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CASE NO.: Special Leave Petition (civil) 13639  of  2000

PETITIONER: SHRI B.S. KHURANA AND OTHERS

       Vs.

RESPONDENT: MUNICIPAL CORPORATION OF DELHI AND OTHERS

DATE OF JUDGMENT:       21/09/2000

BENCH: M.B. Shah & S.N. Variava.

JUDGMENT:

WITH

SLP  (Civil)  Nos.  13920-13921,  14385,  14386,   14398, 14403, 14405, 14393, 14411, 14400, 14406, 14402, 14615, and 14619 of 2000._______________________________

Shah, J. L...I...T.......T.......T.......T.......T.......T.......T..J

   The  question  involved in this group of  special  leave petitions   is     Whether   the  employees  of   Municipal Corporation  can  claim any right for transfer of  municipal quarters  to them on the basis of the resolutions passed  by the  Municipal Corporation, which are not initiated or moved but  objected  to by the Municipal Commissioner?  It is  the contention  of  the  petitioners that once  the  Corporation passes  the resolution for such transfers, the  Commissioner has  to abide by it and on objection being taken by him  the resolution  cannot  be  nullified.  The submission,  in  our view,  is  without  any substance because  of  the  specific statutory  provisions under the Delhi Municipal  Corporation Act, 1957 (hereinafter referred to as the Act).

   Facts  of  the present case reveal that since  1970  the Municipal  Corporation  had  been passing  resolutions,  one after   another,  for  transferring   the  quarters  to  its employees.   The  said  resolutions are objected to  by  the Municipal  Commissioner  on  one ground or the  other.   The Corporation  was  superseded three times on the same  count. On  one  occasion, Corporation requested the  Government  to amend  section 200 suitably so as to empower the Corporation to  transfer the immovable property.  It is pointed out that the  Corporation acquired land and formulated a scheme known as  Northern  City  Extension  Scheme  I  for  residential purposes,  with  provisions also for a shopping area.  On  a plot  of land measuring 2750 sq.  yards on Mandelian Road  a three-storey  building  was constructed.  On  7.5.1968,  the M.C.D.   passed the first Resolution No.143 and approved the proposal  of sale of flats and shops by public auction.  The said  flats  and  shops were put up for  public  auction  on

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4.8.1968  and again 6.10.1968.  All the shops were  disposed of but as the bids received for residential flats were below the  reserve  price,  the  bids  for  flats  were  rejected. Thereafter,  by  resolution No.433 dated 27.7.1970  the  MCD decided  that  the flats may be allotted to the officers  of the  Corporation  on the basis of their salary so  that  the Corporation  may  at  least  be  in  a  position  to  get  a reasonable  return  from  the investment.   It  was  further resolved  that  the  cost  of flats to be  allotted  to  the officers  be borne from the Revenue of the General Account and  transferred  to  the  Remunerative  Project  Account. Again,  by resolution No.868 dated 4.12.1970, it was decided that  the  flats be sold to the municipal employees  on  no profit no loss basis and the allottees be charged at 15% of the  assessed cost in the first instance and the balance  in easy installments spread over a period of ten years.

   The legal advisor considered the above resolution No.868 and  opined  two difficulties in implementing the same  i.e. (1)  Section  200 (d) of the Municipal Act, and (2) in  some colonies the flats were built after taking loan from Central Govt./Delhi  Admn.   on  the condition that  the  same  will remain  as  municipal property and will not be sold  to  its employees.   Hence, the matter was placed for review  before the  Corporation.   The Corporation by its resolution  No.13 dated 25.4.1972 reiterated its earlier decision.

   Thereafter,  the  Lt.  Governor of Delhi in exercise  of his  powers conferred by Section 487 raised an objection  to the  passing of the aforementioned resolution which, in  his opinion,  was in violation of mandate of Section 200 (d) and hence  issued a show-cause notice as to why a direction  may not  be issued for making arrangement for proper performance of  the  duties.  Again, legal opinion was obtained  by  the Corporation  wherein the Corporation was informed that under Section  200 (d) of the Act the Corporation cannot sell  any immovable  property below the market rate and the resolution was  not  consistent with the mandatory provisions  of  law. Again,  by resolution No.437 dated 31.7.1973 it was  decided to  reiterate earlier decision taken on dated 4.12.1970.  It was  also  resolved that with a view to overcome  the  legal impediments  in  the  way  of   the  implementation  of  the resolution,  it  be  urged upon the Government of  India  to suitably  amend  the  provisions  of Sec.200  of  the  Delhi Municipal  Act  and also revise the terms and conditions  of the  loan advanced to the Corporation so as to empower it to transfer  the  quarters  to its employees on no  profit  no loss  basis and also to sell plots of land on no profit no loss  basis to such of the desirous municipal employees who do  not own in Delhi any property in his own name or in  the name of any of his dependent.

