Case: Suryalaxmi Cotton Mills Limited, Nagardhan Vs. State of Maharashtra

B. R. GAVAI, J. ( 1 ) BY way of present petition, the petitioner is challenging the resolution dated 26th March, 2003, passed by the respondent No. 3-Standing Committee of nagpur Zilla Parishad, thereby resolving to cancel the resolution dated 4th September, 2002 passed by the respondent No. 4-Gram panchayat and the order dated 7th May, 2003 passed by the Chief Executive Officer of nagpur Zilla Parishad -the respondent No. 2 herein, thereby informing the respondent No. 4-Gram Panchayat that the resolution passed by it dated 4th September, 2002 is cancelled and directing the respondent No. 4-Gram panchayat to take further steps in accordance with Section 125 of the Bombay Village panchayats Act (hereinafter referred to as "the said Act" for short), and to submit a fresh proposal to the Zilla Parishad. ( 2 ) THE facts in brief out of which the present petition arise, are as under :-The petitioner is a public limited company manufacturing cloth and it has its denim Division situated within the jurisdiction of Nagardhan Gram Panchayat-the respondent no. 4 herein. It is the contention of the petitioner that Nagardhan is situated in backward area and there is no other industry nearby. The petitioner Company started its manufacturing operations in the year 1990. For establishing its factory, it acquired the lands which are situated at a distance of about 3 kms. from the abadi of Village-Nagardhan. It is the contention of the petitioner that one of its objects for establishing the factory, was to provide employment to the local population. ( 3 ) IT is further contended by the petitioner that it has constructed the factory, labourer colony, colony for security staff and also for residential accommodation for the employees working in the petitioner Company. The petitioner Company further contended that insofar as the construction of road, drains, etc. are concerned the petitioner Company, on its own, constructed all these facilities in the factory premises, and that it has made provisions for street lights in the factory area and also in the area outside the factory by installing electric poles. The petitioner company contended that it has constructed latrines, urinals and is fully maintaining sanitation and cleaning the pits etc. The petitioner Company has also provided for drinking water to entire factory staff and others and also water required for other purpose. It is the contention of the petitioner Company that it has also made facility of garden, recreation, playground in the area occupied by it. The petitioner Company also contended that it incurred expenses for social activities, tournaments, etc. wherein children and others participate. The petitioner Company further contended that the respondent No. 4-Gram panchayat has not contributed a single pie for providing these facilities to the petitioner company either towards drinking water, the sanitation, recreation or street lights. It is contended that on the contrary, the petitioner company has provided certain help to the gram Panchayat.( 4 ) IT is submitted that the respondent No. 4 passed a resolution dated 4th september, 2002, thereby resolving to accept rs. 2,27,535/- as lumpsum contribution under the provisions of Section 125 (1) of the said act, during the financial years 2002 to 2006 and accordingly demand bill was issued on 7-9-2002. The petitioner, accordingly, has made the payment of Rs. 2,27,535/- on 25-10-2002 for the financial year 2002-2003. Accordingly, an agreement was also executed between the respondent No. 4 and the petitioner on 7th september, 2002. It is submitted on behalf of the petitioner that the resolution of the Gram panchayat and the agreement were forwarded by the Gram Panchayat to the Chief Executive officer, Zilla Parishad, Nagpur, who placed the same before the Standing Committee on 26th March, 2003. The Standing Committee of the Zilla Parishad passed a resolution on the same day, thereby resolving to cancel the resolution of the Gram Panchayat and issued a communication dated 7th May, 2003 to the gram Panchayat, informing it about the resolution passed by the Standing Committee. In pursuance of the aforesaid communication of the C. E. O. , the respondent No. 4 issued a demand bill dated 16th September, 2003, for rs. 14,15,875/ -. Being aggrieved by the resolution dated 26th March, 2003 passed by the respondent No. 3 and the communication dated 7th May, 2003 sent by the respondent no. 2, the petitioner has approached this Court by way of present petition. ( 5 ) THE matter was heard by this court on various dates and on 21st October, 2004, this Court granted Rule in the matter. This Court refused to grant any interim relief in the matter and clarified that pendency of writ petition would not preclude the Gram panchayat from recovering the taxes under section 124 of the said Act. ( 6 ) DURING the pendency of the petition, another resolution was passed by the gram Panchayat dated 29th November, 2004, thereby resolving to levy a tax of Rs. 2,77,000/- on the petitioner in accordance with the provisions of Section 125 of the said Act, for period between 2003-2004 to 2005-2006. In pursuance to the said resolution, an agreement was also entered into between the petitioner and the respondent No. 4. The said resolution was also forwarded to the Zilla Parishad by the Gram Panchayat. The petitioner, therefore, filed Civil Application No. 168 of 2005, for a direction to the Zilla Parishad to forward the papers to the State Government through the commissioner,. in accordance with the provisions of Maharashtra Village Panchayat (Payment of lumpsum contribution of factory in lieu of taxes) Rules, 1961 (hereinafter referred to as "the said Rules" for short ). The petitioner has also filed another application being Civil Application No. 170 of 2005 praying for disposal of the petition. By separate orders, we have disposed off both these civil applications and have taken the present petition for final hearing. ( 7 ) WE have heard Shri. Mokadam, the learned counsel for the petitioner and Shri. Raut, the learned counsel appearing on behalf of the respondent Nos. 2 and 3.