1. The City Municipal Council, Bijapur, represented by its Commissioner, has presented this writ petition questioning the legality of the order of the State Government by which it directed the petitioner to extend the lease of the land specified in the impugned order in favour of respondent 3 for a period of five years from 31-7-1982 on a revised rent of Rs.1000 per month.
2. The facts of the case, in brief, are as follows: The City Municipal Council, Bijapur is the owner of land bearing No. 409/2 situated in Ward No. 9 in the City of Bijapur. The area of the land is 10,036 sq. ft. It is a vacant land and had been leased by the City Municipal Council in favour of respondent for a 3 period period of 20 years on 31-7-1962. A copy of the agreement of lease is produced as Annexure A. In terms of the said agreement, the lease came to an end on 31-7-1982. Even long before the af6resaid lease period had come to an end, the Municipal Council passed a resolution dt. 30-12-1980 that the lease in favour of respondent 3 should not be extended after 1-7-1982. Questioning the legality of the said resolution, respondent 3 preferred an appeal before the Divisional Commissioner under S. 322 of the Karnataka Municipalities Act, 1964 ('the Act' for short). Simultaneously respondent 3 also made a representation before the State Government, as the period of lease had already come to an end and action had been taken by the petitioner Council for evicting respondent 3 from the land. On 31-81982, the Government made an order directing the Municipal Council not to evict respondent 3 from the land (vide Annex. C). Thereafter on 6-9-1982 the Divisional Commissioner dismissed the appeal of the respondent 3 by his order dt. 1-9-1982 and the same was communicated as per endorsement dt. 6-9-1982 (Annex. D). After the above order was received, the Municipal Commissioner addressed a letter to the State Government requesting the State Government to vacate the stay order given by the Government, and not to prevent the municipal council from evicting respondent 3. The municipal- council also passed a resolution to the same effect on 31-1-1983 (Annex. F). The State Government made the impugned order on 2-3-1984 (Annex. H). It reads:
'PROCEEDINGS OF THE GOVERNMENT OF KARNATAKA
Sub: City Municipal Council, Bijapur Extension of the period of lease of land in favour of Sri N. G. Joshi,
Proprietor, Karnataka Automobiles, Bijapur.
Order No. HUD 105 MIP 80, Bangalore, dt. 2nd Mar. 1984.
Read: 1. Govt. Order No. HUD44 MIP82. dt. 18-7-1983
2. Correspondence ending with letter No. MUN BJR CR 36/&3-84 dt. 5-12-1983 from the Divisional Commissioner, Belgaum Division, Belgaum.
It is reported that the City Municipal Council, Bijapur had granted a land measuring 10,036 sq. ft. on a lease for a period of 20 years on a monthly rent of Rs.130/- to one Sri N. G. Joshi who has set up an automobile w6rkshop under the name Karnataka Auto Mobiles. The lease period ended on 31-7-1982. Sri Joshi had submitted his application requesting either to sell the above land or extend the period of lease for 99 year& The City Municipal Council, in its resolution dt. 30-12-1980 had resolved not to extend the lease any longer in the interest of public, providing addl shops which could also augment the income of the City Municipal Council. Sri N. G. Joshi has been repeatedly representing that he is in possession of the said land from 1949 and that he has put up a temporary construction and had expanded his industry by putting up fuel injection test Bench and has taken electrical lines in 1977 and has taken dealership of the tractors and providing employment to many persons and that in case he is evicted, all these employees would be put to unemployment.
Government have considered the views of the City Municipal Council, the points represented by Sri N. G. Joshi as well as the value of the land and financial position of the City Municipal Council. Government in their order No. HUD 44 MIP 82 dt. 18th July 1983 cited at (1) above, has accorded sanction for taking up the construction of Sri Lalbahadur Sastry Marketing Complex in Bijapur District for which the City Municipal Council has to raise loans from Banis (Banks). Completion of ,this Complex requires considerable time. The City Municipal Council, therefore is not in a position to take up new projects for want of financial resources.
