers from the year 1982 to 2000, there was no occasion for the Municipal Council to adopt the drawal method for allotment; the guidelines in G.O.Ms. No.1001, MA dated 22.11.1982 are illegal and ultra vires; cancellation of allotment is not for violation of a legal or statutory provision nor was allotment obtained by misrepresentation or fraud; no person can be deprived of his vested right on the basis of technicalities; and purchase of immovable property by minors is valid.
The "instructions" required the Municipal Council to notify the remaining plots or prescribe any other mode of allotment, where there were either no applications or the number of applications received, were less than the total number of plots in each category. Clause 31 of the instructions required the date of drawal of lots to be notified in the notice board of the Zaheerabad Municipality and to be published in the newspapers. Even if there were no willing purchasers from 1982 to 2000, the remaining plots should have been re- notified, applications invited, and the plots allotted by drawal of lots. The report of the District Collector dated 05.11.2009 reveals gross violations in re-allotment of plots, in some cases even without supporting applications of the individual applicants; no registers were maintained to show that any applications were made; there was no record to show whether individuals, to whom plots were allotted, were eligible for such allotment; there were no indication as to which plot was allotted to which person, and whether the allottee was an applicant or not; no reasons for re-allotment were mentioned; no public and transparent process was followed; due publicity was not given to solicit applications for allotment of plots; and publicity is said to have been given through 'mike announcement'.
State-owned or public-owned property is not to be dealt with at the absolute discretion of the executive. Certain precepts and principles have to be observed. Public interest is the paramount consideration. Public property has to be dealt with for public purpose, and in public interest. Disposal of public property partakes the character of a trust in that, in its disposal, there should be nothing hanky panky. One of the methods of securing the public interest, when it is considered necessary to dispose of a property, is to sell the property by public auction or by inviting tenders. Though that is the ordinary rule, it is not an invariable rule. Socialist property may be disposed of at a price lower than the market price or even for a token price to achieve some defined constitutionally recognised public purpose, one such being to achieve the goals set out in Part IV of the Constitution. (Ram & Shyam Company v. State of Haryana25). There may be other situations where there are compelling reasons necessitating departure from the rule, but then the reasons for the departure must be rational and should not be suggestive of discrimination. (Sachidanand Pandey v. State of West Bengal26; Meerut Development Authority v. Association of Management Studies27). A transparent and fair method of selection must be adopted so that all those eligible get a fair opportunity. No attempt should be made to scuttle the claim of worthy applicants. (Centre for Public Interest Litigation v. Union of India28). Transparency and compliance with Article 14 of the Constitution would, inter alia, be ensured by holding public auction upon issuance of advertisement in well known newspapers, (Nagar Nigam, Meerut v. Al Faheem Meat Exports Pvt. Ltd.29); and P. Narayana Reddy v. Government of Andhra Pradesh30), where a State asset is sought to be sold or the State purchases goods. (Villianur Iyarkkai Padukappu Maiyam v. Union of India31).
While it is true that the "instructions" enable any other fair and transparent mode of allotment to be adopted, any such alternative mode could have been followed only after its approval by the Municipal council. The Municipal Commissioner admits that no resolution was passed by the Municipality relaxing any of the conditions of the IDSMT Scheme. The alternate mode of allotment should, in terms of G.O.Ms.No.1183 dated 09.11.1981 read with G.O.Ms.No.898 dated 23.10.1982, either have been made by drawal of lots or by public auction. While drawal of lots for the EWS and LIG categories may be justified on the touchstone of Article 39(b) of the Constitution of India, public auction would be a transparent and fair method for allotment of plots to the MIG and HIG categories. It is evident, from the counter affidavit of the State Government, that the Commissioner, Zaheerabad Municipality did not follow the "instructions", in the allotment of plots; and that plots were allotted at the whims and fancies of the Municipal Chairman without the plots being notified afresh, or drawal of lots being conducted, to select allottees from among those who were eligible.
The petitioners have failed to discharge the onus of establishing that the instructions, in G.O.Ms. No.1001, MA dated 22.11.1982, are illegal and ultra vires the Act and the Rules. As Rule 3(1) statutorily mandates compliance with the instructions in G.O.Ms. No.1001, MA dated 22.11.1982, before allotment of plots, it cannot be said that cancellation of allotment was not for violation of any legal or statutory provision. Even otherwise, in terms of Section 387-A of the Act, the instructions issued by the State Government are binding on the Zaheerabad Municipal Council. An executive authority must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them. This rule, though supportable also as an emanation from Article 14, does not rest merely on that article. It has an independent existence apart from Article 14. It is a rule of administrative law which has been judicially evolved as a check against exercise of arbitrary power by the executive authority. (Viteralli v. Saton32; Amarjit Singh Ahluwalia v. State of Punjab33; Sukhdev Singh17; Ramana Dayaram Shetty v. International Airport Authority of India34). The petitioners have no vested right for allotment of plots contrary to the "instructions". Failure on the part of the Zaheerabad Municipality to strictly adhere to the "instructions", and abuse of office by its elected members including its chairmen and vice-chairmen, cannot be brushed aside as a mere technicality.
