ORDER:
HON’BLE SRI JUSTICE S.V. BHATT Writ Petition No.1294 of 2008 Waters Users Association, Nelapadu-2, Tenali Mandal, Guntur District represented by its President has invoked the jurisdiction of this Court under Article 226 of the Constitution of India for writ of Mandamus declaring G.O.Ms.No.1193 Revenue(ASN.V) Department dated 10.09.2007 as illegal, arbitrary and unconstitutional and further prays for declaration that the assignment through impugned G.O. is against the principle of prohibition of encroachment or construction activity by private persons on canal bunds.
Through the impugned G.O., the 1st respondent granted lease of vacant irrigation land of an extent of Ac.2.00 on canal bund situated in between Nizampatnam channel and West Channel Krishna, Western Division, Tenali for 99 years in favour of Kondaveeti Seva Samithi/7th respondent for construction of a kalyana Mandapam, old age home etc.
The averments, in brief, are that a canal bund is located in between Nizampatnam Channel and West Channel, Krishna Western Division, Tenali. The canal is used for drinking and irrigation purposes by several villages along the canal and small and marginal farmers in the neighbourhood. The 1st respondent issued G.O.Ms.No.101 Irrigation & CAD (PW-LA-1) Department dated 03.06.2005 transferring an extent of Ac.117.04 cents to Vijayawada, Guntur, Tenali, Mangalagiri Urban Development Authority,(VGTM-UDA) Vijayawada for better use and preservation of vacant lands in the transferred area. The instant government order reads as follows:
“GOVERNEMNT OF ANDHRA PRADESH ABSTRACT Major Irrigation – Krishna District – Vijayawada City – Action Plan – Comprehensive Development of Vijayawada City – Proposal for transfer of Irrigation Lands for an extent of Acs.117.24 cents to Vijayawada Guntur Tenali Mangalagiri Urban Development Authority, Vijayawada – Orders – Issued.
IRRIGATION 7 CAD (PW-LA-1) DEPARTMENT G.O.ms.No.101 Dated 03.06.2005 Read the following:
1. From the Vice-Chairman, VGTM-UDA, Vijayawada-2 RC.No:C8-g1/2000, Dated 01.04.2002.
2. Ref: From Engineer – in – Chief (Irrigation), Irrigation & CAD, Hyderabad Lr.No:DCE.IV/OTM5/S.5/8751/2002, Dated 5.7.2002.
3. From the Collector & District Magistrate, Krishna, Machilipatnam Roc.No.E4.6484/2001, Dt.23.2.2004.
ORDER GOVERNEMTN AFTER CAREFUL EXAMINATION OF THE PROPOSAL FOR TRANSFEROF Irrigation lands for an extent of Acs.117.4 cents to Vijayawada Guntur Tenali Mangalagiri Urban Development Authority have decided that any vacant land in the heart of the city to be utilized for construction of buildings, should not be allowed and the open areas to be utilize only for connectivity roads and parks. Any of the Irrigation Land, if already, is given on long term lease to private individuals, no further extension shall be given on expiry of such lease, as the city is already congested. The Chief Engineer concerned shall be responsible for protection of these lands and immediate steps should be taken for fencing and protecting the lands, and ordered accordingly.
The Engineer – in –Chief (Irrigation), Irrigation & CAD, Hyderabad and Collector, Krishna District, Machilipatnam are requested to take further action accordingly in the matter.”
The subject matter of the writ petition forms part of the larger extent of land transferred in favour of VGTM-UDA, Vijayawada. On the strength of G.O., it is contended that the vacant land should not be utilized for construction of buildings and the land be utilized for connecting roads and parks, the irrigation lands if already given on long term lease to private individuals, further extension ought not to be granted after expiry of the subsisting lease periods. G.O. directs the Chief Engineer to protect the lands and proper steps for preservation should be taken up by the irrigation and command area. It is the grievance of petitioners that the impugned G.O. is issued firstly contrary to the mandate of G.O.Ms.No.101 dated 03.06.2005 and secondly, defeats the objects for which the Irrigation Department was directed to properly enclose and protect the open areas. It is further averred that the grant of lease to 7th respondent and construction of Kalyana Mandapam buildings etc., would certainly result in contamination of water thereby depriving the enjoyers of canal water and the established right and enjoyment of water from the canal. The petitioner-association claims to have filed objections before the 4th respondent on 26.04.2005 and in spite of receipt of the objections, on the representation received from Sri G.Venkata Reddy, MLA, Duggirala, Guntur District, long term lease of Ac.2.00 of valuable land is granted and the lease is illegal, arbitrary and unconstitutional. It is further stated that the subject matter of writ petition is worth Rs.10 crores and granting lease for 99 years without any condition or consideration amounts to arbitrary exercise of power and unconstitutional.