O R D E R
Government of Karnataka therefore, in accordance with S. 72(2) of Karnataka Municipalities Act, 1964 direct the extension of the lease of land measuring 10,036 sq. ft. belonging to the City Municipal. Council, Bijapur in favour of Sri N. G. Joshi, Proprietor, Karnataka Automobiles, Bijapur for a period of 5 years from 31-7-82 and on a revised rent of Rs.1,000/- (one thousand only) per month.
By order and in the name of the Governor of Karnataka,
Sd/- N, R. Santhurarna Rao,
Under Secretary to Government
Housing & Urban Development Dept.'
Aggrieved by the said order the petitioner has presented this writ petition.
3. Section 720(2) and (3) of the Act, which is relevant for this case reads -
'72. Competency of municipal council to, lease, sell and contract.- (1) Subject to the conditions and restrictions contained in sub-sacs.(2) to (9), and such other restrictions and conditions as the Government may by general or special orders specify, every municipal council shall be competent to lease, sell or otherwise transfer any movable or immovable property which belongs to, or for the purpose of this Act has been acquired by it, and so far as is not inconsistent with the provisions and purposes of this Ac4 to enter into and perform all such contracts as it may consider necessary or expedient in order to carry into effect the said provisions and purposes.
(2) No free grant of immovable property whatever may be its value, no grant for an upset price and no lease for a term exceeding five years, and no sale or other transfer of immovable property exceeding five thousand rupees in value, shall be valid unless the previous sanction of the Government is obtained.
(3) In the case (a) of a lease for a period exceeding one year or of a sale or other transfer, or contract for the purchase of any immovable property, (b) of every contract which will involve expenditure not covered by a budget grant, (c) of every contract the performance of which cannot be completed within the official year current at the date of the contract, the sanction of the municipal council by a resolution passed at a general meeting is required.'
Sub-section (1) of S. 72 confers power on every municipal council the lease, sell or otherwise transfer any movable or immovable property which belongs to it, subject to the conditions and restrictions contained in sub-sec. (2) to (9) of the section and such other restrictions and conditions as the Government may by general or special orders specify. Sub-sec. (2) provides, inter alias that no free grant of immovable property and no lease exceeding five years could be given by municipal council without previous sanction of the State Government. Sub-sec (3), inter alia, provides that no period of lease exceeding one year could be given without the sanction of the municipal council by a resolution passed at the general meeting.
4. By the above provision, it is clear that the power to lease a property belonging to the municipal council belongs to the municipal council itself. If the lease is for a period of more than five years then the municipal council is bound to seek previous sanction of the State Government If the lease is for a period of more than one year, it could be given only by a valid resolution passed by the municipal council. In the present case, there is no resolution of the municipal council to give the land on lease on and after3l-7-1982. Therefore, in view of sub-sec. (3) of S. 72, the property in question cannot be leased at all. The opening part of S. 72(l) of the Act authorises the Government to lay down conditions and restrictions for the exercise of the power by the municipal council for disposing of the property either by general or special orders. Therefore, it is clear that the only power conferred on the Government is to lay down such conditions or restrictions as would ensure a proper exercise of the power of the municipal council, if it chooses to exercise its power under sub-secs. (1) and (2) of S. 72 of the Act. The provision does not confer any power on the Government to direct a municipal council to dispose of any property belonging to it and in favour of any one of the choice of the Government. The impugned order is therefore, clearly without the authority of law.
5. Learned counsel for the Municipal Council submitted that as respondent 3 is continuing on the property even after the expiry of the lease, the Municipal Council be, given liberty to take action against respondent 3 for the recovery of damages for use and occupation.
6. When the property belongs to the Municipal Council and respondent 3 is continuing on the said property aft.-r the expiry of lease, it is open for the municipal coup-61 to take such actions as are ope3i to it in law for his eviction and no liberty need be sought from this Court.
7. In the result. I make the following order.
(i) Writ Petition is allowed.
(ii) The impugned order of the State Government dt. 2-3-1984 (Annex. H) is set aside.
8. Petition allowed.