Case Briefs

Supreme Court: The Division Bench of L. Nageswara Rao and S. Ravindra Bhat*, JJ., dismisses the appeal initiated by the accused contractors in Integrated Housing and Slum Development corruption case. The Bench observed,

“The constructions, according to the reports, were sub-standard – in respect of 100 such houses, so severe that the units were unusable. The main objective of providing housing to 1206 eligible and deserving families remains unfulfilled despite expenditure of substantial amounts.”

Factual Fulcrum

The criminal Public Interest Litigations were filed by the respondents seeking directions to the Union of India, the State of Maharashtra, the Maharashtra Housing and Urban Development Authority (MHADA) and state officials to initiate criminal proceedings against the responsible officers and office bearers of Municipal Council, Naldurg and the contractors concerned for misappropriation of government funds in implementation of the housing scheme in the municipality.

An Integrated Housing and Slum Development Programme (IHSDP) was initiated by the Union Government through the State Government, under the “Jawaharlal Nehru National Urban Renewal Mission” for providing basic services to the urban poor including affordable prices, improved housing, water supply, sanitation, wherein the Maharashtra Government had appointed MHADA as the nodal agency.

The petitioners-respondents alleged that the quality of work carried out by the appellants was very poor and the officials (i.e. MHADA, municipality, etc.) did not inspect or supervise the work, and did not submit the quarterly reports as required under the scheme. It was submitted that the municipality diverted funds meant for the said development project, for other works as the observation made by technical team showed that the municipal council made an excess payment of Rs. 2,43,79,017/- to the contractors as compared to the work done. The allegations were also made with regard to failure to complete the project, and various other omissions were highlighted.

Findings of the High Court

Observing the dereliction of duties on the part of the authorities and certain other irregularities, the High Court had directed the Divisional Commissioner to take actions to its logical end as expeditiously as possible. Pursuant to the direction of the High Court and the report of the technical team the Collector directed the Municipal Council to recover the excess amount paid to the contractors, and blacklist them from Government work, to initiate criminal prosecution against the person(s) who had committed the irregularities, and lastly allot the repairable houses.

Analysis and Conclusion

Noticing that the appellants were all involved as persons or authorized individuals, acting on behalf of entities that were awarded the contract of construction and completion of the housing units, pursuant to the scheme, and that the spot inspection report alleged that they had not performed their task, the made the following observations:

Effect of Delay in Giving Reasoning of the Judgment by the High Court

Rejecting the first grievance of the appellants that the reasoning for the impugned judgment was given and published long after its operative portion was pronounced, i.e. a year and over three months which had prejudiced their case, the Bench stated that though it is clear that the High Court’s order, against which an aggrieved litigant has a right to approach in appeal, under special leave jurisdiction should contain reasons without which it would be well-nigh impossible to exercise that right of seeking special leave, to that extent, the appellants’ grievance was held to be justified, however, the Bench denied to hold that the absence of reasons struck at the legitimacy of the impugned judgment. The Bench stated,

“…prejudice stood off-set with the interim orders of this court, which recognized the piquancy of the situation, and directed stay of further action against the appellants.”

However, the Bench deprecated the High Court’s conduct in not furnishing reasons, either at the time of pronouncement of the operative part of the judgment, or before the commencement of the next working day (of the court).

Motive of PIL

The appellant’s next challenge to the impugned judgment emphasized the need to keep out “busybodies” who “have no interest in matters of public interest” on the ground that the petitioners-respondents had personal motive as they were former Councillors of the municipality. Rejecting the contention of the appellants, the Bench expressed,

“The cause espoused by the said individuals was undoubtedly one of public interest, because it concerned housing for the economically disadvantaged sections of society, in such great numbers.”

The scheme was meant to benefit thousands of persons, and over a thousand housing units were to be constructed and allotted to the beneficiaries. Therefore, in view of the inquiries and the reports, the Bench held that the initiation of public interest proceedings was justified even if the public interest litigants’ motives were ambiguous, or not immediately bona fide, that could not have led to dismissal of the writ petition, before the High Court.

