Judgment:
A.N. Venugopala Gowda, J.
1. Challenge in this appeal is to the order passed by the Learned Single Judge dismissing the writ petition. The challenge in the writ petition was to the Notification dated 02.06.2003 issued by the 1st respondent, laying down the guidelines with regard to the disposal of the properties held by the local bodies and also to a communication of the 2nd respondent dated 31.07.2004.
2. In a nutshell, the facts of the case as stated by the appellants is as follows:
Appellants are the members of a Hindu undivided family. 1st appellant is the kartha. Appellants are the owners of properties bearing Municipal Katha Nos. 3299 & 3300 situated by the side of Hassan-Mysore Road at Holenarasipura. Appellants have established in their said property a petrol bunk in the name and style of; 'A.S. Parameshwaraiah and Brothers'. Towards the eastern end of the petrol bunk, abutting to Hassan--Mysore Road, there is a property belonging to the Town Municipal Council. Appellants sought grant of the said site. By a communication dated 23.08.1985, 3rd respondent intimated the appellants that the property has been granted to them at an upset price of Rs. 16/- per sq. mtr. Appellants obtained katha of the said property vide an endorsement dated 18.8.1989 and paid the tax. On 18.07.1989, Deputy Commissioner, Hassan District had in relation to grant of the said property, instructed the 3rd respondent to verify the proposal and fix the market price at Rs. 47.64ps. per Sq.mtr, pursuant to which, a decision was taken in the meeting of the 3rd respondent on 28.12.1989, fixing the price at Rs. 48/- per Sq.mtr. On 12.06.2003, 1st respondent issued a Government Order dated 02.06.2003 specifying the persons to whom the lands belonging to a Municipality or other local bodies, could be granted. Contending that the Notification is arbitrary and even otherwise did not relate to the earlier transactions, the same was questioned. Since the 3 rd respondent had addressed a letter to the appellants, stating that, the grant made in their favour is cancelled and also took steps to dispose of the property by public auction by issuing a notice on 25.05.2005, the same were challenged.
3. 3rd respondent filed statement of objections. It contended that, the writ petitioners have not approached the Court with clean hands and the statements made in the writ petition are distortion of facts, misleading & incorrect and such a course of action has been adopted with malafide intentions and oblique motives. Appellants had made an application for grant of the plot No. 2776. On 08.06.1983, the issue came up before the Finance Committee which passed a resolution to grant the property to the appellants. On the date of passing the resolution, the 1st appellant happened to be the sitting Municipal Councilor and also the Chairman of the Finance Committee of the 3rd respondent. The meeting was presided over by the 1st appellant. The 3rd respondent did not had any standing committee as on 08.06.1983. It was stated that, the appellants have deliberately kept silent about the resolution dated 08.06.1993 of the Finance Committee, which was chaired by none other than the 1st appellant, who by virtue of his position as the Chairman of the Finance Committee, has wielded influence on the other members, in getting the resolution passed. The resolution is opposed to the principle 'that no person can be a judge in his own cause'. In view of the suppression of material facts, withholding of material information and the documents, the petitioners are guilty of 'suppressio veri and suggestio falsi'. On the very same day, Municipal Council passed a resolution i.e., after the Finance Committee passed its resolution, approving the grant of the property to the appellants. The market value of the land was fixed at Rs. 16/- per Sq.mtr. By a notice dated 23.08.1985, appellants were called upon to tender Rs. 7,040/- being the cost of the said property, i.e., subject to approval/sanction by the Government. The amount was tendered on 08.10.1985. The Chief Officer by a letter dated 12.04.1988, forwarded the resolution to the Deputy Commissioner and also submitted that, on the basis of the information provided by 1 the office of the Sub-Registrar as regards to the prevailing market value of the property in the locality, the market price of the property works out to be Rs. 47.84ps per Sq.mtr and the total value of the property would work out to Rs. 19,130/-. Since the value of the transaction exceeded Rs. 10,000/-, the concurrence/approval of the Government being necessary, requested the Deputy Commissioner that the proposal be recommended to the Government for its approval. A notice dated 06.01.1989, was published in the newspaper on 18.01.1989, bringing to the knowledge of the General public regarding the resolution passed to grant the property to the appellants. Objections were raised by the general public for the grant of property, contending that, if the property is sold by public auction, it would fetch a much higher value. In view of the objections from the members of the public, the Deputy Commissioner conducted a spot inspection of the property on 24.05.1989. The objectors were present and opposed the allotment. The Deputy Commissioner directed the 3rd respondent to submit a report on the existing market value of the property. The Town Municipal Council in its meeting held on 28.12.1989 