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Judgment
Ashok B. Hinchigeri, J.—The petitioners in WP No. 101570/2015 and WP No. 101589-101602/2015 claim to be the lessees in respect of the premises belonging to the fourth respondent-City Municipal Council, Bagalkot. Their grievance is that despite the passing of the resolution by the fourth respondent Council to sell the leased premises to them, they are thrown out of the premises by virtue of the impugned orders, dated 19/12/2014 (Annexure-G) passed by the Deputy Commissioner and dated, 17/1/2015 (Annexure-H) passed by the Regional Commissioner confirming the Deputy Commissioner''s order.
Sri Prabhuling Navadgi, learned Senior Counsel appearing for Sri S.B. Hebbali for the petitioners submits that the premises have been in possession of the petitioners/their ancestors for over a century. They were leased in the year 1912 for the purpose of constructing the godowns for the storage of cotton. The lease period was renewed in 1962 for a period of 5 years. Thereafter, the Municipality passed the resolution on 13/11/2008 for the transfer of premises after taking the current market value from the lessees. It has submitted its resolution to the Government for its previous sanction as required under Section 72(2) of the Karnataka Municipalities Act, 1964 (''the said Act'' for short).
The learned Senior Counsel submits that the Municipal Council passed fresh resolution in its meeting held on 22/2/2011 renewing the lease for a period of 5 years or until the Government gives the sanction for alienating the premises, whichever is earlier. He submits that in the said resolution, the rent is also increased by 20%.
When thus stood the state of affairs, the Municipal Commissioner referred the said Resolution No. 106 dated 22/2/2011 to the Deputy Commissioner. The learned Senior Counsel submits that without putting the petitioners on notice, the Deputy Commissioner passed the impugned order in exercise of power conferred by Section 306 of the said Act suspending the said resolution. Further, the Regional Commissioner, by his order, dated 17/1/2015 (Annexure-H) confirmed the Deputy Commissioner''s order without observing the principles of natural justice, so submits the learned Senior Counsel. He submits that the stand of the President of the Municipal Council before both the Regional Commissioner and Deputy Commissioner was that the notice has to be issued to the beneficiaries of the resolution. However, the two authorities over-ruled the stand of the President of the Municipal Council by holding that there is no need to issue the notice to the beneficiaries of the resolution.
To advance the submission that the parties, whose interests are likely to be affected adversely, have to be given an opportunity of hearing in the proceedings under Section 306 of the said Act, he has relied on this Court''s decision in the case of Mahiboobsab Vs. Chief Officer, Town Municipal Council and Another, . Para 6 of the said decision read out by him is as follows:
"6. So far as the first submission of Sri Hebballi that the petitioner was entitled to be heard by the 2nd respondent before passing the impugned order is concerned, I find considerable force in the said submission. No doubt as pointed out by Sri Nayak that sub-section (1) of Section 306 does not in explicit terms provide for giving an opportunity to a person who is likely to be affected on account of an order being made by the 2nd respondent in exercise of the power conferred on him under sub-section (1) of Section 306 of the Act. But it is necessary to point out that when certain rights have accrued to a party by virtue of a resolution of the Municipal Council, if the resolution of the Municipal Council is to be nullified to the detriment of the person for whose benefit the resolution of the Municipal Council came to be passed, I am of the view that though the provisions in explicit terms does not provide for giving an opportunity to the person who is likely to be affected on account of the decision of the 2nd respondent suspending the resolution of the Panchayat, such a person must be heard. ............................ Therefore, it is clear that such an opinion can be formed only on an assessment of the materials that may be placed before it and only after hearing the parties who are likely to be affected. The consequence of an order under sub-section (1) in a case like this is very serious. It cannot be doubted that it would result in civil consequences. In the instant case, a licence has been granted by the Municipal Council to the petitioner to put up a building. The provisions relating to grant of licence is a reasonable restriction imposed under the provisions of the Act to enjoy one''s own property. Under these circumstances, if a resolution passed granting licence to the petitioner to put up a building is suspended without hearing the petitioner, it would have serious consequences on the rights of the petitioner. Any delay in completing the construction of a building would result in serious financial loss and injury. Therefore, I am of the considered view that though sub-section (1) of Section 306 of the Act does not expressly provide for giving of an opportunity, however, having regard to the consequences that is likely to flow from such an order being passed notwithstanding the fact that sub-section (2) of Section 306 provides for confirmation of the said order by the State Government, the person who is likely to be affected on account of an order being made under sub-section (2) of Section 306 of the Act should be heard. It is well-settled that if a statute does not expressly exclude the right of hearing or compliance of the provisions of natural justice, it is open to the Court to read into the provisions of the statute, the principles of natural justice. In support of the above view, I take assistance from the decision of the Supreme Court in the case of The Government of Mysore and Others v. J.V. Bhat and also in the case of Scheduled Caste and Weaker Section Welfare Association (Regd.) and Another v. State of Karnataka and Others."