The petitioner objects to utilization of canal bund for construction of buildings etc. and prays for quashing the impugned G.O.
The 2nd respondent filed counter affidavit admitting that orders were issued in G.O.Ms.No.101 I&CAD(PW.LA.I) Department, dated 03.06.2005 transferring irrigation lands of an extent of Ac.117.04 cents to Vijayawada, Guntur, Tenali and Mangalagiri, Urban Development Authority. The 2nd respondent does not dispute the location of subject matter as forming part of larger extent covered by G.O.Ms.No.101 dated 03.06.2005. The 2nd respondent further states that proposal for construction of park by Tenali Municipality in an extent of 4500 square meters on the northern side of Executive Engineer’s quarters was submitted through Letter No.DCE/IV/OTM- 5/S5/CM–99 dated 21.12.2001 to the Government for according permission to handover the site to municipal authorities for establishing a park. The Government through memo No.17382/MM.II/2/2001-3 dated 08.04.2002 accorded permission to Municipality to develop a park as recommended through letter dated 21.12.2001. It is further expressed that it is desirable to retain the ownership of canal bund with I &CAD Department. The contradiction of stand of 2nd respondent is evident from the following averments:
“Moreover G.O.Ms.No.101, dated 03.06.2005 speaks about further extension of already leased irrigation bunds to the private individuals only. But, G.O.Ms.No.1193 dated 10.09.2007 was issued in favour of Kondaveeti Seva Samithi which is a voluntary organization for construction of Kalyanamandapam and old age home buildings meant for public purpose.”
This Court is unable to appreciate the reply of the 2nd respondent and what he intends to place on record.
It is further stated that the extent of lease granted through impugned G.O. does not come under the jurisdiction of petitioner- association and incorrect statement is made by the petitioner. The 2nd respondent states that the averments of pollution are confined to a locality. However, it is stated that necessary provision will be provided in the lease agreement to collect garbage in material bins and disposed of the garbage safely. It is stated that the proposal of 7th respondent was placed before the Council of Ministers and after a resolution was passed by the Council of Ministers, impugned G.O. was issued. It is stated that the G.O. is issued in the interest of public and the needy. While justifying construction through the impugned G.O., the 2nd respondent states that all steps are being taken for eviction of encroachments of tank bund.
Mr.Seetharam Chaparla, learned counsel for the petitioner submits that the grant of lease for 99 years through impugned G.O. on the face of it suffers from arbitrary, illegal and uncannalised power of the State Government. The submission of the learned counsel is that Government is entitled to grant lease of Government land on lease or on alienation. For either of the purposes, the Government is required to follow fair, transparent and legal procedure for creation of interest in Government land in favour of third parties. The learned counsel submits that the request of MLA is taken note of without the request being considered either by the Revenue Department or Irrigation Department and, without recommendation or report from any of the departments which have supervisory or administrative control, a decision of the Council of Ministers is taken. The entire exercise is completed without any material justifying long term lease for 99 years and without any condition or consideration. He further submits that by issuing G.O.Ms.No.101 Irrigation CAD Department dated 03.06.2005, the Government have already vested control of larger extent of land with VGTM-UDA and without withdrawing the administrative control of VGTM-UDA, creation of interest in favour of 7th respondent in an extent of same area is prima facie, arbitrary. It is further stated that without putting the public on notice or calling for objections, the impugned G.O. is issued which was for all practical purposes changes the classification of subject land from canal bund to “Assessed Waste”.
