Ayanur Grama Panchayath Vs. State of Karnataka By its Secretary, The Department of Panchayaths Raj, Vidhana Soudha, Dr. Ambedkar Road, Bengaluru Others - Court Judgment

(Prayer: This Writ Petition is Filed Under Articles 226 And 227 of the Constitution of India Praying to Direct the R-2 to Consider the Representaions Filed by the Petitioner as per Annexs-D and E to pass appropriate orders as Contemplated Under Section 118(2) of the Karnataka Grama Swaraj and Panchayath Raj Act, 1993 for effecting Division/Transfer of Panchayaths Fund, Properties, Debts and Obligations between the Ayanur and Kohalli Grama Panchayaths.

This Writ Petition Coming on for orders This Day, the Court Made the Following)

1. The present case brings-forth a very ugly and shameful instance of two public bodies, namely, Grama Panchayaths fighting against each other for allocation of their respective assets and funds which they are supposed to have, to generate the public revenue to undertake the developmental works in accordance with law and subject to the Karnataka Gram panchayath raj Act, 1993 ( Act of 1993 for short). The Petitioner-Ayanur Grama Panchayath. Ayanur, Shivamogga Taluk, Shivamogga District, is pitched against the respondent No.3-Kohalli Grama Panchayath, Kohalli, Shivamogga Taluk, Shivamogga District, which upon bifurcation was separated from the petitioner Panchayath itself.

2. Aggrieved by the auction of certain right of use of public land of the respondent No.3-Grama Panchayath to be given on license basis to the various persons to carry on their trade or commercial establishments for temporary purpose, this writ petition has been filed.

3. These two Grama Panchayaths i.e., the petitioner and the respondent No.3 were bifurcated and made two separate independent Grama Panchayaths under the Notification Annexure-A dated 4.2.2015. The case set-up by the petitioner in the present writ petition is that the respondent No.2-Deputy Commissioner, Shivamogga District failed to pass appropriate orders for vesting of the fund and other properties in the aforesaid two bifurcated Grama Panchayaths as required under Section 118(2) of the Act of 1993 and in the absence of such division of assets and demarcation of the area, the market place notified for licensing by the respondent No.3-Kohalli Grama Panchayath would obviously affect the chances of getting revenue by the petitioner Grama Panchayath and, therefore, it is prayed in the writ petition that such auction proceedings be cancelled and no further proceedings in pursuance of such auction proceedings be undertaken by the respondent.

4. The respondent No.3 has filed an affidavit in response to the writ petition sworn to by the affidavit of Smt. Nagarathnamma, working as President of the said Kohalli Grama Panchayath and it is stated in paragraph 5 of the said affidavit that the said division of the original Ayanur Grama Panchayath into two was undertaken on the basis of a public demand and the villagers belonging to the particular Grama Panchayath. Such divisions were duly notified and respective villages were attached with the two sub-divided Grama Panchayaths. Annexure-A Notification itself gives the details of the respective villages attached with the said divided two Grama Panchayaths. It is further stated in the said affidavit that the auction of the market place to be given on license basis to the various persons is admittedly within the territorial area of the village Kohalli which falls within the territorial jurisdiction of the respondent No.3-Kohalli Grama Panchayath and no prejudice can be said to have been caused to the petitioner-Ayanur Grama Panchayath on account of this auction and the public revenue which was likely to be earned by this auction has been unnecessarily challenged by the petitioner-Grama Panchayath.

5. It was also contended before the court that, after the Notification of the sub-divided Grama Panchayaths vide Annexure-A dated 4.2.2015, the first representation made by the petitioner to the Deputy Commissioner for demarcation of the funds and the assets in terms of Section 118(2) of the Act, Annexure-C was made only on 8-3-2016 after a lapse of one year from the date of Notification on 4.2.2015. This was followed by another representation in this regard to the Deputy Commissioner vide Annexure-D dated 1.4.2016 and then Annexure-E dated 5.4.2016 and then the present writ petition was filed by the petitioner in this Court on 11.4.2016 itself and by an ad-interim order on 12.4.2016 the co-ordinate Bench of this Court, while directing the Government Advocate to take notice, further directed that the auction is permitted but confirmation of the same is stayed for a period of four weeks.

