Municipality Cannot Benefit Private Party At Cost Of State; Disposal Of Public Property Must Be In Public Interest & Free From Bias: Gujarat HC

The Gujarat High Court has held that the State and municipal authorities cannot act in a manner that benefits a private party at the cost of public property, and that any such action would be unreasonable and contrary to public interest. The Court observed that public authorities are bound by the doctrine of public trust and cannot alienate municipal land in an arbitrary manner.A Single Judge Bench of Justice J. C. Doshi was hearing the second appeal arising from a suit for specific performance and declaration of rights in respect of municipal land at Mangrol. The appeal was filed by the original defendant against concurrent judgments of the Trial Court and the First Appellate Court, which had decreed the suit in favour of the original plaintiff and directed execution of a sale deed on the basis of an alleged resolution passed by the Nagarpalika in 1973.The appellant submitted that the General Body of Nagar Seva Sadan, Mangrol had no authority, legal competence or locus to pass any resolution for alienation of immovable property vested in the municipal body. It was argued that municipal property is held in trust for the benefit of the public at large, and that the elected body, instead of adhering to the doctrine of public trust, had acted arbitrarily and autocratically in transferring the suit land to a private individual without any public auction or transparent procedure ensuring fairness and equal opportunity.Reliance was placed on a circular dated 27 December 1971 issued by the Urban Development and Urban Housing Department, under which the power to grant sanction for sale of municipal property vests in the Collector alone. It was contended that every disposition of government or municipal land must conform to the conditions prescribed by the State Government and must also satisfy the Doctrine of Public Trust and the Doctrine of Equality. It was further argued that even dehors the statutory and constitutional infirmities, the suit itself was ex facie barred by limitation.The respondent opposed the appeal by submitting that the jurisdiction of the High Court in a second appeal is extremely limited, particularly when concurrent findings of fact recorded by the courts below are under challenge. It was contended that the High Court cannot undertake a re-appreciation of evidence or substitute its own factual conclusions for those concurrently reached by the Trial Court and the First Appellate Court.The Gujarat High Court held that although findings of fact recorded by the courts below are ordinarily immune from interference in a second appeal, such restraint is not absolute. The Court observed that where a finding is perverse, based on no evidence, founded on a misreading of material evidence, or rendered in disregard of a statutory mandate, the High Court would be justified, and indeed duty-bound, to interfere within the limited scope of Section 100 of the Code of Civil Procedure.On a careful scrutiny of the impugned judgments, the Court found that the Trial Court had failed to examine the crucial issue of limitation and had also ignored the binding notifications and resolutions issued by the Town Development and Urban Development Department, despite specific pleadings to that effect in the written statement. The Court noted that the Trial Court had erroneously relied on Sections 65 and 146 of the Gujarat Municipalities Act to hold that the General Body of Mangrol Nagar Palika was competent to alienate the land, while overlooking statutory restrictions and binding governmental directives governing alienation of municipal property. On the issue of limitation, the High Court noted that the plaintiff sought specific performance of an alleged resolution passed on 31 July 1973, whereas the suit was instituted nearly thirty-seven years later. Describing this delay as a “yawning hiatus”, the Court held that under Article 54 of the Limitation Act, a suit for specific performance must be instituted within three years from the date fixed for performance, or, in its absence, from the date when the plaintiff has notice of refusal. The Court held that the suit was ex facie barred by limitation, and that the pleadings were conspicuously silent and devoid of any explanation for the prolonged interregnum. The High Court further relied on the Government Notification dated 19 May 1988 and held that a conjoint reading of the said notification with the earlier Government Resolutions makes it clear that, under Sections 65(2) and 146(1) of the Gujarat Municipalities Act, the power to sanction sale of municipal or government land vests in the Collector, and even such power is subject to strict statutory conditions and procedural safeguards. Despite specific pleadings on this aspect by the municipal body, both the Trial Court and the First Appellate Court had proceeded sub silentio on this vital issue. The Court noted:“It thus emerges that the General Body of the Nagar Palika had no locus, authority, or jurisdiction to resolve...

Municipality Cannot Benefit Private Party At Cost Of State; Disposal Of Public Property Must Be In Public Interest & Free From Bias: Gujarat HC

Rushil Batra

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