discussed the issue and by taking into consideration the previous resolution dated 08.06.1983 and also the direction of the Deputy Commissioner, resolved that the upset price for the property be fixed at Rs. 48/- per Sq.mtr and to submit the same for approval of the Government. The resolution was forwarded along with a letter dated 16.01.1990 requesting the Deputy Commissioner to recommend to the Government to grant approval for allotment of the property to the appellants. The President of Hassan District Congress (I) party, by a letter dated 05.11.1990 objected to the allotment. The Deputy Commissioner forwarded the proposal to the Director of Municipal Administration for approval, who after examining the entire matter, conveyed to the Deputy Commissioner that, the area of the property being vast and a comer plot, it should be sold by public auction only. It was also informed by 2nd respondent that the proposed grant of property to the appellants has been rejected and the file is closed. The Government thus rejected the proposal in toto and closed the file. The appellants were informed by the 3rd respondent on 08/09.09.1992 that the proposal sent to the Government seeking its approval to allot the property has been rejected. The appellants submitted a representation to the Minister seeking grant of said property and their representation was forwarded to the 2nd respondent, who after examining the same, outrightly rejected the request. In the meantime, the appellants had managed to get the katha of the property in their name, for which the 2nd respondent took serious objection and directed in terms of a communication dated 05.11.1992, to take suitable action against those who were responsible for making out the katha of the property in the name of the appellants. When the matter stood thus, the Deputy Commissioner by a letter dated 11.01.1995 directed the 3rd respondent to resubmit the file pertaining to the allotment of property to the appellants, in pursuance of which, the file was resubmitted. Deputy Commissioner forwarded the file to the 2nd respondent on 17.08.1995 and the 2nd respondent having re-examined the matter, once again rejected the proposal and it was also observed that, the proposed grant is in violation of Sections 72(2), 100 & 112 of the Karnataka Municipalities Act. In view of the said proceedings, 2nd respondent proceeded to pass an order dated 29.07.2002, suspending with immediate effect, the registration of the katha and the allotment of the property and further, restrained the appellants from putting up any construction or carrying out any activities in the property. 3rd respondent was directed to take action in that regard. Appellants having pressurized the Deputy Commissioner, who by a communication dated 22.10.2002, directed the 3rd respondent to resubmit the file and hence the file was forwarded on 15.11.2002. The Deputy Commissioner, forwarded the same to the 2nd respondent with his recommendation to grant the property in favour of the appellants at an upset price of Rs. 3,25,875/-. However, the Deputy Commissioner by making a reference to a letter dated 31.7.2003 of the 2nd respondent, informed the 3rd respondent under a letter dated 12.08.2003 that in view of Government Notification dated 12.6.2003, there is no provision to grant the land to private parties and as the 2nd respondent has rejected the proposal, the property be disposed of as per the directions issued by the Government. The appellants were notified on 23.07.2004 about the rejection of the proposal by the Government. 1st respondent by its order dated 02.06.2003 stipulated the norms that are required to be followed in the matter of disposal of the lands belonging to the Local Bodies. In pursuance of the said Government Order, the Deputy Commissioner was requested to initiate further action for the sale of the property. In the meanwhile, the Project Director, Hassan District, under a letter dated 05.11.2004 directed the 3rd respondent to sell the property through public auction in accordance with the norms stipulated in the Government Order. The appellants were called upon under a letter dated 04.04.2005 to vacate the property and handover the same within a week, for being sold in public auction. The project Director, again under a letter dated 06.05.2005, directed the 3rd respondent to take steps to auction the property within 20 days, in pursuance of which, the 3rd respondent published notice both in the notice board and newspapers, proposing to sell the property in public auction on 30.06.2005.
4. Learned Single Judge, considering the record and the rival contentions, held that, the petitioners having indulged in a misadventure of 'suggestio falsi and suppressio veri,' must suffer the consequence. Further, having regard to the provisions contained in Section 72 of the Act and Rule 39 of the Karnataka Municipalities (Guidance of Officers, Grant of copies and Miscellaneous Provisions) Rules, 1966 and the decision in the case of Mohan, P. Sonu v. State of Karnataka and Ors. : 1992 (2) K.L.J. 245 and the fact that the 1st petitioner has committed fraud on power and misused the office for gaining the property, dismissed the writ petition with costs. Noticing that, the property has been made use of for more than two decades without authority of law, direction was issued to the 2nd respondent to hold an enquiry and the 3rd respondent to recover the damages.
