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Kodachur Ganesh Rao Vs. Government of Andhra Pradesh and Others - Court Judgment

LegalCrystal Citation
SubjectContract
CourtAndhra Pradesh High Court
Decided On
Case NumberWP No. 2017 of 1998 and Batch
Judge
Reported in2000(3)ALD704; 2000(3)ALT645
Acts Constitution of India - Article 226; Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Immoveable Properties (Other than Agricultural Lands) Lease Rules, 1982 - Rule 3; Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1987 - Sections 80(1), 93 and 94
AppellantKodachur Ganesh Rao
RespondentGovernment of Andhra Pradesh and Others
Appellant AdvocateMr. G. Venkat Rao,;Mr. Ramachandra Reddy and;Mr. S. Ramachandra Rao, for L. Ravichander, Advs.
Respondent AdvocateGovernment Pleader for Endowments, Mr. L. Ravichander and;Mr. K.V.N. Bhopal, Advs.
Excerpt:
.....of india - grant of lease of property by government through private negotiation without conducting public auction -lease repudiated subsequently without notice to lessee - action of government illegal as made against principles of natural justice - held, no order for cancellation can be granted as it would result in restoration of another illegal order. (ii) validity of lease - rule 3 of andhra pradesh charitable and hindu religious institutions and endowments immovable properties (other than agricultural lands) lease rules, 1982 - lease granted privately without giving any reason for not holding public auction - nothing to show any request by executive authority in writing to permit lease otherwise than by public auction - held, lease granted not valid and without jurisdiction. - - ..........in preference to the offer of one r. subramanyam for lease of the said land without conducting public auction and directed the commissioner, endowments, to take necessary action in the matter accordingly. questioning the said order, a member of the public, one k. ganesh rao by name, claiming to be a devotee interested in the said institution, filed wp no.2017 of 1998 by way of public interest litigation. five other individuals, namely, b. neeraja and 4 others claiming to be in occupation of a portion of the said land as tenants filed wp no.3128 of 1998 questioning the self-same order whereas p. sankar reddy, the person whose offer has been accepted by the government, field wp no.15332 of 1998 for implementation of the said order of the government. the last writ petition was filed on.....
Judgment:

1. In this Batch of three writ petitions the Court is confronted with the classic dilemma-whether to strike down an order of the Government passed in breach of the principles of natural justice or to refuse relief on the ground that it would lead to the restoration of another illegal order.

2. Let us now briefly examine the facts. The matter relates to the lease of a property-about 300 sq.yards of prime land situated quite opposite to the Secunderabad Railway Station-belonging to a Hindu Religious and Charitable Institution popularly known as 'Ravurivari Dharmasala', Regimental Bazaar, Secunderabad, which is governed by the provisions of the A.P. Charitable and Hindu Religious Institutions and Endowments Act, 1987 (herein referred to as 'the Act') and the Rules made thereunder. In G.O. Rt.No.1224 Revenue (Endts.II) Department, dated14-7-1997, the Government of Andhra Pradesh took a decision to accept the offer of P. Sankar Reddy (petitioner in WP No.15332 of 1998) in preference to the offer of one R. Subramanyam for lease of the said land without conducting public auction and directed the Commissioner, Endowments, to take necessary action in the matter accordingly. Questioning the said order, a member of the public, one K. Ganesh Rao by name, claiming to be a devotee interested in the said institution, filed WP No.2017 of 1998 by way of public interest litigation. Five other individuals, namely, B. Neeraja and 4 others claiming to be in occupation of a portion of the said land as tenants filed WP No.3128 of 1998 questioning the self-same order whereas P. Sankar Reddy, the person whose offer has been accepted by the Government, field WP No.15332 of 1998 for implementation of the said order of the Government. The last writ petition was filed on 8-6-1998. Even before that date the Government issued orders in G.O.Rt.No.633 Revenue (Endts.II), dated 24-4-1998 cancelling G.O. Rt. No. 1224 dated 14-7-1997. In view of this order, strictly speaking, all the three writ petitions have become infructuous and they do not survive. However, the petitioner in WP No.15332 of 1998 has filed an application for amendment being WPMP No.21075 of 1998 in WP No.15332 of 1998 questioning the validity of G.O. Rt. No.633 dated 24-4-1998 on the ground that the same is illegal and without jurisdiction as the Government has no power to review or cancel the earlier order passed by it and it is also in violation of the principles of natural justice as it is passed without giving any notice or opportunity to the petitioner.

