THE MUNICIPAL COMMITTEE, BARWALA, DISTRICT HISAR, HARYANA vs JAI NARAYAN AND COMPANY

THE MUNICIPAL COMMITTEE, BARWALA, DISTRICT HISAR, HARYANA vs JAI NARAYAN AND COMPANY

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले


 REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2222 OF 2022
(ARISING OUT OF SLP (CIVIL) NO. 16530 OF 2018)
THE MUNICIPAL COMMITTEE, BARWALA,
DISTRICT HISAR, HARYANA THROUGH ITS
SECRETARY/PRESIDENT

.....APPELLANT(S)
VERSUS
JAI NARAYAN AND COMPANY & ANR. .....RESPONDENT(S)
J U D G M E N T
HEMANT GUPTA, J.
1. The Municipal Committee, Barwala1
 is in appeal against the judgment
dated 1.5.2018, whereby its second appeal was dismissed arising out
of a suit for mandatory injunction to execute a sale deed in respect of
land measuring 55 kanals 5 marlas sought by the respondent-plaintiff.
2. The respondent-plaintiff claimed title and possession on the basis of an
open auction conducted by the Sub-Divisional Officer, Hisar on
23.3.1999 @ Rs.2,32,000/- per acre after sanction was granted for
auction of the land in question on 25.10.1995. The total sale
consideration comes out to be Rs.15,76,150/- which was deposited
1 For short, the “Municipal Committee”
1
with the Municipal Committee. The plaintiff thus claimed that he is a
bonafide purchaser and is in possession as owner of the suit land. He
deposited the remaining consideration after adjusting an amount of
Rs.4,10,000/- which was already deposited with the Municipal
Committee.
3. The plaintiff asserts that the Municipal Committee had passed a
resolution on 1.5.2002 to get the sale deed executed and registered.
Since the sale deed was not executed, the plaintiff had allegedly
served a registered notice dated 14.8.2006 which was made the cause
of action to file the civil suit for mandatory injunction on 13.6.2011.
4. In the written statement filed by the Municipal Committee, it has been
admitted that the property was put to auction after obtaining
permission from the Deputy Commissioner. However, the possession
of the plaintiff was said to be illegal possession. It was pleaded that
the Municipal Committee is unable to execute the sale deed without
proper sanction of the competent authority i.e., Government of
Haryana.
5. The learned trial court decreed the suit vide judgment and decree
dated 9.3.2016 after giving findings on the following issues framed in
view of the pleadings of the parties:
“1. Whether the plaintiff is entitled to a decree for mandatory
injunction as prayed for?
2. Whether the suit is not maintainable due to non-joinder of
necessary parties?
2
3. Whether the plaintiff has not come to the Court with clean
hand and suppressed the material facts?
4. Whether the plaintiff has no locus standi to file the present
suit?
5. Relief.”
6. Aggrieved against the judgment and decree of the trial court, the
Municipal Committee filed the first appeal which was dismissed on
5.9.2016. The second appeal was also dismissed vide impugned
judgment dated 1.5.2018.
7. Before this Court, learned counsel for the appellant argued that the
auction conducted in which the plaintiff was the highest bidder was not
approved by the State Government. The Ex.P/34 is a communication
addressed by the Deputy Commissioner to the Director Local Bodies to
seek approval of the property put to auction. However, there was no
approval by the State Government of the auction once conducted in
favor of the plaintiff. It was contended that till such time the auction is
confirmed, mere fact that the plaintiff was the highest bidder would not
confer any equitable and legal right to him. It is only after the
confirmation of sale and the letter accepting the bid is issued, the
plaintiff could claim any enforceable right. It was thus contended that
the plaintiff is in unauthorized and illegal possession of the property. It
was contended that the approval of sale of the property by public
auction itself does not amount to confirmation of the auction,
3
therefore, in the absence of confirmation of sale by the State
Government, the plaintiff would not get any right over the property. It
was also argued that the plaintiff in his counter affidavit before this
Court relied upon Section 5 read with Section 10(2)(e) of the Haryana
Municipal Common Lands (Regulation) Act, 19742
 read with Rule 2(4) of
the Haryana Municipalities Management of Municipal Properties and
State Properties Rules, 19763
, though the 1974 Act has been declared
unconstitutional by the Full Bench of Punjab & Haryana High Court in
Rajender Parshad & Ors. v. State of Haryana & Ors.
