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Ajudhia Nath Dowarka Nath Vs. Amar Nath Gupta and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtPunjab and Haryana High Court
Decided On
Case NumberSecond Appeal No. 847 of 1956
Judge
Reported inAIR1961P& H352
ActsSpecific Act, 1877 - Sections 42; Punjab Municipal Act - Sections 47(2); Limitation Act, 1908 - Article 120
AppellantAjudhia Nath Dowarka Nath
RespondentAmar Nath Gupta and ors.
Appellant Advocate A.V. Sastri,; Atma Ram and; S.C. Sibal, Advs.;
Respondent Advocate H.L. Sarin and; Sunder Lal, Advs.
DispositionAppeal allowed
Cases ReferredVaman v. Municipality of Sholapur
Excerpt:
.....of the committee was affirmed after a good deal of deliberation by the punjab government and the execution of the sale deed was the culmination of the long course of negotiations which had started from the year 1940. 14. mr. it is well to observe that it is the sale by the municipality which is impugned and not parcelling of the land into plots or their sale by the first defendant the first defendant could have sold or parcelled the land into plots when he liked, as he was the owner of it......defendant (municipal committee, sonepat) is the owner and the first defendant is the tenant of the suit land measuring 48 bighas and 5 biswas and for restraining the first defendant from making any alienations or exercising any right of ownership on the said land. the municipal committee as the second defendant in its written statement has supported the case of the plaintiffs.6. the pleadings of the parties gave rise to several issues and eventually the suit was decreed by the trial judge on 27th of february 1956. the first defendant being unsuccessful in his appeal before the senior subordinate judge, rohtak has now come in second appeal to this court.7. it has been argued by mr. viswanatha sastri, the learned counsel for the appellant, that the courts below have wrongly decided in.....
Judgment:

Shamsher Bahadur, J.

1. The plaintiff-respondents, Amar Nath Gupta, Manohar Lal, Nand Kishore and Prem Chand as rate-payers of the Municipal Committee, Sonepat, challenged the transaction of sale made fey the second defendant, Municipal Committee of Sonepat, in respect of 48 bighas and 5 biswas of agricultural land in favour of Ajudhya Nath appellant, who was made the first defendant in the suit. The suit was decreed by the trial Judge and this decree was affirmed in appeal preferred by the first defendant, who has now come in second appeal to this Court.

2. In the first instance, 22 bighas and 15 biswas of land were given on lease by the Municipal Committee, Sonepat, on 19th of April 1938, to the Sonepat Electric Supply Company, for 18 years at an annual rent of Rs. 100/-. Subsequently in 1940, another strip of land was given on lease to the same company at Rs. 50/- per annum, the aggregate land under both the leases being 48 bighas and 5 biswas.

3. On 5th of February 1941, a resolution (Exhibit D. W. 3/3) was passed by the Municipal Committee, Sonepat for the sale of the land covered by the two leases to the Electric Supply Company at market value. The proposal was that it was for the benefit of the Committee to sell the land which had been given on lease to the Sonepat Electric Supply Company. The resolution further stated that the sanction of the Commissioner should be obtained for this transaction, it being necessary under the rules to do so.

The sanction of the Commissioner was com-municated to the Municipal Committee through its Deputy Commissioner on 11th of March 1941 vide letter of the Inspector of Local Bodies (Exhibit D. W. 3/9). In the letter, it was stated that 'sanction is hereby accorded to the sale by private treaty, by the Municipal Committee, Sonepat of municipal land measuring 48 bighas and 5 biswas to the Sonepat Electric Supply Co., for Rs. 1,894/13/-'.

4. Though, objections were raised by some persons to this proposal, no one, however, came forward to make any higher offer. It appears that there was some correspondence between the Commissioner of Ambala Division and the Punjab Government and ultimately the matter was settled by a letter received from the Under Secretary to the Punjab Government to the Commissioner of Ambala Division on 27th of August 1946 (Exhibit D. W. 3/10). From this letter, it appears that the good offices of Gh. Lahri Singh, Local Government Minister, were utilised to bring about an amicable settlement of the dispute with regard to sale of the land.

