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Nazeem Khan vs Nagar Palika Parishad And Anr
2022 Latest Caselaw 3539 Chatt

Citation : 2022 Latest Caselaw 3539 Chatt
Judgement Date : 12 May, 2022

Chattisgarh High Court
Nazeem Khan vs Nagar Palika Parishad And Anr on 12 May, 2022
                                                                                   Page 1 of 15

                                                                                            AFR
                HIGH COURT OF CHHATTISGARH, BILASPUR
                                                     Reserved on 16-3-2022
                                                    Delivered on 12-05-2022


                                     FA No. 62 of 2014
     Girwar Singh S/o Hirdelal Halba Aged About 47 Years R/o Ram
      Mandir Ward No. 08, Dallirajhara, P.S. Dallirajhara, Tah. Dondi,
      Distt. Balod C.G., Through- Its General Power Of Attorney Holder-
      Naimuddin, S/o Kamruddin Khan, Age- 62 Yrs, R/o Ward No. 08,
      Indira Colony, Chikhlaksa, Tah. Dondi, Distt. Balod C.G.,
      Chhattisgarh
                                                                               ---- Appellant
                                            Versus
    1. Nagar Palika Parishad,. Dallirajhara, Thru- The Chief Municipality
       Officer, Nagar Palika Parishad, Dallirajhara, Tah. Dondi, Distt.
       Balod C.G., Chhattisgarh
    2. State Of Chhattisgarh Through- The Collector, Balod, Distt. Balod
       C.G., District : Balod, Chhattisgarh
                                                                          ---- Respondents
                                     FA No. 63 of 2014
     Nazeem Khan S/o Naimuddin Khan Aged About 30 Years R/o Lic
      Road, Indira Colony, Chikhlaksa, Tah. Dondi, Distt. Balod C.G.,
      Through- General Power Of Attorney- Naimuddin, S/o Kamruddin
      Khan, Civil And Revenue Distt. Balod C.G., Chhattisgarh
                                                                               ---- Appellant
                                            Versus
    1. Nagar Palika Parishad, Dallirajhara, Thru- The Chief Municipality
       Officer, Nagar Palika Parishad, Dallirajhara, Tah. Dondi, Distt.
       Balod C.G., Chhattisgarh
    2. State Of Chhattisgarh Thru- The Collector, Balod, Distt. Balod C.G.,
       District : Balod, Chhattisgarh
                                                                          ---- Respondents
-------------------------------------------------------------------------------------------------

For Appellants : Mr. B.P. Sharma and Mr. Arpit Agrawal, Advocates.

For respondent No.1. : Mr. Vaibhav A. Goverdhan, Advocate. For State : Mr. Avinash K. Mishra, Govt. Advocate

-------------------------------------------------------------------------------------------------

Hon'ble Shri Justice Narendra Kumar Vyas CAV JUDGMENT

1. Since an identical question involves in both the appeals, they are heard analogously and are being disposed of by this common judgment.

2. The appellant/plaintiffs (appellant Girwar Singh has preferred First Appeal No. 62 of 2014 and appellant Nazeem Khan has preferred First Appeal No. 63 of 2014) have preferred both the appeals against the judgment and decree dated 20-12-2013 passed by the learned 2nd Additional District Balod (CG) in Civil Suit Nos.20-A/13 and 21-A/13 whereby the suits filed by the appellants/plaintiffs for allotment of shop in their names, registration possession of Shop Nos. 1 and 2 situated at Commercial Complex, Ward No.24, Pratiksha Bus Stand, Opposite Sulabh Sauchalay, Dallirajjhara and for restraining the respondent No.1 from initiating the auction proceeding have been dismissed.

