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Babubhai Khandubhai Desai and ors. Vs. Amreli Municipality - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtGujarat High Court
Decided On
Judge
Reported in(1973)14GLR662
AppellantBabubhai Khandubhai Desai and ors.
RespondentAmreli Municipality
Cases ReferredIn Behrampur Municipality v. Anem Pedda Siva Parbatmma and Ors. Civil Appeal No.
Excerpt:
.....been excluded by necessary implication. but what the municipality proposes to do by the impugned resolution is clearly outside the scope and competence of its powers in so far as it proposes to charge construction cost to the intending lessees for the privilege of becoming its lessees......to the municipality to charge stallage or other rents or fees for the use by any person of any public market but it is not competent to the municipality to take not only stallage or other rents or fees but also construction charges for the shops. it was further contended by the petitioners that it is competent to the municipality from time to time sell by public auction or otherwise the privilege of occupying any stall or space but it is not competent to the municipality to provide for charging construction cost in respect of any stall or shop in a municipal market as proposed to be done by the impugned resolution. the main argument which was urged before me at the time of hearing was based on section 208(1) of the act. the petitioners have, therefore, filed this petition challenging.....
Judgment:

B.J. Divan, J.

1. There are 40 petitioners in this Special Civil Application and they contend that all of them are carrying on business at the New Vegetable Market in Amreli Town of Amreli District. The Respondent is the Amreli Municipality constituted under the Gujarat Municipalities Act, 1963 (hereinafter referred to as the Act). According to the petitioners, they are businessmen doing different types of businesses. They carry on their respective business in cabins or stalls owned by the petitioners and situated on the land purchased by the Municipality from the State Government. Formerly on this plot of land there were Police Head-quarters but subsequently the land was purchased by the Municipality for the purpose of putting up the market. In the case of some of the petitioners, they carry on businesses for which licences are required to be obtained from the Municipality and each of such petitioners has obtained the necessary licence from the respondent Municipality to carry on his trade or business for the use of the ground on which the cabins or stalls are put up. The Respondent-Municipality charges rent on a daily basis and the same is being paid by different petitioners. According to the petitioners, the Municipality had purchased the land on which the old Police Head-quarters at Amreli were situated and after purchasing the land the Municipality prepared a scheme for constructing on a part of the said laud stalls for vegetables, fruits etc. and in the remaining portion of that land the scheme of the Municipality was to put up shops for the sale of different articles of daily use. It is the contention of the petitioners that this scheme was prepared with the ostensible object of providing shops with guaranteed possession to middle-class businessmen who had no places of business at less and reasonable cost and on reasonable rent. For a long time after purchasing the land from the Government, the Municipality could not put up any construction on the land and according to the petitioners the Municipality had not got sufficient fund with it for investing in a large-scale construction of stalls and shops. On April 30, 1972, the respondent-Municipality passed a Resolution to the effect that 81 stalls for the sale of vegetables etc. should be allotted to the vegetable vendors without charging any cost of construction but in respect of the other shops on the ground floor, the Municipality would charge cost of construction as determined by the Consulting Engineer according to the classification of shops made by him. Depending upon the size of the shop and the situation of the shop, the municipality proposed to charge cost of construction from Rs. 2000/- to Rs. 20,000/- per shop; and in this manner about 160 shops are proposed to be constructed. Under the Resolution it was provided that the shops would be given on lease of 10 years with an option to the lessee to extend the lease for a further period of 10 years; and in that connection if necessary the sanction of the State Government would be obtained. The Resolution of April 30, 1972 further provides that notwithstanding that the municipality would charge the cost of construction, the ownership of the shop would remain in the municipality and over and above taking the sum for the cost of construction, monthly rent in respect of the said shops at eight annas per Sq. foot would be charged. Under the Resolution, if during the term of the lease, the lessee wants the shop to be transferred to another person, such transfer would be made on the payment of fee equal to 25% of the fee charged at the time of allotment. Under the Resolution even after the expiry of the period of 10 years or 20 years the tenant would be continuing, he would have no right to sub-let the shop or to get the shop transferred to another person. Under the Resolution it was provided that in addition to the rent, the tenant would be required to pay water-tax, house-tax, education cess, electricity consumption charges etc. At the meeting objections were raised that the construction charges which were proposed to be taken from the allottees or from the proposed tenants was excessive and illegal and could not be charged under the law. According to the petitioners, this Resolution of April 30, 1972, a copy of which has been annexed to the petition as Annexure 'A', is contrary to the provisions of the Act.