VI. IN CASES WHERE FACTS ARE NOT IN DISPUTE - INSISTENCE ON COMPLIANCE WITH PRINCIPLES OF NATURAL JUSTICE UNNECESSARY:
Learned Counsel for the petitioners would submit that the Municipal Commissioner had cancelled allotments without even issuing a show cause notice, and without giving the petitioners an opportunity of being heard; the order of cancellation was passed at the behest of the Government under the guise of compliance with the orders in W.P. No.6814 of 2009 to which the petitioners were not parties; the orders were passed without application of mind; and the impugned notices are ex facie illegal, in violation of principles of natural justice, and in violation of Articles 14 and 300-A of the Constitution of India. Learned Counsel would rely on Commissioner of Police v. Gordhandas Bhanji35 in this regard. The petitioners, in all the Writ Petitions, were issued individual notices informing them that plots allotted to them earlier were to be cancelled. Publication of these notices was also caused in the newspapers. All the individual notices contain specific reasons for the proposed cancellation of the earlier allotment. The petitioners, were either minors when applications were submitted on their behalf seeking allotment of plots, or were allotted more than one plot each, or were allotted plots in areas earmarked for open spaces, or were allotted plots without obtaining from them an affidavit that they did not own any other house or plot. None of the petitioners dispute that they fall under one or the other of the aforesaid categories. The "instructions" stipulate that not more than one plot can be allotted to an individual or his spouse or children. Among the pre-conditions for allotment is the requirement of an affidavit being furnished by the applicant that he does not own any other house or plot. Earmarked open areas in the lay-out can only be used as lung space or for other public purposes, and not to be sub-divided, plotted, allotted and sold to individual applicants. The contention that the "instructions" did not prohibit any person from submitting an application on behalf of a minor is only to be noted to be rejected. The purpose and object underlying the "instructions", is to obviate allotment of plots to minors. These "instructions" cannot be circumvented by a parent/guardian submitting an application on behalf of, and thereby seek allotment of plots in favour of, minors. As the petitioners herein were put on notice, and as the notices specify that the allotments were sought to be cancelled as the earlier allotments fell foul of the "instructions", giving the petitioners an opportunity of being heard would merely be an empty formality. The question as to what extent principles of natural justice are required to be complied with would depend upon the fact situation obtaining in each case. (Escorts Farms Ltd. v. Commissioner, Kumaon Division36; Bar Council of India v. High Court of Kerala37; A.Umarani v. Cooperative Societies38; Divisional Manager, Plantation Division v. Munnu Barrick39 and Karnataka SRTC v. S.G. Kotturappa40). Principles of natural justice is not a "mantra" to be applied in a vacuum, or be put in a straitjacket. Natural justice is not an unruly horse, no lurking landmine, nor a judicial cure-all. If fairness is shown by the decision-maker to the man proceeded against, the form, features and the fundamentals of such essential processual propriety being conditioned by the facts and circumstances of each situation, no breach of natural justice can be complained of. The court has to determine whether the observance of the principles of natural justice was necessary for a just decision in the facts of the particular case. (Chairman, Board of Mining Examination and Chief Inspector of Mines v. Ramjee41; Union of India v. Tulsiram Patel42; ECIL v. B. Karunakar43; Municipal Committee, Hoshiarpur v. Punjab State Electricity Board44). They are not required to be complied with when it would be an empty formality. (State Bank of Patiala v. S.K. Sharma45; S.G. Kotturappa40; and Rasiklal v. Kishore46).
The application of principles of natural justice would be limited to a situation where the factual position or legal implication arising thereunder is disputed, and not where it is not in dispute or cannot be disputed. If only one conclusion is possible, a writ would not issue only because there was a violation of the principles of natural justice, (Punjab National Bank v. Manjeet Singh47), as it would be a futile exercise and an empty formality. (State of U.P. v. Om Prakash Gupta48; S.L. Kapoor v. Jagmohan49; U.P. Junior Doctors' Action Committee v. Dr. B. Sheetal Nandwani50; Municipal Committee, Hoshiarpur44; State of Punjab v. Jagir Singh51; S.G.Kotturappa40; P.D.Agrawal v. State Bank of India52; M.C.Mehta v. Union of India53; and Viveka Nand Sethi v. Chairman, J&K Bank Ltd.54). It is not in dispute that, in all the aforesaid Writ Petitions, plots illegally allotted earlier were sought to be cancelled as they contravened the "instructions". The contention that principles of natural justice has been violated does not, therefore, merit acceptance.
