* THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY + WRIT PETITION NO. 7475 of 2008 % 07-07-2008 # 1. P.Pullaiah & Ors. PETITIONERS VS. $ 1.The State of A.P. rep. By its Secretary, Municipal Administration, Secretariat, Hyderabad and others. ..RESPONDENTS ! COUNSEL FOR PETITIONERS: MR.VENKATESWARLU SANISETTY & P.ANITHA NAIDU ^COUNSEL FOR RESPONDENT Nos.1& 2:G.P. FOR MUNICIPAL ADMINISTRATION & URBAN DEVELOPMENT COUNSEL FOR RESPONDENT Nos.3&4: MR. S NAGESWARA REDDY, STANDING COUNSEL. < Gist: > Head Note: ? CITATIONS: 1) 1991 (1) An.W.R. 44 2) 1975 (1) An.W.R. 294 IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE SEVENTH DAY OF JULY TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE B.SESHASAYANA REDDY WRIT PETITION NO : 7475 of 2008 Between: 1 P.Pullaiah, S/o. Rangaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 2 Yendeti Veeraiah, S/o. Peda Subbaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 3 Ch.Rama Prakasam, S/o. Amjaneyulu, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 4 Nooka Rangasai Gopi, S/o. Pitchaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 5 P.Bavappa, S/o.Subrahmanyam, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 6 J.Hanitha Rao, S/o. Kotaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 7 Parsam Sambiah, S/o. Hanumanthu, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 8 A.Srinivasa Rao, S/o. Ramalakshmayya, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 9 A.Brahma Reddy, S/o. Jali Reddy, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 10 Gollakaram Venkata Subbarao, S/o. Lakshmi Narayana C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 11 S.V. Subba Rao, S/o. Hanumayya, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 12 K.Hari Babu, s/o. Venkatrao, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 13 Ch.Mallikarjuna Rao, S/o. Anjaneyulu, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 14 P.Jalaiah, S/o. Venkaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 15 Y.Ramanaiah, S/o. Jalaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 16 Mannem Subba Reddy, S/o. Guravareddy, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 17 Mannem Adi Lakshmi, W/o. Subba Reddy, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 18 Ayinabattini Sambasivarao, S/o. Narasimham, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 19 Konda Narasimha Rao, S/o. Lakshmiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 20 Konda Venkata Narasimha Rao, S/o. Lakshmaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 21 Kotari Krishna Murthy, S/o. Venkaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 22 Peerla Srinivasa Rao, S/o. Kristaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 23 Battula Satti Reddy, s/o. elamanda Reddy, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 24 Purani Venkateswarlu, S/o. Kotaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 25 Purani Srinivasulu, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 26 Pigili Rattamma, W/o. Ankayya, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 27 Gosu Ramesh, S/o. Kotaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 28 Nunemani gopal(Gopi), S/o. Pitchaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 29 N.Sunil Kumar, S/o. Giri, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 30 SK. Pathan, S/o. Meer Khan, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 31 SK. Pathan, S/o. Meer Chan, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 32 A.Ramanaiah, S/o. Narasimha Rao, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 33 Sunkara Srinivas Rao, S/o. Prakasam Murthy, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 34 Dvikanda Vijjireddy, S/o. Venkata Reddy, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 35 Dwaram Lakshmi Narayana Reddy, S/o. Rami Reddy, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 36 Battula Chenchaiah, S/o. Late Veeraiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 37 Talluri Srinivasa Rao, S/o. Subbaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 38 P.Satyanarayana, S/o. Venkateswarlu, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 39 Kottagoral Gopi, S/o. Raghavaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 40 Akula Prasad, S/o. Hanumantha Rao, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 41 Kavali Venkatrama Reddy, S/o. Prakasam Rao, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 42 Battula Veera Reddy, S/o. Satti Reddy, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 43 Doku Guruva Reddy, S/o. Ramalinga Reddy, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 44 Burle Srinivasulu, S/o. Rangamannar, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 45 Purini Venkateswarlu, S/o. Ramalingam, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 46 A.Koti Reddy, S/o. Subba