2. The main contention of the petitioners is that under Section 208 of the Act, it is open to the Municipality to charge stallage or other rents or fees for the use by any person of any public market but it is not competent to the Municipality to take not only stallage or other rents or fees but also construction charges for the shops. It was further contended by the petitioners that it is competent to the Municipality from time to time sell by public auction or otherwise the privilege of occupying any stall or space but it is not competent to the Municipality to provide for charging construction cost in respect of any stall or shop in a municipal market as proposed to be done by the impugned Resolution. The main argument which was urged before me at the time of hearing was based on Section 208(1) of the Act. The petitioners have, therefore, filed this petition challenging the impugned Resolution of April 30, 1972 and they have prayed that this Resolution should be quashed and the Municipality should be permanently restrained from implementing or acting upon the said Resolution and from incurring any expenditure in that connection.

3. A translation of the Resolution of the Municipality is Annexure 'A' to the petition; and the Resolution in terms says that the Municipality has no fund to undertake such a large construction from its own funds and hence the Municipality lays down the terms to lease the stalls and the shops for vegetables and the upper portion. Depending upon the size of the shops and the situation of the shops the construction cost proposed to be charged from the intending lessees varies from Rs. 2,000/- to Rs. 20,000/-; and it is found that ultimately the Municipality would realize Rs. 20,86,000/- from the different shop-keepers towards construction cost in accordance with the scheme set out in the Resolution.

4. In the affidavit-in-reply, the Chief Officer of the Amreli Municipality has contended that the Resolution is legal and the entire scheme for charging of construction cost in the manner in which it is sought to be done is legal.

5. Under Section 4 of the Bombay Rent Act, commonly known as the Rent Control Act, the provisions of that Act do not apply to any premises belonging to a local authority; and hence the relationship between the Respondent-Municipality and its tenants would be governed by the provisions of the Transfer of Property Act and not by the provisions of the Rent Control Act. In the case of any ordinary landlord it is not open to the landlord to charge any premium or any sum other than the rent for the purpose or with the object of letting out the premises to the tenant. However, under the provisions of the Transfer of Property Act, it is open to the landlord to charge a premium at the time of granting lease. In the instant case, the main question before me is not whether the Municipality in its capacity as landlord can lawfully charge these costs of construction even though they may amount to a premium; but the question is whether the Municipality, being a creature of the statute, is competent to charge this particular item for letting out stalls and shops in the market. It is contended in this connection that the respondent Municipality being a creature of a statute can only function within the four corners of the powers conferred upon it by the statute and if the power to collect such premium or construction cost is not conferred upon it, then any attempt to collect such construction costs as and by way of condition-precedent to the granting of a lease is illegal and contrary to the provisions of law. The locus standi of the petitioners to file the present petition has been set out in paras 1, 2 and 3 of the petition and, in my opinion, there is no serious dispute about the locus stand of the petitioners to maintain this petition.

6. Section 207 of the Act, provides:

207(1). It shall be lawful for the municipality to direct that no place other than a municipal market or slaughter-house, shall be used for any of the purposes specified in Sub-clauses (i) and (ii) of Clause (b) of Sub-section 275 except under and in accordance with the conditions of a licence from the executive committee, which may at its discretion from time to time grant, suspend, withhold or withdraw such licences either generally or in individual cases.