( 8 ) SHRI. Mokadam, the learned counsel for the petitioner, submitted that the scheme of Sec. 125 and the said Rules provide the complete procedure in the matter of payment of lumpsum contribution by the factories in lieu of taxes. He submitted that rule 3 of the said Rules provides for making of an application to the Gram Panchayat. Rule 4 provides for passing of the resolution by the gram Panchayat. Rule 5 provides for execution of the agreement between the panchayat and the occupier, and the submission thereof to the Chief Executive officer and Rule 6 provides for submission of application by the Chief Executive Officer to the Government through the Commissioner, for its sanction. He submitted that after passing of the resolution by the Gram panchayat and entering into an agreement by the Gram Panchayat and occupier, the only role that was required to be played by the Zilla parishad (Standing Committee) was to forward the same to the Commissioner who, in turn, is required to forward it to the State Government and it was for the State Government to take the decision in the matter. He submitted that the entire action of the Zilla Parishad in suspending the earlier resolution dated 4th september, 2002 and the subsequent inaction on the part of the Zilla Parishad in not forwarding the proposal to the State government in pursuance to the resolution dated 29th November, 2004, passed by the gram Panchayat, was totally illegal. He further submitted that the impugned order cancelling the resolution, deserves to be quashed and the Zilla Parishad needs to be directed to send the proposal to the State government as required under the provisions of the said Rules. ( 9 ) SHRI. Rant, the learned counsel for the respondent Nos. 2 to 4, on the contrary, submitted that the resolution passed by the gram Panchayat was in contravention of the provisions of Rule 7 of the said Rules and as such the action taken by the Standing committee was justified. He further submitted that since the resolution which was passed by the Gram Panchayat was contrary to public interest, Zilla Parishad was empowered under section 142 of the said Act to suspend the resolution dated 4th September, 2002. He further submitted that the property is liable to be assessed for taxation at Rs. 11,29,786/ -. As such the only lumpsum amount that could be arrived at was 50% of the said amount i. e. Rs. 56,000/ -. However, the Gram Panchayat has arrived at an agreement with petitioner and assessed the tax of Rs. 2,77,000/- which has caused loss to the tune of Rs. 2. 3 lakh to the gram Panchayat.( 10 ) AFTER hearing the learned counsel for the parties, we find that for appreciation of the rival contentions raised on behalf of both the sides, it would be necessary to refer to certain provisions of the said Act and the said rules. Section 125 of the said Act reads thus-"s. 125. Lump-sum contribution by factories in lieu of taxes levied by panchayats.- (1)Subject to any rules that may be made under the Act, and regard being had to the fact that a factory itself provides in the factory area all or any of the amenities which such panchayat provides, a panchayat may arrive at an agreement with any factory with the sanction of the State Government to receive a lump-sum contribution in lieu of all or any of the taxes levied by the panchayat. (2) Where no such agreement as is referred to in sub-section (1) can be reached the matter may be referred to the State government in the manner prescribed and the State Government may after giving to the panchayat and the factory concerned an opportunity of being heard, decide the amount of such contribution. The decision of the State Government shall be binding on the panchayat and the factory concerned. Section 142 of the said Act reads thus -"section 142. Suspension of execution of order.- (1) If, in the opinion of the standing Committee, the execution of any order or resolution of a panchayat or the doing of any thing which is about to be done, or is being done by or on behalf of panchayat, is causing or is likely to cause injury or annoyance to the public, or to lead to a breach of peace, or is, in the public interest, unlawful it may by order in writing suspend the execution or prohibit the doing thereof. (2) When the Standing Committee makes an order under sub-section (1) it shall forthwith send to the panchayat affected thereby a copy of the order, with a statement of the reasons therefor. (3) The Standing Committee shall forthwith forward to the Commissioner a report of every case occurring under this section, and the Commissioner may revise or modify any order made therein and make in respect thereof any other order which the Standing committee could have made. "rules 3, 4, 5, 6, 7 and 10 which are relevant rules for adjudication of the present petition, read thus -"rule 3. Application by occupier of factory.