In spite of granting several adjournments, the respondents could not produce the original file in G.O.Ms.NO.1193 I&CAD dated 10.09.2007 to appreciate the material relied upon by the Government for issuing the impugned G.O. and justify the decision making process for granting long lease of 99 years in favour of 7th respondent. However, the learned Government Pleader by reference to the stand taken in the counter affidavit submits that long lease of 99 years is granted to 7th respondent in the interest of public and needy.
Sri P.Raja Reddy Koneti, learned counsel for respondent No.7 submits that no exception to the request of MLA can be taken and that Government has power to grant lease and having regard to the nature of request made by the MLA, through his representation dated 26.04.2005, it is contended that Government has taken a decision to grant long lease for 99 years and this Court in exercise of its jurisdiction under Article 226 of the Constitution of India ought not to interfere and set aside the impugned G.O. It is stated that the long term lease granted is a policy decision of the Government, the scope of judicial review vis-à-vis a policy decision is very limited and the petitioner failed to either plead or prove any statutory violation and the impugned G.O. furthers public utility. He prays for dismissing the writ petition.
From the above pleadings and material on record, the following points arise for consideration:
I. Whether G.O.Ms.No.1193 dated 10.09.2007 is issued in accordance with law, supported by material and issued in public interest?
II. Whether the 1st respondent on a representation filed by the M.L.A. of Duggirala, can grant long lease of 99 years in favour of 7th respondent through impugned G.O.?
III. To what relief?
Points i to iii:
The averments in brief are that admittedly subject land is a canal bund. The extent of Ac.2-00 of land is also stated to be in a prime locality. Through G.O.Ms.No.101 Irrigation & CAD (PW-LA-1) Department dated 03.06.2005 a larger extent of Ac.117-04 cents was transferred in favour of Vijayawada Guntur Tenali Mangalagiri Urban Development Authority. The Irrigation Department was directed to protect the lands by fencing and preventing encroachment. There is further restriction not to extend the subsisting lease of land with 3rd parties after the expiry of lease period. It is on record that the Irrigation Department through E.N.C. letter No.DCC/IV/OTM-5/85/CM’s assurance/99, dated 21.12.2001, requested permission of the Government for transferring a portion of land on the northern side of Executive Engineer’ quarters to Tenali Municipality to develop as a park. Through Memo No.17382/MM.II/2/2001-3 dated 08.04.2002 on consideration of the nature of proposal permission was granted by the 1st respondent. From the Memo dated 08.04.2002, it is clear the Department which has authority and control over the canals, canal bund area etc. has acted in the matter on a request from municipality and order from the Government. But in the case on hand, representation was made to the Government for allotment on 31.10.2006 by the M.L.A. The same resulted in issuance of impugned G.O. dated 10.09.2007. Further a report said to have been sent by the Engineer-in-Chief (Irrigation) on 25.11.2005 is referred to grant long lease for 99 years of an extent of Ac.2-00 to 7th respondent. The intrinsic circumstances or orders certainly speak in volumes about the manner and mode of grant of Government land to 7th respondent.
It cannot be contended that what is granted through impugned G.O. is definitely State largesse. The 7th respondent is not the only person whose request can be considered for construction of either choultry or orphanage. It is further clear that the 1st respondent issued impugned G.O. on a representation received from the people’s representative. Even if a representation is made, the 1st respondent cannot assume that without subjecting the representation to normal procedure and recommendations from the Irrigation Department and Revenue Department, lease for 99 years can be granted without any consideration or benefit whatsoever to the Government. In respect of grant of State largesse, the view taken by the Courts is consistent that the Government cannot arbitrarily either by showing nepotism or favouritism grant State largesse to chosen individuals. The decisions in TVL SUNDARAM GRANTIES REP. BY ITS MANAGING PARTNER V. NALLIAPPAN V. IMPERIAL GRANITES LTD., REP.
[1]
BY ITS DIRECTOR S.R. ASAI THAMBI AND 4 OTHERS , TVL SUNDARAM GRANTIES V. IMPERIAL GRANTIES LTD. AND
[2]
OTHERS , P.MOHAN RAO V. GOVERNMENT OF ANDHRA
[3]
PRADESH AND OTHERS and KRISHANLAL GERA V. STATE
[4]
OF HARYANA AND OTHERS are useful for considering the principle of judicial review on grant of State largesse.