5. Sri K.V. Narasimhan, Learned Advocate appearing for the appellants, contended that:
(a) The letter of the Deputy Commissioner for revision of the price concerning the property in question and the decision taken by the 3 rd respondent to fix the rate at Rs. 48/- per Sq. mtr, has not been appreciated by the Learned Single Judge.
(b) The action to grant the site having been taken long ago and having been acted upon, the question of applying the Government Notification as at Annexure-N would not arise. It was submitted that, the appellants were made to act in a particular way on the premise of certain situation as then existed and it could not have been taken away to their prejudice by application of the said Notification.
(c) The appellants being ready to pay the market price, the impugned action on the part of 2nd & 3rd respondents is unjustified.
(d) The finding of Learned Single Judge that the first appellant has acted illegally or in bad faith is erroneous, in view of the subsequent events, which have not been considered in the proper perspective.
(e) The direction issued and the cost imposed is not just and legal. Hence, interference in the matter is called for.
6. Sri Subhash, Learned Advocate appearing for the 3rd respondent, on the other hand, contended that:
(a) It is a case of deliberate suppression of material facts and withholding of documents by the appellants.
(b) There is no fair play on the part of the appellants and their conduct, disentitles them of any relief.
(c) The 1st appellant has misused his office and as a Chairman of the Finance Committee, has got the resolution passed under his chairmanship and by using the same, has got the resolution of the Municipal Council passed on the very same day, which was also with a specific condition that, the same is subject to the approval/sanction of the Government and that, the approval was not accorded by the 2nd respondent.
(d) That, there was non-compliance of Section 72 of the Act read with Rule 39 of the Rules, in not giving publicity to the proposal to dispose of the property belonging to the Local Authority and even otherwise, when the matter was published, there were objections from the public, which were considered by the Deputy Commissioner and decision was taken to reject the proposal, which was communicated to the appellants, which they did not question. On the other hand, they surreptitiously moved the authorities by superession of facts and attempted to gain the property illegally.
(e) The writ Court not being approached within a reasonable time of rejection and also with clean hands, disentitled the remedy.
7. Keeping in view, the pleadings of the parties, the records produced, the findings recorded by the Learned Single Judge and the rival contentions urged for consideration, the following points arise for our consideration:
i. Whether there is suppression of material information and the records by the writ petitioners/appellants?
ii. Whether there is misuse of power on the part of the 1st appellant, while he was the Municipal Councillor and Chairman of the Finance Committee of Holenarasipura Town Municipal Council, in the matter of obtaining the grant of the property?
iii. Whether the grant of property by the Town Municipal Council, Holenarasipura in favour of the appellants is in conformity with law?
iv. Whether in the facts and circumstances of the case, any interference with the order passed by the Learned Single Judge is called for?
Re. Point No. (i):
8. Indisputedly, 1st appellant was the Councillor in the 3rd respondent-Municipality. He was also the Chairman of the Finance Standing Committee when the first resolution to grant the property in favour of 'A.S. Parameshwaraiah and Brothers' was passed on 08.06.1983, It is in pursuance of the said resolution, the Municipal Council approved the aforesaid resolution, subject to the concurrence/approval of the Government and fixed the market price at Rs. 16/-per square meter. When the proposal of grant was published in the newspaper on 18.01.1989, there were objections from the public to the grant of the property on the ground that, the property would fetch much higher value than the one fixed by the Municipal Council. Deputy Commissioner conducted the spot inspection on 24.05.1989. A mahazar was drawn and the Municipal Council was directed to submit a report on the existing value of the property. Resolution passed by the Municipal Council was forwarded to the Deputy Commissioner, who in turn forwarded the same to the Director of Municipal Administration for approval. The said authority considering the nature of property, rejected the proposal and ordered to sell the property in public auction, which decision was communicated to the appellants. Though all these factors were well within the knowledge of the appellants, more particularly with the 1st appellant, not even a whisper has been made in writ petition with regard to the said aspects nor any records relating to the said proceedings were produced along with the writ petition. Had not the 3 rd respondent filed the statement of objections and produced the records relating to the proceedings which have taken place, the writ Court would have been deprived of knowing the truth and would have got misled. A person who approaches the Court under Articles 226/227 of the Constitution, must come with frank and full disclosure of facts. If there is any attempt to overreach the Court by withholding true information or material documents, which would have a bearing on the question, the writ petition is liable to be dismissed. The non-disclosure of the facts which were well within the knowledge of the appellants, certainly amounts to suppression of material facts. The appellants despite having the knowledge of the proceedings and the records, noticed supra, have indulged in act of suppression and hence, the Learned Single Judge is justified in observing that there is misadventure on the part of the writ petitioners of 'suppressio veri et suggestio falsi.'