- An occupier of a factory desiring to arrive at an agreement shall make an application not later than sixty days from the commencement of the financial year or, as the case may be, from the functioning of the factory during any financial year, in writing to the panchayat stating.- (a) (i) the amounts paid by him to the panchayat in respect of each of the taxes levied by the panchayat during the three financial years immediately preceding the year, or as the case may be, during the period of less than three years the factory has been functioning immediately preceding the financial year, in which the application is made; (ii) the amount payable by the occupier to the panchayat in respect of all or any of the taxes levied by the panchayat during the financial year in which the application is made the amount payable in respect of each tax being indicated separately; (b) the details of the amenities provided by the occupier in the factory and which the panchayat provides within the limits of its jurisdiction; (c) the expenditure incurred by the occupier on each of the amenities provided by him during the period referred to in sub-clause (i) of clause (a) upto the date of the application; (d)the lump sum amount which the occupier proposes to pay to the panchayat in lieu of all or any of the taxes levied by the panchayat having regard to the amenities provided by the panchayat. 4. Consideration of application bv panchayat.- On receipt of an application under Rule 3, the panchayat shall consider the application and, subject to the provisions of Rules 7 and 8, pass not later than sixty days from the date of receipt thereof, a resolution conveying its decision to the occupier. 5. Execution of agreement between panchayat and occupier and its submission to Chief Executive Officer.- Where the panchayat agrees to accept the lump sum amount proposed by the occupier under clause (d) of Rule 3, an agreement in Form a appended to these rules shall be executed between the panchayat and the occupier and the panchayat shall submit to the Chief Executive Officer such agreement within one month from the date of its execution along with the following documents that is to say :- (a) the application submitted by the occupier, (b) the resolution passed by the panchayat. 6. Submission of application by Chief executive Officer to Government.- On receipt of the agreement and the documents specified in Rule 5, the Chief Executive officer shall, within two months of their receipt, forward the same with the remarks of the Standing Committee of Zilla parishad to the Commissioner who shall, within fifteen days thereafter, submit the same with the comments to the State government for its sanction. 7. Limitation for arriving at agreement.-The amount of lump sum contribution may not be disproportionately less than the amount receivable by the panchayat in respect of taxes levied by it at the normal rate during the financial year in which the application is made and shall be,- (a) not less than 70 per cent of the average amount recovered from levy of octroi for the last three years or for the period during which the factory was functioning up to the date of application, whichever is less, immediately preceding the financial year in which the application is made. (b) not less than 30 per cent of the amount receivable by the panchayat from levy of the following taxes, that is to say :- (i) general sanitary cess, (ii)general water rate, and (c) not less than 50 per cent of the amount receivable by the panchayat from the levy of taxes other than those specified in clauses (a) and (h); provided that, in case of factories which are principally engaged in the production of aircraft for defence purposes, the State government may, having regard to the amenities provided by such factories in the factory area as compared with the amenities provided by the panchayat in the other areas within its jurisdiction, and the amount spent by the factories on such amenities and also having regard to the nature of the public interest served by the factories, relax the rates aforesaid, in consultation with the panchayat and the factory concerned. 10. Agreement not to be sanctioned ordinarily if provisions of rules are not complied with.- No agreement in respect of which the provisions of any of the foregoing rules have not been complied with shall be sanctioned by the State government unless the State Government is of opinion that having regard to the amenities provided by the factory in the factory area as compared with the amenities provided by the panchayat in other areas within its jurisdiction, and the amount spent by the factory on such amenities and also having regard to the nature of public interest served by the factory, the amount of lump sum contribution specified in the agreement as payable by the factory is reasonable and on that account the agreement needs to be sanctioned : provided that before any agreement is sanctioned under this rule, the State government shall obtain the views of the chief Executive Officer concerned. "( 11 ) IT can, thus, be seen that Section 125 of the said Act provides that regard being had to the fact that a factory itself provides in its