VII. ABDICATION OF DUTY AND SURRENDER OF DISCRETION:
It is no doubt true that public orders, publicly made in exercise of statutory authority, cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind or what he intended to do. Public orders made by public authorities are meant to have public effect, and are intended to affect the actings and conduct of those to whom they are addressed, and must be construed objectively with reference to the language used in the order itself. (Gordhandas Bhanji35). It must, however, be borne in mind that cancellation of allotments, in these Writ Petitions, is not an exercise of statutory power, but is for violation of the "instructions". Section 387-A of the Municipalities Act confers power on the Government to issue instructions to any Municipality. Even if cancellation of the allotments by the Municipal Commissioner, is at the behest of the state government, the order of cancellation cannot be said to be an abdication of duty or surrender of discretion or to be have been passed without independent application of mind. In cases where an authority, subordinate to the government, is not exercising any statutory function his actions are liable to be supervised and corrected by the government. Such supervision and interference is not prohibited by any principle. The government, in exercise of its statutory or executive power, can always issue necessary directions to its officers, functioning under its control, in public interest unless the decision is required to be taken by the authority in the exercise of a discretion conferred on him under the statute. In such a case, the principles of administrative law such as the rule against surrender of discretion and abdication of duty has no application. (VET India Pharmaceuticals Ltd v. Govt. of Andhra Pradesh55). Having secured allotment illegally, and in violation of the "instructions", the petitioners cannot be heard to contend that the "instructions" are illegal. Cancellation, of the allotments and the registration of sale deeds, in the present case is not in violation of Article 14 of the Constitution of India.
VIII. ALLOTMENT AND SALE OF PLOTS BY ELECTED OFFICIALS OF ZAHEERABAD MUNICIPALITY TO THEIR KITH AND KIN, THAT TOO AT PRICES PREVAILING TWO DECADES EARLIER, IS ILLEGAL:
It is evident from the copies of the sale deeds, annexed to W.P.No.6814 of 2009 and the other Writ Petitions aforementioned, that the consideration received by the Municipality for the sale of plots are at prices prevailing more than two decades prior thereto. For instance, the sale deed dated 01.09.2007 executed by the Zaheerabad Municipality represented by its chairperson Sri M.Murali Krishna Goud, in favour of Smt.Tahera Begum, W/o.Sri Mohd. Khaja (wife of the erstwhile vice-chairman of Zaheerabad Municipality), records that the consideration for allotment of a plot in the LIG category was Rs.14,933/-, while its market value is reflected in the very same sale deed as Rs.1,53,000/-. Though the "instructions" stipulate the estimated cost of an LIG plot to be Rs.14,933/-, it is also made clear therein that the estimated cost was purely a tentative figure, and the final figure may vary considerably as per the calculations made from time to time. The market value of the land, for payment of appropriate stamp duty, is determined under Section 47-A of the Indian Stamp Act, 1899, (Jawajee Nagnatham v. Revenue Divisional Officer56; Sagar Cements Ltd. v. State of A.P57; P. Sasidar v. Sub-Registrar58), which empowers the registering officer to levy stamp duty on instruments of conveyance, etc. If the registering officer has reason to believe that the market value of the property, covered by the conveyance, has not been truly set forth in the instrument, he may refuse to register such an instrument, and refer the same to the collector to determine the market value of such property, and the proper duty payable thereon. On receipt of such opinion he may call upon the vendor, as per the rules prescribed, to pay the additional duty thereon. (Jawajee Nagnatham56). The "basic value register", maintained for the fiscal purpose of collecting stamp duty and registration charges, and the notification under Section 47-A, are only a guide for collection of revenue. (Land Acquisition Officer v. Jasti Rohini59 and Jawajee Nagnatham56). The market value reflected in the basic value register is but a conservative estimate of the prevailing land prices and, more often than not, the market price of land in any given locality is far higher. No attempt was made by the Zaheerabad Municipality to revise the prices of LIG plots estimated in the year 1982, even when they were sold twenty five years thereafter in the year 2007. In the sale deed referred to above, the market value (even as per the basic value register) is reflected as Rs.1,53,000/-. The sale consideration, shown therein as Rs.14,933/-, is less than 1/10th the registration value mentioned in the said sale deed itself. The elected officials of Zaheerabad Municipality have allotted several plots to their family and relatives without following any transparent procedure, that too at prices prevailing more than two decades earlier. No attempt was made to ascertain whether the allottees of the plots fell under the income limits stipulated under the "instructions" for each such category (i.e., EWS, LIG, MIG and HIG). IX. JURISDICTION UNDER ARTICLE 226 DISCRETIONARY - IT WILL NOT BE EXERCISED WHERE SETTING ASIDE AN ORDER MAY RESULT IN REVIVAL OF AN EARLIER ILLEGAL ORDER:
Learned Counsel for the petitioners would submit that, even if the authority has the power to cancel the plots, the power should have been exercised within a reasonable period, and not after a long lapse of several years; the action of the municipal commissioner is unilateral; cancellation of allotment, after registration of sale deeds, is rescission of the contract which can only be done bilaterally; no restrictions were imposed by the vendor, or the registering authority, for registration of the plots purchased by the petitioners; once the sale is registered the sub-registrar has no power, under the Registration Act, to cancel such registration; the civil court alone is competent to grant a decree for cancellation of the registered sale deeds; the petitioners were bona fide purchasers for valuable consideration; and the petitioners are in uninterrupted possession of the plots ever since the date of registration. Learned Counsel would rely on K.M.Kamallula Basha v District Collector, Chittoor60; and Gaddam Madhusudhan Reddy v. Chief Commissioner of Land Administration61 in this regard.
In Gaddam Madusudhan Reddy61 the order passed by the Joint Collector, under Section 9 of the A.P. Rights in land and Pattadar Passbooks Act, 1971, was under challenge. This Court held that, in the instant case, it was not even pointed out that the petitioners did not possess the corresponding rights; it was more than a decade ago that the passbooks were issued, and a few decades earlier thereto the petitioners or their predecessors-in-title had acquired rights vis-
-vis the land; and the rights, which had such a solid legal and factual foundation, could not be the subject-matter of a whimsical exercise of power by the revisional authority. In K.M.Kamallula Basha60 the order under challenge was the proceedings of the District Collector informing the Sub-Registrar that, since the lands belonged to the government, a no objection certificate could not be issued. It is in this context that this Court held that, when the government itself has incorporated conditions prohibiting alienation for the first time in the year 1954, it was unimaginable how the same condition would operate for assignments made two decades earlier thereto; another aspect of the matter was that a purchaser of assigned land virtually enjoyed possession adverse to the interest of the government; and, with the expiry of thirty {30} years stipulated under the Limitation Act, 1963, he acquired ownership rights by way of prescription.
In the Writ Petitions before us, cancellation of allotment of plots, or for that matter cancellation of the registered sale deeds, was not after thirty years. Reliance placed on the judgments above referred is, therefore, of no avail. As the Chairman, Zaheerabad Municipality lacked jurisdiction to execute and register the sale deeds on behalf of the Municipality, (such a power being conferred exclusively on the Commissioner), the orders of allotment, and registration of the sale deeds, are a nullity and their cancellation by the Commissioner is merely a formal recognition of their invalidity. Allotment and registration of plots by the Chairman did not confer on the petitioners any legal right or interest over such plots. As the allotment itself was void ab- initio, neither was any title or ownership conveyed thereby, nor can the petitioners claim any right or interest over such illegally allotted plots. Even otherwise, if the order of the municipal commissioner, cancelling the allotment and rescinding transfer of property effected earlier by registration of sale deeds, were to be set aside it would result in revival of the earlier allotment which is ex facie illegal. Exercise of jurisdiction under Article 226 of the Constitution of India is discretionary, and a Writ is not issued as of right or as a matter of course. (C.R.Reddy Law College Employees' Association, Eluru W.G.District v. Bar Council of India, New Delhi62). The discretionary power of this Court, under Article 226 of the Constitution of India, need not be exercised in every case where there is an error of law. One of the limitations imposed by this Court, on itself, is that it would not exercise jurisdiction unless substantial injustice has ensued or is likely to ensue. (Sangram Singh v. Election Tribunal, Kotah63). Even if a legal flaw might be electronically detected, this Court would not interfere save manifest injustice. (Rashpal Malhotra v. Mrs. Saya Rajput64 and Council of Scientific and Industrial Research v. K.G.S.Bhatt65). One of the principles inherent is that exercise of discretionary power should be for the sake of justice and, if granting relief results in greater harm to the society, the Court may refrain from exercising the power. (State of Maharashtra v. Prabhu66). The power conferred, under Articles 226 of the Constitution, is to advance justice and not to thwart it. The High Court should, therefore, not merely examine errors of law academically, but should ascertain whether injustice has ensued as a result of an erroneous interpretation of the law. If justice became the by-product of an erroneous view of the law, the High Court is not expected to erase such justice in the name of correcting such an error. (Roshan Deen v. Preeti Lal67 and State of U.P. v. District Judge, Unnao68). This Court exercises its discretion, under Article 226 of the Constitution of India, with great caution and only in furtherance of public interest, and not merely on the making out of a legal point. It is required to keep larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to the conclusion that overwhelming public interest requires interference, would it intervene in the matter. (Master Marine Services Pvt. Ltd v. Metcalfe and Hodgkinson Pvt Ltd.69 and Air India Ltd. v. Cochin International Airport Ltd.70). An order, without jurisdiction or in violation of principles of natural justice, need not be set aside if it would restore/revive an earlier illegal/invalid order, (Maharaja Chintamani Saran Nath Shahdeo v. State of Bihar71, Shakur Basti Shamshan Bhumi Sudhar Samiti v. LT. Governor, National Capital Territory of Delhi72; Raj Kumar Soni v. State of U.P.73), and a writ court, in exercise of its jurisdiction under Article 226 of the Constitution of India, would not exercise discretion to interfere in such cases. (Ramesh Chandra Sankla v. Vikram Cement74). We see no reason, therefore, to exercise discretion to interfere with the action of the respondents in cancelling the earlier allotment of plots, and the earlier registration of sale deeds, and in resuming such plots.
X. ABUSE OF PROCESS OF COURT:
The fact that some of the petitioners are related to the chairman, vice- chairmen and councillors of Zaheerabad Municipality has been suppressed in the Writ Petitions filed before this Court. It is now brought to our notice that petitioner Nos.1, 10 and 11 in W.P.No.25081 of 2010 are the son, wife and daughter of the vice-chairman; petitioners Nos.6, 7 and 16 are the son, daughter and wife of one councillor; and petitioner Nos.4, 18 and 20 are the sister, wife and niece of another councillor. Petitioner No.7, in W.P.No.26380 of 2010, is the wife of the then chairman of the Municipality who had executed the registered sale deeds in her favour. Courts of law are meant to impart justice between the parties. One who comes to the Court must come with clean hands. A person who's case is based on falsehood has no right to approach the Court. He can be summarily thrown out at any stage of the litigation, (S.P.Chengalvaraya Naidu v. Jagannath75 and A.V.Papayya Sastry v. Government of A.P.76), even in collateral proceedings. (S.P.Chengalvaraya Naidu75).
XI. EXERCISE OF DISCRETION FOR EXTRANEOUS REASONS OR FOR CORRUPT MOTIVES VITIATES THE DECISION ITSELF:
It is evident, from the report of the Director General, Vigilance and Enforcement and from the action taken report of the Government, that 178 plots were allotted contrary to the "instructions", of which 28 plots were allotted and registered in favour of the family members of elected officials/public servants. In flagrant violation of the law, and in complete disregard to the instructions issued by the State Government, the chairman, vice-chairman and councillors of Zaheerabad Municipality have allotted plots to all and sundry, and a substantial number unto themselves. No one can arrogate to himself, or assume without any authorisation express or implied in law, a discretion to ignore the rules as it renders the action ultra vires. (Bangalore Medical Trust v. B.S. Muddappa77). If a discretionary power has been exercised for an unauthorised purpose, it is generally immaterial whether its repository was acting in good faith or in bad faith. (Express Newspapers (P) Ltd. v. Union of India78; Professor de Smith: Judicial Review of Administrative Action, fourth Edition at pp. 335-36; and S.R.Venkataraman v. Union of India79). Bad faith is understood to mean intentional usurpation of power motivated by considerations that are incompatible with the discharge of public responsibility. A power is exercised fraudulently if its repository intends to achieve an object other than that for which he believes the power to have been conferred. (Express Newspapers (P) Ltd.78). Fraud on power voids the order if it is not exercised bona fide for the end design. There is a distinction between exercise of power in good faith and misuse in bad faith. The former arises when an authority misuses its power in breach of law, say, by taking into account bona fide, and with best of intentions, some extraneous matters or by ignoring relevant matters. That would render the impugned act or order ultra vires. It would be a case of fraud on power. The misuse in bad faith arises when the power is exercised for an improper motive, say, to satisfy a private or personal need. Use of a power for an "alien" purpose, other than the one for which the power is conferred, is malafide use of that power. The ulterior or alien purpose clearly speaks of the misuse of the power. There is a condition implied in this as well as in other instruments which create powers, namely, that the powers shall be used bona fide for the purpose for which they are conferred. No public body can be regarded as having authority to act in bad faith or from corrupt motives, and any action purporting to be of that body, but proved to be committed in bad faith or from corrupt motives, would certainly be held to be inoperative. (General Assembly of Free Church of Scotland v. Overtown80; Short v. Poole Corporation81). If the decision is influenced by extraneous considerations, which ought not to have been taken into account, the ultimate decision is bound to be vitiated. (Kasturi Lal Lakshmi Reddy v. State of Jammu and Kashmir82; P.Narayana Reddy30). Malice, in its legal sense, means malice such as may be assumed from the doing of a wrongful act intentionally but without just cause or excuse, or for want of reasonable or probable cause. (S.R.Venkataraman79; Shearer v. Shields83). Acting on a legally extraneous or obviously misconceived ground of action would be a case of "malice in law". (Regional Manager v. Pawan Kumar Dubey84). The blatant misuse of office by the elected officials of Zaheerabad Municipality, in allotting plots to their kith and kin at prices prevailing two decades earlier, is a fraud on power and justifies the subsequent decision of the Municipal Commissioner to cancel allotment of plots and registration of the sale deeds.
XII. PUBLIC OFFICIALS MUST PROTECT PUBLIC PROPERTY AND EXERCISE THEIR POWERS IN LARGER PUBLIC INTEREST:
More often than not detriment to what belongs to "many", collectively, does not cause pangs to "any", for no one is personally hurt directly. That is why public officials and public-minded citizens entrusted with the care of "public property" must not only be alert and vigilant in such matters, but also show awareness of the ways of the present day world as also its ugly realities. Public property must be zealously protected. (Chenchu Rami Reddy Reddy v. Government of A.P.85). Public authorities should act fairly, their actions should be legitimate, their dealings above board, and their transactions should be without aversion or affection. Nothing should be suggestive of discrimination. Nothing should be done by them which gives an impression of bias, favouritism or nepotism. (Haji T.M. Hassan Rawther v Kerala Financial Corporation86). Appearance of public justice is as important as doing justice. Nothing should be done which gives an appearance of bias, jobbery or nepotism. (Sachidanand Pandey26). If actions of 'persons holding public or political offices' are tainted by breach of trust, corruption or other extraneous consideration, they would damage the interests of the country. (V.C.Shukla v. State (Delhi Administration)87). Every holder of a public office, by virtue of which he acts on behalf of the State or a public body, is ultimately accountable to the people in whom the sovereignty vests. All powers, so vested in him, must be exercised for public good and promoting the public interest. Every holder of a public office is a trustee. Action of the State or its instrumentalities should not, even apparently, give an impression of bias, favouritism and nepotism. (NOIDA Entrepreneurs Association v. NOIDA88). The adverse impact of lack of probity in discharge of public duties can result in varied defects, not only in the decision-making process but in the final decision as well. Every officer in the hierarchy of the State, by virtue of his being a "public officer" or a "public servant", is accountable for his decisions to the public as well as to the State. This concept of dual responsibility should be applied with rigour in larger public interest and for proper governance. (Delhi Airtech Services Private Limited v. State of Uttar Pradesh89). The principles of public accountability and transparency in State action are applicable to cases of executive exercise of power, besides requiring that such actions also not lack bona fides. Public officers are answerable for both their inaction and irresponsible actions. If what ought to have been done is not done, responsibility should be fixed on the erring officers; then alone, the real public purpose of an answerable administration would be satisfied. (Delhi Airtech Services Private Limited89; Centre for Public Interest Litigation v. Union of India90).
XIII. SHOULD THE SALE CONSIDERATION BE RETURNED TO THE ERSTWHILE ALLOTTEES WITH INTEREST?
Learned Counsel for the petitioners would submit that the paper notification, cancelling the plots en masse, does not refer to any remedial measures to be taken after cancellation of allotment (return of consideration or any alternative allotment).
The "rules of fairness", by which every public authority is bound, requires them to compensate the loss, occasioned to private parties or citizens who were misled by them. Public authorities cannot be absolved of their liability to provide adequate monetary compensation to parties adversely affected. Any direction to public authorities, to pay monetary compensation or damages, would, however, also indirectly harm general public interest as they are entrusted with public funds. Directing administrative redressal would be a more appropriate remedy than payment of monetary compensation, from the public exchequer, for the loss caused. (Hira Tikkoo v. Union Territory, Chandigarh91; Administrative Law by H.W.R. Wade and C.F. Forsyth, 8th Edn., at pp. 370-73; Judicial Review of Administrative Action: de Smith, Woolf and Jowell, 5th Edn., at p. 565, para 13-
028.).
We consider it appropriate, therefore, to direct the Zaheerabad Municipality to refund the sale consideration received from the petitioners, and other allottees, whose plots were cancelled and the land resumed. They need not, however, be paid any interest. We leave it open to the petitioners to proceed against the erstwhile elected officials, of the Zaheerabad Municipality, in their personal capacity for any claim which they may have for interest or damages.