6. Today, the matter has come up before this Court on IA No.1/2016 filed for vacation of the aforesaid interim order by the respondent No.3.

7. This Court heard detailed arguments on the entire case itself and is, therefore, inclined to dispose of this writ petition at this stage.

8. Section 118(2) of the Karnataka Gram Panchayath Raj Act, 1993 reads as under:

Section 118: Effect of division of panchayat area: (1) xxxxxx

(2) When the new panchayat areas are declared under this Section so much, of the Gram Panchayat fund and other properties vesting in the existing Gram Panchayat shall vest in and such portion of the debts and obligations shall be transferred to the Gram Panchayat established or the Administrator appointed under this Section as the Deputy Commissioner may be order direct.

9. Learned counsel for the petitioner Mr. G. Lakshmeesh Rao, contended that since the respondent No.2-Deputy Commissioner failed to pass appropriate orders despite representations filed before him prejudice was caused to the petitioner-Ayanur Grama Panchayat and in the absence of such an order which was required to be passed by the respondent No.2-Deputy Commissioner, the petitioner-Panchayat Samithi is likely to be deprived of its revenue being unaware of its assets and funds which were required to be demarcated and bifurcated by the Deputy Commissioner in terms of Section 118(2) of the Act. Hence, the present writ petition is filed by the petitioner.

10. Per contra, learned Government Advocate and learned counsel for respondent no.3 have opposed these submissions and urged that, as far as the bifurcation of the Panchayath territorial area is concerned, that has been duly notified in Annexure-B itself and therefore the territorial bifurcation area is not at all in dispute. However, as far as the bifurcation of the Grama Panchayath funds and other existing property vesting in the existing Grama Panchayath namely Ayanur Grama Panchayath into two is concerned, the petitioner and the respondent No.3-Grama Panchayath respectively were to produce the relevant records of the funds and properties asking for bifurcation in terms of Section 118(2) of the Act and thereafter the Deputy Commissioner only could be expected to pass an appropriate order.

11. Mr. V. Sreenidhi, learned Government Advocate appearing for the respondent-State also submitted that, both the Grama Panchayaths can even now be relegated before the Deputy Commissioner to pass appropriate orders in accordance with law.

12. Having heard the learned counsels for the parties, this Court is indeed pained and surprised at the litigation brought before this Court raising an inter se dispute between the two public bodies elected by the public of the respective areas and wasting the public time and money for a simple cause which could have very well been raised and has in fact been raised before the Deputy Commissioner seeking the bifurcation of the funds and the properties upon the bifurcation of the Grama Panchayath into two of the originally existing Ayanur Grama Panchayath under the Notification dated 4.2.2015.

13. It is like one arm of the same body fighting against the other arm, if an example of human body is taken into consideration. It is indeed unfortunate that the petitioner Grama Panchayath chose to invoke the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India for seeking a mandamus direction to the Deputy Commissioner to pass appropriate orders under Section 118(2) of the Act, which otherwise also he was expected to do and the petitioner had already approached him for that purpose, but without pursuing the representations of the petitioner before the respondent No.2-Deputy Commissioner, the said Panchayat Samithi chose to approach this Court for seeking such mandamus direction. The representations made by the petitioner Panchayath Samithi to the Deputy Commissioner were made in the recent past only on 8.3.2016 in the first instance followed by the representations dated 1.4.2016 and 5.4.2016 and the present writ petition was filed on 11.4.2016, just after a week thereof.

14. There is no averment in the writ petition that in various representations, that the petitioner viz. Panchayath Development Officer of the Panchayath Samithi personally approached the respondent No.2 Deputy Commissioner to pass such orders and the necessary details were already furnished. Therefore, he sought to consider these representations in accordance with law. It came to the Court for a cause which did not really arise to it at all. The auction of the right to use market place or land of the respondent No.3-Grama Panchayath is, admittedly, within the territorial jurisdiction and area of the respondent No.3 Kohalli Grama Panchayath only. If the autonomy or the independence of the two Grama Panchayaths after their bifurcation was to be respected, which the petitioner Ayanur Grama Panchayath was bound to do. Actually no cause of action could said to have arisen to the petitioner Ayanur Grama Panchayath at all to stall or seek cancellation of such auction proceedings before this Court coupling such prayer with a prayer to the Deputy Commissioner to pass appropriate orders in terms of Section 118(2) of the Act.

