SCA/13011/2007 1/6 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 13011 of 2007 For Approval and Signature: HONOURABLE MS. JUSTICE R.M.DOSHIT & HONOURABLE MR.JUSTICE SHARAD D.DAVE ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to civil judge ? ========================================================= GUJARAT GYAN PRACHAR SAMITI & 1 - Petitioner(s) Versus RAJKOT MUNICIPAL CORPORATION & 1 - Respondent(s) ========================================================= Appearance : MR MITUL K SHELAT for Petitioners MR RM CHHAYA for Respondent(s) : 1, MS MINI NAIR AGP for Respondent(s) : 2 ========================================================= CORAM : HONOURABLE MS. JUSTICE R.M.DOSHIT and HONOURABLE MR.JUSTICE SHARAD D.DAVE 28th August, 2008 ORAL JUDGMENT (Per : HONOURABLE MS. JUSTICE R.M.DOSHIT) The petitioner-Gujarat Gyan Prachar Samiti, a Public Charitable Trust and one of its trustees SCA/13011/2007 2/6 JUDGMENT [hereinafter referred to as, “the Trust”] have preferred the present petition under Article 226 of the Constitution of India to challenge the decision of the respondent-Rajkot Municipal Corporation [hereinafter referred to as, “the Corporation”] to transfer the land Final Plot No. 744 admeasuring 2987 sq.m of Town Planning Scheme [Raiya-4] to the Trust on consideration of 50% of the market value for construction of a hospital. It is the claim of the Trust that initially the said plot no. 744 was offered at 25% of the market price. Once having offered the plot at twenty five per cent of the market price, the Corporation is now estopped from demanding higher consideration from the Trust. In the development plan prepared by the Corporation, the above referred Final Plot No.744 is reserved for hospital/health center/dispensary. Pursuant to the recommendation made by the Municipal Commissioner on 10th June, 2005, the Corporation in its General Meeting held on 18th August, 2005 passed a resolution to offer the above referred Plot No. 744 and some other plots @ 25% of the market value by public auction, on the terms and conditions mentioned SCA/13011/2007 3/6 JUDGMENT in the said resolution. Condition no.13 thereof provided that the possession of the land would be given over after the State Government approves the proposal and only after full premium is paid. Section 79 of the Bombay Provincial Municipal Corporation Act, 1949 provides for disposal of property belonging to the Corporation. Clause [d] thereof reads as under:- “[d] the consideration for which any immovable property or any right belonging to the Corporation may be sold, leased or otherwise transferred shall not be less than the current market value of such premium, rent or other consideration.” Provided that any such sale, lease or transfer to a member of a Scheduled Caste, Scheduled Tribe or any other backward class specified as such class in an order of the President under clause (3) of article 338 of the Constitution or any such sale, lease or transfer to a public charitable trust for the purpose of construction or maintenance of a public hospital may be effected, with the prior sanction of the State Government, for a consideration less than such market value to such extent as the State Government may approve. It is clear that the Corporation is under statutory obligation to dispose of its property at the current market value. However, in case of transfer of the property, inter alia, in favour of the public charitable trust, for the purpose of construction or SCA/13011/2007 4/6 JUDGMENT maintenance of a public hospital, the land may be offered for consideration lesser than the market value, with the prior sanction of the State Government. The State Government is also authorized to decide the extent of concession which could be offered. As in the present case, the Corporation had offered Plot No. 744 at a price less than the current market value, the Corporation was required to seek prior sanction of the State Government. Accordingly, a proposal was made to the State Government. The State Government accorded its approval on 2nd January, 2007 on condition, inter alia, that the premium charged by the Corporation shall be fifty per cent of the market value prevalent in the year 2006. In view of the said approval, by communication dated 15th January, 2007, the Trust was called upon to pay additional sum of Rs. 47,79,200/= [equivalent to the price agreed under the original offer]. Feeling aggrieved, the Trust has preferred the present petition. It is the claim of the Trust that decision to offer Plot No. 744 on lease for thirty years at 25% of the market price was taken by the Corporation in SCA/13011/2007 5/6 JUDGMENT consonance with its General Resolution dated 13th April, 1998. The Corporation is, therefore, estopped from claiming any amount other than what was offered by the Trust in public auction. We are unable to agree with this proposition. Section 79 [d] of the Act enjoins the Corporation to obtain prior approval of the State Government before disposing of its property for consideration lesser than the current market value. It was in exercise of power conferred by proviso to Section 79 [d] of the Act, the State Government accorded its approval on condition that the consideration should not be less than 50% of the current market value. Even, the offer made by the Corporation was subject to the above referred condition. The Trust was aware that whatever it had offered was subject to approval or the condition imposed by the State Government. The principle of promissory estoppal, therefore, cannot be invoked. The action of the Corporation and the State Government being in consonance with the statutory provision, no interference is warranted. We, however, have noticed that instead of fifty percent of the market value stated by the State SCA/13011/2007 6/6 JUDGMENT Government, the Corporation has claimed double the offer price i.e., more than 50% of the current value. Though the Trust had offered Rs. 1,600/= per sq.m. against the upset price of Rs. 1,500/= per sq.m. it cannot be presumed that the Trust would have offered double the price had the upset price been Rs. 3,000/= per sq.m. We are therefore of the view that it would be in the interest of justice that the Corporation demands additional sum of Rs. 1,500/= per sq.m i.e., one-forth of the market value prevalent in the year 2006. The Corporation may, therefore, reconsider its demand made under communication dated 15th January, 2007. Subject to the above observation, the petition is dismissed. Rule is discharged. {Miss R.M Doshit, J.} {Sharad D. Dave, J.} Prakash*