3. The brief fact, as reflected from the record are that the appellants/plaintiffs have filed Civil Suit before the learned 2 nd Additional District Judge, Balod mainly contending that the defendant No.1 namely Nagar Palika Parishad, Dalli-rajhara has issued an advertisement in daily newspaper on 26-8-2009 for auction of the suit property of 14 shops situated at Ward No.24, near Pratiksha Bus Stand, Opposite Sulabh Sauchalay, Dallirajjhara as per the right of occupation accordingly, earnest money has to be deposited on 30-9-2009 and auction has to be conducted on 1-10- 2009 at 2.00 pm. The plaintiffs have deposited Rs.3,000/- each as security amount/auction money. The minimum price was determined by the respondent No.1 was at Rs. 2,00,000/-. The appellant and two persons have also participated in the auction. The plaintiffs offered maximum price to the tune of Rs.2,27,000/-, in the auction and auction was closed at Rs.2,27,000/- and the rent was fixed at Rs.1,500/-. As per advertisement, 1/3rd amount has to be deposited after accepting the auction and entire amount has to

be deposited within 15 days from the date of acceptance of the bid then only shops have to be allotted. It has been further contended that as per the Rules when plaintiff went to office of Municipal Corporation, Dalli-rajhara, for depositing 1/3rd amount the Chief Municipality Officer has informed them that construction of shop has not been completed, when the construction will be completed they will intimate the appellant with regard to deposit the amount. Somehow it has been dragged and ultimately on 24-4-2010 the appellants/plaintiffs have moved applications for allotment of shops and to deposit the amount but their request was not acceded and again the plaintiffs/appellants have submitted their applications on 3- 8-2010. They have also made a complaint before the Collector, Durg, and it has been informed to the Collector that vide letter dated 15-9-2010 as per instructions received by the State Government they will construct the work and do the needful. Thereafter, it has been brought to the notice of the appellants/plaintiffs that some persons have illegally occupied the shops and started doing their business, therefore, they sought information under Right to Information Act and it has been informed that on 9-9-2009 the matter will be placed in the meeting of the Council and any action will be taken as per decision of the committee. It has been informed that no one has taken possession of the suit property and if anybody has taken the property of suit shops, they will be evicted as per law and the said shops shall be taken back. The appellants/plaintiffs have sent a notice to defendant No.1 on 20.07.2012 through their Advocates which was replied by the defendant No.1 on 26.07.2012 intimating that on 21.06.2012, the Government has rejected the proposal made by the council and allotment be treated as null and void. It has also been informed to the plaintiff that the Government has directed for conducting fresh auction proceedings as per Chhattisgarh Municipalities (Transfer of Immovable Propety) Rules 1996. It has been contended that before auction the Municipal Corporation, Dallirajhara has already allotted 21 shops in which Pramod Kumar, Manoj Kumar and Pushpa Devi have been allotted

shops by the process of auction on less offered price in comparison to offer made by the plaintiff. The appellants/plaintiffs are ready and willing to perform their part of contract, therefore, proposed auction proceeding may be stayed and on the above factual matrix the appellants have prayed that the suit shops No. 1 and 2 be allotted in their names and the defendant no. 1 and 2 be also restrained from initiating further auction proceeding. The appellants/plaintiffs have filed applications for grant of injunction.

4. The defendant No.1/respondent No.1 has filed written statement denying the allegation and contending that as per the right of auction, Clause 2.9 of the condition of the tender process, if 1/3rd amount is not deposited by the auction purchaser, immediately after auction the earnest money shall be confiscated in favour of Municipal Corporation. The Chief Municipality Officer has already submitted detailed facts before the Collector vide its letter dated 15- 9-2010. It has been further contended that the plaintiffs/appellants and other auction purchasers have not deposited the amount, therefore, as per the approval granted by the Government of Chhattisgarh on 21.06.2012 the whole auction proceeding was cancelled, as such the plaintiffs/appellants are not entitled to get any relief and prayed for dismissal of the suit.

5. Learned trial court on the pleadings of both the parties have framed as many as five issues which are as under:

i. Whether the suit filed by the plaintiffs is barred by limitation?

ii. Whether the plaintiffs have done proper valuation of the suit for the purpose of court fee?

iii) Whether the appellants/plaintiffs are entitled to get the possession of Shops No. 1 and 2?

iv) Whether the defendants are restrained from re-

auctioning of shops No. 1 and 2 by permanent injunction?

v) Relief and costs?

