IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated: 21-06-2005 Coram: THE HONOURABLE MR. JUSTICE M.KARPAGAVINAYAGAM and THE HONOURABLE MR. JUSTICE C.NAGAPPAN Writ Appeal No.3816 of 2003 and W.A.M.P.Nos.6231 and 6232 of 2003 --- 1. K.Padmavathi 2. P.Sivaraj 3. S.Shanmugam .. Appellants Vs. 1.The Corporation of Coimbatore, rep. by its Commissioner, Coimbatore. 2.The Asst. Commissioner (West Zone), Corporation of Coimbatore, Coimbatore - 641 002. 3.Ramani 4.Natarajan 5.Iyyappan .. Respondents Writ Appeal filed against the order dated 22.9.2003 passed by the learned single Judge in W.P.No.12892 of 2002. For Appellants : Mr.T.P.Manoharan For Respondents 1 and 2 : Mr.N.R.Chandran, A.G. for Mr.J.Sathya Narayana Prasad For Respondents :Mr.A.L.Somayaji, S.C. for 4 and 5 Mr.M.A.P.Thangavel https://hcservices.ecourts.gov.in/hcservices/ JUDGMENT M.KARPAGAVINAYAGAM, J. The writ petitioners are the appellants herein. They filed a Writ of Mandamus directing the respondents 1 to 3, the Commissioner of Corporation and Corporation officials to allot the 144 newly constructed open shops in the public market, viz., Panneerselvam Market, Coimbatore either by way of lease or licence or on payment of daily sungam only in accordance with law and procedures prescribed therefor, instead of, arbitrarily allotting to the men and agents of the respondents 4 and 5, the individuals. 2. The short facts leading to the filing of the writ petition are as follows: “(a) Panneerselvam Public Market in Coimbatore is belonging to the Corporation of Coimbatore, the first respondent herein. It consists of 34 permanent shops including 12 Mutton Stalls and 5 Provision Stores. There is also a vast open area in front of the shops. (b) In accordance with the Bye-laws, the Corporation has been leasing out 34 permanent shops through Tender-cum-Public Auction on annual lease. In the open area, poor and small traders are permitted to bring their articles in baskets and do business on temporary and daily wages by collecting sungam from them every day. The appellants also have been doing the business as small traders. Consequently, totally about 800 to 1000 small traders have been doing business every day and earning their livelihood. (c) Natarajan and Iyyappan, the fourth and fifth respondents are the unruly elements in the area and they are having permanent shops in the public market on lease. They wanted to have control over the entire market. Using their muscle power, they began to put up structures in the open area and gave the same to their men and agents on permanent basis by collecting 'Pagadies' and 'Daily Mamool'. In the process, they had taken full control of the public market and completely prevented the poor small traders to enter into the open area and carry on business therein. Thus, the Corporation was prevented from implementing the Bye-laws. (d) At that point of time, some of the small traders in order to retrieve the public market from their control, filed a suit in O.S.No.467 of 2000 against the individuals, praying for permanent injunction restraining them from any way interfering with the small traders right to do business on payment of sungam in the open area https://hcservices.ecourts.gov.in/hcservices/ in the public market. The trial Court granted interim injunction to that effect. (e) In compliance with the said order, the Corporation, the first respondent herein had retrieved the public market from the control of the respondents 4 and 5 and removed the illegal structures put up by them and consequently, the small traders including the appellants were permitted to carry on business in the open area on daily basis on payment of sungam. Thereafter, the interim injunction originally granted was made absolute after hearing the counsel for Corporation. (f) When the injunction was in force, the Corporation began to construct 144 open portions/shops with Asbestos roofs in the open area. The first respondent decided to treat those 144 portions as open shops and to lease out the same to 144 persons on permanent basis as per Bye-laws. (g) It can be done only through Tender-cum-Public Auction as it is being done in respect of the 34 permanent shops. Further, as per G.O.Ms.No.147 M.A. & W.S.Dept., dated 30.12.2000 issued by the Government of Tamil Nadu, the Corporation, the first respondent herein, should transfer those open shops by way of lease only through public auction. In pursuance of the decision, the first respondent Corporation Commissioner has also issued Public Auction and Tender Notice on 7.8.2002 for leasing out the 144 new open shops. (h) At that stage, to circumvent the above position of law, the respondents 4 and 5, the individuals who have got the muscle power, colluded with the other officials to adopt a "Backdoor Method" to get all the 144 open shops allotted to the men and agents of the 