area all or any of the amenities which such panchayat provides, Panchayat may arrive at an agreement with any factory with the sanction of the State Government to receive in lump-sum contribution in lieu of all or any of the taxes levied by the Panchayat. However, such an agreement has to be subject to the rules that may be made under the Act. It is, thus, clear that an agreement can be arrived at between the factory and the Panchayat for payment of lump sum contribution in lieu of payment of taxes, subject to the provisions of the Rules and further subject to the sanction of the State Government. ( 12 ) RULE 3 of the said Rules requires that an occupier of a factory desiring to arrive at an agreement should make an application not later than sixty days from the commencement of the financial year or, as the case may be, from the functioning of the factory during any financial year, in writing to the Panchayat. Such application is required to give details regarding amounts paid by him to the Panchayat in respect of each of the taxes levied by the Panchayat during three financial years immediately preceding the year or as the case may be, during the period of less than three years, the factory has been functioning immediately preceding the financial year in which the application is made. It is also required to give the details regarding the amounts payable by the occupier to the panchayat in respect of all or any of the taxes levied by the Panchayat during the financial year in which the application is made. The applicant is further required to give details about the amenities provided by the occupier in the factory and which the Panchayat provides within its jurisdiction and the expenditure incurred by the occupier on each of the amenities provided by him. The applicant is further required to specify the lump sum amount which he proposes to pay to the panchayat in lieu of all or any of the taxes levied by the Panchayat having regard to the amenities provided by the Panchayat. Rule 4 of the said Rules provides that on receipt of the application under Rule 3, the Panchayat shall consider the said application and subject to Rules 7 and 8, pass not later than sixty days from the date of receipt thereof, a resolution conveying its decision to the occupier. Rule 5 requires that after such an agreement is arrived at, an agreement in Form a appended to the rules shall be executed between the panchayat and the occupier. Such agreement is required to be submitted to the Chief executive Officer within one month from the date of its execution along with the application submitted by the occupier and the resolution passed by the Panchayat. ( 13 ) RULE 6 provides that on receipt of the agreement and the documents specified in Rule 5, the Chief Executive Officer shall, within two months of the receipt thereof, forward the same with the remarks of the standing Committee of Zilla Parishad, to the commissioner who shall, within fifteen days thereafter, submit the same with the comments to the State Government for its sanction. ( 14 ) RULE 7 of the Rules provides for certain limitation in arriving at agreement. It provides that lump sum contribution will not be disproportionately less than the amount receivable by the panchayat in respect of taxes levied by it at the normal rate during the financial year in which the application is made. It provides that in case of octroi, it shall not be less than 70% of the average amount recovered by it for last three years. In case of general sanitary cess and general water rate, it requires that it shall not be less than 30% of the amount receivable by it and in case of other taxes, it should not be less than 50% of the amount receivable by it. ( 15 ) RULE 10 of the said Rules provides that no agreement in respect of which the provisions of any of the foregoing rules have not been complied with, shall be sanctioned by the State Government unless the state Government is of opinion that having regard to the amenities provided by the factory in the factory area as compared with the amenities provided by the Panchayat in other areas within its jurisdiction, and the amount spent by the factory on such amenities and also having regard to the nature of public interest served by the factory, the amount of lump sum contribution specified in the agreement as payable by the factory is reasonable and on that account the agreement needs to be sanctioned. However, prior to granting a sanction to such an agreement, the State government is required to obtain the views of the Chief Executive Officer concerned. ( 16 ) IT could, thus, be seen that the said Rules provide a complete code insofar as issue of payment of lump sum contribution by factory in lieu of taxes is concerned. On an application by the occupier under Rule 3 of the said Rules, the concerned Panchayat is required to consider the same and pass necessary resolution. Rule 5 provides that if there is an agreement between Panchayat and occupier, they are required to execute a written statement in form a Upon execution of such an agreement, Panchayat is required to forward the said agreement with relevant documents, to the Chief Executive Officer. Rule 6 provides that on receipt of such proposal from gram Panchayat, the Chief Executive Officer should obtain the remarks of the Standing committee of the Zilla Parishad and forward the same to the Commissioner who, in turn, is required