6. The appellants/plaintiffs to substantiate their averments in the plaint have exhibited the documents, notice dated 28.07.2012 (Annexure P/1), reply of Municipal Corporation dated 25-8-2012 (Ex.P/2), registered power of attorney (Ex.P/3) and examined themselves as PW/1 and Shekhar Kamde (PW/2). The defendant No.1 has not led any evidence. The witnesses Giriwar and Nazeem (PW/1) have submitted an affidavit under Order 18 Rule 4 reiterating the stand taken by them in the plaint, in their cross examination they have admitted that defendant No.1 Nagar Palika Parishad, Dalli-rajhara has issued an advertisement with regard to auction in the daily newspaper. They have also admitted that they read over the terms of the auction. They have also admitted that immediately after auction they have to deposit 1/3rd amount but they have not deposited the same. They have also admitted that other persons are running shops and in this regard they have not produced any document. They have also admitted that they have not produced any document with regard to purchase of the shops by them. The other witness namely Shekhar Kamde (PW/2) has filed his evidence by way of an affidavit as per Order 18 Rule 4 of CPC and supported the case of the plaintiffs/appellants and in the cross examination he has admitted that he is not aware that whether after auction the appellants/plaintiffs have deposited 1/3rd amount or not. He is also not aware that due to non-depositing of amount, auction has been cancelled. He has stated that shop No.1 belongs to Girwar Singh and shop No.2 belongs to Nazeem Khan.

7. Learned trial court while considering the provisions of the Chhattisgarh Municipalities Act, 1961, has considered how the property of the Municipal Corporation has to be disposed off and has taken a note of provision and thereafter, the learned trial court has recorded a finding that as per Clause IV of the Rules of 1996 the proposal was sent to the State Government which has rejected the same on 21-6-2012. Learned trial Court has also recorded a

finding on the basis of the evidence of the plaintiffs themselves that proposal has not been accepted and in fact, the claim of the plaintiffs/appellants is that as per the terms and conditions of tender is only invitation of offer and unless the offer is accepted by the competent authority, it cannot become the contract, as such it is not a contract. Since the contract has not been executed, therefore, the appellants/plaintiffs have no right to get the registration of the suit property in their names and on that ground the trial court has dismissed the suit. Against that, the plaintiffs/appellants have preferred the instant appeals before this court.

8. Learned counsel for the appellants would submit that the finding recorded by the learned trial court is perverse and suffers from surmises and conjecture as the learned trial Court has not considered the fact that the plaintiff was ready and willing to perform his part of contract but the defendant no.1 has not performed his part of the contract. It has been further contended that plaintiff has gone to defendant to deposit the amount as per the terms mentioned in the tender but the defendant no.1 has not accepted the same on the pretext that construction of shop is not completed. This vital fact of the case has not been taken into consideration by the learned trial Court therefore, judgment and decree passed by learned trial Court deserves to be set aside.

9. Learned counsel for the appellants/plaintiffs would submit by way of written synopsis that plaintiffs have been allotted Gumpti which was caught fire on 22-9-2019 and to rehabilitate them authorities have already asked the appellants/plaintiffs to run the present shop No. 1 and 2 which are under construction near Bus Stand. Since then they are running the shops. It has also been contended that at the time of rehabilitation, it has been informed to them whenever the allotment of shops would be made, then shop Nos. 1 and 2, shall be allotted to them. This submission made by the appellants/plaintiffs cannot be considered as there was no such material placed on record before the trial court and the proceeding of First Appellate Court is continuation of civil suit, as such this court cannot take note of

factual position made in the written synopsis. Therefore, this submission cannot be accepted. Accordingly, the submission made by learned counsel for the appellants/plaintiffs deserves to be and is hereby rejected.

10. Learned counsel for respondent no.1 would submit that the findings recorded by the learned trial Court is perfect, justified and in accordance with the Municipal Corporation Act and Rules made therein. He would refer the judgment of Hon'ble Supreme Court in the case of State of Punjab vs. Mehar Din in Civil Appeal no. 5861 of 2009 decided on 02.03.2022 and would pray for dismissal of the appeal.

11. I have heard learned counsel for the parties and record of the Court below with utmost satisfaction.

12. Before going into the legal submissions raised by the learned counsel for the appellants and respondents in the bar, it is expedient for this court to examine the relevant provisions which are applicable in the present case. Section 109 of the Chhattisgarh Municipalities Act, 1961 provides provisions governing the disposal of Municipal property vested in or under the management of council. Section 109 of the Chhattisgarh Municipalities Act, 1961 reads as under;

"Section 109 - Provisions governing the disposal of Municipal property vesting in or under the management of Council (1) No streets, lands, public places, drains or irrigation channels shall be sold, leased or otherwise alienated, save in accordance with such rules as may be made in this behalf.

