Gujarat High Court
Natyakala Charitable Trust vs Morvi Nagarpalika on 1 October, 2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SECOND APPEAL NO. 39 of 2003
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE SANJEEV J.THAKER
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Approved for Reporting Yes No
Yes
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NATYAKALA CHARITABLE TRUST & ORS.
Versus
MORVI NAGARPALIKA & ANR.
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Appearance:
DR VENUGOPAL H PATEL(7411) for the Appellant(s) No. 1,2.1
NANAVATY ADVOCATES(1373) for the Respondent(s) No. 1
NOTICE SERVED for the Respondent(s) No. 2
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CORAM:HONOURABLE MR.JUSTICE SANJEEV J.THAKER
Date : 01/10/2025
ORAL JUDGMENT
1. The present Second Appeal under section 100 of Code of
Civil Procedure has been filed, challenging the judgment and
decree, passed in Regular Civil Appeal No.24 of 1995, dated
27.03.2003, whereby, the Joint District Judge (FTC), Morbi,
Rajkot has dismissed the appeal and confirmed the judgment
and decree, passed by the Civil Judge (Senior Division) Morbi,
in Regular Civil Suit No.49 of 1988, dated 11.08.1995.
2. For the sake of convenience, the parties are referred to as
per their original status as that in the suit.
3. The brief facts arising in the present Second Appeal are
that plaintiff filed a suit for declaration that the Resolution
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passed by the Adminstrator bearing ADM/371, dated
08.05.1986, whereby the Adminstrator decided to sell the suit
property in favour of the defendant No.1 is legal and void, that
in pursuant to the said Resolution the order passed by the
Adminstrator i.e. defendant No.3 in favour of defendant Nos.1
& 2, be declared as illegal and void and whatsoever order that
have been passed by the then Adminstrator of Municipality in
respect of the suit property be declared as illegal and void and
further to demolish the construction that has been made in the
suit land by the defendant No.1 & 2.
4. The defendants appeared in the said suit and defendant
No.1 & 2 filed reply, Exhibit-22, defendant No.3, vide Exhibit-
27, the trial Court framed issue, vide Exhibit-91, which reads as
under:-
i) Whether after supersession of Municipality property of
Municipality vests in the Government?
ii) Whether Administrator of Municipality has any power
or authority to sell the property of Municipality during
supersession period?
iii) What relief plaintiff is entitled to?
iv) What order and decree?
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5. After considering the oral evidence, documentry evidence
and giving findings on all the issue, the trial Court allowed the
said suit. Being aggrieved by the said judgment and decree, the
defendant No.1 & 2 filed Regular Civil Appeal No.24 of 1995
and after reappreciating the evidence, the first appellate Court
dismissed the said appeal. Hence, the present Second Appeal.
6. The present Second Appeal has been admitted by
coordinate bench by an order dated 30.09.2003 and the
following substantial question of law has been framed:-
"Whether in case of supersession of the Municipality
by the State Government under the powers conferred
by ection 263(1) of the Gujarat Muncipalities Act,
1963 and upon vesting of the properties of the
Municipality in the State Govenment under Section
263(2)(c) of the Act, the Administrator appointe by the
State Government shall have power to deal
with/dispose of the properties of the Municipality."
7. Learned advocate for the defendant No.1 & 2 has mainly
argued that if the documentary evidence produced, vide Exhibit-
66 are taken into consideration, a notification was issued on
27.12.1984 under sub section 1 of section 263 of the Gujarat
Municipality Act, 1963 and Morbi Municipality has been
superseded for the period beginning from 16.08.1984 and
ending on 31.12.1984 and such extension was till 21.08.1986.
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Vide Exhibit-65, Director of Municipality, State Gujarat,
Ahmedabad had appointed defendant No.3 as an Administrator
of Morbi Municipality, with effect from 16.06.1984, with an
authority to exercise all the powers to perform all the duties of
the said municipality during the period of supersession of the
said municipality and under the provision of section 263(2)(b)
of the Gujarat Municipality Act, 1963 wherein the
Administrator has been given all powers and duties of the
Municipality during the period of supersession, the
Administrator by Resolution No.371, dated 08.05.1986, decided
to sell the suit property to the defendant No.1 and pursuant to
the said Resolution No.371, defendant No.3 had decided to sell
the suit property which belonged to the plaintiff, at the rate of
Rs.120/- per sq. meter, and thereafter, vide Exhibit-84, on
06.11.1986, the Sanad was issued by the plaintiff, and thereafter,
the sale deed was executed on 20.11.1996, which is produced,
vide Exhibit-88.