Right to be Heard

Lastly, rejecting the main arguments of the appellants that criminal proceedings had been initiated against them even though they were not heard in the public interest proceedings, and that being adverse to them the judgment was vitiated on account of their non-participation, the Bench opined that the High Court disposed of the PILs directing the Divisional Commissioner to take appropriate steps to its logical end as expeditiously as possible, making it evident that the High Court did not by itself direct initiation of investigation nor did it direct registration of an FIR, hence, the appellants were not required to be on party array. The Bench emphasised,

“Whilst the reasoning for the impugned judgment was undoubtedly published after a long and unexplained delay, the effect of its operative directions was not to per se prosecute.”

Moreover, the constructions were sub-standard – in respect of 100 such houses, so severe that the units were unusable and dilapidated which rendered the main objective of providing housing to 1206 eligible and deserving families unfulfilled despite expenditure of substantial amounts.

Hence, rejecting the argument of the appellants that they ought to have been heard even before action was initiated as unsound, since, according to the decision of the Constitutional Bench in Lalita Kumari v. Govt. of U.P., if there are allegations with respect to commission of cognizable offences, brought to the notice of the police authorities, ordinarily an FIR has to be lodged.

Verdict

Lastly, noticing that High Court did not comment on whether the allegations were true or whether the submissions on behalf of the petitioners justified their conduct or omission, and that the FIR was registered by the police following the imperative nature of the law declared in Lalita Kumari where it was held that a preliminary enquiry ordinarily is to be eschewed whenever cognizable offences are reported, the Bench dismissed the appeals.

[Shaikh Ansar Ahmad Md. Husain v. State of Maharashtra, 2021 SCC OnLine SC 867, decided on 05-10-2021]

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Kamini Sharma, Editorial Assistant has put this report together 

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Appearance by:

For the Appellants: Shyam Divan, Senior Advocate


*Judgment by: Justice S. Ravindra Bhat 

Know Thy Judge| Justice S. Ravindra Bhat

Case BriefsHigh Courts

Himachal Pradesh High Court: A Division Bench of Tarlok Singh Chauhan and Sandeep Sharma, JJ., while dismissing the present petition upon lack of merits said, “A writ of Mandamus can be issued only when there is a legal right that the parties asking for the writ to compel the performance of statutory duties cast upon the authorities.”

 Background

The present petition was filed to seek a writ of mandamus, directing the respondents to consider the issue of creation of bifurcation and re-organization of new Gram Sabha and Gram Panchayat, in order to facilitate the development work of villages and ensure necessary facilities to all. Prayer was also sought to grant the said writ on the ground that the population of villages as mentioned under the petition, exceeded 2700 and proper regulation/management is only permissible if the aforementioned residents are uniformly divided.

 Observation

The Court reproduced Section 3 of the Himachal Pradesh Panchayati Raj Act, 1994, which reads as hereunder;

Section 3 Declaration of Sabha area -(1) The Government may, by notification, declare any village or group of contiguous villages with a population of not less than one thousand and not more than five thousand to constitute one or more Sabha areas for the purposes of this act and also specify its headquarter:

Provided that in a Scheduled area the Government may by order declare any village or group of contiguous villages with a population of less than one thousand to constitute a

Sabha area:

Provided further that the Government may, after having due regard of the geographical location, lack of means of transport and communication and administrative convenience, declare an area comprising a village or group of contiguous villages having a population either less than one thousand or more than five thousand to constitute a Sabha area.

(2) The Government may, at the request of the Gram Sabha concerned or otherwise, and after previous publication of a proposal by a notification, at any time –

(a) Increase any Sabha area by including within such Sabha area any village or group of villages

(b) Diminish any Sabha area by excluding from such Sabha area any village or group of villages

(c) Alter the headquarter of any Sabha area

(d) Alter the name of any Sabha area

(e) Declare that any area shall cease to be a Sabha area

2-A When on account of the reason that the Sabha area is, during the term of the Gram Panchayat, increased or diminished or ceased under sub-section (2), the increase or diminution or cessation of the Sabha area shall not affect the term of the office bearers of Gram Panchayat, till the expiration of the duration of the Gram Panchayat specified in sub-section (1) of section 120 or its dissolution under section 140 of this Act.

