The court affirmed that public auction is mandatory for property transfers by Panchayats, regardless of lease duration, and unauthorized allotments cannot create rights for allottees.

ORDER :

1. The present petition has been filed by the petitioners, who are allottees of shops, which were allotted to them by Gram Panchayat, Bahoriband, District Katni. The present petition seeks to challenge the order dated 07.09.2022 (Annexure P-1) and order dated 26.05.2023 (Annexure P-2). By the order Annexure P-1, the competent authority under M.P. Lok Parisar Bedakhali Adhiniyam, 1974 (for short referred to as ‘Adhiniyam 1974’) has ordered eviction the petitioners from the shops by exercising powers under Section 5 of the said Adhiniyam, while by the order Annexure P-2, the appellate authority under the said Adhiniyam has rejected the appeal of the petitioners.

2. Learned counsel for the petitioners while assailing the orders Annexure P-1 and P-2 has stated that certain shops were constructed by Gram Panchayat, Bahoriband (respondent No. 6) and after such construction, the shops were allotted to the present petitioners by the Gram Panchayat and the allotment was on lease with monthly rent. The lease was of 35 months and contained a renewal clause after expiry of 35 months period with 10% increase of monthly rent. Learned counsel for the petitioners has submitted that the eviction order Annexure P-1 has been passed on the ground that the shops were constructed by Janpad Panchayat, Bahoriband and after construction the shops were required to be handed over to the Janpad Panchayat, because Gram Panchayat was only construction agency. However, the Gram Panchayat has allotted the shops by passing resolution in Gram Sabha. The competent authority found the act of allotment by the Gram Panchayat on strength of resolution of Gram Sabha to be unauthorized act, and also carried out without auction, even if it were authorised. These reasons are attacked by the petitioners. Learned counsel for the petitioners has also submitted that in terms of Section 5A and Section 65 of M.P. Panchayat Raj Evam Gram Swaraj Adhiniyam, 1993, the Gram Panchayat is duly competent to acquire, hold and dispose of any property, movable and immovable.

3. It is also argued by learned counsel for the petitioners that in view of Section 65(1) the sanction of the State Government or Officer authorized by the State Government is required before disposal or transfer of the property by Panchayat only if the lease for a period exceeding three years. It is further argued that in terms of Rule 4 of M.P. Panchayat (Transfer of Immovable Property) Rules, 1994 (for short referred to as ‘Rule 1994’) Rule 4 provides for sanction of competent authority of the State only in case the property is being leased out for a period exceeding three years. Thus, it is argued that since the lease was granted to the petitioners for a period of 35 months, there was no requirement of any sanction of the State Government.

4. Learned counsel for the petitioners has also argued that the competent authority while ordering eviction has held that no public auction was carried out by the Gram Panchayat before allotment of the shops to the petitioners. Learned counsel for the petitioners submits that in terms of Rule 4 of Rules of 1994, the procedure of public auction is laid down under Rule 5 and said Rule 5 is dependent upon compliance of Rule 4. Thus, it is argued that only if the case falls within Rule 4 and transfer is sale, exchange or lease for a period exceeding three years, only then the compliance of Rule 5 is required to be done by conducting public auction.

5. Learned counsel for the petitioners also submitted that the petitioners have been given the shops on rent, which does not amount to any transfer of property and therefore, even the Rules, 1994 are not applicable for the allotment made to the petitioners. It is argued that giving a shop on rent, it is not transferred in any manner whatsoever; hence, Gram Panchayat was competent to give the shops on rent to the petitioners in whatever manner it liked.

6. It is also stated by learned counsel for the petitioners that the eviction orde