In TVL SUNDARAM GRANTIES’s case (supra 1), the Madras High Court observed as under:
“ The Hon’ble Supreme Court while dealing with the scope of Article 14 of the Constitution of India held that, it is well settled and is axiomatic, the State’s actions, irrespective of distribution of its largess or otherwise is to be tested on the principle of fairness in distribution, or its action as well as the grant of equal opportunity to all prospective lessees or other claimants and equal treatment to all. The rule of law is the very basis of governance in a civilized society. Article 14 of the Constitution of India provides that the state should treat all persons with an equal eye and even hand and should grant equal opportunity to all while distributing its largess, only exception the state can avail of is of making reasonable classification of the persons or things to meet the socio- economic needs or to provide or serve for a particular needs of the society in the facts and circumstances of each case. Discrimination is antithesis of rule of law. All acts of the state, whether administrative or quasi-judicial or exercising of police power or dealing with the state property or grant of its largess etc. have to be decided on the principle of fairness and absence of discrimination of any nature. The cardinal tenets is the objective test is fairness.”
In the appeal in TVL SUNDARAM GRANITES’s case (supra 2), the Apex Court held as under:
“ The position is well settled by a catena of decisions of this Court that while grant of largesse is at the discretion of the State Government, its action should be open, fair, honest and completely above board. In the impugned judgment the High Court has directed the State Government to consider the matter of grant of lease for quarrying granite in the area in question afresh after inviting fresh applications. As such no serious prejudice has been caused to the appellant by such direction. Therefore, we are not persuaded to interfere with the impugned judgement in exercise of jurisdiction under Article 136 of the Constitution.”
under:
I n P.MOHAN RAO’s case (supra 3), this Court observed as “The Government cannot act in a manner which would benefit a party at the cost of the State; such an action would be both unreasonable and contrary to public interest. The Government, therefore, cannot give a contract for a consideration less than the highest that can be obtained for it, unless of course there are other considerations which render it reasonable and in public interest to do so. It is on a total evaluation of various consideration which have weighed with the Government in taking a particular action, that the court would have to decide whether the action of the Government is reasonable and in public interest (Kasturi Lal Lakshmi Reddy 4 supra). Where the object is augmentation of revenue and nothing else, the State is under an obligation to secure the best market price. (Ram & Shyam Co. vs. State of Haryana (12) (1985) 3 SCC 267. In such matters there should not be any suspicion of a lack of principle. (V.Purushotham Rao vs. Union of India (13) (2001) 10 SCC 305. The rule that property should be purchased/sold through public auction or by inviting tenders not only secures the best price but also ensures fairness in the activities of the State and public authorities. Their actions should be legitimate and 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 facts would be absent if the matter is brought to public auction. There may be situations necessitating a departure from the rule, but then such instances must be justified by compulsion and not by compromise. It must be justified by compelling reasons and not just by convenience. (Haji T.M.Hassan Rawther vs. Kerala Financial Corpn. (14) (1998) 1 SCC 166.
Public auction with open participation, and a reserve price, guarantees public interest being fully subserved. (State of U.P. vs. Shiv Charan Sharma (15) AIR 1981 SC 1722). The object of holding the auction is generally to raise the highest revenue. (Ramana Dayaram Shetty (10 Supra). The methodology which can be adopted for receiving maximum consideration in a normal and fair competition would be by public auction which is fair and transparent. Public auction not only ensures a fair price and maximum return it also militates against any allegation of favouritism on the part of the Government authorities. Courts have accepted public auction as a transparent means (Shiv Charan Sharma (15 supra), Ram & Shayam Co.(12), Sterling Computers Ltd., vs. M.& N Publications Ltd., (16) (1993) 1 SCC 445, Mahesh Chandra vs. Regional Manager, U.P. Financial Corpn. (17) (1993) 2 SCC 279, Panchaiyappaa’s Trust vs.