4th and 5 the respondents. Accordingly, the respondents 4 and 5 prepared a list of 144 persons who were their men and collected the amounts from them. The third respondent Assistant Commissioner of Corporation also has recommended for allotment through the "Back-Door Method", even though this can be done by the public auction as per the Bye-laws and the G.Os. (i) Admittedly, the suit was pending in which permanent injunction was in force. At that stage, the appellants filed the present W.P.No.12892 of 2002 praying for a Writ of Mandamus directing the respondents 1 to 3, the Corporation officials to allot the 144 newly constructed open shops in the public market either by way of lease or licence or on payment of daily sungam only in accordance with law and procedures, instead of allotting to the men and agents of the respondents 4 and 5.” https://hcservices.ecourts.gov.in/hcservices/ 3. According to the respondents 1 and 2, the officials, the temporary shops were constructed after observing all the formalities. Before construction, the premises were occupied by the members of the Association,by name Kovai Malar Viyabarigal Sangam. Before vacating them from the premises, the Association gave applications numbering 144 requesting for allotment of shops after completing the construction. After receipt of those applications, these persons were asked to shift to the nearby Corporation Elementary School playground. After the construction was over, out of 144, 128 shops were allotted to them. As such, the allotment cannot be said to be wrong. Therefore, the writ petition is liable to be dismissed as not sustainable in law and on facts. 4. According to the respondents 4 and 5, they are the office- bearers of the Kovai Flower Merchant's Association. Only on the assurance given by the Corporation, the members of the Association vacated the premises and on their request, the same were re- allotted. 5. After considering the respective submissions made by the counsel for the parties, the learned single Judge allowed the writ petition holding that the Corporation must follow the rules and they shall not auction the newly constructed shops in favour of the respondents 4 and 5 and as such, the Corporation shall let out either by way of licence or by auction the said shops only in accordance with the rules and they cannot violate the rules. 6. The learned single Judge having said so, observed in the last paragraph that 144 persons who were carrying on business in the public market are entitled to preferential treatment; therefore, all those persons who were carrying on business in that place before they were shifted shall be given preference and that Only the shops in excess, if any, can be allotted to others, who may be new entrants to get licence. With these observations, the writ petition was disposed of. 7. Thus, the writ petitioners even though they were able to get the writ petition allowed, aggrieved over the observation made by the learned single Judge that 144 persons who were said to be doing business in the open area must be given preference, have approached this Court as they felt that these two type of directions given by the learned single Judge are mutually destructive of each other. Hence, this writ appeal. 8. We have heard Mr.T.P. Manoharan, the learned counsel for the appellants, Mr.N.R.Chandran, the learned Advocate General representing Mr.J.Sathya Narayana Prasad, the learned counsel for the respondents 1 and 2 and Mr.A.L.Somayaji, the learned senior counsel appearing for the respondents 4 and 5, who argued at length https://hcservices.ecourts.gov.in/hcservices/ elaborating their respective pleas. We have given our meticulous consideration to the respective submissions. 9. At the outset, it shall be stated that the learned single Judge having allowed the writ petition by giving a Mandamus directing the authorities concerned to conduct public auction with reference to the allotment of 144 shops in accordance with the procedure, strangely has given a further direction that 144 persons who occupied earlier should be given preference as they are entitled to preferential treatment and if any vacant space is available subsequent to the allotment of the shops, the other persons can be permitted to occupy the same to carry on business. 10. The learned single Judge after having considered the prayer, affidavit and counter-affidavits of the parties, thought it fit to allow the writ petition by issuing a Writ of Mandamus as prayed for. The crux of the Mandamus is that allotment has to be made only as per the procedure contemplated under public auction. If that being so, there is no reason as to why the learned single Judge has given a direction to the first respondent Corporation, Coimbatore to give preference to the 144 persons who were stated to have occupied the place earlier by giving preferential treatment. This means, the second direction directing the first respondent to allot 144 shops to 144 persons is in direct conflict with the first direction. To elaborate this aspect, it would be worthwhile to refer to the actual prayer made by the petitioners/appellants in the writ petition. 