Skip to content


D. Thangapandi and Others Vs. The State of Tamil Nadu, Rep. by its Principal Secretary to Government, Department of Municipal Administration and Water Supply, Chennai and Others - Court Judgment

LegalCrystal Citation
CourtChennai Madurai High Court
Decided On
Case NumberW.P (MD) Nos.16217, 22960 & 24461 of 2016 & C.M.P. (MD) Nos. 11864 to 11866, 16431 to 16433 & 17660 of 2016
Judge
AppellantD. Thangapandi and Others
RespondentThe State of Tamil Nadu, Rep. by its Principal Secretary to Government, Department of Municipal Administration and Water Supply, Chennai and Others
Excerpt:
.....1971 - section 22 -method of allotment - petitioner sought to direct second respondent to allot 51 fruit shops to members of petitioner's society at newly constructed wholesale fruit market near prescribed palace, by following fair method of allotment within time period stipulated by this court court held - petitioners contention that allotment of 240 shops to members of third and fourth respondent will monopolize fruit trade in prescribed place was also not acceptable for simple reason that members of third and fourth respondents, who are allotted of shops have been trading fruits for decades together in simmakkal and yanaikkal area and thus almost all license holders are shifted to another place to ease traffic congestion and for convenience of public - second respondent..........the respondent no.2 to allot 51 fruit shops to the petitioners at the newly constructed wholesale fruit market near mattuthavani, madurai, by following a fair method of allotment within the time period stipulated by this court. prayer in w.p.(md) no.22960 of 2016 : writ petition filed under article 226 of the constitution of india praying to issue a writ of certiorarified mandamus, to call for the records pertaining to the impugned order in ma.va.3/037969/16 dated 02.11.2016 delivered on 24.11.2016 on the file of the respondent no.2 and quash the same asillegal and consequently for a direction, directing the respondent no.2 to allot 51 fruit shops to the members of the petitioner's society at the newly constructed wholesale fruit market near mattuthavani, madurai, by following a fair.....
Judgment:

(Prayer: in W.P.(MD) No.16217 of 2016 : Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorarified Mandamus, to call for the records pertaining to the impugned Memorandum of Understanding dated 17.04.2015 on the file of the respondent No.2 and quash the same as illegal and consequently for a direction, directing the respondent No.2 to allot 51 Fruit Shops to the petitioners at the newly constructed wholesale fruit market near Mattuthavani, Madurai, by following a fair method of allotment within the time period stipulated by this Court.

Prayer in W.P.(MD) No.22960 of 2016 : Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorarified Mandamus, to call for the records pertaining to the impugned order in Ma.Va.3/037969/16 dated 02.11.2016 delivered on 24.11.2016 on the file of the respondent No.2 and quash the same asillegal and consequently for a direction, directing the respondent No.2 to allot 51 Fruit Shops to the Members of the Petitioner's Society at the newly constructed wholesale fruit market near Mattuthavani, Madurai, by following a fair method of allotment within the time period stipulated by this Court.

Prayer in W.P.(MD) No.16217 of 2016 : Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Mandamus, to direct the respondent Nos.1 and 2 to conduct public auction for the allotment of 240 fruit shops at the newly constructed wholesale fruit market near Mattuthavani, Madurai, by following a fair method of allotment within the time period stipulated by this Court.)

Common Order:

P. Kalaiyarasan, J.

1. Three writ petitions have been filed viz., (i)W.P.(MD) No. 16217 of 2016 by 51 petitioners, seeking to call for records pertaining to the impugned Memorandum of Understanding dated 17.04.2015 on the file of the Commissioner of Madurai Corporation and quash the same, (ii) W.P.(MD) No.22960 of 2016 by Vaigai Pala Commission Vanigargal Nala Sangam, seeking to call for records pertaining to the impugned order of the Commissioner of Madurai Corporation dated 02.11.2016, whereby, the request of the Sangam for allotment of shops to the members was rejected and quash the same and (iii) W.P.(MD) No.24461 of 2016 filed by an individual as Public Interest Litigation, seeking direction to the government as well as the Commissioner of Madurai Corporation, to conduct public auction for the allotment of 240 fruit shops at the newly constructed wholesale fruit marker near Mattuthavani, Madurai, by following a fair method of allotment, by way of issuance of writ of certiorarified mandamus in the first two writ petitions and mandamus in the third writ petition.