to submit the same with his comments to the State Government and the State government is required to consider the matter for sanction. ( 17 ) RULE 7 of the said Rules provides for certain limitations. It provides that the amount receivable by the Panchayat in respect of taxes should not be disproportionately less than the amount receivable by it. It also provides that in case of Octroi, it should not be less than 70% of the average amount recovered by it for last three years, in case of general sanitary cess and general water rate, it shall not be less than 30% of the amount receivable by it and in case of other taxes, it should not be less than 50% of the amount receivable by it. However, it can be seen that the provisions of Rule 7 are not mandatory. By subsequent amendment in the year 1980, rule 10 has been added to the said Rules which enables the State Government to even grant sanction in case where the agreement does not comply with any of the foregoing Rules. It could, thus be seen that a limitation as prescribed under Rule 7 is not mandatory. Having regard to certain factors specified in rule 10, the State Government may even grant sanction to any agreement which does not conform to any of the foregoing Rules. However, prior to granting such sanction, the state Government has to arrive at the subjective satisfaction that having regard to the amenities provided by the factory in the factory area as compared with the amenities provided by the Panchayat in other areas within its jurisdiction, and the amount spent by the factory on such amenities and also having regard to the nature of public interest served by the factory, the amount of lump sum contribution specified in the agreement as payable by the factory is reasonable and on that account the agreement needs to be sanctioned. Rule 10 further requires that prior to such sanction, the State Government shall obtain the view of the Chief Executive Officer concerned. We, therefore, find that the contention of the learned counsel for the respondents that since the said agreement is in contravention of Rule 7, the Standing committee was justified in invoking powers under Section 142 of the said Act, is without substance. ( 18 ) AS already discussed, Section 125 of the said Act and the said Rules are complete Code in itself insofar as the matter regarding payment in lump sum by the factories in lieu of taxes is concerned. If the standing Committee of the Zilla Parishad is of the view that the agreement arrived at by the Gram Panchayat with the occupier is not in the public interest, or contrary to any of the provisions of the Rules, it can always point out the same to the State Government while forwarding the proposal. However, we find that invoking of powers under Section 142 of the said Act, in the present case, is totally unjustified. When the said Act and the said rules specifically deal with the matter of lump sum contribution by the factories in lieu of taxes, recourse to general provision under section 142 of the said Act, in our view, is not warranted. In any case, Section 142 of the said Act only provides for suspension of the resolution and it is mandatory for the Standing committee to forward the said order of suspension to the Commissioner and it is for the Commissioner to take a final decision in the matter. However, in the present case, we find that vide resolution dated 26th March, 2003, the Standing Committee of the Zilla parishad has cancelled the resolution passed by the Gram Panchayat dated 4th September, 2002. A bare perusal of Section 142 of the said Act would reveal that the action of the standing Committee in cancelling the resolution is totally beyond its purview. In any case, when Section 125 of the said Act and the said Rules specifically deal with the matter regarding lump sum contribution by the factories in lieu of taxes levied by the panchayat, the Zilla Parishad was bound to comply with the said provisions. ( 19 ) AS already discussed, the limited role that the Zilla Parishad plays in the matter is forwarding the agreement along with the documents specified in Rule 5 to the commissioner along with its remarks, for its sanction. It is ultimately for the State government to consider the matter. As already discussed hereinabove, the Zilla Parishad can always give its comments and opposition to the resolution of the Gram Panchayat and the state Government will have to consider the same before taking a decision regarding granting its sanction. The reliance placed by the learned counsel for the respondent Nos. 2 to 4 on Rule 7 of the said Rules, in our view, is also not justified. It is always open for the standing Committee to point out to the State government that any of the provisions of the rules have not been complied with by the gram Panchayat. Whether to grant sanction even in case provisions of Rules have not been complied, is within the domain of the State government in view of the provisions of Rule 10 of the said Rules. The only requirement is that the State Government is required to consider various aspects stated in Rule 10 and thereafter arrive at its subjective satisfaction. Further requirement is that before any such decision is taken by the State Government, the state Government has to lake into consideration the views of the Chief Executive officer concerned. We, therefore, find that the Rule 10 provides sufficient safeguard insofar as the public