8. It has been argued by learned advocate for the defendant
No.1 & 2 that pursuant to the provisions of section 263(2)(b) of
Gujarat Municipality Act, 1963, the Adminstrator had all the
powers and duties, and therefore, exercising the said powers and
duties, the Administrator had passed a Resolution and pursuant
to the said Resolution even after the period of supersession was
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over on 21.08.1996, the plaintiffs themselves have executed
Sanad on 06.11.1986 which is produced, vide Exhibit-84 and
that sale deed has been executed by the Chief Officer on
20.11.1986, vide Exhibit-88, and therefore, the plaintiffs had
entered the shoes of the Administrator and also on the grond of
promissery estoppel in view of the fact that the plaintiffs himself
has executed Sanad of the sale deed, the plaintiff could not
challenged the Resolution and the sale deed and it cannot be
said that the sale deed is pursuant to the Resolution passed by
the Administrator on 08.05.1996, and therefore, it has been
argued that the Administrator appointment by the State
Governent hadall the powers to deal with/dispose of the
property of the Municipality, and therefore, the present Second
Appeal is required to be allowed and judgment and decree
passed by the trial Court and confirmed by the first appellate
Court is required to be quashed and set aside.
9. Per contra, learned advocate for the plaintiff has mainly
argued that if the provision of section 263(2)(c) of the Gujarat
Municipality Act, 1963 are considered all the property vested in
the Municipality would vested in the State Government, and
therefore, the Administrator did not have any power to sell the
suit property to the defendant No.1 in view of the fact that the
Adminstrator did not have any power to deal with the property
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which vested in the Municipality in view of the fact that during
the period of supersession, the said property vested in the State
Govenment, and therefore, as the Notification of supersession is
there on 16.06.1984 to 21.08.1986 and the Resolution by which
the Adminstrator had decided to sell the suit property to
defendant No.1 is on 15.06.1984, the Adminstrator could not
have passed an order to sell the suit property to the defendant,
and therefore, the judgment and decree passed by the trial Court
and confirmed by the appellate Court does not require
interference. Therefore, the present Second Appeal is require to
be dismissed.
10. Moreover, it has been argued by the learned advocate for
the plaintiff that with respect to the fact that considering the sale
deed executed by the plaintiff, if the provision of section 65(3)
of the Gujarat Municipalties Act are taken into consideration,
the said section clearly states that sanction by Resolution is
required to be passed at a General Meeting, if the suit property
does not exceed one lakh, in the present case, the sell of
immovable property does not exceed one lakh, and therefore,
section 65 of Gujarat Municipalities Act, 1963 will have to be
considered. In the present case, there is no sanction of the
Municipality by which Resolution is passed at General body for
the validity of the said contract, whereby the sale deed has been
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executed by the plaintiff in favour of the defendant No.1, and
therefore, also the judgment passed by the trial Court and
confirmed by the first appellate Court does not require any
interference. The learned advocate for the plaintiff relied on the
judgment reported in AIR 1961 MP 324 in the case of Hitkarini
Sabha, Jabalpur v. Corporation of the City of Jabalpur and
Another.
11. Having heard learned advocate for the parties and having
considered the judgment and decree passed by the trial Court
and confirmed by the first appellate Court. The fact that will
have to be taken into consideration while deciding the
substantial question of law are as under:-
(i) In the year 1984, Government of Gujarat has placed Morbi
the Municipality under supersession, by its order dated
14.06.1984, under Section 263(1) of the Gujarat Municipality
Act, 1963 and the said supersession order of the Govemnment
remained from 16.06.1982 to 21.08.1996.
(ii) Defendant No.3 was appointed as Administrator of Morbi
Municipality.
(iii) The Administrator by Resolution decided to sell the suit
property to defendant No.1 on 15.06.1984, Exhibit-65, Sanad
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has been issued by plaintiff on 06.11.1986, whereby, defendant
No.1 paid the amount of Rs.21,773/- to the plaintiff, vide
Exhibit-84.
(iv) The sale deed has been executed by plaintiff in favour of
defendant No.1 on 20.11.1986, vide Exhibit-88.