2. The issues involved in all the three writ petitions are one and the same with respect to the allotment of shops at the newly constructed wholesale fruits market near Mattuthavani, with reference to Memorandum of Understanding dated 17.04.2015 between the Madurai Corporation as one Party and Madurai Pazha Commission Vanigargal Sangam and Simmakkal Pazhakkadai Motha Viyabarigal Sangam as the second party, who have been arrayed as respondents in all the three writ petitions. Therefore, common order is passed in these writ petitions.

3. The gist of the case of the writ petitioners in all the writ petitions are as follows:

3.1. In Madurai Corporation, there are wholesale fruit markets at Yanaikkal area in Simmakkal, which is in the heart of the city near Meenakshi Amman Temple. The second respondent Madurai Corporation proposed to shift the Simmakkal fruit market to the outskirts of Madurai at Mattuthavani, so as to eradicate the existing traffic congestion. As per the said proposal, it has been decided to construct 240 shops at Mattuthavani to accommodate all those wholesale fruit sellers having shops at Yanaikkal area.

3.2. Several persons are engaged in wholesale fruit trading at Simmakkal wholesale fruit market without obtaining due permission from the second respondent Corporation. They are entirely depending upon the fruit shops to meet out family needs and it is their only source of income. But, to the dismay of many licensed holders and poor small traders in Simmakkal, the second respondent Corporation has arbitrarily decided and entered into a Memorandum of Understanding with Madurai Pazha Commission Vanigargal Sangam and Simmakkal Pazhakkadai Motha Viyabarigal Sangam on 17.04.2015. The second respondent has arbitrarily decided to allot shops for the members of the above two Sangams without even verifying the details of the persons, who are having shop presently at Simmakkal. The above Sangams have collected huge sum of money as bribe from the members of the Sangams and decided to allot shops among themselves, ignoring all the genuine wholesale fruit sellers, who are having shops at Simmakkal. Moreover, persons belonging to same family are allotted several shops, which is against the principles of equality. The allotment of shops to the above said two Sangams alone is nothing but monopoly of fruit business at Madurai. The Memorandum of Understanding dated 1704.2015 entered into between the Madurai Corporation and the above two Sangams is in violation of Article 14 and 19(1)(g) of the Constitution of India.

3.3. The affected persons, who were denied the allotment of shops registered the Nala Sangam in the name of Vaigai Pala Commission Vanigargal Nala Sangam and sought for allotment of shops. But, the second respondent rejected the representation made by the Nala Sangam and issued the order dated 02.11.2016, wherein, it is stated that no public auction will be conducted for allotment of shops and all the shops will be allotted to the members of the above said two Sangams.

3.4. Constitution of India mandates that State action must not be arbitrary and discriminatory. The second respondent has not adopted a fair method in allotting shops to the existing shop owners of wholesale fruit shops at Simmakkal. Monopolizing the fruit business by allotting 240 shops to the above said two Sangams is violation of Article 14 and 19(1)(g) of the Constitution of India. Even as per the proceedings dated 17.04.2015 of the second respondent, only 156 owners have so far applied for allotment of shops by furnishing deposit amount. The above said two Sangams have filed several suits in O.S.Nos.227 to 253 of 2016, challenging the notices issued by the Commissioner of Corporation, wherein, he asked the Sangams for details of the members, who are all having shops at Simmakkal. All of a sudden, the suits are withdrawn for the reasons best known to them. Therefore, the petitioners have come forward with these writ petitions for the reliefs sought therein.

4. The averments in the counter filed by the second respondent Corporation are as follows:

4.1. The second respondent Corporation is constructing 240 shops in various sizes at Mattuthavani area in order to accommodate the wholesale fruit sellers, who are already doing business in Simmakkal and Yanaikkal area of Madurai City. The wholesale vegetable market functioning near Meenakshi Amman Temple belongs to Madurai Corporation. In order to ease the traffic congestion and to maintain the city properly, the Madurai Corporation had shifted the wholesale vegetable Central market from the middle of Madurai City to Mattuthavani during the year 2010. At the time of shifting also, those, who are already having shop at old Central vegetable market were allotted with shop at new Central market at Mattuthavani on priority basis without any auction. After shifting all the Central vegetable market, the members of public repeatedly made suggestions for shifting all wholesale fruit market from Simmakkal and Yanaikkal area in order to reduce the traffic congestion in the main roads connecting the North-South of Madurai City. The wholesale fruit business has been carried on in Simmakkal and Yanaikkal area for the past several decades by the merchants in the space owned by them. Unlike the Central vegetable market, which was owned by Corporation, the wholesale fruit business has been done in their own premises by the merchants and hence, the Corporation ought to act necessarily in confidence and support of wholesale merchants to achieve the object of the shifting the wholesale business from the bottle neck congestion area to outside area.