He has also relied on the Division Bench Judgment in the case of Sanna Hutchamma Vs. State of Karnataka and Others, . Para 5 of the said decision reads as follows:
"5.........................
In any event, the power conferred either under S. 199 of the 1951 Act or under S. 306 of the Act of 1964 was a power to suspend the execution of a resolution when it was about to be implemented, therefore, when the resolution of the T.M.C., Turuvekere, had been implemented as early as in 1957, there was nothing to suspend after 14 years and, therefore, the order of the Deputy Commissioner suspending the resolution and the order of the Government confirming the order of the Deputy Commissioner were outside the purview of S. 199 of the 1951 Act and S. 306 of the 1964 Act.
Further though S. 199 of the 1931 Act or S. 306 of the 1964 Act does not prescribe any period within which the power can be exercised, it must be exercised within a reasonable time. The power cannot be exercised after a long lapse of time when the parties have proceeded on the basis that the resolution of the Municipal Council was lawful and acted upon such resolution as in the present case particularly after the building has been constructed on the site after securing the license from the Municipal Council."
He submits that when the resolution No. 106, dated 22/2/2011 is already implemented, the authorities are not justified in initiating the proceedings under Section 306 of the said Act. He pointedly brings to my notice that the initiation of the proceeding is after 3 years from the date of the passing of the Resolution No. 106. Three out of five years of the extended lease period are already over. He submits that as held by the Division Bench in the case of Sanna Hutchamma, the power under Section 306 of the Act is exercisable only in emergency situation and not under the normal circumstances.
Sri S.S. Patil, the learned counsel for the petitioners in WP No. 103669-103707/2015 submits that the petitioners in the said batch of petitions are all sub-lessees. He submits that the authorities have taken the possession of the premises from the said sub-lessees. He submits that the impugned act of taking over the possession by the authorities is illegal and arbitrary. Without holding the enquiry and without delivering the finding that the petitioners are the unauthorized occupants under the Karnataka Public Premises (Eviction of Unauthorized Occupants) Act, 1974, the authorities are not justified in taking the possession using force.
Sri Ravi V. Hosamani, the learned Additional Government Advocate appearing for respondent Nos. 1 to 3 submits that the public interest demands that the premises in question be auctioned. He takes serious exception to the conduct of the lessees, who have indiscriminately sub-leased the premises for running all kinds of business, including the bars and hotels.
Sri Anand R. Kolli, the learned counsel for the fourth respondent Municipality submits that by the non-observance of the principles of natural justice, the petitioners have not suffered any prejudice or hardship? He submits that Section 306 of the Act does not prescribe the giving of any opportunity of hearing to the petitioners. He submits that these premises are spread over the extent of about six and half acres of lands and that neither the lessees nor the sub-lessees are paying any rent or lease consideration.