   Subsequently, the Corporation by resolution No.937 dated 9.2.1979  resolved that in view of the Commissioners letter@@           JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ dated  14.12.1978  unauthorised occupants of  the  municipal@@ JJJJJJJJJJJJJJJJJ quarters in Nimri Municipal Colony be offered these quarters on  hire purchase basis at the market value existing in 1974 plus  interest  upto date @ 11% p.a.  and that the offer  be made  to those who pay the first installment within a period of  4 months from the date of offer.  The Standing Committee also  resolved  on  12.4.1979   for  transferring  tenements constructed  under  the Low Income Housing Scheme  at  Nimri Colony to the allottees.  This was objected by the Municipal

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Commissioner  by  a letter dated 5.2.1980 stating  that  324 quarters cannot be transferred as the Corporation is already short  of  municipal accommodation and that it has  received loan of Rs.461 lacs from the Government of India and further quarters  cannot be transferred except at a market rate in a fair  competition.   However,  by resolution  No.1156  dated 28.2.1980, the Standing Committee resolved that the quarters in  Nimri  Colony  be sold to allottees-  employees  at  the market  price.   In  response to the above  resolution,  the Corporation  passed Resolution No.  1205 dated 10.3.1980 and decided  to  sell the municipal quarters in Nimri  Municipal Colony to allottees-employees.

   Subsequently,   on  1.4.1980,   the  Central  Government superseded  the  Corporation  and  one of  the  grounds  for super-session  was:  The Corporation passed a Resolution to sell  staff quarters in Nimri Colony to  occupants/allottees ignoring  the fact that the quarters were meant to serve  as amenity to serving staff.

   The  Commissioner,  on account of super-session  of  the elected  representatives,  in exercise of his  powers  under Section  490 of Act passed resolution No.235 dated 23.7.1980 rescinding  the  earlier resolutions regarding  transfer  of tenements constructed at Nimri Colony to the allottees.

   After elections, the Corporation passed fresh Resolution No.924  dated 15.2.1984 restoring the earlier resolution for sale  of  quarters at Nimri Colony  to  allottees/authorised occupants at the market value of 1974.  Although the Central Govt.  superseded the earlier set of elected representatives for  passing  a resolution for sale, the Central Govt.   did not  take any action against the elected representatives for passing  the  same.  Further, inspite of the letter  of  the Commissioner  to  the  Corporation   requesting  to  rescind resolutions  dt.4.12.1970, 25.4.1972, the Standing Committee by  resolution  No.1515 dated 21.2.1988 recommended  to  the Corporation  that the resolution of 4.12.1970 be reiterated. Subsequently,  by  resolution No.1076 dated  20.2.1989,  the Corporation  accepted  the recommendations of  the  Standing Committee  and  reiterated  its   earlier  resolution  dated 4.12.1970  with  recommendation of sale of the  quarters  at Nimri  Colony  at  market  value prevalent in  1974  to  the present allottees/unauthorized occupants only.

   On  27.12.1989, the Central Government issued notice  to the  Corporation to show cause as to why the Corporation  be not  superseded.  On 6.1.1990, the Ministry of Home  Affairs superseded  the MCD and appointed Chief Secretary to perform duties  of Municipal Corporation of Delhi.  On 18.1.1990 Lt. Governor  directed  the Corporation to  rescind  resolutions dated 4.12.1970, 25.4.1972, 31.7.1973, 21.12.1988, 20.2.1989 and  4.10.1989  except in so far as they related to part  of the Nimri Colony.  On 21.3.1990, the Commissioner, Municipal Corporation   made   recommendation   for   rescinding   the resolution  and  on  22.3.1990 the  Chief  Secretary,  Delhi exercising  his  powers of Administrator of the  Corporation approved  the  proposal for rescinding the  resolutions  (1) dated  4.12.1970,  (2) dated 25.4.1972, (3) dated  31.7.1973 and  (4) dated 20.2.1989.  No other resolution was passed by the  Corporation.   Hence,  the   earlier  resolutions   for transfer of the municipal quarters stood rescinded.