4
. Even the
First Appellate Court and Second Appellate Court have referred to the
1974 Act while dismissing the appeals filed by the Municipal
Committee.
8. When the appeal came up for hearing before this Court on 14.3.2022,
attention of the counsel for the plaintiff was drawn to the Full Bench
judgment of Punjab & Haryana High Court in Rajender Parshad
declaring the 1974 Act as illegal. Therefore, vesting of land to
shamilat deh on the strength of the aforesaid statute itself was not
tenable. However, Mr. Sanchar Anand, learned counsel for the plaintiff
submitted that it is not the case that the property vested with the
Municipality on the strength of the 1974 Act. It was argued that the
property was put to auction after previous approval of the Deputy
Commissioner and later vide Ex.P/34, the sale stands confirmed.
2 For short, the “1974 Act”
3 For short, the “1976 Rules”
4 AIR 1980 P&H 37
4
Therefore, once the plaintiff has been found to be the highest bidder
and sale has been confirmed by the Deputy Commissioner, the plaintiff
has been rightly granted decree for mandatory injunction.
9. We have heard learned counsel for the parties and find that the decree
passed by the three courts below, to say the least, is a perverse
reading of the provisions of law as well as the factual position. Rule 2 of
the 1976 Rules has to be referred to appreciate the present dispute. It
reads as thus:
“2. Procedure for alienation. – (1) A municipal committee
proposing to alienate permanently or for a term exceeding ten
years any land or other immovable property of which it is the
owner shall apply to the Deputy Commissioner for sanction.
(2) An application under sub-rule (1) shall be accompanied by a
plan of the proposed property to be alienated together with a
statement in Form A appended to these rules.
(3) The Deputy Commissioner shall record an order on the
application, -
(i) sanctioning it (subject to such conditions, if any, as he thinks
fit); or
(ii) refusing to sanction it; provided that no sale by auction shall
be valid, until it has been confirmed by the Deputy
Commissioner.
(4) When the Deputy Commissioner has accorded sanction to a
sale by auction, the Form A aforesaid shall in due course be resubmitted to him with the details regarding the auction shown in
Form B. The Deputy Commissioner shall thereon either confirm
the sale or refuse to confirm it. If the Deputy Commissioner
refuses to confirm the sale, the same shall be void.”
10. The 1976 Rules contemplates two acts to be completed by the Deputy
5
Commissioner, one of which is approval of conduct of sale which was
granted on 25.10.1995. Thus, there is compliance as far as clause (i) of
Rule 2(3) of the 1976 Rules is concerned. The other important provision
is sub-rule (ii) of Rule 2(3) of the 1976 Rules which contemplates that
no sale by auction shall be valid until it has been confirmed by the
Deputy Commissioner. The communication dated 10.1.2007 (Ex P-34)
referred to by the plaintiff is not the communication by the Deputy
Commissioner to the Municipality or to the plaintiff that the sale stands
confirmed. In fact, it is an inter-departmental communication with no
endorsement of the copy of the said communication to the plaintiff.
Thus, the reliance of the plaintiff on the communication dated
10.1.2007 (Ex.P/34) is not helpful to the argument raised by him as it is
the inter-departmental communication from the Deputy Commissioner
to the Director, Urban Local Body Department to seek approval but in
the absence of any approval granted, no right would accrue. The
communication is inter alia to the following effect:
“3. Hence while confirming sale of Municipal Committee land
measuring 54 Kanal & 7 Marla comprised in Khasra No. 517 and
518, conducted on 23.03.1999 by open auction/bid to the
maximum successful bidder of this land @ Rs.2,32,000/- (Rupees
Two Lacs Thirty Two Thousand) per acre, which has been
accepted by Sub Divisional Office and Head Municipal
Committee Barwala, you are requested to please issue Ex-post
facto approval so that the sale deed of the land in the name of
the purchaser M/s Jai Narain & Company may be got done by the
Municipal Corporation Barwala.”