Reddy, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 47 N.Koteswara Rao,(Koti), S/o. Lakshminarayana, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 48 T.Nagaraju, S/o. Subbaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 49 K.Bapaiah, S/o. Subbaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 50 K.Veeraswamy, S/o. Venkateswarlu, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 51 M.Venkata Rao, S/o. Balarao C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 52 Asodi Sankar Reddy, S/o. Jali Reddy, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 53 P.Suresh, S/o. Siva, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 54 Chintalapudi Mallikarjuna Rao, S/o. Kotaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 55 Sunkara Seshu, S/o. Venkateswarlu, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 56 D.subba Reddy, S/o. Rami Reddy, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 57 K.Sakuntala, W/o. Venkatareddy, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 58 K.Mallikarjuna Reddy, S/o. Srinivasa reddy, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 59 Mypati Poli Reddy, S/o. Nancharlu, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 60 Katireddy Subbulu, W/o. Yedukondalu, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 61 Katireddy Lakshminarayana, S/o. Yedukondalu, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 62 Kavuri Ayyappa Reddy, S/o. Kotaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 63 Purimetla Gangaiah, S/o. Kotiaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 64 B.K. Reddy, S/o. Koti Reddy, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 65 B.Anjireddy, S/o. Kotilinga Reddy, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 66 N.V.Subba Rao, S/o. Pitchaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 67 N.V.Satyanarayana, S/o. Subbarao, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 68 B.Sankaraiah, S/o. Narayana , C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 69 V.Venkata Narayana, S/o. Venkata Subbaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 70 Yerra Reddy Venkata Reddy, S/o. Subbaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 71 Pallabolu Venkatrao, S/o. Subba Rao, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 72 Dwaram Peda Subba Reddy, S/o. Koti Reddy, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 73 U.Rattamma, W/o.Yelamanda, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 74 R.Suseela, W/o. Venkateswarlu, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 75 Pasupuleti Venkata Rao, S/o. Veeraiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 76 Mankana Boina Sivamma, W/o. Raja, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 77 SK.Ghouse, W/o. Kareem, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 78 Doki Nageswara Rao, S/o. Ramalinga Reddy, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 79 Doma Sekhara Reddy, S/o. Seshagirirao, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 80 Vanama Subba Reddy, S/o.Rami Reddy, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 81 Purini Subba Rao, S/o.Narayana, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 82 Purini Koteswaramma, W/o. Koteswara Rao, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 83 Kavuri Ramana Reddy, S/o. Venkareddy, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 84 Kavuri Venkateswarlu, S/o. venka Reddy, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 85 Jallipalli Venkateswarlu, W/o. Venkateswarlu, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 86 Jallipalli Naga Raji, W/o. Venkateswarlu, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 87 Nookala Venkateswarlu, W/o. Venkata Subbaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 88 Ch.Avinash, S/o. Rama Prakasam, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 89 Kakara nancharamma, W/o. Subbaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 90 Ch.Ramanjaneyulu, S/o. Mallikarjunarao, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 91 P.Srinivasulu Reddy, S/o. Chengala Reddy, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 92 Kanneboyina Suba Rao, S/o. Nagaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 93 Chintalapudi Nagarjuna, S/o. Rama Prakasam, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 94 Nakkala Rama Krishna, S/o. Ramayya, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 95 Chittiboyina Chalapathi, S/o. Basavayya, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 96 Peyyala Soma Raju, S/o. Jalayya, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 97 Kolliboyina Somayya, S/o. Tatayya, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 98 V.Subba Rao, S/o. Hanumayyam C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 99 P.Venkata