Section 275(1)(b) provides as follows:

275. (I) A Municipality may from time to time make, alter, or rescind by-laws not inconsistent with this Act:

(b) prescribing the conditions on or subject to which and the circumstances in which and the areas or localities in respect of which licences may be granted, refused, suspended or withdrawn for the use of any place not belonging to the municipality:

(i) as a slaughter-house;

(ii) for the manufacture, preparation, storing, sale or supply for the purpose of trade of any article or thing intended for human food or drink, whether such food or drink is to be consumed in such place or not

This is the provision of Section 275(1)(b)(i) and (ii) and, therefore, looking to the power to make by-laws, it would be lawful for the Municipality to direct that no place other than the municipal market shall be used for the purpose of selling articles of food etc. except under and in accordance with the licence from the Executive Committee. Section 208 of the Act provides as follows:

208. (1) The municipality may from time to time open or close any public market or slaughter-house. It may also either take stallage or other rents or fees for the use by any person of any such market or slaughter-house, or from time to time sell by public auction or otherwise the privilege of occupying any stall or space in or of otherwise using any such market or slaughter-house.

(2) Any person who, without the permission of or a licence from the Municipality, shall sell or expose for sale any article in the said markets or use the said slaughter-house, shall be punished with fine which may extend to fifty rupees.

It is, therefore, clear that under Section 208, it is open to the Municipality from time to time to open any public market or slaughter-house and having once opened looking to the exigencies, it may close down such public market. Once a public market is opened, the municipality may either take stallage or other rent or fee for the use thereof or it may from time to time sell by public auction or otherwise the privilege of occupying any stall or place in or of otherwise using such public market. Mr. Vakharia, for the respondent Municipality, is right when he contends that under the scheme of the Act, particularly Sections 80 and 82, the Municipality may open a market either on its own, land or on the land of another. Section 80 of the Act provides:

80. (1) A municipality may acquire and hold property both moveable and immoveable, whether within or without the limits of the municipal borough.

(2) All property of the nature specified in the clauses to this section, not being specially reserved by the State Government, shall be vested in and belong to the municipality, and shall, together with all other property of whatever nature or kind, which may become vested in the municipality, be under its direction, management and control, and shall be held and applied by it as trustee, subject to the provisions and for the purposes of this Act:

(a) All public town-walls, gates, markets, slaughter-houses, manure and night soil depots.

It may be noted that Section 208 of the Act which comes under the provisions relating to regulations of market etc. does not require that the public market must be opened on land belonging to the Municipality itself. The public market can be opened even on land belonging to another individual or another person but the municipality is not prohibited from opening a public market on its own land or land which is vested in it. Under Section 87 of the Act, duties of every municipality have been laid down and it has been provided that it should be the duty of every municipality to make reasonable and adequate provision for the matters set out in the different clauses of Section 87, within the limits of the Municipal Borough. Under Clause D, 'markets' are mentioned as one of the duties which are to be carried out by the Municipality. Section 91 of the Act on the other hand provides for discretionary functions of the Municipality and it provides that a municipality may at its discretion provide either wholly or partly out of the municipal property and fund for the matters set out in that section provided they are within the limits of the Municipal Borough and under Clause A (b) constructing, establishing or maintaining markets is mentioned. Thus constructing, altering or maintaining of markets is one of the duties of the municipalities and is also one of the discretionary functions of the Municipality. Section 65 of the Act provides as follows:

65. (1) A municipality shall be competent, subject to the restriction contained in Sub-section (2), to lease, sell or otherwise transfer any moveable or immoveable property which may, for the purposes of this Act, have become vested in or been acquired by it; and so far as is not inconsistent with the provisions and purposes of this Act, 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) In the case of every lease or sale of land under Sub-section (1) of Section 146 and of a lease of immoveable property for a term exceeding ten years and of every sale or other transfer of such immoveable property, the market value of which exceeds one lakh of rupees, the previous permission of the State Government is required.