11. Therefore, no concluded contract ever came into force. Reference may
6
be made to the judgment of this Court reported as Haryana Urban
Development Authority & Ors. v. Orchid Infrastructure
Developers Private Limited
5
, wherein this Court held as under:
“13. Firstly, we examine the question whether there being no
concluded contract in the absence of acceptance of bid and
issuance of allotment letter, the suit could be said to be
maintainable for the declaratory relief and mandatory injunction
sought by the plaintiff. The plaintiff has prayed for a declaration
that rejection of the bid was illegal. Merely by that, plaintiff could
not have become entitled for consequential mandatory
injunction for issuance of formal letter of allotment. Court while
exercising judicial review could not have accepted the bid. The
bid had never been accepted by concerned authorities. It was
not a case of cancellation of bid after being accepted. Thus even
assuming as per plaintiff's case that the Administrator was not
equipped with the power and the Chief Administrator had the
power to accept or refuse the bid, there had been no decision by
the Chief Administrator. Thus, merely by declaration that
rejection of the bid by the Administrator was illegal, the plaintiff
could not have become entitled to consequential relief of
issuance of allotment letter. Thus the suit, in the form it was
filed, was not maintainable for relief sought in view of the fact
that there was no concluded contract in the absence of allotment
letter being issued to the plaintiff, which was a sine qua non for
filing the civil suit.
14. It is a settled law that the highest bidder has no vested right
to have the auction concluded in his favour. The Government or
its authority could validly retain power to accept or reject the
highest bid in the interest of public revenue. We are of the
considered opinion that there was no right acquired and no
vested right accrued in favour of the plaintiff merely because his
bid amount was highest and had deposited 10% of the bid
amount. As per Regulation 6(2) of the Regulations of 1978,
allotment letter has to be issued on acceptance of the bid by the
Chief Administrator and within 30 days thereof, the successful
bidder has to deposit another 15% of the bid amount. In the
instant case allotment letter has never been issued to the
petitioner as per Regulation 6(2) in view of non-acceptance of
the bid. Thus there was no concluded contract....”
5 (2017) 4 SCC 243
7
12. In State of Punjab & Ors. v. Mehar Din
6
 this Court observed that
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. It was held as under:
“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.”
13. This Court has also considered that the inter-departmental
communication and/or the notings on the file are not the decisions of
the State. It has been held by the Constitution Bench in a judgment
reported as Bachhittar Singh v. State of Punjab
7
 that merely
writing something on the file does not amount to an order. It was held
as under:
“10. The business of State is a complicated one and has
necessarily to be conducted through the agency of a large
number of officials and authorities. The Constitution, therefore,
requires and so did the Rules of Business framed by the
Rajpramukh of PEPSU provide, that the action must be taken by
the authority concerned in the name of the Rajpramukh. It is not
6 2022 SCC OnLine SC 250
7 AIR 1963 SC 395
8
till this formality is observed that the action can be regarded as
that of the State or here, by the Rajpramukh. ................. Indeed,
it is possible that after expressing one opinion about a particular
matter at a particular stage a Minister or the Council of Ministers
may express quite a different opinion, one which may be
completely opposed to the earlier opinion. Which of them can be
regarded as the “order” of the State Government? Therefore, to
make the opinion amount to a decision of the Government it
must be communicated to the person concerned. In this
connection we may quote the following from the judgment of
this Court in the State of Punjab v. Sodhi Sukhdev Singh (AIR
1961 SC 493 at page 512] :
xxx xxx xxx
11. We are, therefore, of the opinion that the remarks or the
order of the Revenue Minister, PEPSU are of no avail to the
appellant.”