Re. Point No. (ii):
9. Indisputedly, first appellant was the Muncipal Councillor and also the Chairman of Finance Committee of the 3rd respondent as on 8.6.83. The grant of the property to the appellants was first taken up in the Finance Committee meeting held on 8.6.83 which was chaired by the 1st appellant. A resolution was passed to grant the property of the 3rd respondent to 'M/s. A.S. Parameshwaraiah & Brothers'. On the very same day, the Municipal Council of Holenarasipur Town, passed the resolution approving the grant of property as resolved by its Finance Committee. If the 1st appellant had withdrawn himself from the proceedings of the Finance Committee and the Council meeting held on 8.6.83, there could have been no occasion to call it a misuse of power. Being the Chairman of the Finance Committee, 1st appellant had participated in the deliberations and the committee has passed the resolution for the benefit of the Chairman of the Committee and his brothers. The action is nothing but misuse of power for personal gain. 1st appellant has made use of his position in the 3rd respondent--Council to obtain the grant of property made in the name of himself and his brothers. Hence, the case attracts the observations made by the Apex Court in the case of R. Sai Bharathi v. J. Jayalalitha and Ors. : 2004 (2) SCC 9, wherein, ithas been held as follows:
Persons in public life are expected to maintain very high standards of probity, and particularly, when there is likely to be the even the least bit of conflict of interest between the office one holds and the acts to be done by such person, ought to desist himself from indulging in the same. Such standards of behaviour were scrupulously observed in the earlier days after independence, but those values have now dwindled and instances of persons holding high elective offices indulging in self-aggrandisement by utilising Government property or in distribution of the largesse of the Government to their own favourites or for certain quid pro quo are on the increase.
We have to strongly condemn such actions.
(emphasis supplied by us)
10. The material circumstances stated in the statement of objections filed by the 3rd respondent noticed supra clearly establish that, the 1st appellant has misused his position both as a Chairman of Finance Committee and as a Councillor of Town Municipal Council, Holenarasipura, in the matter of obtaining the grant of the property.
Re. Point No. (iii):
11. The mandate of Section 72(2) of the Act is that, any immovable property belonging to a Municipality is to be sold, leased or transferred the value of which exceeds Rs. 25,000/- (earlier Rs. 5000/-) on consideration, such property could be sold, leased or transferred only with the previous permission of the Government. Rule 39 provides the procedure. The Municipality is statutorily obligated to adopt the procedure prescribed under Rule 39, by which it can get maximum possible consideration for transfer of immovable property. The methodology which can be adopted for receiving maximum consideration would be the public auction which is expected to be fair and transparent. Public auction not only ensures fair price and maximum return, it also militates against any obligation of favourism on the part of the authorities, while giving grant for disposing of the property of Municipality, which is a public property. Apex Court in catena of decisions has held that, public auction as transparent means for disposal of public property. If a decision is required to be noticed, we can find one in the case of Haryana Financial Corporation v. Jagadamba Oil Mills 2003 (3) SCC 496. Apex Court has emphasized that, the public property owned by the State or an instrumentality of the State should be sold by public auction or by inviting tenders. When such a procedure is required to be adopted as a rule, not only to get highest price for the property but also to ensure fairness in the activities of the State and its instrumentalities, a Municipality or any other local authority shouldjustify the action assailed on the touchstone of justness, fairness, reasonableness and also as a reasonable prudent owner.
12. It is for achieving the said object, the legislature in its wisdom has enacted under Sub-section (2) of Section 72 of the Act, the mandatory procedure to be followed while disposing of the property of a Municipality. There has to be distinct demarcated approach by the Municipality / local body, when compared with a disposal of a private property. When a property of an authority is disposed of, there should be an invitation for participation in public auction to ensure transparency, obtain maximum return and to be free from any bias or discrimination.