Official Trustee of Madras (18) (1994) 1 SCC 595, Chairman and MD SIPCOT vs. Contromix (P) Ltd. (19) (1995) 4 SCC 595, New India Public School vs. HUDA (20) (1996) 5 SCC 510, State of Kerala vs. M.Bhaskaran Pillai (21) (1975) 3 SCC 432, Haryana Financial Corpn. Vs. Jagdamba Oil Mills (22) (2002) 3 SCC 496 and Aggarwal & Modi Enterprises (P) Ltd., vs. New Delhi Municipal Council (23)(2007) 8 SCC 75). It is well recognised that one of the fairest means, which a State can adopt, without showing any favour in purchase/sale of property, is by auction. (Chint Ram Ram Chand vs. State of Punjab (24) (1996) 9 SCC 338). Invitation for participation in public auction ensures transparency and it would be free from bias or discrimination and beyond reproach. (Aggarwal & Modi Enterprises (P) Ltd., (23 supra), It is admitted, in the counter affidavit filed by the 2nd respondent, that the 3rd respondent- temple would incur an expenditure of Rs.1.2 Crores on procurement of audio and video CDs from the 4th respondent. It is also not in dispute that the subject work was awarded to the 4th respondent through private negotiations and without adhering to the established mode of awarding contracts through the tender process. As departure from the norm would be justified only in cases where it is in the public interest to do so, or to achieve some defined constitutionally recognised public purpose, the question which necessitates examination is whether the impugned order seeks to achieve any such public purpose. No prescribed policy, giving preference in award of contracts of State/Central Government public enterprises, has been placed before this Court. In the absence of which Central Government undertakings, such as the 4th respondent, would stand on part with others eligible to compete for being awarded such contracts. The justification put forth for adopting the private negotiations route is that preparation of audio and video CDs, and making of short films, is a specifialized field which requires expertise of a high order and that it is not amenable to the tender process.”
In KRISHANLAL GERA’s case (supra 4), the Apex Court observed as under:
“If a chunk of a government stadium, being prime land in the heart of the city meant for developing sports and athletics is misused or illegally allowed to go into private hands, it cannot be said that no public interest is involved. While the High Courts are not expected to take policy decisions in regard to sports administration and infrastructure, nor expected to supervise the running of the sports stadia, they are bound to interfere and protect public interest when blatant misuse is brought to their notice. The High Courts should direct the authorities concerned to perform their duties and take action in regard to the irregularities, omissions and negligence, so that the interest of the public, particularly human resources development, could be protected.”
Considered the impugned G.O. in the light of the principles stated in the reported cases, this Court is of the opinion that the representation dated 31.10.2006 is given undue preference and importance by the 1st respondent. Further without any material whatsoever decision to grant long lease of 99 years is taken and impugned G.O. is issued. The G.O. further does not show that there is consideration of circumstances either on the necessity or utility for granting lease and the benefit the Government is to derive by granting a long lease of 99 years in favour of 7th respondent. The G.O. as it appears from the material on record refers to recommendation of Engineer- in -Chief in letter dated 25.11.2005 which is certainly anterior to the representation dated 31.10.2006. There is no material to show that why a particular bit of the choice of the applicant is taken up for grant of long term lease. There is no material to justify the grant of lease in favour of 7th respondent and that it is beneficial to a particular class/classes of people or at least to the public at large. In the opinion of this Court, the 1st respondent does not have so much of power and discretion to create interest in favour of private individuals in the manner done in the instant case. Further when the opportunity is given for production of record for the reasons best known to respondent in spite of several adjournments, the record is not produced. The counter affidavit of 2nd respondent does not answer the issues in the grant of long term lease without a condition or any consideration/benefit to Government or public at large. There is no denial of the fact that the subject land is a valuable land. Further without changing classification from canal bund to any other category lease of canal land is granted to 7th respondent.
For all the above reasons, the points are answered in favour of the petitioner and against the respondents. The impugned G.O. is set aside and the writ petition is allowed. No order as to costs.
S.V.BHATT, J DATE:14.11.2014 Klp/Stp
[1] 1997(2) CTC 678
[2] (1999) 8 SCC 150,
[3] 2009 (I) APLJ 98
[4] (2011) 10 SCC 529