4.2. When the Corporation initiated proposal for shifting wholesale fruit shops, the respondents 3 and 4 in W.P.(MD) No. 24461 of 2016, who are the respondents 4 and 5 in W.P.(MD) Nos. 16217 and 22960 of 2016(hereinafter mentioned as respondents 3 and 4) made their objections. After negotiations, the Council of Madurai Corporation has passed a resolution No.378, dated 17.05.2013 for construction of wholesale fruit market shops near the Central vegetable market at Mattuthavani. Thereafter, an estimate was prepared by the Corporation for construction of shops at Mattuthavani and the cost was arrived at Rs.16 crores. Considering the financial position of Madurai Corporation, a Memorandum of Understanding was entered into between the Corporation and the respondents 3 and 4 on 17.04.2015 and thereby, it was agreed by them to pay Rs.11,84,00,000/- to Madurai Corporation (Rs.1,000/- per sq. ft.) towards their contribution for construction of shops at Mattuthavani. Further, the Corporation is also entitled to collect monthly rent from the allottees based on the size of the shop. It was also agreed to construct 240 shops for wholesale fruit merchants and out of the same, 147 shops are for members of third respondent association and remaining 93 shops are for the members of the fourth respondent association. The above procedure was approved by the Council of Madurai Corporation through its resolution No.891 dated 24.04.2015. The respondents 3 and 4 are representing all the wholesale fruit shop merchants, who are doing business at Simmakkal and Yanaikkal area.

4.3. The Corporation with a noble object to ease the congestion at Simmakkal and Yanaikkal area had undertaken the project of developing new market for wholesale fruit shops at Mattuthavani with the support of fruit merchants represented through respondents 3 and 4. The Corporation is going to get more revenue by way of rent collection from the shop owners. As on today, the members of the third and fourth respondents had paid major part of their contribution namely Rs.10,62,69,000/- and with the same, the construction of shops was ongoing and the same is nearing completion. Vaigai Pala Commission Vanigargal Nala Sangam is of recent origin and formed for the purpose of litigation. All the three writ petitions have been filed with similar allegation and averments questioning the allotment of shops in the new wholesale fruit market at Mattuthavani. Therefore, the writ petitions are to be dismissed.

5. The contentions of two Sangams arrayed as the respondents 3 and 4 in W.P.(MD) No.24461 of 2016 and the respondents 4 and 5 in W.P.(MD) Nos.16217 and 22960 of 2016 in their counters separately filed are as follows:

5.1. It is admitted that the second respondent Corporation decided to shift the fruit trading shops to Mattuthavani, Madurai for the purpose of eradicating the traffic congestion in Simmakkal area. The existing fruit shops at Simmakkal area do not belong to the second respondent and they are private properties of so many individuals. Some of the fruit merchants are having own shops. Remaining are running shops on tenancy. Request of one Balaji for allotment of a shop to him was rightly rejected by the second respondent as he is not the member of either the third respondent or fourth respondent Sangam in the light of Memorandum of Understanding dated 17.04.2015 entered into between the Madurai Corporation and the said two Sangams. The said Balaji filed W.P. (MD) No.23381 of 2015 and the same is pending. Having full knowledge of the ongoing construction and proposal of shifting the shops, some merchants with an ulterior motive, recently formed Vaigai Pala Commission Vanbigargal Nala Sangam keeping mum for a quite long period.

5.2. Memorandum of Understanding was entered into pursuant to the resolution of the Council of Madurai Corporation as per resolution No.378 dated 17.05.2013. In the memorandum of Understanding, it has been clearly stated that the vacant site belongs to the second respondent and only pursuant to the resolution, the second respondent decided to construct 240 shops as per the approved plan. As per the Memorandum of Understanding, out of the total cost of Rs.16 crores for construction, third and fourth respondents have to pay Rs.11,84,00,000/- and the remaining cost of construction can be borne from the deposit of advertising agency and from parking charges in the proposed fruit market. The monthly rent is also to be paid by the allottees. There is no arbitrariness in the decision. Even while rejecting the request of Vaigai Pala Commission Vanigargal Nala Sangam, the second respondent Corporation stated that the second respondent is ready to allot shops to them in future, when additional shops are constructed.

6. The learned counsel for the petitioners in all the three writ petitions contend that the impugned Memorandum of (1)(g) of Constitution of India and that allotment of entire shops constructed by Madurai Corporation to the members of third and fourth respondents without conducting any public auction is against law. It is further contended that allotting all the shops to the members of the third and fourth respondents will lead monopolization of the wholesale fruit trading in Madurai.