The proprietor of the Sonepat Electric Supply Company was prepared to pay Rs. 300/- per acre for the land and the Minister after making enquiries considered this to be a fair and reasonable price. According to the settlement embodied in this letter.

'the Company shall pay rent up to 11th March 1941 as agreed to between the parties. After tills date the Company shall be considered to have bought this land and shall pay the price therefore, together with interest at the rate of 2 per cent i.e., from 11th March, 1941 to the date of actual payment'.

The price thus fixed came to Rs. 3,347/6/- or which Rs. 3,015/10/- represented the principal sum and the balance of Rs. 331/12/- is the interest from 11th of March 1941. Pursuant to the orderconveyed by the Government, the Municipal Committee passed a resolution on 28th of September, 1946 (Exhibit D. W. 3/6) authorising its Senior Vice-President to execute the sale-deed, on behalf of the Municipal Committee.

The sale-deed (Exhibit D. W. 9/1) was duly executed on 30th of September 1946 in favour of the first defendant as proprietor of the Electric Supply Company. After having purchased the land, the first defendant submitted a plan for development of the area and divided it into sites for building houses. This plan was sanctioned on 23rd of June 1948 (Exhibit D. W. 3/2). It is thecase of the first defendant that subsequently 80 or 90 plots were sold and some houses have been built upon these plots.

5. At this stage, it may be pointed out that under Sub-section (2) of Section 47 of the Punjab Municipal Act,

'every transfer of immovable property belonging to any committee must be made by an instrument in writing, executed by the president or vice-president, and by at least two other members of committee, whose execution whereof shall be attested by the secretary'.

Under Sub-section (3), 'no contract or transfer of the description mentioned in this section executed otherwise than in conformity with the provisions of this section shall be binding on thecommittee'.

Admittedly, the contract of sale did not conform to the requirements of Sub-section (2) of Section 47 of the Punjab Municipal Act. It was proposed bysome Municipal Commissioners in a resolution, of 16th of October 1954 to file a civil suit against the first defendant to recover the land because the sale-deed had not been executed in accordance with the requirements of Section 47. This resolution was put for discussion, and in the resolution of 3rd of November 1954 (Exhibit D. W. 3/1} it was agreed that 'there is neither legal nor any moral ground for the institution of the civil suit for the redemption of the land in question'.

One Shri R. C. Singal dissented while another member remained neutral. The present suit was thereafter brought by the four rate-payers on 28th of December 1954 for a declaration that the second defendant (Municipal Committee, Sonepat) is the owner and the first defendant is the tenant of the suit land measuring 48 bighas and 5 biswas and for restraining the first defendant from making any alienations or exercising any right of ownership on the said land. The Municipal Committee as the second defendant in its written statement has supported the case of the plaintiffs.

6. The pleadings of the parties gave rise to several issues and eventually the suit was decreed by the trial Judge on 27th of February 1956. The first defendant being unsuccessful in his appeal before the Senior Subordinate Judge, Rohtak has now come in second appeal to this Court.

7. It has been argued by Mr. Viswanatha Sastri, the learned counsel for the appellant, that the Courts below have wrongly decided in favour of the plaintiffs that they have a right to bring the present suit. It has also been urged by him that the relief under Section 42 of the Specific Relief Act is discretionary and it was not a judicious exercise of discretion to have granted the relief to the plaintiffs. Lastly, it has been contend-ed by Mr. Sastri that the suit in any event is barred under Article 120 of the Indian Limitation Act.

8. As regards the maintainability of and the right of the plaintiffs to bring the suit, it bas been urged that Section 42 only enables a person to have his 'legal character' or any right to any property vindicated by way of declaration and nothing more. The legal status of tile plaintiffs as rate-payers has not been threatened or put in jeopardy in any manner and a suit on this score is clearly untenable. The status of the plaintiffs as rate-payers which has never been denied cannot possibly clothe them with a right to sue for the Municipal Committee which has not chosen to-challenge the sale made in favour of the first defendant.