The submissions of the learned counsel have received my thoughtful consideration. The first question that falls for my consideration is whether the impugned order passed by the Deputy Commissioner and the Regional Commissioner are liable to be quashed on the ground of the violation of the principles of natural justice. It is not in dispute that the Deputy Commissioner and the Regional Commissioner have proceeded on the footing that it is not necessary to put the beneficiaries of the resolution on notice and hear them in the matter. Such a view is in sharp contrast to what this Court has said in the case of Mahiboobsab (supra). When the resolution of the Municipal Council, dated 13.11.2008 virtually makes the lessees as the owners-in-the-making subject to the approval of the Government, their accrued rights cannot be taken away without putting them on notice. The subsequent resolution, dated 22.2.2011 only extends the lease period for 5 years or till the Government gives its approval, whichever is earlier. By the said resolution, Municipality has also raised the rate of rent by 20% for the 5 years extended lease period from 2011 to 2016. Some of the lessees have been paying the rent at the revised rate. 60% of the extended lease period is already over. Taking these facts and circumstances into account, it cannot be said that no rights have accrued to the petitioners.
As held by the Apex Court in the case of A.K. Kraipak and Others Vs. Union of India (UOI) and Others, , the administrative decision-making, if it involves the civil consequences, must be consistently with the rules of natural justice. Even if a statute does not prescribe the giving of opportunities of hearing, the principles of natural justice cannot be excluded unless expressly prohibited by the statute.
In the light of the facts and circumstances of the case and the Apex Court''s judgments to which the reference is made hereinabove, I have no hesitation in holding that the impugned orders are unsupportable and unsustainable, as they are passed in violation of the principles of natural justice.
I therefore quash the impugned orders passed by the Deputy Commissioner and the Regional Commissioner. The matter is remanded to the Deputy Commissioner for fresh enquiry in accordance with law. The petitioners (in W.P. Nos. W.P. Nos. 101570/2015 & 101589-602/2015) are directed to be present before the Deputy Commissioner at 11.00 a.m. on 26.09.2015 without waiting for any notice from him. Further, the petitioners shall co-operate with the Deputy Commissioner in the speedy conclusion of the remanded proceedings. Needless to observe that all the contentions are left open to be urged before the Deputy Commissioner. It shall also be open to the petitioners to raise the contention that under Section 306 of the Act, the power to suspend the execution of a resolution can be exercised only when the resolution is about to be implemented; such a power cannot be exercised after a long lapse of time when the parties have acted on the resolution of the Municipal Council. It is for the Deputy Commissioner to deliver the finding on such a contention, if raised, after hearing both the parties.
The quashing of the impugned orders does not mean that the petitioners'' rights automatically stand revived. The subsequent events that some of the petitioners have not been paying the rent, that they have been violating the conditions of lease cannot be lightly wished away. But it is also the Court''s anxiety that no precious property can be kept idle. The non-performing assets are not in the interests of anybody. Every property has to be put to use to the extent possible and in a manner known to law.
To balance the interests of the petitioners and of the Government and the Municipality, I pass the following order:
i) The Deputy Commissioner shall dispose of the remanded matter as expeditiously as possible and in any case within two months from 26.09.2015.
ii) The petitioners shall clear the rental arrears, if any within one month from today. In future also, they shall keep clearing the rents as and when they fall due for payment and as per the revised rates specified in the Municipal Council''s resolution No. 106 dated 22.02.2011 (Annexure-E in W.P. Nos. 105170 & 101589-101602 of 2015).
iii) The petitioners shall give an undertaking that they would use the leased premises strictly and only for the purpose for which they were leased.
iv) It is open to the Municipality to determine the lease, if the petitioners violate any condition of the lease agreement or of the order extending the lease period.
v) If the petitioners file the affidavit undertaking to abide by and to comply with the directions at (ii) and (iii) supra, the Municipal Council shall restore the possession to the concerned persons.
vi) It is made clear that the restoration of the leased premises to the concerned persons is subject to the outcome of the proceedings remanded to the Deputy Commissioner and the challenge thereto before the Regional Commissioner and perhaps before this Court thereafter. The petitioners shall not plead equity, if the outcome of the remanded proceedings go against them.
No finding is delivered on the status of the petitioners in W.P. Nos. 103669-103707/2015, who claim to be the sub-lessees for two reasons - (a) the matter involves resolving the factual controversies and (b) the lessees, under whom they claim to be sub-lessees, are not made parties to their writ petitions. However, the same does not come in the way of the sub-lessees working out their remedies in a manner known to law.
No order as to costs.