7. The learned counsel for the second respondent, per contra, contends that the Corporation of Madurai with good intention and object to ease the traffic congestion, decided to shift the wholesale fruit market situate in Simmakkal and Yanaikkal area of Madurai to the outskirts viz, Mattuthavani and since the merchants in Simmakkal and Yanaikkal area are doing business either in their own premises or in rental premises and they have not been running the business in the place belonging to Corporation, the Council of the Corporation after negotiation with third and fourth respondents, passed a resolution and pursuant to the resolution, the Madurai Corporation entered into a Memorandum of Understanding with third and fourth respondents Sangam. The Madurai Corporation acted only as per law and there is no arbitrariness in their act.

8. The learned counsel for the third and fourth respondents advanced their arguments on the basis of their averments in their counters and reiterate the argument of the learned counsel for the second respondent.

9. The petitioners knocked the doors of this Court mainly on the ground of arbitrariness, discrimination and that the Madurai Corporation acted in violation of law. The Corporation, being a statutory body, must follow a rational basis and decide the issue in hand in the larger interest of the Society.

10. The admitted facts are that the wholesale fruit market is situate in Simmakkal and Yanaikkal area, which is heart of the City. At present, the merchants are running the business either in their own premises or in the rental premises there. The premises do not belong to Madurai Corporation. In order to ease the traffic congestion in Simmakkal and Yanaikkal area, which is heart of the City, where the wholesale fruit trade is now going on, the Madurai Corporation decided to shift the wholesale fruit market to the outskirt viz., Mattuthavani.

11. The petitioners challenge only the method of allotment of shops and the Memorandum of Understanding entered into by the Madurai Corporation with third and fourth respondents. Memorandum of Understanding dated 17.04.2015 was entered into by the Madurai Corporation, pursuant to the resolution of the Council. Section 22 of Madurai City Municipal Corporation Act, 1971 reads thus:

22.Function of Council.- (1) Subject to the provisions of this Act, the municipal government of the city shall vest in the council, but the council shall not be entitled to exercise functions expressly assigned by or under this Act or any other law to a standing committee or the Commissioner.

Section 23(1) reads thus:

23. Resolutions and orders of council.-(1)The standing committee and the Commissioner shall be bound to give effect to every resolution or order of the council unless such resolution or order is cancelled in whole or in part by the Government.

12. Thus, as per the provisions, Municipal governance vests in the council and its decision is to be given effect to by the standing committee and the Commissioner. The council of Madurai Corporation has passed resolution No.378, dated 17.05.2013, approving construction of wholesale fruit market shop in Mattuthavani after negotiations with the respondents 3 and 4. Pursuant to the resolution, Memorandum of Understanding between the Municipal Corporation and third and fourth respondents was entered into on 17.04.2015, thereby stipulating procedures for construction of shops and allotment. The said procedure was also approved by the council of Madurai Corporation through its resolution No.891, dated 24.04.2015. In the Memorandum of Understanding dated 17.04.2015, total cost of construction was estimated to Rs.16 crores and the members of the respondents 3 and 4 agreed to pay Rs.11,84,00,000/- in two instalments and the balance to be borne by the Corporation by augmenting the income from other sources. It was also agreed to allot all the 240 shops to the members of the respondents 3 and 4 and they also agreed to pay rent quarterly in advance as fixed by the Corporation Thus, the above Memorandum of Understanding was entered into by the Corporation with the respondents 3 and 4, pursuant to the resolution No.378, dated 17.04.2013 of the Council of the Corporation, following the above provisions of law.

13. It is well settled that judicial review of contractual obligations or enforcement of contractual obligations are not permissible under Article 226 of the Constitution of India. Now, let this Court analyse the contentions of the petitioners about the arbitrariness, discrimination and violation of Article 14 and 19(1)(g) of Constitution of India.

14. The learned counsel for the petitioners cited the judgment of the Hon'ble Supreme Court in South Central Railways V. S.C.R.Caterers, Dry Fruits, Fruit Juice Stalls Welfare Association reported in (2016) 3 Supreme Court Cases 582 and contended that the act of State must not be arbitrariness and discriminatory. In the above ruling, it has been held as follows:

25. Article 14 of the Constitution of India mandates that State action must not be arbitrary and discriminatory. It must also not be guided by any extraneous considerations which are antithetical to equality. A three-Judge Bench of this Court in Ramana Dayaram Shetty V. International Airport Authority of India held as under:

21. ..... It must, therefore follow as a necessary corollary from the principle of equality enshrined in Article 14 that though the State is entitled to refuse to enter into relationship with any one, yet it it does so, it cannot arbitrarily choose any person it likes for entering into such relationship and discriminate between persons similarly circumstanced, but it must act in conformity with some standard or principle which meets the test of reasonableness and nondiscrimination and any departure from such standard or principle would be invalid unless it can be supported or justified on some rational and non-discriminatory ground.