XIV. IS SUSPENSION OF THE CHAIRMAN, ZAHEERABAD MUNICIPALITY MERELY FOR THREE DAYS NOT TOO TRIVIAL A PUNISHMENT?
Before we part with the case, we must record our anguish at the apathy and indifference exhibited by public servants in permitting the elected officials of Zaheerabad Municipality to loot the public exchequer. Instead of coming down heavily on such illegal acts, the Executive has chosen to gloss over such abuse of office and authority. The 1st respondent informed this Court, by their affidavit dated 02.12.2010, that Sri M. Murali Krishna Goud, ex-chairperson of Zaheerabad Municipality, had registered more than one plot to 36 persons, 7 plots to minors and 2 plots without affidavits; and 28 plots were allotted and registered in favour of the family members of elected officials and public servants.
On 24.09.2010 the learned Additional Advocate General placed before this Court a copy of G.O.Ms.No.359, Municipal Administration and Urban Development (Elec.I) Department, dated 19.08.2010 whereby the Government, in the exercise of its powers under Section 59-A(1) of the Act, suspended Sri M. Murali Krishna Goud from the office of the Chairperson, Zaheerabad Municipality for abusing his position while discharging the duties vested in him. The G.O. refers to the vigilance and enforcement department report, regarding irregularities in the sanction and registration of plots under the IDSMT scheme in Zaheerabad Municipality. Sri N.V. Sumanth, learned Counsel for the petitioner in W.P. No.6814 of 2009, informed this Court that, in the meanwhile, the State Government had, by G.O.Ms. No.376 dated 31.08.2010, revoked the order of suspension passed earlier in G.O.Ms.No.359 dated 19.08.2010. The Learned Additional Advocate General expressed his ignorance of any such order having been passed by the State Government.
This Court called upon the first respondent to file an affidavit setting out, among others, the circumstances that lead to issuance of G.O.Ms.No.359, Municipal Administration and Urban Development (Elec.1) Department, dated 19.08.2010, and the subsequent G.O.Ms. No.376, Municipal Administration and Urban Development (Elec.1) Department, dated 31.08.2010; why the decision to limit the period of suspension of Sri M. Murali Krishan Goud, chairperson, Zaheerabad Municipality, for a period of three days, was neither intimated to this Court nor to the Learned Advocate General representing the official respondents; and why such a decision of the government, to limit the period of suspension for a period of three days, was not reflected in G.O.Ms.No.359 dated 19.08.2010.
In her affidavit dated 19.12.2012 the Chief Secretary, Government of A.P submits that, after examining the report of the vigilance and enforcement department, the government had decided to suspend Sri M. Murali Krishna Goud, the then chairperson, Zaheerabad Municipality; a show cause notice was issued, and his explanation obtained, as stipulated in Section 59-A(2); the file was, thereafter, submitted to the then Minister for Municipal Administration and Urban Development for suspending the chairperson for the remaining period of the term; the Minister had, however, ordered suspension only for a period of three days; as per the orders of the Minister, a draft G.O. was prepared to suspend the then chairperson for a period of three days; the file was referred to the law department which advised that the chairperson be suspended immediately without mentioning the period of suspension, and the suspension be revoked after a period of three days; as per the advice of the law department, G.O.Ms. No.359 dated 19.08.2010 was issued suspending Sri M. Murali Krishna Goud without mentioning the period of suspension; a copy of the said G.O. was handed over to the Additional Advocate General for submitting it to the Court; the suspension of the Chairperson was revoked vide G.O.Ms.No.376 dated 31.08.2010; and by oversight the fact that the period of suspension was limited only to three days was not brought to the notice of the office of the Advocate General. The power conferred on the government, under Section 59-A(1) of the Act, is to suspend any chairperson or vice-chairperson or a member of the Municipality who, in their opinion, had abused his position in the discharge of the duties vested in him. Under Sub-section (3) thereof the government may, suo motu or on an application made by the chairperson or vice-chairperson or member, revoke the order of suspension issued under sub-section (1). Section 60(1) confers power on the government to remove any chairperson or vice-chairperson who, in their opinion, has willfully disobeyed the provisions of the Act or any rules, bye- laws, regulations or has abused his position or the powers vested in him. For abuse of position in the discharge of their duties, the government can either suspend the chairperson and vice-chairperson under Section 59-A(1), or remove them from office under Section 60(1) of the Act. While resort may be had to Section 59-A(1), to suspend the chairperson or vice-chairperson, in cases where the abuse is trivial, the power to remove the chairperson/vice-chairperson ought to be exercised, under Section 60(1), where such abuse is flagrant and brazen, and its consequences adversely affect larger public interest. In the present case, the chairman of the Municipality has violated the provisions of the Act in executing sale deeds which he was not empowered to (as such a power has been conferred, under Section 45 of the Act, only on the Commissioner). He and several other ex-chairmen, and ex-vice-chairmen, of Zaheerabad Municipality have also abused their office in allotting and alienating plots to their kith and kin, that too at abysmally low prices i.e., at prices prevailing two decades prior to the registration of the sale deeds. While Courts would not usurp the power of the government to decide, or take upon itself the task of determining, whether the chairmen/vice-chairmen should have been suspended or removed from office under Section 59-A(1) or 60(1) respectively, the nature and extent of punishment imposed in the present case shocks our conscience by its triviality. For gross abuse of office, flagrant violation of the law, and blatant misuse of power by elected municipal councillors, the vice-chairmen and the chairmen of Zaheerabad Municipality, in allotting plots to their near and dear contrary to the "instructions" and at an abysmally low cost, the Minister for Municipal Administration has chosen merely to suspend the Chairman, that too only for three days. Such undue indulgence in imposing a symbolic punishment would, justifiably, be perceived more as a reward for abuse of authority, than as a punishment for such unpardonable acts. Even more disconcerting is that subterfuge has been resorted to by the law department of the state government, headed by the law secretary (who ordinarily is, and in the present case was, a judicial officer in the cadre of District Judge), to avoid criticism from the judicial branch for such misplaced lenience shown, by the executive branch of the State, to the chairman, Zaheerabad Municipality. The law department has, in effect, advised the executive to mislead the Court into believing that the chairperson was being suspended for the remainder of his term and not merely for three days, and to surreptitiously revoke the order of suspension three days thereafter. While this Court was kept in the dark of this subterfuge, the government, suo motu and without even a request from the chairman, revoked the order of suspension exercising its powers under Section 59-A(3) of the Act.
