Calcutta HC Directs Howrah Municipal Corp To Execute 2010 Land Sale, Says Undisclosed Cabinet Decision Can't Defeat Highest Bidder's Rights

The Howrah Municipal Corporation cannot indefinitely withhold execution of a sale deed in favour of the highest bidder merely because the State Government failed to grant approval, the Calcutta High Court has held, while directing completion of a land sale process pending since 2010.

Justice Shampa Sarkar observed that the statutory powers of the municipal corporation under the Howrah Municipal Corporation Act could not be curtailed by an undisclosed cabinet decision or subsequent government policy, particularly when no statutory rules mandated prior approval from the State.

The Court directed the State Urban Development and Municipal Affairs Department to grant approval within eight weeks for execution of conveyance deeds in favour of Overseas Scrap Trading Corporation regarding two plots at Holding No. 432, G.T. Road (North), Howrah. It further held that if approval was not granted within the stipulated period, HMC would proceed independently with execution of the deeds.

“The cabinet's observation which is not on record, and which has not seen the light of the day, cannot curtail the vested right of the petitioner as the successful bidder, to be conveyed the property,” the Court held.

The petitioner company had challenged the inaction of HMC and the State authorities in completing the conveyance despite being declared the highest bidder in a 2010 auction conducted by HMC for sale of two plots on an “as is where is basis.” The company contended that it had deposited the requisite amounts and repeatedly pursued the matter for over a decade while HMC itself continued corresponding with the State Government for approval.

The State opposed the writ petition on grounds of delay and maintainability, arguing that the petitioner was effectively seeking specific performance of a contract through a writ proceeding. It further contended that approval was necessary under the State's 2012 Land Allotment Policy and raised objections regarding the title and alleged thika character of the land.

Rejecting the objections, the Court held that the delay was not attributable to the petitioner since the issue remained under active consideration between HMC and the State for years. The Court noted that correspondence between the authorities continued till 2021 and beyond, showing that the matter had remained “alive throughout.”

The Court further clarified that Section 223 of the Howrah Municipal Corporation Act empowered HMC to dispose of its immovable properties and that absence of procedural rules framed by the State could not disable the corporation from exercising statutory powers. Relying on precedent, the Court held that where a statute confers power, exercise of such power does not depend on framing of rules unless expressly provided.

On the issue of State approval, the Court observed that the tender notice itself did not stipulate any requirement of prior governmental sanction. It held that the rights of the highest bidder had crystallised before the 2012 Land Allotment Policy came into force and the policy could not retrospectively defeat those rights.

The Court also rejected the State's contention that the land was thika property. Referring to reports of the Thika Controller and precedents governing thika tenancy law, the Court held that the land had pucca structures and had been leased through a registered lease for 50 years in 1953, taking it outside the statutory definition of thika tenancy under the older regime.

Holding that no rival claimant had ever challenged HMC's ownership and that HMC had consistently treated itself as owner of the land since before 1953, the Court concluded that refusal to execute the conveyance on speculative objections was unsustainable.

Case Title: Overseas Scrap Trading Corporation vs Howrah Municipal Corporation and Ors.

Case No: W.P.A 13525 OF 2021

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