14. Furthermore, this Court in a judgment reported as Union of India v.
Avtar Singh
8
 held that letter does not records the decision of the
Central Government under Section 33 of the Displaced Persons
(Compensation and Rehabilitation) Act 1954, so as to be a decision by
the Central Government. It was observed as under:
“19. .…..Therefore the High Court was clearly in error in treating
the letter of Shri Dube dated May 31, 1963 as a decision of the
Central Government in exercise of the power conferred by
Section 33. There was no reason for decision nor any occasion
for the Central Government to exercise power under Section 33
and therefore, it is not possible to agree with the High Court that
the letter records the decision of the Central Government under
Section 33. If the letter of Shri Dube is not a decision of the
Central Government under Section 33 of the Act, as a necessary
corollary, the impugned decision must be treated as one
rendered for the first time in exercise of the revisional power
under Section 33 and therefore, it cannot be said to be one
without jurisdiction. In this view of the matter, the appeal will
have to be allowed.”
8 (1984) 3 SCC 589
9
15. In a judgment reported as State of Orissa and Others v. Mesco
Steels Limited and Another
9
, this Court held that the High Court
was in error in proceeding on an assumption that a final decision had
been taken and in quashing what was no more than an interdepartmental communication constituting at best a step in the process
of taking a final decision by the Government. It was held as under:
“20. On the contrary, the issue of the show cause notice setting
out the reasons that impelled the Government to claim
resumption of a part of the proposed lease area from the
respondent-company clearly suggested that the entire process
leading up to the issue of the show cause notice was tentative
and no final decision on the subject had been taken at any level.
It is only after the Government provisionally decided to resume
the area in part or full that a show cause notice could have been
issued. To put the matter beyond any pale of controversy, Mr.
Lalit made an unequivocal statement at the bar on behalf of the
State Government that no final decision regarding resumption of
any part of the lease area has been taken by the State
Government so far and all that had transpired till date must
necessarily be taken as provisional. Such being the case the
High Court was in error in proceeding on an assumption that a
final decision had been taken and in quashing what was no more
than an inter-departmental communication constituting at best a
step in the process of taking a final decision by the Government.
The writ petition in that view was pre-mature and ought to have
been disposed of as such. Our answer to question No. 1 is
accordingly in the affirmative.”
16. This Court in a judgment reported as State of Uttaranchal v. Sunil
Kumar Vaish
10 held that a noting recorded in the file is merely a
noting simpliciter and nothing more. It merely represents expression of
opinion by the particular individual. By no stretch of imagination, such
9 (2013) 4 SCC 340
10 (2011) 8 SCC 670
10
noting can be treated as a decision of the Government. It was held as
under:
“24. A noting recorded in the file is merely a noting simpliciter
and nothing more. It merely represents expression of opinion by
the particular individual. By no stretch of imagination, such
noting can be treated as a decision of the Government. Even if
the competent authority records its opinion in the file on the
merits of the matter under consideration, the same cannot be
termed as a decision of the Government unless it is sanctified
and acted upon by issuing an order in accordance with Articles
77(1) and (2) or Articles 166(1) and (2). The noting in the file or
even a decision gets culminated into an order affecting right of
the parties only when it is expressed in the name of the
President or the Governor, as the case may be, and
authenticated in the manner provided in Article 77(2) or Article
166(2). A noting or even a decision recorded in the file can
always be reviewed/reversed/overruled or overturned and the
court cannot take cognizance of the earlier noting or decision for
exercise of the power of judicial review. (See State of Punjab v.
Sodhi Sukhdev Singh AIR 1961 SC 493, Bachhittar Singh v. State
of Punjab AIR 1963 SC 395, State of Bihar v. Kripalu Shankar
(1987) 3 SCC 34, Rajasthan Housing Board v. Shri Kishan (1993)
2 SCC 84, Sethi Auto Service Station v. DDA (2009) 1 SCC 180
and Shanti Sports Club v. Union of India (2009) 15 SCC 705).”