3. On the other hand, it is the stand of the petitioners in the two other writ petitions and also the stand of the official respondents that G.O. Rt. No.1224, dated 14-7-1997 is itself illegal and void being incontravention of Rule 3 of the Immovable Properties (Other than Agricultural Lands) Lease Rules, 1982, framed under the Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, which requires all the immovable properties other than the agricultural lands owned by the Hindu Religious Institutions and Endowments should be leased out only by holding a public auction. Rule 3 of the said Rules reads as follows:

'3. (1) All leases of immovable properties or of the rights pertaining thereto, belonging to Charitable and Hindu Religious Institutions or Endowments shall be made by public auction :

Provided that the competent authority may, on a request made in writing by the Executive Authority, permit the lease of any property or right otherwise than by public auction, if he is satisfied, for reasons to be recorded in writing, that the interests of the institution or endowment will not suffer thereby.(2) The public auction shall be held at the place where the properties are situated or rights exist:Provided that the competent authority may, if he is satisfied that in case the holding of auction at a place other than the one in which the properties proposed to be leased are situate, will not be detrimental to secure a proper bid or will be helpful to secure a better bid or to thwart local collusions among the bidders, permit such auction, but no auction shall be held, in a district other than the one in which the property is situated.'

It is manifest from a reading of the said Rule that leases of immovable properties belonging to the Charitable and Hindu Religious Institutions and Endowments shall normally be made by public auction.However, according to the proviso, the competent authority (Government) may, on the request made in writing by the Executive Authority, permit the lease of any property or right otherwise than by public auction, if he is satisfied for reasons to be recorded in writing that the interests of the institution or endowment will not suffer thereby. In the instant case, admittedly there was no such request from the Executive Authority nor did the Government record any reasons in G.O. Rt. No. 1224, dated 14-7-1997 as contemplated in the proviso to the said Rule for departing from the standard mode of public auction beyond stating that the Government have carefully examined the matter and it has been decided to accept the offer of Sri P. Sankar Reddy as it is reasonable when compared to the offer of R. Subramanyam. The Government has not given any reasons whatsoever as to why the normal mode of public auction should be dispensed with. The Supreme Court in Haji T.M. Hassan v. Kerala Financial Corporation, : [1988]1SCR1079 , held as follows:

'The public property owned by the State or by any instrumentality of the State should be generally sold by public auction or by inviting tenders. This Court has been insisting upon that rule, not only to get the highest price for the property but also to ensure fairness in the activities of the State and public authorities. They should undoubtedly act fairly. Their actions should be legitimate. Their dealings should be above board. Their transactions should be without aversion or affection. Nothing should be suggestive of discrimination. Nothing should be done by them which gives an impression of bias, favouritism or nepotism. Ordinarily these factors would be absent if the matter is brought to public auction or sale by tenders. That is why the Court repeatedly stated and reiterated that the State ownedproperties are required to be disposed of publicly. But that is not the only rule. As O. Chinnappa Reddy, )., observed, 'though that is the ordinary rule, it is not an invariable rule'.

'There may be situations necessitating departure from the rule, but then such instances must be justified by compulsions and not by compromise. It must be justified by compelling reasons and not by just convenience.'

4. Sri S. Ramachandra Rao, the learned senior Counsel appearing for the petitioner in WP No. 15332 of 1998, however, sought to contend that as the Assistant Commissioner and the Commissioner of Endowments have recommended the acceptance of the petitioner's offer, it must be presumed that the Executive Officer of the institution who was their subordinate also concurred with the proposal and G.O. Rt.No.1224, dated 14-7-1997 is, therefore, not contrary to the lease rules. I am unable to accept this submission. It appears from G.O. Rt No.1224 itself that the Commissioner of Endowments has merely requested the Government to issue necessary orders to sell the leasehold rights either in public auction or to one of the applicants. In the unreported judgment in WP No.2123 of 1993 dated 1-7-1998, my learned Brother Hon'ble Justice J. Chelameswar, after considering the scope of the proviso to Rule 3 of the abovementioned Rules, held that the language of the proviso clearly indicates that the Competent Authority (i.e., Government) is only the supervisory authority and that the proposal to resort to such an exceptional procedure must emanate from the Executive Authority of the temple or endowment, as the case may be. It was further held that by necessary implication, the Executive Authority must satisfy itself that by resorting to such an exceptional procedure, the interests of the institution will not suffer. The Competent Authority'srole is only limited to verify the correctness of the assessment made by the Executive Authority. The Competent Authority cannot direct the Executive Authority of an institution to depart from the general rule enshrined under Rule 3. The said judgment was confirmed in WA No.1525 of 1998. In a recent decision reported in Board of Trustee of Sri Balaji Swamy Temple v. State of Andhra Pradesh, : 2000(2)ALD581 , my learned Brother Hon'ble Justice G. Raghuram, while considering the scope and effect of Section 80(1)(c) of the Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1987 which requires that every sale of any immoveable property belonging to any Charitable or Religious Institution or Endowment shall be effected by tender-cum-public auction in the prescribed manner subject to the confirmation by the Commissioner and which also provides that the Government may, in the interest of the institution or endowment and for reasons to be recorded therefor in writing, permit the sale of such immovable property otherwise than by public auction, held that the Government, while according permission is obligated in law to record reasons in justification of the decision to sell the lands otherwise than by public tender-cum-public auction and that this legislative safeguard cannot be wily-nily subverted by recourse to a laconic and ritualistic exercise of power. The learned Judge has also referred to the decision of the Supreme Court in C. Rami Reddy v. Government of Andhra Pradesh, : [1986]1SCR989 , wherein the Apex Court deprecated the sale of land belonging to a charitable endowment by private negotiations instead of by public auction. I have, therefore, no hesitation in holding that G.O. Rt. No.1224, dated 14-7-1997 is illegal and void as it is plainly in contravention of Rule 3 of the abovementioned Rules.