If those who indulge in grave and serious acts of corruption are let off merely with a slap on the wrists, and are not imposed exemplary punishment, not only would it encourage others to indulge in similar illegal acts but would further fuel public anger and resentment against those holding public offices, and completely erode public confidence in the governance structure. Unless those holding public offices are promptly and severely dealt with, for abuse of office/authority and for indulging in acts of self-aggrandisement, public outrage may, in the not too distant future, get out of hand. As neither the then Minister for Municipal Administration nor the then Law Secretary of the State Government are arrayed as respondents in these Writ Petitions, we refrain from saying anything more lest we be perceived to have passed strictures without giving them an opportunity of being heard.
XV. CONCLUSION:
The Commissioner, Zaheerabad Municipality shall forthwith, and in any event not later than four weeks, resume the plots which are in the possession of the petitioners. These, and the other plots already resumed, shall be re-allotted strictly in accordance with the IDSMT scheme, the instructions issued in G.O.Ms.No.1001 dated 22.11.1982, and the guidelines prescribed by the state government from time to time. The provisions of the Act and the Rules shall be strictly adhered to. Before commencing afresh the exercise of allotment of plots the Municipal Commissioner shall, in consultation with the state government, revise the cost of each plot, and the income limits of each category (i.e. EWS, LIG, MIG and HIG), in the light of current market prices and the present income levels. He shall ensure that the exercise of allotment shall be fair, transparent and above board.
The records, kept in its custody, shall be returned forthwith by the High Court Registry to the Office of the Learned Advocate General under due acknowledgment. The state government shall ensure that the disciplinary action, initiated against the officials involved, is completed post haste and in any event not later than four months from the date of receipt of a copy of this order. In case the guilt of the delinquent officials is established in the enquiry, the state government shall impose such punishment on them as is commensurate with the gravity of their misconduct. While the first respondent, in its affidavit dated 02.12.2010, stated that the State intends to take action against the officials under the Prevention of Corruption Act, 1988, no such action appears to have been taken against them till date. The first respondent shall forthwith initiate criminal proceedings, under the Prevention of Corruption Act, 1988, against those officials of Zaheerabad Municipality involved in abuse and misuse of authority. Crime No.54 of 2011, registered against the vice-chairmen of Zaheerabad Municipality, shall be promptly investigated and a final report, under Section 173(2) Cr.P.C, filed at the earliest in any event not later than three months from the date of receipt of a copy of this order. The criminal cases instituted against the ex-chairperson, ex-vice-chairperson, and others shall be expedited. It goes without saying that the criminal court shall try the accused on the evidence led before it, uninfluenced by any observations made in this order.
W.P.No.6814 of 2009 is allowed. W.P.Nos.20453, 25081, 26380, 27874 and 28532 of 2010 are dismissed with exemplary costs, and the interim orders passed in these Writ Petitions are vacated. The petitioners in these Writ Petitions shall pay costs of Rs.3,000/- (Rupees three thousand only) each to the Zaheerabad Municipality within four weeks from today, failing which it is open to the Municipal Commissioner to take action, in accordance with law, for recovery of the said amount. In view of the observations and the directions issued hereinabove, we see no reason to proceed against the respondents under the Contempt of Courts Act. C.C.No.1455 of 2010 is, accordingly, closed.
________________________ (GODA RAGHURAM, J) ______________________________ (RAMESH RANGANATHAN, J) .01.2013