17. Thus, the letter seeking approval of the State Government by the
Deputy Commissioner is not the approval granted by him, which could
be enforced by the plaintiff in the court of law.
18. The suit was not maintainable for the reason that there was no vested
right with the plaintiff to claim such a decree merely on the basis of a
participation in the public auction. Secondly, even if the plaintiff had
any right on the basis of an auction, he could at best sue for specific
performance of the so-called agreement. In Orchid, the plaintiff had
sought decree of declaration and of consequential mandatory
11
injunction. This Court held that such suit was not maintainable as no
concluded contract came into existence by merely submitting the
highest bid. In these circumstances, suit for mandatory injunction was
not maintainable.
19. It is to be noted that though the plaintiff had served a notice on
14.9.2006, but still the suit was filed in the year 2011 in respect of the
auction conducted in the year 1999. The suit for mandatory injunction
was filed on or after 13.6.2011, i.e., more than 12 years after the
auction was conducted on 23.3.1999. Therefore, even the suit for
specific performance was barred by limitation as such suit, even if
maintainable, could be filed within three years of the auction being
conducted in terms of Article 54 of the Schedule to the Limitation Act,
1963. The suit for injunction was filed beyond the period of limitation
and was not properly constituted. The courts have not examined such
aspect as was expected to examine legally.
20. Section 61 of the 1973 Act deals with vesting of the property with the
Municipal Committee and how the property can be utilized. Sections
61 and 62 read thus:
“61. Property vested in committee.—(1) Subject to any special
reservation made or to any special conditions imposed by the
State Government, all property of the nature hereinafter in this
section specified and situated within the municipality, shall vest
in and be under the control of the committee, and with all other
property which has already vested or may here after vest in the
committee, shall be held and applied by it for the purposes of
this Act, that is to say,—
12
(a) all public town-walls, gates, markets, stalls, slaughter houses,
manure and night-soil depots and public buildings of every
description which have been constructed or are maintained out
of the municipal fund;
(b) all public streams, springs and works for the supply, storage
and distribution of water for public purposes, and all bridges,
buildings, engines, materials and things connected therewith or
appertaining thereto, and also any adjacent land, not being
private property appertaining, to any public tank or well;
(c) all public sewers and drains, and all sewers, drains, culverts
and water-courses in or under any public street or constructed
by or for the committee alongside any public Street, and all
works, materials and things appertaining thereto;
(d) all dust, dirt, dung, ashes, refuse, animal matter or filth or
rubbish of any kind or dead bodies of animals collected by the
committee from the streets, houses, privies, sewers, cesspools
or elsewhere or deposited in places fixed by the committee
under section 152;
(e) all public lamps, lamp-posts, and apparatus connected
therewith or appertaining thereto;
(f) all land or other property transferred to the committee by the
State Government or acquired by gift, purchase or otherwise for
local public purposes;
(g) all public streets, not being land owned by the State
Government, and the payments, stones and other materials
thereof, and also trees growing on, and erections, materials,
implements, and things provided for, such streets;
(h) Shamlat Deh.
(2) Where any immovable property is transferred otherwise than
by the sale by the State Government to a committee for public
purposes, it shall be deemed to be a condition of such transfer,
unless specially provided to the contrary, that should the
property be at any resumed by the State Government the
compensation payable therefor shall, notwithstanding anything
to the contrary in the Land Acquisition Act, 1894, in no case
exceed the amount, if any, paid to the State Government for the
transfer together with the cost or the present value, whichever
13
shall be less of any buildings erected or other works executed on
the land by the committee.
62. Inventory and map of municipal property.—(1) The
committee shall maintain an inventory and a map of, all
immovable property of which the committee is proprietor, or
which vests in it or which it holds in trust for the State
Government.
(2) The copies of such inventory and map shall be deposited in
the office of the Deputy Commissioner and such other officer or
authority as the State Government may direct and all changes,
made therein shall forth with be communicated to the Deputy
Commissioner or other officer or authority.”