(2) Subject to the provisions of sub-section (1),--

(a) the Chief Municipal Officer may, in his discretion, grant a lease of any immovable property belonging to the Council, including any right of fishing or of gathering and taking fruits, flowers and the like, of which the premium or rent; or both, as the case may be, does not exceed two hundred and fifty rupees for any period not exceeding twelve months at a time: Provided that every such lease granted by the Chief Municipal Officer, other than the lease of

the class in respect of which the [Substituted by M.P. Act No. 20 of 1998.] [President-in Council] has by resolution exempted the Chief Municipal Officer from compliance with the requirements of this proviso, shall be reported by him to the [Substituted by M.P. Act No. 20 of 1998.] [President-in-Council] within fifteen days after the same has been granted.

(b) with the sanction of the [Substituted by M.P. Act No. 20 of 1998.] [President-in Council], the Chief Municipal Officer may, by sale or otherwise grant a lease of immovable property including any such right as aforesaid for any period not exceeding three years at a time of which the premium, or rent, or both, as the case may be, for any one year does not exceed one thousand five hundred rupees.

(c) with the sanction of the Council, the Chief Municipal Officer may lease, sell or otherwise convey any immovable property belonging to the Council.

(3) The sanction of the [Substituted by M.P. Act No. 20 of 1998.] [President-in-Council] or of the Council under subsection (2) may be given either generally for any class of cases or specially in any particular case:

Provided that-- (i) no property vesting in the Council in trust shall be leased, sold or otherwise conveyed in a manner that is likely to prejudicially effect the purpose of the trust subject to which such property is held;

(ii) no land exceeding fifty thousand rupees in value shall be sold or otherwise conveyed without the previous sanction of the State Government and every sale or other conveyance of property vesting in the Council shall be deemed to be subject to the conditions and limitations imposed by this Act or by any other enactment for the time being in force.]".

13. Chhattisgarh Municipalities (Transfer of Immovable Property) Rules 1996 (for short, "the Rules 1996") provides that no immovable property which yields or is capable of yielding an income shall be transferred by sale, or lease or otherwise conveyed except to the highest bidder at a public auction or offer in a sealed cover. Rules, 4, 5 and 7 are relevant which are extracted as under:

"4. When a transfer is to be made by a public auction or by inviting offers, the time, the date,

the place and the conditions of the auction or offer shall, not less than 15 days prior to the date of auction or last date for the receipt of offers, be advertised in one or more local news- papers and shall be widely made known in the manner as determined by the Council.

5. The auction shall take place under the supervision of the Chief Municipal Officer, or such officials, as may be authorised by the Chief Municipal Officer in this behalf.

7. When a resolution is passed by the Council for the purpose of the proviso (ii) of sub-section (3 ) of Section 109, the Chief Municipal Officer shall forward the proposal to the State Government enclosing the following information ;-

(i) nature of the property, i.e., land, shop, building, etc.;

(ii) area of such property along with its site plan;

(iii) in case of land acquired/purchased, by the Council the purpose for which it was acquire/purchased;

(iv) the purpose for which such land/property is earmarked in the city Master Plan;

(v) for what purpose the property is being used at present;

(vi) the purpose for which such property shall be used by the person whose bid/offer has been recommended for acceptance;

(vii) in case of building/shop, the cost of construction and the date of completion of its construction;

(viii) the date of publication of notice in the local news-papers, and the date of auction or the last date fixed for the receipt of offers, as the case may be;

(ix) Upset price/market value determined for auction/offers;

(x) conditions of auctions/offers;

(xi) the number of persons participated in the auction or the number of the offerers who gave their offer, as the case may be;

xii) the name of the first two highest bidders/offerers as the case may be, and the auction/offer price as quoted by them."

14. Section 109 (3) provides that no land exceeding Rs. 50,000/- in value shall be sold or otherwise conveyed without the previous sanction of the State Government and every sale or other conveyance of property vesting in the Council shall be deemed to be subject to the conditions and limitations imposed by this Act or by any other enactment for the time being in force. Since, the State Government has not granted approval and cancelled the tender process, the plaintiff cannot claim any right to occupy the said shops.