Rao, S/o. Veeraiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 100 Ballamudi Venka Reddy, S/o. Subba Reddy, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 101 Peerla Venkateswarlu, S/o. Subbaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 102 B.Venkateswarlu, S/o.Subbaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 103 M.Sai Baba, S/o.Venkata Narayana, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 104 Vadlamudi Ragavulu, S/o. Ramaswamy, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 105 Koduri Venkatrama Reddy, S/o Musala Reddy, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 106 Gottala Narasimha, S/o. Sivaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, 107 Purini Sivanandamma, W/o. Kotaiah, C/o. Damodaram Sanjeevaiah Vegetable Market, Trunk Road, Ongole, Prakasam District, ..... PETITIONERS AND 1 The State of Andhra Pradesh, rep by its Secretary, Municipal Administration, Secretariat, Hyderabad. 2 The Commissioner of Municipal Administration, A.C. Guards HYDERABAD. 3 Ongole Municipality, rep by its Chairman,ONGOLE, Prakasam District. 4 The Commissioner,Ongole Municipality, ONGOLE, Prakasam District. .....RESPONDENTS Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court may be pleased to issue an order or order or direction or writ specially Writ of Mandamus (A) declare the action of the respondents in fixing non-refundable deposit (GoodWill) of Rs.1,00,000/- from retail vegetable vendors and Rs. 1,50,000/- from wholesale dealers for allotment of shop in a newly constructed agricultural market complex, at Vooracheruvu in Survey No14/1 near RTC Complex and also fixing a lease amount of Rs.3,000/- for retail vegetable vendors and Rs. 5,000/- for wholesale dealers vide Resolution dated 30.01.2008 In CR No.1030 of the Ongole Municipality as arbitrary, illegal and violative of Articles 14,19 (G)(1) of the Constitution of India and (B) direct the respondents to allot the shop in the newly constructed agricultural market complex, Vooracheruvu in Survey No 14/1, near RTC Complex to all the existing vegetable vendors on the same terms and conditions as are prevailing in the old Vegetable market i.e., Damodaram Sanjeevaiah Vegetable Market, Ongole. Counsel for the Petitioners: MR.VENKATESWARLU SANISETTY Counsel for the Respondent Nos.1&2: GP FOR MUNCIPAL ADMN. & URBAN DEV. Counsel for the Respondent Nos.3 & 4 : MR.S.NAGESWARA REDDY, STANDING COUNSEL The Court made the following : ORDER: This writ petition has been filed by the petitioners, who are 107 in number, with a prayer to issue a writ of Mandamus declaring the action of the respondents in fixing non-refundable deposit (goodwill) of Rs.1,00,000/- from retail vegetable vendors and Rs.1,50,000/- from wholesale dealers for allotment of shops in the newly constructed agricultural market complex and also fixing the lease amount of Rs.3,000/- for retail vegetable vendors and Rs.5,000/- for wholesale dealers pursuant to the council resolution dated 30.01.2008 in Cr.No.1030 of Ongole Municipality-3rd respondent as arbitrary, illegal and violative of Articles 14, 19(1)(g) of the Constitution of India. The further relief sought for in the writ petition is to direct the respondents to allot the shops to the petitioners in the newly constructed agricultural market complex. 2. P.Pullaiah has sworn to the affidavit filed in support of the writ petition. Writ affidavit, in brief, is: The petitioners are small time vegetable vendors in Damodaram Sanjeevaiah Vegetable Market, Ongole. They have been doing the said business for the last 30 to 40 years. The Ongole Municipality-3rd respondent constructed Damodaram Sanjeevaiah Vegetable Market about 50 to 60 years ago. Some of the petitioners are in occupation of the shops in Damodaram Sanjeevaiah Vegetable Market since the time of their forefathers. Since the place where Damodaram Sanjeevaiah Vegetable Market is situated has become densely populated, Ongole Municipality-3rd respondent has taken a decision to construct a new market complex in Survey No.14/1 at Vooracheruvu, Near RTC Complex, Ongole. The Ongole Municipality-3rd respondent has taken a decision to close down the old Damodaram Sanjeevaiah Vegetable Market. There are 120 shops in the Damodaram Sanjeevaiah Vegetable Market. The Ongole Municipality-3rd respondent has been entrusting the collection of rents on contract basis by way of public auction. All the vegetable vendors in the said market used to pay Rs.300/- per month to the contractor. The Ongole Municipality-3rd respondent passed resolution on 25.01.2008 to close down the old vegetable market i.e. Damodaram Sanjeevaiah Vegetable Market and open the newly constructed agricultural market complex at Vooracheruvu. It is proposed to collect Rs.1,00,000/- from the retail vendors and Rs.1,50,000/- from the wholesale dealers as goodwill and fixed