(3) In the case:

(a) of a lease for a period exceeding one year of a sale or other transfer of immoveable property the market value of which does not exceed one lakh of rupees or contract for the purchase of any immoveable property;

the sanction of the municipality by a resolution passed at a general meeting is required.

Therefore, it is obvious that it is open to the municipality to grant a lease for a period upto ten years by a Resolution passed at a general meeting but if the period of the lease is to exceed 10 years, then the previous permission of the State Government is required. It was contended on behalf of the Municipality that subject to the restrictions mentioned in Section 65 of the Act it is open to the respondent Municipality to lease out its immoveable property or sell it or otherwise dispose it of. It is no doubt true as Mr. Vakharia contends that Section 65 is a section which empowers the municipality to deal with all its immoveable properties and in appropriate cases transfer it by granting a lease. If the period of lease is upto 10 years, a Resolution passed at the general meeting is required but if the term is to exceed 10 years, the previous permission of the State Government is required. In the instant case, however, I am not concerned with the question of the power of the Municipality to grant a lease but the question before me is whether it is competent to the Municipality to charge the construction cost in the manner in which' it is proposed to be done under the impugned Resolution. It is no doubt true that when the municipality is empowered to grant a lease for a period of 10 years by a Resolution of the General Meeting, it is equally competent for it to lay down proper terms and conditions of the lease; but again I am not concerned in the instant case with any ordinary property of the municipality but I am concerned with a public market, which the municipality proposes to set up in this land which it purchased from the Government. Mr. Vakharia has rightly pointed out that this land was purchased from the Government by the municipality and it was in 1965 that the municipality obtained possession of this land from the Government.

7. It was further contended on behalf of the respondent-Municipality that Chapter XI of the Act in which Section 207 occurs, deals with the powers of the Municipality in different spheres. Chapter XI covers Sections 146 to 232 (both inclusive). The heading of the Chapter is 'Municipal Powers and Offences'; and there are sub-groups of sections in this Chapter. Section 208, which is the material section requiring consideration, occurs in group of sub-sections with the heading 'Regulation of market, sale of goods etc.'. It was contended on behalf of the municipality that the power to open and close any public market is part of the regulatory powers conferred upon the Municipality by Chapter XI and, therefore, the power to charge any amount by way of premium, which a landlord can charge under the provisions of the Transfer of Property Act, cannot be looked for in this Section 208. I am unable to agree with this contention of Mr. Vakharia. Section 208 confers upon the Municipality the power to open or close any public market and it simultaneously provides that in connection with any public market it may either take stallage or other rents or fees for the use by any person of any such market or from time to time sell by public auction or otherwise the privilege of occupying any stall or place in or of otherwise using any such market. It is no doubt true that the relevant power is conferred by the use of the words 'it may either take stallage or other rents etc.'; but in connection with the public markets, there is only Section 208 and no other section. It is a well-settled principle of construction of statutes that the particular provision excludes the general provision. The general provision set out in Section 65 which deals with the power to lease immoveable properties vested in the municipality is a general provision; whereas Section 208 is the specific and particular provision in connection with public market; and it provides that in connection with public markets, the Municipality may either take stallage or other rents or fees or in the alternative it may sell by public auction or otherwise the privilege of occupying any stall or space in or of otherwise using any such market. Thus, the statute contemplates that in connection with a public market, the municipality may charge moneys in any one of the following forms:

(1) Stallage;

(2) Other rents;

(3) Fees for the use of any public market; and

(4) Consideration for sale by public auction or otherwise of the privilege of occupying any stall or space in or of otherwise using any such market.

These are different forms of considerations which can be charged by the municipality under the provisions of Section 208(1). The stallage has been denned by the dictionary to mean 'a tax or toll levied for the liberty of erecting a stall in a fair or a market.' In the instant case, is it difficult to say that the construction cost which the municipality proposes to charge can be designated as stallage or rents or fees; nor is it consideration for the sale by public auction or otherwise of the privilege of occupying any stall or place in or otherwise of using any such public market. The Municipality proposes to charge rent over and above the construction costs. Other rents and charges are going to be collected under the scheme set out in the impugned Resolution and it is for the granting of the lease that the construction cost of Rs. 2,000/- to Rs. 20,000/- is going to be charged by the respondent-Municipality.