15. The auction of the market area under Annexure-J, the newspaper publication, containing the notice inviting tenders published on 02.04.2016 was for the village Kohalli, which admittedly, was included in the territorial jurisdiction of respondent No.3-Kohalli Panchayath Samithi under Annexure-A, Notification dated 04.02.2015.

16. The learned counsel for the petitioner also submitted that even the geographical division of villages and their distribution amongst two panchayath Samathies upon their bifurcation vide Notification dated 04.02.2015 was also ill-conceived. However, there is neither any ground raised for questioning the demarcation of the areas in the Notification, Annexure-B, nor, as learned opposite counsel rightly pointed out, is related to the relief claimed in the present writ petition.

17. It is indeed unfortunate that for the redressal of such a grievance, the petitioner has filed the present writ petition not only seeking directions against the other Government authority like the Deputy Commissioner of Shivamogga District, but also its own counter-part namely respondent No.3-Kohalli Grama Panchayath. The apprehension of the petitioner-Panchayath Samithi that without the appropriate orders under Section 118(2) of the Act being passed by the Deputy Commissioner, there would be loss of revenue to the pre-existing Grama Panchayath namely, Ayanur Grama Panchayath, is absolutely unfounded.

18. In the demarcated area vested in the petitioner-Grama Panchayath itself, it definitely has the freedom to explore the sources of raising public revenue under the permissible levies as per the provisions of the Act. Even without waiting for the bifurcation of the funds and assets under the order of the Deputy Commissioner under Section 118(2) of the Act, nothing prevented the petitioner-Grama Panchayath from raising its own revenues from the permissible levies in accordance with law. The very fact that after their bifurcation under Notification dated 4.2.2015, both the petitioner and respondent NO.3 have been working independently shows that even in the absence of orders under Section 118(2) of the Act, they have been carrying on their affairs, up till now. Therefore, what prompted the petitioner to file this writ petition is not palatable.

19. It is true that the provisions of Section 118(2) of the Act enumerates the consequences which have to ensue or follow upon the division of Panchayath area notified and the Deputy Commissioner is required to pass appropriate orders vesting the funds and other properties vesting in the existing Grama Panchayath upon such bifurcation or division, but passing of such order by the Deputy Commissioner would naturally require the sub-divided Grama Panchayaths to file their requisite claims along with the details of the properties and funds, so that appropriate orders in that regard may be passed. It is not purely an administrative order to be passed by the Deputy Commissioner suo motu on his own, but such division of funds and other properties would require application of mind by the Deputy Commissioner after giving an opportunity of hearing to the concerned Grama Panchayaths, who can produce the relevant material and evidence before the said authority. Therefore, passing of the order by the Deputy Commissioner is not an automatic or natural consequence of the sub-division of Grama Panchayaths under Section 118(2) of the Act, but that requires application of mind by the Deputy Commissioner to the relevant facts and the evidence placed before him.

20. Invoking of the jurisdiction of this Court at this stage by the petitioner was neither necessary nor called for and the petitioner-Grama Panchayath ought to have approached the respondent No.2-Deputy Commissioner and pursued its representations to its logical end.

21. As noted above, the representations filed by the petitioner-Panchayath Samithi are only of the recent past and that too after waiting for approximately one year or more, after their sub-division on 4.2.2015, the petitioner-Panchayath has filed its representation only on 8.3.2016 followed by two representations dated 1.4.2016 and 5.4.2016.

22. The aforesaid type of litigation between the two wings of the same institution namely, Panchayath Raj Institution, which are created and intended to decentralize the powers and distribution of the same down the line up to village level, cannot be disturbed by such unfortunate litigation brought at the instance of a public body wasting the public time and money in the process. The same deserves to be deprecated.