12. Therefore, taking into consideration the above referred
facts, this Court will have taken into consideration section 263
of the Gujarat Municipality Act, 1963, which reads as under:-
"263(1) If, in the opinion of the State Government, a
municipality is not competent to perform, or deliberately
makes default in the performance of the duties imposed on it
by or under this Act, or otherwise by law or exceeds or
abuses its powers, the State Government may, after giving
the municipality an opportunity to render an explanation, by
an order published, with the reaons therefore, in the Official
Gazette declare the municipality to be incompetent or in
default, or to have exceeded or abused its powers, as the
case may be and may dissolve such municipality or
supersede it for such period not exceeding two years as may
be specified in the ordr. Such period may extend beyond the
term for which the councillors of the municipality would
have held office under section3, if the municipality had not
been superseded under this section.
13. In the present case, defendant is relying on section 263(2)
(b) of the Gujarat Municipal Act and the plaintiff is also relying
on provision of section 263(2)(c) of the Gujarat Municipal Act,
which reads as under:-
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"263(2)(b). all powers and duties of the municipality
shall, during the period of dissolution or supersession, be
exercised and performed by such officer as the
Development Commissioner from time to time appoints in
this behalf"
263(2)(c). all property vesed in the municipality shall,
during the period of dissolution or supersession, vest in
the State Government."
14. Though, section 263(2)(c) of Gujarat Municipalities Act,
1963 has been deleted by Guj.17 of 1993, section-20(2)(c), but
the fact remains that when the transaction has taken place before
06.11.1986, the said provision was in existance, and therefore,
the same will have to be considered, if the said provision is
taken into considertion, the fact remains that the property which
belonged to the Municipality before supersession i.e. before
16.06.1984 i.e. the date when the Notification came into force,
the same vested in the State Government and as per section
263(2)(c) of the Gujarat Municipality Act, wherein, it has been
specifically stated that during the period of supersession i.e.
between 16.06.1984 to 21.08.1986, the suit property vested in
the State Government, therefore, the Administrator i.e.
defendant No.3 did not have any power to pass a Resolution
No.371, dated 15.06.1984 to sell the suit property to defendant
No.1 & 2. If the judgment relied by the learned advocate for the
plaintiff is taken into consideration, more particularly, in the
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case of Hitkarini Sabha, Jabalpur v. Corporation of the City
of Jabalpur and Another reported in AIR 1961 MP 324,
wherein, the Court has held as under in paragraph No.13:-
"In Dagdulal v. Municipal Committee, Burhar, 1960 MP LJ
627 a Division Bench of this Court has interpreted section
57 of the C.P. and Berar Municipalities Act and has held
that so long as the Municipal Committee is not reconstituted,
the ownership of the property stands transferred by
operation of law to the provisioncial Govt. and therefore, an
adminstrator has no power whatsoever to sell the property
which has so vested."
15. Moreover, if the provisions of section 65(3) of Gujarat
Municipalities Act, 1963 are taken into consideration, which
reads as under:-
"65(3) In the case-
(a) of a lease for a period exceeding one year or of a sale or
other transfer of immovable property the market value of
which does not exceed one lakh of rupees or contract for the
purchase of any immovable property ;
(b) of every contract which will involve expenditure not
covered by a budget grant;
(c) of every contract the performance of which cannot be
completed within the official year current at the date of the
contract;
the sanction of the municipality by a resolution
passed at a general meeting is required."
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16. Therefore, even after the period of supersession was over
on 21.08.1986, and thereafter, when the sale deed was executed
on 20.11.1986, there was no Resolution was passed at a General
Meeting to validate the contract of sale and there was no
sanction of the Municipality by Resolution passed at General
Meeting. Though, the said sale deed could not have been
executed by the plaintiff relying on the Resolution dated
15.06.1984, produced vide Exhibit-65, which was passed by
Administrator in view of the fact that the suit property vested in
the State Government. In view of the same, substantial question
of law is answered in the negative and the Administrator
appointed by the State Government did not have power to deal
with/dispose of the properties of the Municipality under Section
263(2)(c) of the Gujarat Municipality Act in view of the fact
that suit property vested in the State Government in view of the
supersession of the Municipality by the State Government
under the power conferred under Section 263(1) of the Gujarat
Municipality Act, 1963.
17. In view of the same, the present Second Appeal is required
to be dismissed and is hereby dismissed.
(SANJEEV J.THAKER,J)
Manoj Kumar Rai