This argument can only be accepted so far as the 'legal character' of the plaintiffs is concerned, As rate-payers they can justly be said to have a right in the property of the Municipal Committee and as such are entitled to bring the suit. Mr. Sastri has placed reliance on the observations of Rt. Hon'ble Sir Lawrence Jenkins in the Privy Council case of Shsoparsan Singh v. Ramnandan Prasad Singh, ILR 43 Cal 694: (AIR 1916 PC 78) for the proposition that the provisions of Section 42 of the Specific Relief Act are exhaustive and any attempt to extend its frontiers must be discountenanced by Courts. As stated by his Lord-ship at p. 704 (of ILR Cal) : (at p. 80 of AIR):-- 'There is so much more danger in India than here of harassing and vexatious litigation that the Courts in India ought to be most careful that mere declaratory suits be not converted into a new and mischievous source of litigation.' It is contended that the plaintiffs have no substantial and direct grievance of their own and it would merely be a disguise for them to assume (hat they have any title to property in respect of which they seek a declaratory decree. I do not think there is anything in the observations or the ratio of the Privy Council decision to support the appellant's assertion nor can any assistance be derived for the appellant's case by the ruling of Chief Justice Weston in Kishori Lal v. Beg Raj, AIR 1952 Punj 387, where it was held that

'a suit for simple declaratory decree is not competent outside the restrictions imposed by Section 42 as the section is exhaustive of the cases in which a decree merely declaratory can be made.'

In my opinion, the lower appellate Court has correctly applied the principle enunciated by the Division Bench of the Bombay High Court (Chief Justice Chagla and Gajendragadkar J.) in The Municipal Corporation for the City of Bombay v. Covind Laxman, AIR 1949 Bom 229. At p. 232, Chief Justice Chagla observed thus:--

'Every rate-payer has the right to prevent the public body to which he pays the rates from acting contrary to law or contrary to its own charter. In these cases the law assumes that the member of the corporation or the rate-payer has a specific legal interest which entitles him to come to Court in support of his right and in order to prevent the corporation or the public body from acting contrary to law or their own charter. There seems to be no reason in principle why the member of the corporation or the rate-payer should only come to Court by way of a suit, and why he should be debarred from invoking the jurisdiction of the Court under Section 45.'

It is true that the High Court of Bombay was dealing with a case under Section 45 of the Specific Relief Act but, in my opinion, the principle to be applied in a case falling under Section 42 is no different. The touch-stone for the right of a particular plaintiff to bring a suit under Section 42 of the Specific Relief Act is whether his interests are affected by the act complained of.

It is not necessary that the plaintiff should show that he has an interest in the particular fund which has been misapplied or misappropriated. The rule as stated by Chaudhuri J. in In re Abdul Rasul. ILK 41 Cal 518: (AIR 1915 Cal 91) is that 'he alone is a competent relator who has some interest other than that of the community at large in the question to be tried'. Being rate-payers, the plaintiffs have a peculiar and special interest in the properties of the Municipal Committee and are vitally concerned with the illegal or ultra vires acts of the Municipal Committee.

9. Hari Chand, in his commentary on the Punjab Municipal Act (1934 edition), at page 278, goes so far as to say that 'all property acquiredor held by committee is held in trust for public purposes or for purposes of the Act.' All properties vesting in the municipality under Section 56 of the Punjab Municipal Act are charged with a public trust of which 'the inhabitants are the beneficiaries'. Reference may also be made to the rule laid down by a Division Bench of the Bombay High Court (Parsons and Tyabji JJ.) in Vaman v. Municipality of Sholapur, ILR 22 Bom. 646, where it was held that

'a suit will lie at the instance of individual tax-payers for an injunction restraining the municipality from misapplying its fund.'

10. It is impossible to accede to the argument of the learned counsel for the appellant that as the interests of the plaintiffs cannot be predicated a declaratory suit at their instance cannot lie.

11. It has next been contended that the appellant has been dealing with the property as an owner since 1946 when the sale-deed was executed. The property has been split up into plots and various persons have acquired interests and title in the property which was sold by the second defendant to the appellant. There is also an allegation that buildings have been constructed on some of the plots. The Municipal Committee sold the land despite some opposition and after sanction had been given by the Commissioner and the sale had even received the stamp of approval of the then Punjab Government which had deputed its Minister, Ch. Lahri Singh, to settle the whole dispute.