   Civil Writ Petitions no.1662/1988 etc.  for implementing

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the  earlier resolutions for transferring the quarters  were filed  before  the High Court.  In the said  writ  petitions also,  subsequent resolution rescinding earlier  resolutions was  challenged.   The learned Single Judge dismissed  those petitions.   L.P.As.  No.118 of 1989 etc.  were filed before the High Court and the High Court dismissed the same.  Hence these special leave petitions.

   In  our view, as stated earlier power to dispose of  the immovable   property   under  Section   200  vests  in   the Commissioner with the sanction of the Corporation.  Further, under Section 200 (d), consideration for such sale shall not be  less than the value at which such immovable property can be  sold in normal and fair competition.  For this  purpose, we  would  refer  to  various Sections relied  upon  by  the learned  counsel for the parties.  The Act, under which  the Municipal  Corporation of Delhi is established provides  for functions  and  duties of the Municipal Commissioner and  as well  as  that of Standing Committee, Corporation and  other bodies  created under the Act.  Sub-section (1) of Section 3 provides  for  establishment  of  Municipal  Corporation  of Delhi.   Sub-section 2 thereof reads thus:  Sub-section (2) of  Section  3:  The Corporation shall be a  body  corporate with  the  name aforesaid having perpetual succession and  a common  seal  with power, subject to the provisions of  this Act, to acquire, hold and dispose of property and may by the said name sue and be sued.

   The aforesaid sub-section inter alia makes it clear that subject to the provisions of the Act, Corporation shall have power  to acquire, hold and dispose of property.  Hence,  no absolute  power  to dispose of the property is conferred  on the Corporation.

   Sections 42 and 43 of the Act provide for obligatory and discretionary  functions  of the  Corporation.   Thereafter, Section  44  states  that for the efficient  performance  of functions  of  the  Corporation, there  shall  be  following municipal authorities namely:  -

   (a) the Standing committee;     (b) the Wards Committee; and     (c) the Commissioner.

   Under Section 54, the Commissioner of the Corporation is to  be appointed by the Central Government by a notification in  the  Official Gazette and his powers and  functions  are prescribed  under  Section 59.  Relevant part thereof  reads thus:  -

   Section  59:   Functions  of  the  CommissionerSave  as otherwise  provided in this Act, the entire executive  power for  the purpose of carrying out the provisions of this  Act and  of  any  other Act for the time being  in  force  which confers,  any power or imposes any duty on the  Corporation, shall vest in the Commissioner who shall also

   (a)  exercise all the powers and perform all the  duties specifically conferred or imposed upon him by this Act or by any other law for the time being in force;

   (b)   (c) . (d) .

   Under  this  Section the entire executive power for  the purpose  of  carrying out the provisions of the Act vest  in

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the  Commissioner who has to exercise all powers and perform all the duties specifically conferred or imposed upon him by the Act.

   For  our purpose, Section 200 is the relevant  provision for  finding  outwhether  the  immovable  property  can  be disposed  of by the Corporation despite objections raised by the Commissioner.  The said provision reads thus:  -

   Disposal  of  PropertyWith respect to the  disposal  of property  belonging to Corporation, the following provisions shall have effect, namely:-

   (a) the Commissioner may in his discretion dispose of by sale  or  otherwise, any movable property belonging  to  the Corporation  not  exceeding  in value in each  instance  one thousand  rupees,  or such higher amount as the  Corporation may  prescribe,  or let out on hire any movable property  or grant  a  lease of any immovable property belonging  to  the Corporation  including  any  right of gathering  and  taking fruits  and the like, for a period not exceeding one year at a time;

   (b)  the  Commissioner  may, with the  sanction  of  the Standing Committee-

   (i)  dispose  of,  by  sale or  otherwise,  any  movable property  belonging  to the Corporation the value  of  which does not exceed five thousand rupees;

   (ii) grant a lease (other than a lease in perpetuity) of any immovable property belonging to the Corporation;  or

   (iii)  sell  or  grant  a lease  in  perpetuity  of  any immovable property belonging to the Corporation the value of which  does  not exceed fifty thousand rupees or the  annual rent of which does not exceed three thousand rupees;

   (c)  in case not covered by clause (b), the Commissioner may,  with the sanction of the Corporation, lease, sell, let out  on hire or otherwise transfer any property, movable  or immovable belonging to the Corporation.