15. Now coming to the facts of the case, as per the tender document, Rule 2.8 it is incumbent on the part of the auction purchaser to deposit the amount within the time prescribed provided in the tender and the said amount is not deposited then the earnest money will be forfeited in favour of Municipal Corporation as per Clause 2.9 of the Tender document. Clause 2.8, 2.9, 2.10 and 2.11 are relevant which are extracted as under :

"2.8 उच्चतम बोलीदाता को नीलामी के तुरत ं बाद नीलामी बोली राशश की एक ततहाईि राशश जमा करनी होगी यह राशश धरोहर राशश के अलावा होगी । जो बोली स्वीकृ्त होने पर

राईिट आफ आकूपेशन की शेष राशश मे समायोजजत कर ली जावेगी ककन्तु अस्वीकृ्त होने पर आकूपेशन की राशश एवं

धरोहर राशश वापस की जावेगी ।

               2.9           यकद बोली की एक ततहाईि राशश बोलीदाता
               नीलामी के तुरत
                            ं बाद जमा करने मे असमरर रहते है तो

उसकी धरोहर राशश नगर पाललका कोष मे राजसात कर ली जावेगी ।

2.10 नीलामी बोली छ०ग० नगर पाललका अतधकनयम

1961 के धारा 109 के अध्यधीन होगी । नीलामी बोली स्वीकृ्त होने के 30 कदवस के भीतर बोलीदाता को राईिट

आफ आकूपेशन की राशश नगर पाललका कोष मे जमा करना होगा एवं कनयम/शतर के अधीन स्वयं के व्यय पर

प्रचललत दर अनुसार 15 कदवस के भीतर पंजीयन कराना अकनवायर होगा । पंजीयन पश्चात बोलीदाता को दक ु ान का वास्तकवक कब्जा सौपा जावेगा ।

2.11 कबना कोईि कारण बताये नीलामी की बोली स्वीकार करने या न करने का अतधकार नगर पाललका दल्लीराजहरा

को होगा ।"

16. Learned counsel for the appellants/plaintiffs have referred to the judgment of Hon'ble Supreme Court in Rame Gowda (dead) by Lrs vs. M. Varadappa Naidu (dead) by Lrs and others 1 and would submit that since the appellants/plaintiffs are in peaceful possession, rightful owner may only recover it by taking recourse to law. In the present case, the appellants/plaintiffs are not in possession of suit property, in accordance with law as they are in illegal possession, therefore, the judgment cited by learned counsel for the appellants/plaintiffs is not applicable to the facts of the present case.

17. Similarly, in Poona Ram vs Moti Ram (dead) through Lrs and others2 the Hon'ble Supreme Court has held that the suit for possession based on possessory title/previous possession and not ownership/proprietary title, essential conditions to be met and established by plaintiff in such a case, to succeed. In the present case, appellants/plaintiffs have not been able to prove that they are in possession of the suit property on the promissory ownership or the property of right of the title, but they are occupying the land illegality not in accordance with provisions of law, therefore, this judgment is not applicable to the facts of the present case.

18. The appellants/plaintiffs were highest bidders in the auction but they have not deposited 1/3rd amount after acceptance of the offer and the earnest money is liable to be forfeited in the account of Municipality. The plaintiffs/appellants have also not complied with condition No.2.8, coupled with facts, the Government has not

1 (2004)1 SCC 769 2 (2019) 11 SCC 309

approved the auction which is a mandatory requirement as per Rules 1966. Learned trial court has rightly dismissed the suit, even otherwise, it is well settled proposition of law that the offer unless accepted by the opposite party, it cannot become contract.

19. Hon'ble the Division Bench of High Court of Madhya Pradesh in the State of Madhya Pradesh vs. Hamkim Singh and another 3, has held as under:

"The offer of the bid and deposit of the amount by the plaintiff No. 1 was in the nature of a 'proposal'. Before that could be accepted by the Chief Conservator of Forests, the communication was sent to him that the plaintiff was withdrawing his offer. The Chief Conservator of Forests, therefore, had no right to put his signature on the contract deed and to treat it as if the contract had come into being. It therefore, follows that, in fact, no contract came into being between the Parties and the defendant State had no right to enforce the contract as such. It is no doubt true that in Sale Condition No. 14 (Ex. D-l) a provision has been made that if a successful bidder fails at the close of the auction to pay the amount of the consideration, or the first instalment, as the case may be, or to furnish a security or to complete the formalities, the earnest money deposited by him shall be forfeited to the State Government and the coupe shall be re-auctioned and the deficiency shall be realised from the original bidder as arrears of land revenue".