23. The Hon ble Supreme Court faced with almost a similar circumstance in disputes between the public sector undertakings in the case of Oil and Natural Gas Commissioner and another-vs-Collector of Central Excise reported in 1995 Supp (4) Supreme Court cases 541 had to observe in the following terms;

1. We are happy to find that the Cabinet Secretary has taken the appropriate initiative as indicated in our order dated 11-09-1991 and has reported to us that the dispute between the Government Department and the public sector undertaking of the Union of India has been settled. In that view of the matter no further action is necessary on the petition.

2. In this report the Cabinet Secretary has stated:

I would also like to state that the Government respects the views expressed by this Honourable Court and has accepted them that public undertakings of Central Government and the Union of India should not fight their litigation in Court by spending money on fees on counsel, court fees, procedural expenses and wasting public time. It is in this context that the Cabinet Secretariat has issued instructions from time to time to all Departments of the Government of India as well as to public undertakings of the Central Government to the effect that all disputes, regardless of the type, should be resolved amicably by mutual consultation or through the good offices of empowered agencies of the Government or through arbitration and recourse to litigation should be eliminated.

3. We direct that the Government of India shall set up a Committee consisting of representatives from the Ministry of Industry, the Bureau of Public Enterprises and the Ministry of Law, to monitor disputes between Ministry and Ministry of Government of India. Ministry and public sector undertakings of the Government of India and public sector undertakings in between themselves, to ensure that no litigation comes to Court or to a Tribunal without the matter having been first examined by the Committee and its clearance for litigation. Government may include a representative of the Ministry concerned in a specific case and one from the Ministry of Finance in the Committee. Senior officers only should be nominated so that the Committee would function with status, control and discipline.

4. It shall be the obligation of every Court and every Tribunal where such a dispute is raised hereafter to demand a clearance from the Committee incase it has not been so pleaded and in the absence of the clearance, the proceedings would not be proceeded with.

24. The said order came to be further clarified by the Hon ble Supreme Court in Oil and Natural Gas Commission Vs. Collector of Central Excise reported in (2004) 6 SCC 437 in the following terms and it was observed that appropriate alternative remedies should be availed by them before approaching the Court of law.

1. The order of this Court dated 11^th October, 1991 in Civil Appeal Nos.2058-59 of 1988 in the matter of the setting-up and functioning of the High Power Committee for resolving disputes between Union of India on the one had and its Public Sector Undertakings on the other, requires some clarifications so that some mis-conceptions arising out of the memo of the Cabinet Secretariat referred to in the course of the said order, are removed.

2. The relevant portion of the memo referred to in the course of this Court s order dated 11th October, 1991 reads:

It is in this context that the Cabinet Secretariat has issued instructions from time to time to all Departments of the Government of India as well as to Public Undertakings of the Central Government to the effect that all disputes, regardless of the type, should be resolved amicably by mutual consultation or through the good offices of empowered agencies of the Government or through arbitration and recourse to litigation should be eliminated.

3. The purpose of setting up this High Power Committee was to ensure that as far as possible, the controversies between a Ministry and a Ministry of the Government of India, a Ministry and a Public Sector Undertaking of the Government of India and between Public Sector Undertakings themselves are resolved by recourse to the High Power Committee and that time consuming and expensive litigation is avoided.

4. There are some doubts and problems that have arisen in the working out of these arrangements which require to be clarified and some crease ironed out. Some doubts persist as to the precise import and implications of the words and recourse to litigation should be avoided . It is clear that order of this court is not to effect that-nor can that be done-so far as Union of India and its statutory corporations are concerned, the statutory remedies are effaced. In deed the purpose of the Constitution of the High Power Committee was not to take away those remedies. The relevant portion of the order reads.

We direct that the Government of India shall set up a Committee consisting representatives from the Ministry of Industry, the Bureau of Public Enterprises and the Ministry of Law, to monitor disputes between Ministry and Ministry of Government of India; Ministry and Public Sector Undertaking of the Government of India and Public Sector Undertakings in between themselves, to ensure that no litigation comes to Court or to a Tribunal without the matter having been first examined by the Committee and its clearance for litigation. Government may included a representative of the Ministry concerned in a specific case and one from the Ministry of finance in the Committee. Senior Officers only should be nominated so that the Committee would function with status, control and discipline.