5. The next-question for consideration is whether G.O. Rt. No.633 dated 24-4-1998cancelling the earlier orders issued in G.O. Rt. No.1224, dated 147-7-1997 is valid or not. Admittedly this order was passed without giving any notice or opportunity to the petitioner in WP No.15332 of 1998. It does not, therefore, admit of any doubt that it is in violation of the principles of natural justice. The learned Government Pleader appearing for the State-respondents, however, contends that G.O. Rt. No.1224 is nothing but an official communication, that there is no concluded contract in favour of the petitioner and that till a lease is actually granted in his favour no vested or legal right accrues to the petitioner and in that sense the cancellation of G.O. Rt. No.1224 by the Government without notice to the petitioner does not involve any violation of the principles of natural justice. It is difficult to accept this argument. Though no lease is actually granted in favour of the petitioner, the cancellation of the order of the Government undoubtedly affects the interests of the petitioner and it is prejudicial to him. Principles of natural justice, therefore, require that he should be given an opportunity before cancelling the order. Further Section 93 of the Act, which deals with the revisional power of the Government to call for records from the subordinate authorities and pass orders, clearly provides that the Government shall not pass any order prejudicial to any party unless he has had an opportunity of making his representation. Section 94 of the Act provides that the Government may, either suo motu or on an application from any person interested made within 90 days of the passing of an order under Section 93 review any such order if it was passed by them under any mistake, whether of fact or of law or in ignorance of any material fact. The power of review conferred by this section is thus available only within 90 days of passing the original order. In the instant case G.O.Rt.No.1224 is dated 14-7-1997 whereas the cancellation order in G.O.Rt.No.633 is dated 24-4-1998 which is clearly beyondthe period of 90 days provided under Section 94. Thus viewed from any angle, G.O.Rt.No.633, dated 24-4-1998 is illegal and unsustainable.

6. Thus both the orders of the Government, namely, G.O. Rt .No.1224, dated 14-7-1997 and G.O. Rt. No.633, dated 24-4-1998 were not legally passed, the former being in contravention of the mandatory requirements of Rule 3 of the abovementioned Rules and the latter being in breach of the principles of natural justice and also the provisions of Sections 93 and 94 of the Act. In these circumstances if the Court were to strike down the latter order, it would result in the restoration of the former which is equally bad in law. It is well settled that the High Court, in exercise of its jurisdiction under Article 226 of the Constitution is not always bound to strike down an order passed in violation of the principles of natural justice and the Court may, in the circumstances of a given case, refuse to exercise its extraordinary discretionary power to strike down such an order. If any authority were needed in support of this proposition, it is sufficient to refer to the latest decision of the Supreme Court in M.C. Mehta v. Union of India, : [1999]3SCR1173 , where his Lordship Justice M. Jagannadha Rao, after an illuminating and perceptive analysis of various decisions and treatises, Indian and foreign, has summarised the legal position on this topic. It appears from G.O. Rt. No.633, dated 24-4-1998 that the Commissioner of Endowments has reported that the site in question is situated just opposite to the Railway Station, Secunderabad, which is a prime locality, that it is worth crorers of rupees and that the earlier order of the Government in G.O. Rt. No.1224, dated 14-7-1997 is detrimental to the interests of the institution. I am, therefore, satisfied that it is a fit case where this Court should refuse to exercise its discretion to strikedown G.O. Rt. No.633, dated 24-4-1998 as sought for by the petitioner in WP No.15332 of 1998.

7. The learned Counsel for the petitioner in WP No.15322 of 1998 has finally submitted that on the strength of G.O. Rt.No.1224 dated 14-7-1997, the petitioner has altered his position by entering into a memorandum of understanding dated 31-12-1997 with the persons in occupation of the land incurring huge expenditure and as such it is not open to the Government to cancel G.O. Rt. No.1224 on the principle of promissory estoppel and also legitimate expectation. This claim of the petitioner is, however, disputed by the respondents by contending that the person in possession were already declared to be encroachers by the Deputy Commissioner by order dated 25-6-1994 and their eviction was also ordered and that the alleged memorandum of understanding set up by the petitioner is collusive and fraudulent. That apart, as the order passed by the Government is plainly contrary to the statutory provisions and the law laid down by the Apex Court as well as this Court, neither the principle of promissory estoppel nor doctrine of legitimate expectation is available to the petitioner. I do not, therefore, find any substance in the above contention.

8. For the foregoing reasons, all the three writ petitions are dismissed but without costs.


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