President Of Municipal Council Cannot Be Individually Held Liable For Decision Taken By Council: Chhattisgarh High Court

The Chhattisgarh High Court has held that the President and the Chief Municipal Officer of a Municipal Council cannot be individually held liable for a decision taken collectively by the Municipal Council through a duly passed resolution. The Court observed that where the diversion of funds and other decisions were approved unanimously by the entire municipal body, individual criminal liability could not be fastened upon only two office-bearers. [2026 LiveLaw (Chh) 60]Justice Amitendra Kishore Prasad was hearing a batch of writ petitions arising from an order whereby the State Government cancelled the lease granted in favour of the Municipal Council, Balod, under the Integrated Development of Small and Medium Towns (IDSMT) Scheme, directed recovery of the diverted lease amounts, and ordered initiation of criminal proceedings against the then President and the then Chief Municipal Officer. The allottees challenged the cancellation of their leases, while the then President and Chief Municipal Officer questioned the direction for criminal prosecution.The petitioners contended that the decision to auction the plots and utilise the revenue for payment of employees' salaries, electricity dues and basic civic amenities was not an individual act but a collective decision, and they could not be singled out for a decision taken by the entire municipal body. The State contended that the Municipal Council had violated the conditions of the lease by allotting plots instead of constructing residential houses under the IDSMT Scheme and by diverting the revenue generated from the allotments for purposes not permitted under the lease agreement.The Court upheld the State's decision to cancel the allotments. It observed that the lease executed between the State and the Municipal Council specifically required the construction of residential houses under the IDSMT Scheme for eligible beneficiaries and prohibited sub-leasing or diversion of funds for other purposes without prior permission. The Court found that the Municipal Council had allotted undeveloped plots to private individuals instead of constructing residential houses and had utilised the proceeds for salaries, electricity dues and civic amenities contrary to the terms of the lease. The Court affirmed the cancellation of the allotments.While considering the challenge of the then President and Chief Municipal Officer, the Court held that where a decision is taken collectively by a statutory body after deliberation, it cannot ordinarily be treated as an individual decision of one office-bearer. “… Petitioner… cannot be singled out or held exclusively liable for what was undeniably a collective institutional decision. Where a resolution represents a joint decision of the entire municipal body, individual liability cannot be restrictively imposed upon only two of its members,” the Court observed.Accordingly, while dismissing the writ petitions filed by the allottees and upholding the cancellation of the allotments, the Court partly allowed the writ petitions filed by the then President and the then Chief Municipal Officer and quashed the impugned order insofar as it directed the initiation of criminal proceedings against them.Case Title: Rakesh Yadav v. Union of India & Ors. [WPC No. 489 of 2018] and connected matters.Click Here To Read/Download Order

President Of Municipal Council Cannot Be Individually Held Liable For Decision Taken By Council: Chhattisgarh High Court

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President Of Municipal Council Cannot Be Individually Held Liable For Decision Taken By Council: Chhattisgarh High Court

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