JUDGMENT :- The Municipal Board, Mussoorie has a ropeway connecting the Mall Road to Gunhill. On 24-3-1972, tenders were invited by the Board for running the ropeway. The petitioners tender was the highest. The tender was accepted and thereafter on 14-6-1972, an agreement was entered into between the petitioner and the Board for running the ropeways for three years with effect from 15-6-72 to 14-6-1975. Amongst the various conditions of the agreement, one of the conditions stipulated was that the ropeways were to be given to the petitioner in a running condition and thereafter the contractor would be responsible for the maintenance and upkeep of the ropeways. The ropeway was handed over to the petitioner on 19-6-1972. It thereafter transpires that the petitioner informed the Board that the ropeway was not in a fit condition and as such the royalty fixed under the agreement should be reduced. This the petitioner did by his letter dated 13-11-1972. On 4-12-1973, the President of the Municipal Board wrote a letter to the petitioner saying that the State had directed that ropeway be completely stopped from operation. On 27-12-1973, the petitioner informed the Board that an amount of Rs. 60,000 will be required for repairs of the ropeway and in case the Board was not prepared to spend the same, the lease in favour of the petitioner may further be extended by five years and in that event the petitioner would get it repaired at his own costs. On 28-12-1973, a meeting of the Board took place, and it was resolved that as the Board did not have sufficient funds, it was not in a position to repair the ropeways. It further resolved that the petitioner may carry out the repair of the ropeways and the lease be extended for a period of five years from 1-1-1974. This resolution was later on confirmed by the Board on 8-1-1974. Subsequently, a registered agreement was entered into between the petitioner and the Board on 1-1-1974 (sic). On 27-8-1975, the State Govt. purporting to act in exercise of powers conferred on it under S.34 (I-B) of the U. P. Municipalities Act (hereinafter referred to as the Act) cancelled the resolutions of the Board dated 8-12-1973 and 8-1-1974 by which it had decided to extend the lease of the petitioner for a period of five years. The petitioner has challenged this order of the State Government.

2. Counsel for the petitioner has contended that inasmuch as the resolution of the Board had already been executed by a subsequent contract having been entered into between the petitioner and the Board, the State Government had no jurisdiction, in exercise of powers conferred on it under S.34 (I-B) of the Act to cancel the resolution. Section 34 (I-B) of the Act may be quoted at this stage:-

"34. Powers of the State Government or the Prescribed Authority or the District Magistrate to prohibit execution of or further execution of resolution or order of Board-

"(I-B). The State Government may, of its own motion or on report or complaint received by order prohibit the execution or further execution of a resolution or order passed or made under this or any other enactment by a Board or a Committee of a Board or a joint committee or any officer or servant of a Board or of a joint committee, if in its opinion such resolution or order is prejudicial to the public interest, or has been passed or made in abuse of powers or in flagrant breach of any provision of any law for the time being in force, and may prohibit the doing or continuance by any person of any act in pursuance of or under cover of such resolution or order." This section came up for consideration before the Supreme Court in the case of Municipal Board, Kannauj v. State of U. P. (AIR 1971 SC 2147). In that case, the Municipal Board, Kannauj had dismissed 74 sweepers. Subsequently, the State Government in the purported exercise of its powers under S.34 (I-B) of the Act cancelled the resolution dispensing with the service of the sweepers. It was held by the Supreme Court tha

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