20. Hon'ble Supreme Court in recent judgment decided on 2-3-2022 in the matter of State of Punjab and others vs. Mehar Din ( Civil Appeal No.5861 of 2009) has examined the procedure for sale by public action and has held that in paragraph 17 that "even if the public auction has been completed to the highest bidder, no right is accrued till the confirmation letter is issued to him as the acceptance of the highest bid is provisional, subject to its conformation by the competent authority". It is not in dispute that the 3 (1973) AIR (MP) 24

competent authority ie., the State Government has not approved the bidding auction process and after recording its satisfaction, has accordingly initiated auction process vide its order dated 21-6-2012.

21. Hon'ble Supreme Court in the matter of State of Punjab and others and Mehar Din (supra), has held in para 21, 25 and 26 which are extracted below:

"18. This Court has examined right of the highest bidder at public auctions in umpteen number of cases and it was repeatedly pointed out that the State or authority which can be held to be State within the meaning of Article 12 of the Constitution, is not bound to accept the highest tender of bid. The acceptance of the highest bid or highest bidder is always subject to conditions of holding public auction and the right of the highest bidder is always provisional to be examined in the context in different conditions in which the auction has been held. In the present case, no right had accrued to the respondent even on the basis of statutory provisions as being contemplated under Rule 8(1)(h) of Chapter III of the Scheme of Rules, 1976 and in terms of the conditions of auction notice notified for public auction.

19. The scope of judicial review in the matters of tenders/public auction has been explored in depth by this Court in a catena of cases. Plausible decisions need not be overturned and, at the same time, latitude ought to be granted to the State in exercise of its executive power. However, allegations of illegality, irrationality and procedural impropriety would be enough grounds for Courts to assume jurisdiction and remedy such ills.

21. The exposition of law on the subject has been consistently followed by this Court even in the later decisions holding that superior Courts should not interfere in the matters of tenders, unless substantial public interest was involved or the transaction was malafide. It was consistently stressed by this Court that the need for overwhelming public interest should always be kept in mind to justify judicial intervention in contracts involving the State and its instrumentalities and while

exercising power of judicial review in relation to contracts, the Courts should consider primarily the question whether there has been any infirmity in the decision-making process.

25. Undisputedly, the provisional bid, in the instant case, was not confirmed by the competent authority (Sales Commissioner) and not being accepted after recording its due satisfaction by an order dated 2nd July, 1993 and the decision of the authority in passing the order of cancellation of the auction bid was scrutinized/examined by the appellate/revisional authority and the discretion exercised by the competent authority in taking decision of cancellation was upheld at later stages.

26. This being a settled law that the highest bidder has no vested right to have the auction concluded in his favour and in the given circumstances under the limited scope of judicial review under Article 226 of the Constitution, the High Court was not supposed to interfere in the opinion of the executive who were dealing on the subject, unless the decision is totally arbitrary or unreasonable, and it was not open for the High Court to sit like a Court of Appeal over the decision of the competent authority and particularly in the matters where the authority competent of floating the tender is the best judge of its requirements, therefore, the interference otherwise has to be very minimal" .

22. From the above stated legal provisions and facts of the case, evidence brought on record, it is quite clear that the finding recorded by the learned trial court that the offer has not been accepted by the Municipal Corporation, even the plaintiffs/appellants have not complied with the condition No. 2.8 of the tender document, coupled with the fact that the Government has not approved the said tender process as per Rules of 1996, therefore, the trial court has rightly dismissed the suit. This finding is neither perverse nor suffers from any irregularity or illegality which warrants interference by this court.

23. Accordingly, the instant both the appeals being devoid of merit are liable to be and are hereby dismissed.

24. Interim relief granted earlier in both the appeals shall continue upto four months and thereafter the same shall stand vacated automatically.

Sd/-

(Narendra Kumar Vyas) Judge

Raju

 
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