(emphasis supplied) It is abundantly clear that the machinery contemplated is only to ensure that no litigation comes to Court without the parties having had an opportunity of conciliation before an in-house Committee.

It is also clarified that even the pending matters before any court or Tribunal should also be the subject matter at the deliberations of the High Power Committee. All the matters pending as on today either instituted by the Union of India or any of the Public Sector Undertakings shall within one month from today be referred by the appellant or the petitioner, as the case may be, to the High Power Committee. The High Power Committee will deal with these matters most expeditiously and endeavour to resolve the matters.

5. Accordingly, there, should be no bar to the lodgment of an appeal or petition either by the Union of India or the Public Sector Undertakings before any court or tribunal so as to save limitation. But, before such filing every endeavour should be made to have the clearance of the High Power Committee.

However, as to what the court or tribunal should do if such judicial remedies are sought before such a court or Tribunal, the order of 11^th October 1991 clarifies:

It shall be the obligation of every Court and every Tribunal where such a dispute is raised hereafter to demand a clearance from the Committee in case it has not been so pleaded and in the absence of the clearance, the proceedings would not be proceeded with.

6. Wherever appeals, petitions etc, are filed without the clearance of the High Power Committee, so as to save limitation, the appellant or the petitioner as the case may be, shall within a month from such filing, refer the matter to the High Power Committee with prior notice to the Designated Authority in Cabinet Secretariat of Government of India authorized to receive notices in that behalf. Sri. K.T.S. Tulsi, learned Additional Solicitor General, stated that in order to coordinate these references of the High Power Committee the Government proposes to nominate the Under Secretary (Coordination) in the Cabinet Secretariat as the nodal authority to coordinate these references. The reference shall be deemed to have been made and become effective only after a notice of the reference is lodged with the said nodal authority. The reference shall be deemed to be valid if made in the case of the Union of India by its Secretary, Ministry of Finance Department of Revenue, and in the case of Public Sector Undertakings by its Chairman, Managing Director or chief Executive, as the case may be. It is only after such reference to the High Power Committee is made in the manner indicated that the operation of the order or proceedings under challenge shall be suspended till the High Power Committee resolves the dispute or gives clearance to the litigation. If the High Power Committee is unable to resolve the matter for reasons to be recorded by it. It shall grant clearance for the litigation.

7. The High Power Committee shall submit a half yearly report-instead of quarterly report as earlier indicated to this Court as to the number of matters referred to it and the manner in which they were dealt with and disposed of. The report for the half-year ended 31st December, 1993 shall be lodged before 31st January, 1994 and for every half year thereafter within one month of the expiry of the half year.

I.A.Nos.3 and 4 stand disposed of.

This order will be read as part of and supplementary to the order dated 11th October, 1991.

25. Similar is the position in the present case where this Court has to deal with and after hearing the learned counsels at length, while putting off this litigation and relegating back the petitioner before the Deputy Commissioner, it deserves to be said that these kind of writ petitions by the public bodies pitched against other public bodies cannot be appreciated by this Court at all. The letter and spirit of the aforesaid extracted portion from the judgments of the Supreme Court deserves to be extended even to the Panchayath Raj institutions including the petitioner and the respondents in the present case. Therefore, the Chief Secretary or the Principal Secretary of Panchayath Raj Department and for all such other Departments and Public Institutions should issue the appropriate guidelines in this regard.

26. This Court would have imposed exemplary costs also on the petitioner-Ayanur Panchayath Samithi for filing such unnecessary and frivolous litigation before this Court, but in view of the fact that the petitioner is a public body operating at the village level and is supposedly not manned by very well qualified people, appreciating the need of filing the litigation in proper perspective before the Constitutional Courts, this Court is not imposing any costs at this stage, while dismissing the writ petition.

27. This writ petition is accordingly dismissed.

28. Copy of this order be endorsed to the Chief Secretary and Principal Secretary of Panchayath Raj Department for information and needful.