13. In the case of Mohan P. Sonu v. State Of Karnataka and Ors. (supra) material facts of the case were that, adjacent to the appellant's property, there was a vacant land which belonged to a Municipal Council. An application was made for allotment, upon which, Town Municipal Council, passed a resolution and recommended that the land be granted to the appellant. The recommendation was forwarded to the State Government which accorded sanction under Section 72(2) of the Act, to allot the land to the appellant at the market price. A writ petition was filed by a resident of the town questioning the correctness of the Government order, contending that, the sale/grant was based on an undervaluation. Writ petition was allowed on the ground that there was violation of the procedure prescribed under Rule 39. Said order was questioned by the grantee/appellant, contending that, Rule 39 has no application when Section 72 applies and therefore, the grant of the land following the procedure prescribed under Section 72 was valid. Considering the said contention, it was held as follows:
4. We find it very difficult to uphold this submission. The object of Rule 39 has been stated in the Judgment of the Learned Single Judge of this Court in Jaichand v. Town Municipality, Robertsonpet and Ors. : 1976 (1) KAR.L.J. 30 We are in agreement with the view there expressed. The object of giving due publicity to the proposal to dispose of rights in respect of a property belonging to a local authority before it is so disposed of is quite obvious. The publication is necessary in order to realise the highest possible income and to prevent persons in-charge of the Municipal Council from disposing of the rights in favour of persons in whom they are interested. Disobedience of the provisions of Rule 39 cannot be overlooked. It is a mandatory rule intended to protect public revenue. Matters relating to public revenue cannot be dealt with arbitrarily and in the secrecy of an office. Whatever done in that regard should be done in accordance with law, which, in the instant case, requires due publicity to be given to dispose of the property in the prescribed manner.
5. Section 72 is a further safeguard. Publicity given to the proposal of Municipal Council to dispose of property rights under Rule 39 would attract offers from persons interested in acquiring such rights and these offers would enable the State Government to decide whether the sanction of the State Government that is contemplated by Section 72 should or should not be given. Rule 39 is, therefore, complementary to Section 72 and both operate together.
6. In this view of the matter, we must hold that the Learned Single Judge was right in coming to the conclusion that the alienation of the said land in favour of the appellant without following the proper procedure set out by Rule 39, was bad in law.
The stand taken by 3 rd respondent in its statement of objections which is supported by the record discloses that, the Town Muncipal
Council has not acted in conformity with law in the matter of grant of its property to the appellants. In the circumstances, the stand of the appellants that, they are ready to pay the market value of the property has rightly been not accepted by the Learned Single Judge.
Re. Point No. (iv):
14. The decision of the 3rd respondent to grant the property is based on the resolution as at Annexure-'R1', which is vitiated on account of participation of the 1st appellant in the proceedings, wherein, it was resolved to grant the property to himself and his brothers. Prior to the passing of said resolution by the Finance Committee or its approval by the Town Municipal Council, due publicity was not given and public were not made known of the land of the 3rd respondent being available for grant. Everything appears to have been done in secrecy by the 1st appellant for obtaining grant for himself and his brothers.
15. It is not in dispute that, the appellants have made use of the property for expansion of their business and have enjoyed the same for more than two decades on the basis of the vitiated proceedings, which were tailor made to suit the convenience of the appellants. Indisputedly, the property is a commercial property situated in a prominent locality of Holenarasipura. There being no grant in favour of the appellants in accordance with law and since the property has already been made use by the appellants on account of misuse of the power by the 1st appellant, Learned Single Judge was justified in directing the Director of Municipal Administration to conduct an enquiry with regard to the damages payable by the appellants for the illegal use of the public property and to recover the amount in a manner known to law. Starting facts have come to the notice of the Court, which was on account of misuse of office by the 1st appellant to obtain grant of the property belonging to the Municipal Council. Since it is a public property and revenue, in the circumstances of the case, directions issued by the Leanrned Single Judge cannot be found fault with.
16. Learned Single Judge has taken note of material facts & records and after correct appreciation of the same with reference to the relevant provisions of law, has passed the order dismissing the writ petition. Even after reconsideration of the record, we are unable to arrive at any different findings or conclusion in the matter. The impugned order is flawless.
For the foregoing reasons, the appeal, lacks merit and shall stand rejected. Ordered accordingly.