11. The petitioners filed the writ petition representing the small traders having their daily business in the Coimbatore Panneerselvam Open Market. Since there was a disturbance at the hands of the respondents 4 and 5, the alleged unruly elements with the collusion of the respondents 1 to 3, the Corporation officials, by not permitting the small traders to carry on their business in the open space, they made a prayer in the writ petition in W.P.No.12892 of 2002 which is as follows: “For the reasons stated in the accompanying affidavit, the petitioner pray that this Hon’ble Court may be pleased to issue a writ in the nature of writ of Mandamus or any other appropriate writ, direction or order, directing the respondents 1 to 3, namely, the Corporation officials, to allot the 144 newly constructed open shops in the Public Market, viz., Panneerselvam Market, Coimbatore either by way of lease or licence or on payment of daily sungam only in accordance with law and procedure prescribed therefor, instead of, arbitrarily allotting to the men and agents of the respondents 3 to 5 alone and to pass such further or other order or orders that this Hon’ble Court may deem fit and proper in the circumstances of the case and render justice.” https://hcservices.ecourts.gov.in/hcservices/ 12. According to the petitioners, as per the affidavit before the learned single Judge and also through the typed set, the petitioners and others as poor small traders have been permitted to bring their articles in baskets and do business on temporary and daily basis in the open space at the Panneerselvam Market by collecting sungam every day. Already there were 34 permanent shops situated inside the market. These shops were leased out through Tender-cum- Public Auction on annual lease. The respondents 4 and 5 though obtained two permanent shops in the public market on lease, they being unruly elements, by using their muscle power, put up structures in the open area and began to give the same to their men and agents by collecting 'Pagadies' and 'Daily Mamools', thus prevented these small traders like the petitioners from carrying on their daily business. In the said process, the entire open space in front of the market was in full control of the respondents 4 and 5. To retrieve the public market from the hands of the respondents 4 and 5, some small traders who were affected like the petitioners filed a suit against both the officials and the respondents 4 and 5 praying for permanent injunction and obtained interim injunction. On the strength of the interim injunction, the illegal structures put up by the respondents 4 and 5 were removed and the small traders were permitted to carry on business in the open area on daily basis on payment of sungam. The interim injunction was made absolute after hearing the respondents. At that stage, the first respondent, despite the pendency of the suit and the injunction order being in force, with collusion of the other respondents, put up Asbestos roofs over the open area of the public market and converted the same into 144 open portions/shops. 13. As per G.O.Ms.No.147 dated 30.7.2000, the first respondent Corporation could allot the shops only by way of lease or licence through the public auction. The first respondent also issued Public Auction and Tender Notice dated 7.8.2002 for leasing out the 144 newly constructed open shops. Somehow or the other to circumvent the above public auction, the respondents 3 to 5 colluded with the respondents 1 and 2 to adopt a "Backdoor Method" and prepared a list of 144 persons, who are the men and agents of the respondents 4 and 5 and openly began to declare that the open shops will be allotted on lease only to the 144 persons suggested by the respondents 4 and 5. 14. In order to prevent the entry of 144 persons at the instance of the respondents 4 and 5 through "Backdoor Method" and in order to make the first respondent to follow the procedures by conducting public auction as per the Tender Notice dated 7.8.2002, the petitioners filed the writ petition seeking for a Mandamus. The learned single Judge on hearing the counsel for the parties and also perusal of the records gave the relief to the prayer sought for by the petitioners with regard to Mandamus. Virtually, the https://hcservices.ecourts.gov.in/hcservices/ said order has been passed by the learned single Judge accepting the case of the petitioners. The relevant portion of the order is as follows: “The prayer of the petitioner is that the Corporation must follow the Rules; violating the Rules, they shall not auction the newly constructed shops in favour of respondents 4 and 5. In so far as this aspect is concerned, there cannot be any difference of opinion. The Corporation shall let out either by way of licence or by auction only in accordance with the Rules and they cannot violate the Rules. In so far as the prayer is concerned, the writ of mandamus is allowed.” 