   (d)  the consideration for which any immovable  property may  be  sold, leased or otherwise transferred shall not  be less  than the value at which such immovable property  could be  sold, leased or otherwise transferred in normal and fair competition;

   (e)  the  sanction  of  Standing  Committee  or  of  the Corporation  under the aforesaid clauses may be given either generally  for  any  class of cases or  specially  for,  any particular case:

   (f)  subject to any conditions or limitation that may be specified in any other provisions of this Act, the foregoing provisions  of this section shall apply to every disposal of property belonging to the Corporation made under, or for any purpose of, this Act.

   (g)  Every case of disposal of property under clause (a) and clause (b) shall be reported by the Commissioner without delay   to  the  Standing   Committee  and  the  Corporation respectively.

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   The scheme of the aforesaid Sections makes it abundantly clear  that  the entire executive power for the  purpose  of carrying out the provisions of the Municipal Corporation Act vests  in  the Commissioner.  His functions and  duties  are statutorily  prescribed.  His appointment is also to be made by  the  Central Government by notification in the  Official Gazette.  Similarly, the functions of the Standing Committee and  other committees are also prescribed.  In the light  of the  aforesaid statutory provisions, we have to consider the scheme  of  Section 200 which empowers the  Commissioner  to dispose  of  the  moveable property or grant  lease  of  any immovable  property  or  to  sell the same  subject  to  the conditions  provided  thereunder.   On   the  condition   of obtaining sanction of the Corporation, the power to transfer immovable  property,  the  value  of  which  exceeds   fifty thousand  rupees  vests in the Commissioner.  Result  isthe Commissioner can transfer such immovable property only after obtaining  sanction  of  the   Corporation.   Obtaining   of sanction  by  the Commissioner is mandatory.  The effect  of the  non-observance  of  the  statutory  prescription  would vitiate  the transfer.  This would also mean that the  power to  dispose  of the property would vest in the  Commissioner and  not in the Corporation.  No specific power is conferred upon   the  Corporation  for   such  transfer.   The  scheme envisages  checks  and  balances for disposal  of  immovable property  on the power of the Commissioner.  In the light of the  aforesaid  interpretation  of Section 200,  it  is  not necessary  for us to deal with other contentions raised  and dealt   with   by  the  High   Court.   In  the  facts   and circumstances  of  the case, at no point of time,  Municipal Commissioner has decided or agreed to transfer the Municipal quarters  in favour of its employees/allottees.  There is no legal  right  to  claim  ownership  on  the  basis  of   the resolutions   passed   by  the   Corporation  as  the   said resolutions  are  without  any power or  authority.   Hence, there is no substance in these petitions.

   Lastly,  learned  counsel for the petitioners  submitted that  the  petitioners are staying in the disputed  quarters since more than 30 years.  Therefore, in any case sufficient time  may  be given to them for vacating the same.  On  this ground,   we  have  heard  the   learned  counsel  for   the respondents.  Considering the facts and circumstances of the case,  particularly  the stand taken by the  Corporation  of disposal  of  quarters  in favour of its employees  who  are occupying the same, as prayed for, time to vacate is granted till  the  end of the academic year 2001, i.e.  up  to  30th April 2001 on their furnishing the usual undertaking to hand over  peaceful  and vacant possession of the premises on  or before the said date and to pay regularly the licence fee as payable  by  the employee of the Corporation (not market  or penal  rent).  However, this benefit would be given to those petitioners  who  file  usual   undertaking  to  vacate  the premises  before  this Court and send a copy thereof to  the Municipal  Commissioner  or the Delhi Jal Board within  four weeks from today.

   The special leave petitions are dismissed accordingly.