interest is concerned. If any of the action in the matter of payment of lump sum contribution by the factories in lieu of taxes is contrary to the public interest according to the Zilla Parishad, it can always bring the same to the notice of the State government. The State Government is bound to take into consideration the view of the Zilla parishad before it arrives at the decision in the matter. If the State Government finds that the agreement arrived at by the Gram panchayat with the occupier is not in the public interest or is not in accordance with Rule 10, it can always refuse to grant its sanction. But the said powers are required to be exercised by the State Government. Zilla Parishad cannot exercise the jurisdiction vested with the state Government. The limited role that is given to the Zilla Parishad is to forward the proposal to the State Government through the commissioner, with its remarks. We, therefore, find that the resolution dated 26th march, 2004 passed by the Standing committee is contrary to the provisions of the said Act and said Rules and the same is quashed and set aside.( 20 ) HOWEVER, it has been brought to our notice and it is not disputed that subsequently another resolution has been passed by the Gram Panchayat on 20th november, 2004, thereby accepting an amount of Rs. 2,77,000/- in lump sum in lieu of payment of taxes and an agreement has been entered into between the Gram Panchuyat and the occupier. However, it appears that the Zilla parishad is sitting tight over the said proposal and is not forwarding the same to the State government. As already discussed, the limited role of the Zilla Parishad is to forward such proposal with its comments to the State government through the Commissioner. We, therefore, direct that the Chief Executive officer of the Zilla Parishad i. e. the respondent no. 2 shall forthwith forward the proposal received from the respondent No. 4-Gram panchayat along with necessary documents and the remarks of the Standing Committee to the Commissioner who, in turn, shall forward the same to the State Government along with his comments. On receipt of the said proposal, the State Government would take into consideration the provisions of the said Act and the Rules and take appropriate decision in the matter.

Decision:
1[ds]( 16 ) IT could, thus, be seen that the said Rules provide a complete code insofar as issue of payment of lump sum contribution by factory in lieu of taxes is concerned. On an application by the occupier under Rule 3 of the said Rules, the concerned Panchayat is required to consider the same and pass necessary resolution. Rule 5 provides that if there is an agreement between Panchayat and occupier, they are required to execute a written statement in form a Upon execution of such an agreement, Panchayat is required to forward the said agreement with relevant documents, to the Chief Executive Officer. Rule 6 provides that on receipt of such proposal from gram Panchayat, the Chief Executive Officer should obtain the remarks of the Standing committee of the Zilla Parishad and forward the same to the Commissioner who, in turn, is required to submit the same with his comments to the State Government and the State government is required to consider the matter for sanction. ( 17 ) RULE 7 of the said Rules provides for certain limitations. It provides that the amount receivable by the Panchayat in respect of taxes should not be disproportionately less than the amount receivable by it. It also provides that in case of Octroi, it should not be less than 70% of the average amount recovered by it for last three years, in case of general sanitary cess and general water rate, it shall not be less than 30% of the amount receivable by it and in case of other taxes, it should not be less than 50% of the amount receivable by it. However, it can be seen that the provisions of Rule 7 are not mandatory. By subsequent amendment in the year 1980, rule 10 has been added to the said Rules which enables the State Government to even grant sanction in case where the agreement does not comply with any of the foregoing Rules. It could, thus be seen that a limitation as prescribed under Rule 7 is not mandatory. Having regard to certain factors specified in rule 10, the State Government may even grant sanction to any agreement which does not conform to any of the foregoing Rules. However, prior to granting such sanction, the state Government has to arrive at the subjective satisfaction that having regard to the amenities provided by the factory in the factory area as compared with the amenities provided by the Panchayat in other areas within its jurisdiction, and the amount spent by the factory on such amenities and also having regard to the nature of public interest served by the factory, the amount of lump sum contribution specified in the agreement as payable by the factory is reasonable and on that account the agreement needs to be sanctioned. Rule 10 further requires that prior to such sanction, the State Government shall obtain the view of the Chief Executive Officer concerned. We, therefore, find that the contention of the learned counsel for the respondents that since the said agreement is in contravention of Rule 7, the Standing committee was justified in invoking powers under Section 142 of the said Act, is without substance. ( 18 ) AS already discussed, Section 125 of the said Act and the said