15. The reading of the above paragraph would indicate that the learned single Judge has given a specific direction that the Corporation shall let out either by way of licence or by auction only in accordance with law and they cannot violate the rules. This direction would clearly indicate that there should not be any allotment to any person much less than the persons recommended by the respondents 4 and 5 without conducting auction. At the same breath, in paragraph 10, the learned single Judge has given a further direction which would be detrimental to his first direction to make allotment to the 144 persons who were said to have conducted the business earlier before construction of the 144 shops. The relevant portion of the observation is as follows: “Admittedly, in this market there were number of vendors carrying on business in flowers for years together. From the affidavit filed by respondents 1 and 2, it is seen that only after enumerating the merchants, who were carrying on business, they were given alternative spot and they are presently carrying on business in that place temporarily. Therefore, those persons, who were enumerated already and found to have been carrying on business already in the market, cannot be deprived of their rights. ...... All these persons who were carrying on business in that place before they were shifted shall be given a place first. Only the shops in excess, if any can be allotted to others, who may be new aspirants to get licence. If the petitioners proved their case that they were carrying on business earlier, prior to the date when they were shifted, they will also be entitled to such treatment preferential treatment. Otherwise, the petitioners and all the others, who may apply for licence to carry on business, may be treated on par. They can be granted licence with respect to the remaining excess shops only.” 16. By virtue of this direction, there is no necessity to issue fresh licence or to conduct public auction. There is no reason given in the impugned order by the learned single Judge as to why the Writ of Mandamus as sought for issued by him in paragraph 9 has to be diluted by giving another direction that https://hcservices.ecourts.gov.in/hcservices/ there need not be any public auction in regard to the 144 persons who were said to be occupying the said portions earlier. It is unfortunate that the learned single Judge failed to notice that the petitioners have never admitted that the said 144 persons have actually occupied the shops before the construction. Therefore, the second direction which is quite contradictory to the first direction is merely based upon the affidavit filed by the respondents. As such, this second direction as mentioned in paragraph 10 would not stand, especially when the conclusion by the learned single Judge that the petitioners are entitled for Mandamus. 17. This aspect of the matter could be looked into from yet another angle. There is no dispute in the fact that under G.O.Ms.No.147 dated 30.7.2000, the leasing of the shops or open shops or immovable property of all the urban Local Bodies shall be decided in the public auction for the first time and after expiry of the period, it is for the Local Bodies either to continue the period of lease in favour of the existing lessees or to conduct fresh public auction. 18. According to the counter-affidavit filed by the respondents 1 and 2, namely by the Commissioner of the Coimbatore Municipal Corporation, the Panneerselvam Market, particularly in the portion which has now been reconstructed, originally did not have the proper amenities and proper structures. Since there was open space in front of the market, it was proposed to provide proper structures with platforms for the benefit of the vendors. For the said purpose, the vendors who were generally in occupation of the market were asked to shift to nearby Corporation Elementary School playground. Thereafter, the Corporation constructed temporary sheds after observing all the formalities. Before vacating the premises, an Association by name Kovai Malar Viyabarigal Sangam had given applications from its members numbering 144 who were said to be doing business regularly in the market requesting for allotment of shops after completing the construction work. Accordingly, after the construction was over, the Corporation decided to allot the 144 shops in the name of 144 persons who have earlier occupied. 