(3) If the whole of the Sabha area is included in a municipality, the Sabha area shall cease to exist and its assets and liabilities shall in the manner prescribed be disposed of.

Reliance was further placed on other recent judgments by this Court, in CWP No. 4602 of 2020 titled Ratti Ram v. State of H.P., CWP No. 4118 of 2020 titled Bihari Lal v. State of H.P. and CWP No. 3999 of 2020 titled Joginder Singh decided on 16-12-2020.

Decision

Dismissing the present petition, the Court said, “…the issue, as raised in this petition, is not justifiable as no mandamus can be sought for bifurcation of Gram Panchayat(s) under Article 226 of the Constitution at the instance of an individual.”[Dharam Pal v. State of HP, 2020 SCC OnLine HP 3094, decided on 18-12-2020]


Sakshi Shukla, Editorial Assistant has put this story together

Case BriefsHigh Courts

Chhatisgarh High Court: P. Sam Koshy, J. quashed the impugned orders/resolutions being contrary to law.

The facts of the case are that the petitioner company is the largest coal-producing company of India having 100% shares vested with the Government of India, having mines spread over different districts of the State. The State Government in the exercise of powers conferred under the relevant Act has framed Rules i.e. “Terminal Tax (Assessment and Collection) on Goods Exported From MP/CG Municipal Limit Rules, 1996 to regulate the assessment and collection of terminal tax on goods, which shall be exported from within the limits of the Municipal Corporation, the Municipal Council and the concerned Nagar Panchayat. The Schedule appended to the rules prescribes the rate at which the terminal taxes is to be levied as also the maximum rate leviable. The respondents-Municipal Corporation, Municipality, Nagar Panchayat have purportedly enhanced the terminal tax exercising the powers under Section 133 of the Municipal Corporation Act of 1956 or Section 355 read with Clause 16 of Sub-section (1) of Sections 127 & 129 of the Municipal Act of 1961. Hence the instant petition was filed challenging the said enhancement.

Counsel for the petitioners, Shailendra Shukla submitted that the authorities are not empowered to issue such orders in the teeth of the Rules framed by the State Government in 1996, under which there is already a schedule prescribed with the maximum rate also prescribed. He further submitted that any change to the rate of tax would have been only by the State Government that too by amending the provisions of Rules of 1996 and the schedule appended therein. He further stated that the Constitution of India by the 74th amendment added Article 243-X providing power to impose tax and raise funds.

Counsel for the respondents, B.D. Guru opposed the contentions highlighting the different provisions of the Municipal Corporation Act as also the Municipal Act.

The Court relied on a Supreme Court judgment titled ACC Ltd. v. State of M.P., (2005) 5 SCC 347, and held that the Municipality is only entitled to recover the export tax at the rate prescribed by the State Government and not as claimed by the municipality. It cannot impose a tax on its own as the imposition is always subject to the approval of the State Government.

In view of the above, petition is allowed and impugned orders set aside. [South Eastern Coalfields Ltd., v. State of Chhattisgarh, 2020 SCC OnLine Chh 148, decided on 17-07-2020]


*Arunima Bose, Editorial Assistant has put this story together

Case BriefsHigh Courts

Jharkhand High Court: The instant writ petition entertained by Sujit Narayan Prasad, J. was filed under Article 226 of the Constitution of India for quashing the Memo issued by the respondent whereby the water reservoirs in the urban area has been directed to be handed over in favor of the municipality.