21. Clause 61(1)(h) of the 1973 Act is the subject matter of challenge in
another appeal before this Court whereas clauses (a) to (g) except
clause (f) deal with the public utility services. The clause (f) deals with,
“the land or other property transferred to the Committee by the State
Government or acquired by gift, purchase or otherwise can be utilised
only for local public purposes.”
22. In terms of Section 62 of the 1973 Act, the Municipal Committee is
required to maintain an inventory and map of all immovable property
of which the Committee is the proprietor or which vests in it or which it
holds in trust for the State Government. In the absence of nature of
land as to whether it is a land owned by the Municipality and is not
vested with the Municipality in terms of Section 61 of the Act, no
direction by the courts could have been granted. It has not come on
record as to whether such land was vesting with the Municipal
Committee or that it was not mentioned in the list of inventories of the
14
properties of Municipal Committee. We find that Municipal Committee
was remiss in defending its property as a custodian of public property.
23. Section 245 of the 1973 Act falling in Chapter XII (Control) empowers
the Deputy Commissioner or any other officer not below the rank of
Assistant Commissioner by a general or special order to carry out the
functions assigned therein. The Deputy Commissioner has a power to
suspend any resolution or order of Committee under Section 246. Any
action taken by the Deputy Commissioner under Sections 246, 247 or
248 of the 1973 Act is to be reported to the Commissioner.
24. Section 250 of the 1973 Act confers power with the State Government
to issue directions for carrying out the purposes of the Act. The said
provision reads thus:
“250. Power of State Government to give directions.—The State
Government may issue directions to any committee for carrying
out the purposes of this Act and in particular with regard to—
(a) various uses to which any land within a municipal are may be
put;
(b) repayment of debts and discharging of obligations;
(c) collection of taxes;
(d) observance of rules and bye-laws;
(e) adoption of development measures and measures for
promotion of public safety, health, convenience and welfare;
(f) sanitation and cleanliness;
(g) establishment and maintenance of fire-brigade.”
15
25. It is in pursuance of the powers conferred on the State Government, a
message was conveyed on 12.9.1994 on behalf of the Director, Local
Bodies, Haryana to all the Deputy Commissioners of the State of
Haryana that no municipal property will be sold without the prior
approval of the Government. The learned trial court has discarded
such communication for the reason that such communication has not
been proved as per the provisions of the Indian Evidence Act, 1872. It
may be stated that the State or the Deputy Commissioner was not
impleaded as a party to the civil suit filed. In fact, the objection raised
was that the State has not been impleaded as a party. Such
communication has been produced by the Municipal Committee when
the Committee examined Shri Mahavir Singh, Secretary as DW-1 and
Shri Sandeep Kumar, Building Inspector as DW-2. Such communication
has come on record from the official source which would carry
presumption of correctness under Section 114 of the Indian Evidence
Act, 1872 that the official acts have been regularly performed. The
original record was not necessarily required to be proved by
summoning the Government officials as such document was produced
by the officials of the Municipal Committee from the official record.
26. Thus, since direction issued by the State Government is in terms of
Section 250 of the 1973 Act, the Deputy Commissioner was bound to
seek approval of the State Government. The binding nature of such
instructions is evident from the fact that the Deputy Commissioner has
16
sought approval from the State Government when a communication to
this effect was addressed on 10.1.2007.
27. In view of the above, we find that the plaintiff has been granted decree
for mandatory injunction not only beyond the period of limitation but in
contravention of the statute and the rules framed thereunder.
28. Consequently, the appeal is allowed. The judgment and decree passed
by the courts below are set aside. The plaintiff is in possession, which
is found to be illegal and without the authority of law. The Municipality
shall take possession of land forthwith and furnish compliance report
within three months. The amount of Rs.15,76,150/- shall stand
forfeited towards the damages for the illegal occupation of the land for
more than 20 years since the date of auction in contravention of law.
.............................................J.
(HEMANT GUPTA)
.............................................J.
(V. RAMASUBRAMANIAN)
NEW DELHI;
MARCH 29, 2022.
17

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