Rules are complete Code in itself insofar as the matter regarding payment in lump sum by the factories in lieu of taxes is concerned. If the standing Committee of the Zilla Parishad is of the view that the agreement arrived at by the Gram Panchayat with the occupier is not in the public interest, or contrary to any of the provisions of the Rules, it can always point out the same to the State Government while forwarding the proposal. However, we find that invoking of powers under Section 142 of the said Act, in the present case, is totally unjustified. When the said Act and the said rules specifically deal with the matter of lump sum contribution by the factories in lieu of taxes, recourse to general provision under section 142 of the said Act, in our view, is not warranted. In any case, Section 142 of the said Act only provides for suspension of the resolution and it is mandatory for the Standing committee to forward the said order of suspension to the Commissioner and it is for the Commissioner to take a final decision in the matter. However, in the present case, we find that vide resolution dated 26th March, 2003, the Standing Committee of the Zilla parishad has cancelled the resolution passed by the Gram Panchayat dated 4th September, 2002. A bare perusal of Section 142 of the said Act would reveal that the action of the standing Committee in cancelling the resolution is totally beyond its purview. In any case, when Section 125 of the said Act and the said Rules specifically deal with the matter regarding lump sum contribution by the factories in lieu of taxes levied by the panchayat, the Zilla Parishad was bound to comply with the said provisions. ( 19 ) AS already discussed, the limited role that the Zilla Parishad plays in the matter is forwarding the agreement along with the documents specified in Rule 5 to the commissioner along with its remarks, for its sanction. It is ultimately for the State government to consider the matter. As already discussed hereinabove, the Zilla Parishad can always give its comments and opposition to the resolution of the Gram Panchayat and the state Government will have to consider the same before taking a decision regarding granting its sanction. The reliance placed by the learned counsel for the respondent Nos. 2 to 4 on Rule 7 of the said Rules, in our view, is also not justified. It is always open for the standing Committee to point out to the State government that any of the provisions of the rules have not been complied with by the gram Panchayat. Whether to grant sanction even in case provisions of Rules have not been complied, is within the domain of the State government in view of the provisions of Rule 10 of the said Rules. The only requirement is that the State Government is required to consider various aspects stated in Rule 10 and thereafter arrive at its subjective satisfaction. Further requirement is that before any such decision is taken by the State Government, the state Government has to lake into consideration the views of the Chief Executive officer concerned. We, therefore, find that the Rule 10 provides sufficient safeguard insofar as the public interest is concerned. If any of the action in the matter of payment of lump sum contribution by the factories in lieu of taxes is contrary to the public interest according to the Zilla Parishad, it can always bring the same to the notice of the State government. The State Government is bound to take into consideration the view of the Zilla parishad before it arrives at the decision in the matter. If the State Government finds that the agreement arrived at by the Gram panchayat with the occupier is not in the public interest or is not in accordance with Rule 10, it can always refuse to grant its sanction. But the said powers are required to be exercised by the State Government. Zilla Parishad cannot exercise the jurisdiction vested with the state Government. The limited role that is given to the Zilla Parishad is to forward the proposal to the State Government through the commissioner, with its remarks. We, therefore, find that the resolution dated 26th march, 2004 passed by the Standing committee is contrary to the provisions of the said Act and said Rules and the same is quashed and set aside.( 20 ) HOWEVER, it has been brought to our notice and it is not disputed that subsequently another resolution has been passed by the Gram Panchayat on 20th november, 2004, thereby accepting an amount of Rs. 2,77,000/in lump sum in lieu of payment of taxes and an agreement has been entered into between the Gram Panchuyat and the occupier. However, it appears that the Zilla parishad is sitting tight over the said proposal and is not forwarding the same to the State government. As already discussed, the limited role of the Zilla Parishad is to forward such proposal with its comments to the State government through the Commissioner. We, therefore, direct that the Chief Executive officer of the Zilla Parishad i. e. the respondent no. 2 shall forthwith forward the proposal received from the respondent No.panchayat along with necessary documents and the remarks of the Standing Committee to the Commissioner who, in turn, shall forward the same to the State Government along with his comments. On receipt of the said proposal, the State Government would take into consideration the provisions of the said Act and the Rules and take appropriate decision in the matter.