8. In Behrampur Municipality v. Anem Pedda Siva Parbatmma and Ors. Civil Appeal No. 415 of 1961, decided by the Supreme Court on March 27, 1963, the principles governing the application of municipal statutes were laid down. The question before the Supreme Court was in connection with the power of the Municipality to enter into an agreement to charge some fee in respect of the encroachments on its land and one of the contentions was that the Municipality had the power to enter into any agreement charging any sum it liked for permitting the encroachment and what had ; happened in that case was that the Municipality had by a resolution determined the terms on which it would be prepared to make such an agreement. This contention on behalf of the Behrampur Municipality was rejected by the Supreme Court. Sarkar J., delivering the judgment of the Supreme Court observed:

We do not find this contention at all acceptable. When the statute expressly states that a Municipality may permit an encroachment by granting a licence for which it may charge a fee, it would follow that the Municipality cannot permit an encroachment upon any other terms. The Municipality is a statutory body. It can only act within the bounds of its statute. If the statute says that it can permit encroachment only on certain terms, we think it clear that it cannot permit encroachment on any other term. It would follow that it cannot enter into a contract charging whatever sum it liked for permitting an encroachment on the public street. That is also commonsense.

Applying the same standard to the section before me it is open to the Municipality to enter into an agreement regarding the use of its properties on which a public market is set up; but when this particular statute states that a Municipality can charge stallage, other rents or fees for the use by any person of such public market or consideration for the sale by public auction or otherwise of the privilege of occupying any stall or place in or otherwise using any such public market, it would follow that the Municipality cannot permit the use of a public market on any other terms of the specific provision of Section 208(1) granting the power to the Municipality to charge either stallage or other rents or fees or consideration for sale by public auction or otherwise of the privilege of occupying any stall or place, excludes all other forms of consideration for the use of any stall or place in the public market. Being a creature of the statute it is not open to the Municipality to travel outside the four corners of Section 208(1) so far as public markets are concerned and seek to charge any sum not covered by Section 208(1). In the instant case, two principles of construction of statutes have to be simultaneously applied-(1) the particular excluding the general; and (2) in the case of a statutory body like the municipality, it can only charge that amount which it is permitted to charge and all other charges not included in the statute must be deemed to have been excluded by necessary implication.

9. It was sought to be contended on behalf of the Municipality by Mr. Vakharia that Section 208 can come into force only after the public market has come into existence but not if a market is yet to come into existence. This seems to be an argument of despair because the whole scheme which has been set out in the impugned resolution is to set up a public market which the Municipality is empowered to do only under Section 208 and it is proposed to charge fees in accordance with the scheme for the construction charges and the charging of construction cost to the intending lessees in the market. Of course, if the Municipality drops the entire scheme of constructing this public market, nothing more requires to be stated; but what the Municipality proposes to do by the impugned resolution is clearly outside the scope and competence of its powers in so far as it proposes to charge construction cost to the intending lessees for the privilege of becoming its lessees.

10. Under these circumstances, it is obvious that the Resolution, dated April 30, 1972, in so far as it proposes to charge construction costs from the shop-keepers according to the details set out in the resolution, is ultra vires the powers of the Municipality under the provisions of the Act. Therefore the impugned Resolution is illegal and void and must be quashed and set aside.

11. I, therefore, allow this Special Civil Application and set aside the Resolution passed by the Amreli Municipality on April 30, 1972, at Sr. No. 4 of the agenda.

12. The respondent Municipality is restrained from implementing or acting upon the said Resolution and from incurring any expenditure in connection with the implementation of the said Resolution. There would be no order as to costs of this Special Civil Application. Rule is made absolute.


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