.............

.............

29....... The situation is made worse by the handing over of public functions of private entrepreneurs, which then exploit the policies of the Government against the poor and downtrodden people of the country. If the appellants under the guise of the Police are permitted to deny renewal opf licences in favour of the licensees, it would amount to deprivation of their right to freedom of occupation guaranteed under Article 19(1)(g) of the Constitution as well as the right to livelihood, which action of the appellants would be diametrically opposed to their constitutional duty towards social justice as well as uplifting the weaker sections of the society and the unemployed youth of the country.

Bearing the above judgment in mind, let this Court analyse the facts of this case.

15. All the wholesale fruit traders in Simmakkal and Yanaikkal are members of the third and fourth respondents. They have been running wholesale fruit business in their own premises and rental premises in that area. The Corporation to ease the traffic congestion in that busy locality, situate in the heart of city, decided to shift the wholesale fruit market from that area to the ourskirts viz., Mattuthavani in the larger interest of the Society. The Corporation, after negotiations with third and fourth respondents passed the resolution, which culminated into a Memorandum of Understanding. Due to paucity of fund with the Corporation, for the construction, they decided to augment major portion of the construction cost from the merchants/allottees and the balance construction cost by the Corporation. The allottees do not claim any ownership in the property and they also agreed to pay the rent.

16. The learned counsel for the petitioner also cited the judgment of this Court in K.Padmavathy and Others Vs. Corporation of Coimbatore reported in 2005(4) MLJ 11 and contended that allotment without public auction and giving preferential treatment on the ground that they were the original occupants cannot be valid in law. The above judgment was rendered, where preferential treatment for allotment of shops was given to persons, who are the original occupants of the premises under the control of Corporation. But, in the present case, the merchants have been running the business in their own or rental premises and not in the place belonging to Corporation. Under the said circumstances, they were pressurised and persuaded to move to the outskirts and the Corporation, after negotiation with them, passed the resolution and then entered into a Memorandum of Understanding. Therefore, this Court is of the considered view that the Corporation acted rationally without any discrimination. There is no deprivation of the right to freedom of occupation guaranteed under Article 19(1)(g) of the Constitution of India.

17. Vaigai Pala Commission Vanigargal Nala Sangam is an association formed subsequent to the Memorandum of Understanding dated 17.04.2015. Their representation was rejected by saying that allotment to them will be considered in future, when additional shops are constructed. It is also pertinent to note that it is not the case of the petitioners that any of the wholesale trader in Simmakkal and Yanaikkal area who was not a member of third and fourth respondent on the date of Memorandum of Understanding is left out. The second respondent has categorically stated in its counter that the respondents 3 and 4 are representing all the wholesale fruits shop merchants, who are doing business at Simmakkal and Yanaikkal area. No acceptable material has been put forth on the side of petitioners to rebut the same. As per the counter of second respondent, third and fourth respondents paid almost their entire contribution towards the cost of construction and third and fourth respondents also averred in the counter that they forwarded demand drafts of the members/allottees to the second respondents and they have not collected any amount from any of the members.

18. Another contention of the petitioners that allotment of 240 shops to the members of third and fourth respondent will monopolize the fruit trade in Madurai is also not acceptable for the simple reason that the members of third and fourth respondents, who are allotted of the shops have been trading fruits for decades together in Simmakkal and Yanaikkal area and thus almost all the license holders are shifted to another place to ease the traffic congestion and for the convenience of the public. Thus, the second respondent Corporation, as a statutory body, took a rational decision and the same does not warrant any interference.

19. For the aforesaid reasons, all the three writ petitions fail. Accordingly, these writ petitions are dismissed. No costs. Consequently, connected miscellaneous petitions are also dismissed. However, considering the fact that lease in perpetuity is not permissible in law and in terms of the statutory provisions, the second respondent is directed to adjust a portion of the quarterly rent towards the contribution made by the allottees for construction of the shops within a time frame as fixed by the Corporation. After making full adjustment of contributions alleged to have been given by the present lessees, the Corporation is directed to conduct public auction in respect of the shops in question.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //