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Andhra Pradesh High Court
Judges : BASI REDDI
G.Rami Reddy - Appellant
Versus
State OF A.P. represented by Secretary, Local Administration - Respondent
Decided On : 04-20-62
MUNICIPAL COUNCIL - LEASE OF MUNICIPAL PROPERTY - PUBLIC AUCTION - MANDAMUS - LOCUS STANDI OF RATEPAYER - Madras District Municipalities Act (V of 1920), Ss. 22, 303 - Statutory Rules, R. 12 (1) (f) - Constitution of India, Art. 226.
Fact of the Case:
The Cuddapah Municipality owned a theatre known as Muddukrishna Theatre, which was leased out by public auction. The last public auction was held on 11-10-1951, and the highest bidder was the 3rd respondent. A lease deed was executed for a period of five years ending with 31-12-1956. The lease was renewed for a further period of five years from 1-1-1957 to 31-12-1961 without following the procedure prescribed by Statutory Rule 12 (1) (f). The 3rd respondent applied for extension of the lease for another period of five years beginning from 1-1-1962. The Municipal Council resolved to extend the lease for five years from 1-1-1962 on the existing monthly rent of Rs. 1500.00. The petitioner, a ratepayer of the Municipality, filed a petition before the Director of Municipal Administration apprising him of the fact that the Municipal Council was trying to favour the 3rd respondent by giving the lease once again to him on a monthly rent of Rs. 1500.00 in spite of the fact that he was a persistent defaulter. The Director of Municipal Administration issued instructions to the Municipal Commissioner to lease out the theatre by public auction taking into account the offer made by the petitioner. The Municipal Council resolved to lease out the theatre for a period of three years by public auction on 29-11-1961. In the meantime, the 3rd respondent appealed to the Government and the Government issued telegraphic orders on 27-11-1961 staying the auction. On 16-12-1961, the Government passed an order permitting the Municipal Council to lease out the theatre to the 3rd respondent for a further period of two years from 1-1-1962 at the existing rent of Rs. 1500.00 per month, by relaxing Rule 12 (1) (f) of the relevant rules.
Finding of the Court:
The court held that the order of the Government dated 16-12-1961 was bad, as it was passed without jurisdiction and abrogated the mandatory rule 12 (1) (f) of the Statutory Rules. The court further held that the petitioner had locus standi to maintain the writ petition as he was a ratepayer of the Municipality and had a direct and personal interest in the matter.
Issues: 1. Whether the Government had the power to pass the impugned order relaxing Rule 12 (1) (f) of the Statutory Rules? 2. Whether the petitioner had locus standi to maintain the writ petition.
Ratio Decidendi: 1. The court held that there was no provision in the Madras District Municipalities Act or in the rules made thereunder which authorised the Government to give directions in individual cases abrogating the mandatory rule in question. 2. The court held that the petitioner had locus standi to maintain the writ petition as he was a ratepayer of the Municipality and had a direct and personal interest in the matter.
Final Decision: The court allowed the writ petition and issued a writ of mandamus to the State of Andhra Pradesh to forbear from giving effect to the order passed by the Government in G. O. Ms. No. 1682, M. A. , Health, Housing and Municipal Administration Department, dated 16-12-1961. The court further directed the Commissioner, Cuddapah Municipality to lease out the Municipal Muddukrishna Theatre, Cuddapah, by public auction, in accordance with the resolution No. 410 passed by the Municipal Council on 14-11-1961.
( 1 ) THIS case brings to light an instance of a Municipal Council misusing its powers to help a private individual at the sacrifice of public revenue and when, at long last, the Municipal Council tried to rectify its mistake and set matters right, the State Government preventing it from doing so by unwarranted interference from above.
( 2 ) THIS writ petition has been filed by a ratepayer of the Municipality in question for an appropriate writ under Article 226 of the Constitution directing the authorities to act in accordance with law.
( 3 ) THE following facts, leading up to the filing of the writ petition, speak for themselves: The Municipality of Cuddapah owns a theatre known as Muddukrishna Theatre centrally situated within the Municipality. For a very long time, the theatre was being leased out by public auction. The last public auction was held on 11-10-1951. On that occassion, the 3rd respondent (R. V. Parthasarathy Prasad) was the highest bidder; the bid amount was Rs. 2400. 00 per month and the period of lease was five years as from 1-12-1951. A lease deed was executed by the 3rd respondent for a period of five years ending with 31-12-1956. One of the conditions of the lease was that the rent had to be paid by the 25th of every month.
( 4 ) UNDER the Statutory Rules made by the State Government in exercise of its rule-making power under Section 303 of the Madras District Municipalities Act (V of 1920), a lease of immovable property belonging to a Municipal Council may be granted by the Municipal Council itself if the period of the lease is three years or less, and where it exceeds three years, the prior sanction of the Inspector-General of Local Administration (formerly known as Inspector of Municipal Councils and Local Boards) has to be obtained. Furthermore, Rule 12 of the "rules relating to receipts and expenditure of Municipal Councils" prescribes that leases of buildings belonging to a Municipal Council the rents of which are expected to exceed Rs. 200. 00 per annum, shall be effected by public auction. Rule 12, so far as is material for purposes of this case, provides:--"12. (1) (f): Leases of buildings and of lands belonging to the Municipal Council the rents of which are expected to exceed Rs. 200. 00 per annum, shall be effected by public auction which shall be conducted by the executive authority or by a person duly authorised by him who shall give full publicity thereto in such manner as he considers suitable. The bids at the auction shall be placed by the executive authority before the Municipal Council or a committee thereof according as the highest bid at the auction exceeds or does not exceed Rs. 1,000. 00. The Municipal Council or the committee, as the case may be, shall determine which of the bids at the auction shall be accepted. Where the bid accepted is not the highest bid, the reasons for rejecting a bid or bids higher than the one accepted shall be recorded in writing; Provided that. . . . . . . . . . . . Provided further that in the case of buildings and lands referred to in Clause (f) if at a public auction held, the bid is found to be lower than that obtained in the previous year and if the previous years lessee desires the continuance of the lease at the old rate, the Municipal Council may, notwithstanding the public auction held, grant the lease to him. "
( 5 ) ALTHOUGH the lease granted to the 3rd respondent in 1951 was one which required the prior sanction of the Inspector of Municipal Councils and Local Boards, it appears from the audit report of the year 1953-54 that no such sanction was obtained but only the sanction of the Collector was taken. The audit report of that year further shows that the kist amounts were not collected on the due dates as per the terms of the lease deed, and it was pointed out that the terras of the agreement should be strictly enforced in the matter of collection of instalments lest heavy arrears should accumulate.
( 6 ) THE Municipal Council, howev
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