The petitioner had contended that certain water reservoirs had been settled in favor of the petitioner for the year 2016-17 and in terms of the contract the petitioner carried out the fishing work in the aforesaid tanks but all of a sudden the impugned decision was taken on by which the tank was transferred in favor of the municipality therefore, the ground was raised that when the terms and conditions of the contract was in subsistence during the course when the impugned order was passed, the same cannot be done in the course of subsistence period of the contract, hence the impugned order was not sustainable in the eyes of law.

Counsel for the State-respondent Gautam Kumar, submitted that the impugned decision was taken in terms of the Cabinet decision which was issued by the appropriate authorities and the said Cabinet decision was taken in pursuance to the provision of Section 126 of the Jharkhand Municipal Act, 2011 wherein the provision was made about vesting of property which includes public tanks/reservoirs also, therefore, if the Cabinet took a decision to follow the statue and in terms thereof any decision which was taken, the same cannot be interfered with.

The Court observed that the tanks in question were settled in favor of the petitioner in the year 2016-17 by the order in that regard by the competent authority but in course of subsistence period of the contract the impugned decision was taken to transfer the tanks in favor of the municipality by taking aid of the decision by the State of Jharkhand. It further found no dispute about the settled position of law that if any Act has been acted upon, it was to be followed in its strict sense and there cannot be any deviation otherwise it will be said that the rule of law was not prevailing. It held, “It is a settled legal proposition that Article 14 of the Constitution is not meant to perpetuate illegality or fraud, even by extending the wrong decisions made in other cases. The said provision does not envisage negative equality but has only a positive aspect.” Hence, the petition was dismissed.[Somath Haldar v. State of Jharkhand, 2019 SCC OnLine Jhar 683, decided on 13-06-2019]

Case BriefsSupreme Court

Supreme Court: In the matter where in all 869 leases were alleged to be given by the Municipality to different persons without authority of law and on which constructions have been put up without any formal lease executed in favour of concerned persons/occupants nor the approval of the State Government in terms of Section 65 of Gujarat Municipality Act, 1963, was obtained, the Court said that municipality is a trustee and must, therefore, ensure that public streets are not encroached upon.

The Bench of T.S. Thakur, CJ and A.M. Khanwilkar, J held that the fact that a resolution has been passed by the Executive Committee of the Municipality or a letter of allotment is issued by the Municipality, cannot legitimize the occupation of a public property in absence of a formal lease deed executed in that behalf and more so in respect of a land falling within the public street no right can enure in favour of the allottees/occupants of the structure on a public property, in respect of which no formal lease deed has been executed and that too when no prior approval of the State Government for such allotment and grant of lease has been obtained by the Municipality.

It was alleged that he direction given by the Gujarat High Court to take possession of the concerned property and remove illegal occupants therefrom and to demolish the unauthorized structure was in derogation of the Section 258 of the Gujarat Municipalities Act, 1963. Rejecting the said contention the Court said that municipality is obliged to restore the public property as it had originally existed, if such direction is issued by the Collector and hence, the High Court’s direction is not in derogation of the said provision; and particularly when the Collector is expected to exercise that power by following due process.

Directing the removal of the encroachment, the Court said that considering the fact that some of the structures may be in existence for quite some time and have been tolerated for all these years, it may warrant a humane approach to be taken by the State Authorities. For that the State Government must evolve a comprehensive policy, if already not in existence; and thereafter the Collector may proceed to take action in respect of such unauthorized occupation and encroachment on the public property.

However, if a new policy is required to be formulated, it may provide for rehabilitation of the unauthorized occupants to alternative location, if the unauthorized structure in occupation of a given person has been tolerated for quite some time or has been erected before the cut off date to be specified in that regard. If the structure has been erected after the cut off date, no right of rehabilitation would enure to the occupant(s) of the unauthorized structure(s) on the public property; and such structure(s), in any case will have to be removed in terms of the direction given by the High Court. The State Government may formulate an appropriate policy within six months from today, if already not in existence. [Asikali Akbarali Gilani v. Nasirhusain Mahebubbhai Chauhan, 2016 SCC OnLine SC 1122, decided on 07.10.2016]