19. According to the counter-affidavit of the fourth respondent A.N.Natarajan, he is one of the office-bearers of Kovai Malar Viyabarigal Munnetra Sangam and there are more than 400 members in the Sangam. The fourth respondent is the President of the Committee consisting of 40 members and the fifth respondent is the Treasurer of the Sangam. The fourth respondent being one of the flower vendors by profession is in occupation of one shop in the open space. Originally, the members of the Sangam who occupied the open space were asked by the Corporation to shift their https://hcservices.ecourts.gov.in/hcservices/ business to nearby Corporation School ground temporarily in order to put up Asbestos roof to provide 144 flower vending stalls at Panneerselvam Flower Market, in the open space. At that time, an assurance was given to the members of the Sangam for reallotmentin the newly put up roof top market at Panneerselvam Flower Market. Accordingly, the 144 flower vendors have been permitted to occupy the newly constructed shops. 20. So, the reading of both the counter-affidavits filed on behalf of the respondents 1 and 2 and on behalf of the respondents 4 and 5 would indicate that their stand before the learned single Judge is that the fourth respondent was the President of the Sangam and all the 144 persons have occupied the open space for carrying on their business and since the construction was proposed to be made with Asbestos roof, they were given assurance for re-allotment and on that basis, they shifted from that place to Corporation School playground and thereafter, after the construction, the same thing was re-allotted. 21. The above statement made by both the respondents through two counter-affidavits would indicate that there is a conspicuous silence with reference to the particulars of the allotment by the Corporation to 144 persons originally made in their favour. As indicated above, there is G.O.Ms.No.147 dated 30.7.2000. By virtue of the said G.O., the open shops shall be allotted to the persons concerned only in accordance with law through public auction. As clearly mentioned in G.O.Ms.No.147, when the allotment is made for the first time, it must be through public auction. Of course, the Local Body has got discretion to continue the period even after expiry of the lease period, if so desired. 22. Admittedly, it is not the stand of the respondents 1 and 2 that either Sangam or members of the Sangam, namely 144 persons were permitted to occupy the open space either by way of lease or by licence through public auction. The only stand taken by the respondents is that they had earlier occupied the open space and done the business and they were asked to shift their business to nearby area so that the Corporation would construct new structures and re-allot them to those persons. The learned single Judge has miserably failed to take into consideration whether such alleged occupation by the 144 persons was permitted by the Corporation in accordance with the rules and regulations contained in the Bye- laws. 23. As stated above, it cannot be debated that as per the Bye- laws and the G.Os. relating to the lease and licence, the Local Bodies should do the same only through public auction. When it is not established that those persons were the permitted occupants as https://hcservices.ecourts.gov.in/hcservices/ per the legal permission by the Corporation and when it is the stand of the respondents that they were permitted to occupy after the construction only on the basis of the assurance given by the Corporation even before vacating them from that place, it is not proper for the learned single Judge to issue such a direction that the authorities should give preferential treatment to the 144 persons by making allotment in their names. 24. In this context, it is important to note that the very same authority, namely the first respondent Corporation chose to issue the Auction Notice on 7.8.2002 with reference to the right to collection of the charges at Panneerselvam Market and with reference to the allotment of 144 shops constructed in the open market. When such is the stand taken by the Corporation through the Auction Notice which was issued on 7.8.2002 to conduct public auction as per the G.O.Ms.No.147 dated 30.7.2000, how can they now take a different stand that the 144 shops could be allotted to the 144 persons who occupied earlier, who were not admittedly selected through the public auction. 25. In M/S. KASTURI LAL v. STATE OF J. & K. (A.I.R.1980 S.C.1992), the Supreme Court would hold as follows: “Where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or granting other forms of largess, the Government cannot act arbitrarily at its sweet will. There are two limitations imposed by law which structure and control the discretion of the Government in this behalf. The first is in regard to the terms on