It is very strongly contended that it would not be a sound and judicious exercise of discretion at this stage to uproot the title merely because there has been some defect in the execution of the sale-deed. Sub-section (3) of Section 47 makes it clear that the transaction which does not conform to the requirements of Sub-section (2) would not be binding on the Municipal Committee. It Implies that on the rest of the world it would be binding. It is only the Municipal Committee which could avoid the transaction and the corporation not haying taken any action and indeed haying declined to accept the resolution sponsored by some Municipal Commissioners to challenge the sale, it should not now be declared at the instance of the disgruntled ratepayers that the sale is not binding on the second defendant.

12. Mr. Sastri has brought my pointed attention to the fact that if the suit had been brought by the Municipal Committee, the first defendant would have been able to set up by way of defence a case for restitution under Section 64 of the Indian. Contract Act. A decree in favour of the plaintiffs in the present suit might preclude the first defendant from claiming compensation from the Municipal Committee on basis of a quasi-contract. There is cogency in the argument which has been advanced on behalf of the appellant and more so, as I am informed at the Bar, that a suit filed by the Municipal Committee against the appellant for possession of the land in suit is also pending in the civil Courts. That suit, in fact, should be a proper forum for determination of the rights and liabilities of the parties under the contract

13. This brings me to the question of limitation. There is no specific provision in the Limitation Act which would be applicable in the present situation, and under the residuary Article 120, the limitation of six years would run from the time when the right to sue accrued. The sale had been sanctioned by the Commissioner in 1941 and the sale deed was actually drawn up on 30th of September 1946. The present suit by the rate-payers was brought on 28th of December 1954. Their was no secrecy about the sale transaction which was witnessed by a registered sale deed and there can be no manner of doubt that because of the agitation amongst the inhabitants of Sonepat against the sale, the rate-payers if not the inhabitants of the town had full knowledge of it. The sale transaction of the Committee was affirmed after a good deal of deliberation by the Punjab Government and the execution of the sale deed was the culmination of the long course of negotiations which had started from the year 1940.

14. Mr. Sarin, for the respondent, has argued that limitation for the suit would run from the time when the appellant started openly selling plots. I do not think that this is a correct line of approach and, in my opinion, it is impossible to controvert the position that the cause of action had accrued so far as the plaintiffs are concerned when the sale deed had been executed. It is well to observe that it is the sale by the municipality which is impugned and not parcelling of the land into plots or their sale by the first defendant

The first defendant could have sold or parcelled the land into plots when he liked, as he was the owner of it. The plaintiffs could not depend for their cause of action on the action or inaction of the first defendant. Mr. Sarin also contends that the final refusal of the Committee to intervene on 3rd of November 1954 gave the plaintiffs a fresh cause of action. This argument is neither reasonable nor convincing. To accept 3rd of November 1954 as the date when the cause of action accrued to the plaintiffs would introduce an element of uncertainty and artificiality which should be avoided,

The land had been taken for purposes of development and exploitation and it would be unfair to expect the first defendant to wait indefinitely the result of the representations which had been made by some persons to the Municipal Committee to take action to challenge the sale. From whatever aspect the matter is looked at, the conclusion is irresistible that the right to sue accrued to the plaintiffs not later than the date when the sale-deed was executed. I am of the opinion that the suit of the plaintiffs is barred by time and! should have been dismissed by the Courts below.

I also think that it would have been a sound and judicious exercise of discretion to dismiss the declaratory suit of the plaintiffs. Though it is not necessary to do, I may add by way of caution that this conclusion would not affect the decision on the question of limitation in the suit brought by the Municipal Committee which as Ihave stated before is pending adjudication. The Court seized of that case, I repeat, would be the proper forum for adjudicating all the disputes which are likely to arise if the sale is set aside. With these observations, I would allow this appeal and dismiss the suit of the plaintiffs. I would, however, leave the parties to bear their own costs.


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