Point of Law: It is a very well settled position in law that fraud vitiates everything and every action, which principle is squarely applicable in the facts and circumstances of this case.

JUDGMENT :

This writ petition is filed by a Private Limited Company seeking to quash Ext. P4 report of the Vigilance Department, Ext. P5 order of the Local Self Government Department and consequential Ext.P6 demand raised by the Thrikkakara Municipality dated 20.05.2016 directing the petitioner to remit an amount of Rs. 14,18,307/-towards the building permit fee for the area which was detected in the Vigilance Quick Verification Report; and for a further direction to the Thrikkakara Municipality -the first respondent to issue cutting permission for laying of electricity cable to the apartment building constructed by the petitioner as per Ext.P7 request.

2. Brief material facts for the disposal of the writ petition are as follows:-

Petitioner is a Private Limited Company engaged in the development of residential properties and construction of villas and apartments. Petitioner entered into a joint venture agreement on 16.09.2006 with owners of properties in Kakkanad for construction of villas and three multi-storied apartments. The owners of the properties applied for permission from then Thrikkakara Grama Panchayat (thereafter, upgraded as Municipality) for making the construction. According to the petitioner, since the Kerala Municipality Act, 1994 (for short ‘the Act, 1994’) was not enforced within the Panchayat area, on 10.10.2006 as per Ext.P1 certificate the Panchayat informed that permission is not required for the construction. While so, as per G.O. (MS) No. 250/2006/LSGD dated 06.11.2006, the Municipality Building Rules was implemented in the Thrikkakara Panchayat on and with effect from 06.12.2006. Accordingly, an application was submitted by the land owners and the petitioner for permit on 19.12.2007. On 27.12.2007, building permit was issued after collecting an amount of Rs. 2,97,777/-towards compounding fee as per a Circular dated 03.07.2007 issued by the State Government – the third respondent. As per the said Circular, the Panchayat was authorized to regularize the permit of the buildings after collecting compounding fees. It is the case of the petitioner that the implementation of the structural plan in Thrikkakara Panchayat was made only on 16.01.2007, long after Ext.P1 building permit was regularised after accepting compounding fee. According to the petitioner, the compounding fee was realized to the total area of 595.435 cents with a Floor Area Ratio of 2.99. Thereafter, the Local Self Government Engineers verified the calculation of compounding fee and a further amount of Rs. 6,025.31/-was collected. Thus according to the petitioner, a total amount of Rs. 3,03,797/-was realized from the petitioner for regularization of the building permit as per Ext.P2 towards compounding fee. Accordingly, the construction of the villas and two towers were completed and the construction of the third tower has reached six floors. While so, one Abdul Kareem, the Chairman, Standing Committee of the erstwhile Thrikkakara Grama Panchayat filed a complaint before the Court of Enquiry Commission and Special Judge, Thrissur against a former Panchayat Secretary alleging corruption in the issuance of building permit to the petitioner. Apparently, as per an order dated 23.12.2008, the Vigilance Court directed a quick verification by the Vigilance and Anti-corruption Bureau, Ernakulam Unit. The quick verification report was filed before the Vigilance Court on 26.07.2010 recommending, interalia departmental action against the Secretary and to recover additional compounding fee of Rs.7,17,979/-from the petitioner. The case of the petitioner is that all these were done without notice to the petitioner or the property owners. It is evident from the vigilance report that the permit was issued taking into account the total area of the land as 595.435 cents with a FAR of 2.99, which was incorrect. The actual area according to the Vigilance Department was only 586.648 cents with a FAR of 3.038. Anyhow, accepting the vigilance report, further procee