Viswanatha Iyer, J.
1. In this Original Petition Kulasekharapuram Pan-cheyat in Quilon District challenges the order of the Government, Ext P-5 dated 9th January, 1973, allowing a revision petition filed by the Thazhava Panchayat against the order of the Director of Pen-chayats sanctioning the opening of a new public market by the petitioner-Pancha-yat. Thazhava Panchayat is running a public market at a distance of about 300 metres away from the site proposed to be used by the Kulasekharapuram Panchayat for running a new public markets A tarred road connects the two places. The public market run by the Thazhava Panchayat is in existence since 1950 if not earlier. The objection of the Thazhava Panchayat to the opening of a new market so close to its market is stated to be based on Rule 26 of the Kerala Panchayat (Public and Private Market), Rules, 1964. That rule is in the following terms:--
'A Panchayat shall not except with the prior sanction of the Director of Pan-chayats open a new public market nor issue licence for a private market if the site for such market is within a distance of three kilometres from ah existing public or private market:
Provided in the case of an eveningmarket such distance limit shall be 1.5kilometres from any other existing even-ing market.'
This rule was introduced only in 1965 and is apparently intended to avoid unhealthy competition between two markets, whether public or private. The answer of the petitioner-Panchayat is that this rule is intended to apply only to the opening of a new market within the same Panchayat where another market private or public, exists. Since that is not the case here the Thazhava Panchayat has no right to object the opening of a new market by the petitioner-Panchayat. The contention of the petitioner-Panchayat, though accepted by the Director of Pan-chayats, was rejected by the Government in the order under challenge. The correctness of the Government order is canvassed in this writ petition. When the Original Petition was heard by one of us the decision of a learned single Judge of this court in Sainuddin v. Municipal Commr., Attingal, 1972 Ker LT 300 = (AIR 1973 Ker 12) which supports the stand taken by the Thazhava Panchayat was relied on by the latter. Since the correctness of that decision was challenged the case was adjourned for hearing by a Division Bench and it is in these circumstances the Original Petition has come up for consideration before us.
2. Section 85 of the Kerala Panchayat Act (Act 32 of 1960) empowers a Panchayat to provide with the sanction of the Director a place for use as a public market. All public markets within a Panchayat area shall be under the control and management of the Panchayat. Rules framed under the Act provide for the procedure to be followed to open a public or a private market within a Panchayat 'Public market' is denned in the Act and the Rules to mean any market owned, constructed, repaired or maintained by the Panchayat. Rule 3 provides that before taking a decision the Panchayat should publish a notice in the notice board of the Panchayat in any prominent place in each ward of the Panchayat, and in any daily newspaper having wide circulation in the Panchayat area inviting objections, if any, to the opening of a new public market. If any objection is received the Panchayat must consider it before passing a resolution to open a new market and then seek the sanction of the Director as required by Section 85 (1) of the Act. This procedure indicates that the inhabitants within the Panchayat area can, for diverse reasons, object to the opening of a new market. The objection of the residents of the neighbouring Panchayat or of the neighbouringPanchayat itself is not contemplated by the procedure prescribed for opening a new market. Each Panchayat, is, subject to the provisions of the Act, an autonomous unit. It is for the Panchayat to decide what amenities are to be provided for the inhabitants and where that amenity should be. The Panchayat derives income from a public market or a private market. In the former case it gets income by way of rental of the various stalls in the market. In the latter case it receives licence fee for permitting a private market to continue. This is one of the sources of income to the Panchayat. In tapping such a source the interests of the Panchayat alone matters. It may be that the functioning of two markets very close to each other situate in two adjoining Panchayats may not fetch that income as may otherwise be derived by the existence of one market alone in a particular place. If the market is situate in one Panchayat area alone even if it affects the income of a market in a neighbouring Panchayat, there is no provision for any apportionment of the income of the Panchayat from the market between the two neighbouring Panchayats. If the existing market is situate within the area of two or more Panchayats, then alone provision is made in Rules 24 and 25 to apportion the income between the two Panchayats. Thus the rules framed do not in any way provide for considering the interests of any adjoining Panchayat when a public market is proposed to be opened in any Panchayat. In this set up of the rules we have to understand the scope of Rule 26. Rule 26 only mentions that no new market shall be opened within a radius of three kilometres of an existing market, whether public or private. But by the very definition of a 'public market' namely, a market owned, constructed or re-paired or maintained by the Panchayat that existing public market must be in the same Panchayat. With respect, this aspect has been overlooked in the deci-sion reported in Sainuddin v. Municipal Commr., Attingal, 1972 Ker LT 300 = (AIR 1973 Ker 12). The facts in that case are as follows. There was an existing public market within the Attingal Municipal area. An evening market was started in the neighbouring Mudakkal Panchayat. The distance of the evening market place was less than 1.5 kilometres from the Municipal market place. The licensee of the evening market was sought to be restrained by the Attingal Municipality from conducting the mar-ket on the ground that the evening market is within the prohibited distancementioned in the Rule 26 from the public market conducted by the Municipality.No sanction of the Director of Panchayatis required to start a private market oran evening market in a Panchayat. Thesanction of the Director had not been obtained by the Mudakkal Panchayat before granting licence to the evening market. According to the licensee of theevening market the sanction of the Director should be obtained only if the existing market, whether public or privateor evening, is in the same Panchayat asthe newly opened market. Since the public market conducted by the AttingalMunicipality is outside the MudakkalPanchayat area the Municipality has noright, according to the licensee, to objectto the opening of a market by the Mudakkal Panchayat. On these facts this courtobserved:
'The principle underlying the restriction regarding distance between the two markets is to avoid unhealthy competition and the evil consequences that normally flow from such a situation. If that is the purpose, the evil sought to be avoided is there, even if the existing market is one established under the Municipalities Act. The expression used, as stated earlier, is 'an existing public or private market' and not a public or private market already existing or functioning under the Panchayats Act. The Ava-navanchery public market run under orders of the Municipality is thus an existing public market. The ban in Rule 26 must, therefore, apply.'
With respect, we feel that the reasoning of the learned Judge is not correct. To understand the rule as applicable only to an existing market in the Panchayat it is not necessary that the rule-making authority should have expressed 'a public or private market already existing or functioning under the Panchayat Act'. 'Public market' is defined both under the Act and the Rules to mean a market owned, constructed, repaired or maintained by the Panchayat. When the rules under the Panchayat Act provide for opening and maintaining a public market it follows that such market must be a market functioning under the Panchayat Act. The very scheme of the rules relating to the opening of a market of which a reference has already been made earlier leads only to an inference that the existing market must be a market functioning under theAct in the Panchayat. Therefore, we feel that Rule 26 of the Kerala Panchayat (Public and Private Market) Rules has not been correctly interpreted in the decision relied on by the respondent.
3. From this it follows that the Government was not right in interfering with the sanction granted by the Director to open a new public market by the petitionern-Panchayat on the ground that the existing market managed by the Tha-zhava Panchayat is within a distance of 300 metres only. The decision of the Government is therefore unsustainable.
4. In the result, the original petition is allowed. Ext. P-5 order of the Government dated 9th January, 1973 is quashed. In the circumstances of this case, the parties shall bear their costs.