Rs.3,000/- as monthly rent for the retail vegetable vendors and Rs.5,000/- for the wholesale vegetable vendors. The action of the Ongole Municipality-3rd respondent in collecting the goodwill amount and fixing the rent exorbitantly is illegal and arbitrary and violative of Articles 14 and 19 (1)(g) of the Constitution of India. It is further averred in the writ affidavit that a duty is cast upon the Municipality to establish public markets. Once public market is established, the Municipal Council is empowered to levy any one or more fees prescribed under Section 277 of the Andha Pradesh Municipalities Act, 1965 (for short, ‘the Act’). The Act does not empower the Ongole Municipality-3rd respondent to collect goodwill. It only empowers the municipalities to collect fee in respect of public market. In exercise of powers under clause [c] of sub-section 2 of Section 326 of the Act, the Governor of Andhra Pradesh has framed the Rules known as the Andhra Pradesh Municipality (Acquisition of Transfer of Immovable Properties) Rules, 1967. Rule 5 of the said Rules deals with transfer by lease of immovable property belonging to municipal council. Rules also framed in exercise of powers under sub-section (1) of Section 3 of the Act and these rules are called as the Andhra Pradesh Municipality (Regulation of Receipts and Expenditure) Rules, 1968 (for short, ‘the Rules’). Under Rule 12(A), a municipality can fix reasonable lease/rent amount and it does not empower the municipality to charge goodwill. 3. 4th respondent filed counter-affidavit. S.Ravindrababu, Municipal Commissioner, Ongole Municipality has sworn to the counter-affidavit. It is stated in the counter-affidavit that the agricultural market committee has constructed new market complex in the site belonging to the Ongole Municipality with the funds of agricultural market committee, Ongole, to a tune of Rs.7.00 Crores. The Government under G.O.Ms.No.271 of Agricultural and Co-operation (AMII) Department, dated 01.09.2007, decided to handover the new vegetable market complex to Ongole Municipality-3rd respondent subject to the following conditions: a) The vegetable market complex at Ongole constructed by Agricultural Market Committee, Ongole, shall be handed over to Ongole Municipality for a consideration of Rs.7.00 crores payable with 9% interest on decreasing balance within a period of two years; b) The Municipality has to pay an amount of Rs.5.00 crores on conclusion of the auction and the balance principal amount with interest shall be paid from the monthly rental accruals over a period of two years. c) The Government has constituted a committee with the following officers to allot the shops and to ensure the repayment of cost of construction along with interest to the Agricultural Marketing Department. 1. Collector and District Magistrate, Prakasam – Chairman. 2. The Assistant Director of Marketing – Member. 3. Person-in-charge,Agrl. Market Committee, Ongole – Member; 4. Commissioner of Municipality, Ongole – Member; 5. Executive Engineer, R& B – Member. d) The municipality shall open a separate account for the funds pertaining to the Market Complex and the same shall be operated till the cost of building is fully repaid. The Municipal Health Officer, Ongole Municipality, submitted a report on 04.10.2007. As per the report, the present market is not safe in public health point of view. He recommended closure of the vegetable market at the present place under Section 250 of the Act. Therefore, it is proposed to shift Damodaram Sanjeevaiah Vegetable Market to the new market complex. There are 120 shops in Damodaram Sanjeevaiah Vegetable Market. According to Rule 7 of the Rules relating to the Receipts and Expenditure Rules, 1965, the Municipal council has a right to collect fee in respect of the use of any market by way of conducting open auction every year. Accordingly, the vegetable vendors have to pay the fee fixed in the Market Gazettee notification to the highest bidder whose bid is confirmed by the competent authority. The vegetable market complex at Ongole constructed by the Agricultural Market Committee, Ongole was handed over to the Ongole Municipality-3rd respondent on 16.10.2007 in accordance with G.O.Ms.No.271, dated 01.09.2007, for a consideration of Rs.7.00 crores payable with 9% interest on decreasing balances within a period of two years. The Ongole Municipality-3rd respondent has to pay an amount of Rs.5.00 crores on conclusion of the auction and the balance principal amount with interest shall be paid from the monthly rental accruals over a period of two years. Therefore, the Municipal Council in its Resolution No.1030, dated 30.01.2008, has resolved fixing the goodwill and monthly rent to all the blocks of market in the new market including the vegetable wholesale and retail shops. Under sub-section (1) of Section 277 of the Act, the Municipal Council may provide place for use as public markets. Under sub-Section (2) of the Section 277 of the Act, the Council may, in any public market, levy any one or more of the following fees at such rates and may place the collection of such fees under the management of such persons as may appear to it proper for any period not exceeding one year at a time and on such terms and subject to such conditions as it may deem fit – a) fees for the use, or for the right to expose goods for sale in such markets; b) fees for the use of shops, stalls, pens or stands in such markets; c) fees on vehicles or pack-animals carrying, or on persons bringing goods for sale in such markets; d) fees on animals brought for sale into, or sold in such markets; and e) licence fees on brokers, commission agents, weighmen and measurers practicing their calling in such markets. Under sub-section (4) of Section 277 of the Act, the council may lease any land, shop, godown, building or terrace of a building owned by it and situated anywhere in the municipality for any period not exceeding five years at a time and subject to such terms and conditions as the council may deem fit. There is no proposal to convert the market into a commercial establishment. In view of the conditions stipulated in G.O.Ms.No.271, dated 01.09.2007, the Ongole Municipality-3rd respondent has proposed in fixing goodwill and rent without collecting any fees as implemented in the old market as per Section 277 of the Act. The fixing of the goodwill is not arbitrary and illegal. The Municipal Council, Ongole, conducted open auction on 26.03.2008, 23.04.2008, 24.04.2008 and 25.04.2008 to the remaining 90 shops excluding the shops allotted to the petitioners. There was heavy participation and competition among the bidders. The plinth area of each vegetable wholesale market shop is 12 x 27 feet. The goodwill amount fixed by the municipal council is Rs.1.50 Lakhs and the monthly rent is Rs.5,000/-. During the open auction, the highest bid amount to a shop No.57 is Rs.4.25 Lakhs and the lowest bid amount to a shop No.38 is Rs.1.51 lakhs in this category. The plinth area of each vegetable retail market shop is 9 x 13 feet. The goodwill amount fixed by the municipal council is Rs.1.00 lakh and the monthly rent is Rs.3,000/-. During the open auction, the highest bid amount to a shop No.111 is Rs.5.10 lakhs and the lowest bid amount to a shop No.118 is Rs.1.81 lakhs in this category. The plinth area of each flower market shop is 10 x 13 feet. The goodwill amount fixed by the municipal council is Rs.1.00 lakh and the monthly rent is Rs.1,500/-. During the open auction, the highest bid amount to a shop No.1 is Rs.5.46 lakhs and the lowest bid amount to a shop No.17 is Rs.1.77 lakhs in this category. The plinth area of each fruit market shop is 10 x 13 feet. The goodwill amount fixed by the municipal council is Rs.1.00 lakh and the monthly rent is Rs.1,500/-. During the open auction the highest bid amount to a shop No.38 is Rs.3.73 lakhs and the lowest bid amount to a shop No.26 is Rs.1.02 lakhs in this category. The plinth area of each fish market shop is 10 x 13 feet. The goodwill amount fixed by the municipal council is Rs.0.50 lakh and the monthly rent is Rs.2,000/-. During the open auction, the highest bid amount to a shop No.24 is Rs.1.45 lakhs in this category. The plinth area of each mutton market shop is 10 x 13 feet. The goodwill amount fixed by the municipal council is Rs.0.50 lakhs and the monthly rent is Rs.2,000/-. During the open auction the highest bid amount to a shop No.19 is Rs.1.00 lakhs and the lowest bid amount to a shop No.24 is Rs.0.53 lakh in this category. The goodwill and the rent fixed by the Municipal Council in C.R.No.1030, dated 30.01.2008 is legal. At present the Ongole Municipality-3rd respondent has not proposed to demolish the old vegetable market. The Municipality will take further course of action in respect of old market as per sub-section (3) of Section 277 of the Act. For better appreciation, I may refer paras.13 and 14 of the counter-affidavit and they are thus: “13. It is submitted that the averments made by the petitioners are false. At present the Municipality is not proposed to demolish the old vegetable market. The Municipality will take further course of action in respect of old market as per sub-section (3) of the Section 277 of APM Act, 1965. The council resolution No.1030, dt.30.01.08 is enclosed for kind perusal. Opportunity is given to the existing vegetable vendors with minimum goodwill and monthly rent amount. 14. It is submitted that the present allotment shops in the newly Agricultural Market Committee Complex is involved with financial commitment. In the present old market the vendors are being paid daily fees to the highest bidder