Dindayal Tiwari and Others vs State of U.P. and Others

B.M. Lal, J.—These two petitions involve common questions of fact and law, therefore, both the petitions are being disposed of by the common judgment.

Substantially in both the petitions, the relief sought is to quash the impugned order dated 24.7.1996 passed by the Collector, Deoria whereby an auction for collecting Tahbazari from taxi stands etc. of Nagar Mahapalika, Deoria alleged to have been conducted on 13.5.1996 was set aside and fresh auction was directed to be held on 26.7.1996.

These petitions were put up for admission on 26.7.1996 on which date this Court directed to issue notices to other side and meanwhile operation of impugned order was stayed.

On behalf of one Hari Shankar Pandey and Ors. an impleadment application has been moved on the ground that pursuant to aforesaid order dated 24.7.1996 fresh auction has been held and they being the highest bidders and bid has been knocked down in their favour, consequently they being necessary party, be impleaded and heard. For the reasons stated in the impleadment application, their impleadment is allowed.

In short facts, leading to these petitions are as under:

According to the Petitioners, u/s 116 of United Provinces Municipalities Act, 1916 (for short the Act), subject to any special reservation made by the State Government, all property of the nature specified in that section and situated within the municipal area vested in and belonged to the Municipality and all other property which become in the Municipality came under its direction, management and control. Consequently Nagar Palika Deoria held auction in respect of collection of Tahbazari and Theka from taxi/tempo stands, etc. on 13.5.1996 for a period of one year. in accordance with the provisions of Sections 293 and 293A of the Act which conferred powers on the Municipality to charge and impose fees to be fixed by bye-laws or by public auction or by agreement, for the use or occupation (otherwise than under a lease) of any immovable property vested in it. u/s 293A of the Act, the Municipality may with the previous sanction of the State Government impose and levy fees for use of any place to which the public is allowed access and at which the Municipality may provide sanitary and other facilities to the public. The Municipality Deoria, having found Petitioners'' bid the highest, knocked down the same in their favour but the State Government vide impugned order dated 24.7.1996 cancelled the aforesaid auction. Hence these petitions.

According to the Respondent State, in fact no public auction was conducted on 13.5.1996 as alleged rather in collusion with the office-bearers of the Municipality in utter disregard to the provisions of relevant Act, Rules and bye-laws, alleged auction dated 13.5.1996 was held causing great loss of revenue to the Municipality. No due publicity was given to the alleged auction dated 13.5.96. In the previous year, i.e. 1995-96 the same auction fetched Government revenue to the tune of Rs. 35.004 lacs. Therefore, in the subsequent year, i.e., 1996-97. the Government revenue should have naturally increased but the alleged auction dated 13.5.96 was shown to have been given in Rs. 29.430 lacs whereas the auction held on 26.7.96 pursuant to the impugned order has fetched Government revenue to the tune of Rs. 39.225 lacs which is Rs. 10,00,000 more than that of alleged auction dated 13.5.96. This factual position establishes the misuse of powers by the office-bearers of the Deoria Municipality in collusion with the Petitioners resulting into depletion of Government revenue and when it was brought to the notice of State Government, State passed the impugned order.

Learned Counsel for the Petitioners contended that the State Government has no power, authority and jurisdiction to pass the impugned order and the Petitioners were not afforded opportunity to participate in the fresh auction held on 26.6.96, therefore, impugned order is liable to be quashed.

While dealing with the arguments advanced by learned Counsel for the Petitioners, it may be mentioned that subject to any special reservation made by the State Government, all property of the nature specified in Section 116 of the Act, situated within the municipal area vested in and belonged to the Municipality and came under its direction, management and control, by virtues of Section 116 of the Act. The expression ''vest'' is of fluid or flexible content and can, if the context so dictates, bear the limited sense of ''being in possession and enjoyment''. Indeed, to postulate vesting of absolute title in the Municipality by virtue of declaration u/s 116 of the Act is to stultify Section 116 (f) and (g). The overriding title of the State subsists despite the Notification of vesting u/s 116 (f) and (g) and, therefore, in suitable cases where it is brought to the notice of State Government that the Municipality is misusing the vesting by unfairly granting contracts to certain favourite persons causing loss of Government revenue, in exceptional circumstances, taking aid of Section 34 (1b) of the Act, it can cancel such auctions and direct for re-auctions. In the instant case, when it was brought to the notice of State Government that the Municipality in collusion with Petitioners, without following settled norms and rules, misused its powers in giving the auction to the Petitioners resulting into heavy loss of Government revenue, it cancelled the alleged auction dated 13.5.96 and directed for re-auction which fetched more than Rs. 10,00,000 as compared to the alleged auction dated 13.5.96. Thus, the auction taken by the State Government for augmentation of Government revenue and for preventing the misuse of powers by the Municipality, does not appear to be arbitrary, unreasonable or without jurisdiction.

It may also be noted that the public property is not to be fettered or grabbed by unfair procedure and there should be transparency in the transaction and the State Government is supposed to take care of these aspects of matter, therefore, we are of the considered opinion that the action taken by the Government is not bad on those grounds.

However, that is not all. This Court has also to look one more aspect of the matter and that is whether the second auction held in pursuance of the impugned order on 26.7.96 was given due publicity and whether all the intending participants were given opportunity to participate. In this regard, it may be stated that undeniably impugned order of re-auction was passed on 24.7.96 and the re-auction was to be held on 26.7.96, i.e. within two days. This clearly shows that no reasonable time was given for holding the re-auction and no due publicity of the same was given.

Therefore, in the peculiar facts and circumstances of the instant case, for the reasons given above, this Court is of the opinion that with a view to meet the ends of justice, the second auction also deserves to be quashed and the first auction has already been cancelled by the State Government.

In the result, the impugned order dated 24.7.96 passed by the State Government is maintained to the extent it has cancelled the auction dated 13.5.96 and the order dated 24.7.96 is quashed to the extent it has directed to hold re-auction within two days, i.e., on 26.7.96. The auction held on 26.7.96 pursuant to the impugned order dated 24.7.96 is also quashed under the circumstances of the case. It is directed that fresh auction be conducted strictly in accordance with the provisions of the Act, Rules, Bye-laws and settled norms by the office bearers of the Municipality Deoria under the supervision of District Administration Deoria after giving due publicity of the same giving due notice of clear seven days or the statutory period if prescribed.

With these directions, both the petitions are finally disposed of. There shall be no order for costs.