THE HON’BLE SRI JUSTICE V.V.S.RAO WRIT PETITION Nos.9458, 9805, 10138, 10304, 10491, 10501, 10623, 10773, 10784, 10786, 10790, 10799 and 10829 of 2005 DATED:07.08.2006 BETWEEN Kanigalla Venkata Subba Rao and others. … Petitioners and The Vice Chairman, VGTM Urban Development Authority, Vijayawada, Krishna District and others. … Respondents THE HON’BLE SRI JUSTICE V.V.S.RAO WRIT PETITION Nos.9458, 9805, 10138, 10304, 10491, 10501, 10623, 10773, 10784, 10786, 10790, 10799 and 10829 of 2005 COMMON ORDER PART-I Introduction This common Judgment shall dispose of these petitions involving common questions for consideration. There are mainly three categories of petitioners. First category of petitioners (W.P.Nos.9458, 10491, 10304 and 10773 of 2005) are the wholesale merchants of Vijayawada, who are also members of a society called Vijayawada Wholesale Commercial Complex Members Welfare Society (Merchants Association, for brevity). The petitioners in this sub group are also members of their respective trade associations. Second category of cases is filed by the wholesale merchants, who are allegedly not members of the Merchants Association, but they are members of their respective trade associations. Vijayawada Daily Parcel Lorry Office Owners Welfare Association and other Lorry transporters filed third category of cases. The alleged restraint imposed on the right to carry on business by seizing their respective business places/shops brought them together for redressal. This was allegedly done by the authorities of the respondents, namely, Vijayawada Municipal Corporation (VMC); Vijayawada, Guntur, Tenali and Mangalagiri Urban Development Authority (hereafter called, the Urban Authority) and Commissionerate of Vijayawada City Police. All the businessmen in this group of writ petitions mainly allege that the high handed action of various authorities is not a reasonable restraint on the business right and therefore, impinges the fundamental right under Article 19(1)(g) of the Constitution of India . The petitioners are also aggrieved by the orders given by the respondent authorities to shift their wholesale business to Wholesale Commercial Complex constructed outside the city of Vijayawada. PART – II Back Ground Facts Vijayawada is a historic city and more often than not dubbed as business capital of State of Andhra Pradesh. The wholesale business in various commodities is concentrated in the area, which is called I Town area. It is a part of the old city. The Government approved General Development Plan of 1969 under A.P.Town Planning Act, 1920 (Town Planning Act, for brevity), classifying the I Town area (surrounding famous Indrakiladri Hills) as mostly residential with few areas as light commercial zone. The effect of such plan is that no wholesale business is permissible in a residential-cum-light commercial zone. This was, however, followed more in breach. Over a period of time, large wholesale enterprises set up their shops in I Town. This naturally resulted various problems for the residents with regard to basic infrastructure facilities. Vijayawada Urban Development Authority was constituted under A.P.Urban Areas (Development) Act, 1975 (Urban Development Act, for brevity). In 1980, the said authority adopted zoning regulations earmarking I Town area consisting of ward numbers 1 to 7 of the then Vijayawada Municipality as residential area/zone. This means wholesale business cannot be permitted in that area. The continued suffering by the community and peoples opinion for shifting the wholesale trade from I Town resulted in VMC and Urban Authority as well as Police initiating steps in that direction. Shifting the wholesale market to less congested outskirts of the city was mooted. As a first step, it was thought to construct mega wholesale commercial complex. All the wholesalers – at least most of them; formed into Merchants Association and took up the task of acquiring the land, developing and constructing wholesale market complex. An extent of Acs.30.00 of agricultural land in R.S.No.498/2 in Gollapudi village falling within Vijayawada Urban Agglomeration was purchased by the Merchants Association. As the land was purchased for construction of wholesale market complex, VMC as well as Urban Authority pursued with the Government to exempt the land from the provisions of Urban Land (Ceiling and Regulation) Act, 1976 (ULC Act, for brevity). Though the request for exemption was initially declined, due to timely intervention of well-meaning Members of Legislative Assembly and Members of Parliament, Government of Andhra Pradesh issued orders in G.O.Ms.No.330, dated 14.06.2002, granting exemption to the land from the provisions of the ULC Act with a direction to the Merchants Association to deposit a sum of Rs.1,90,90,000/- with Urban Authority towards infrastructural development charges. Several trade associations, on behalf of their members, agreed to take several plots or shops in the proposed market complex to be constructed by the Merchants Association. Be it also noted that as the property purchased was agricultural land, the Government in exercise of their powers under Section 12(2) of the Urban Development Act, notified, vide G.O.Ms.No.557, dated 31.12.2002, variations of the master plan for urban authority modifying the land use from agriculture to commercial use zone. The Merchants Association having obtained necessary exemptions, modifications and permissions from various authorities completed the construction of wholesale commercial complex at Gollapudi. As part of the development was taken up by the Merchants Association itself, the Urban Authority refunded the amount deposited by the association earlier to enable the completion of other developmental works. The association appears to have completed 489 shops besides developing plots. These were allotted to various members of the association. In spite of allotment of developed plots/shops, wholesale merchants of I Town area did not shift to market complex near Gollapudi. As there was continuous demand for shifting of the wholesale business to Gollapudi market, the merchant association addressed a letter on 23.07.2004 to the Commissioner of Police requesting time till 15.08.2004 to shift their shops to the new complex. As the entire administration was normally interested in solving the long pending problem in Vijayawada wholesale business area, a meeting was convened on 27.11.2004 at the Camp Office of District Collector. It was impressed upon all the trade associations, to immediately shift wholesale business to Gollapudi market. On 04.03.2005, Merchants Association convened meeting of Executive, tenders/construction sub committees and special invitees. It was resolved to stop the business in I Town area and shift the same to Gollapudi market complex before 31.03.2005. While enclosing a copy of such resolution, the General Secretary of Merchants Association addressed a letter on 11.03.2005 to the Vice Chairman of Urban Authority requesting to take necessary action in connection with shifting of the shops of the members from their locations in I Town to Gollapudi complex. Similar letter was addressed to the District Collector. A meeting was proposed at th e Camp Office of the District Collector on 23.03.2005 and accordingly the association sent notice, dated 17.03.2005 to its members. After the meeting, the Merchants Association passed resolution to the effect that it shall be the duty of every member to shift the wholesale business to Gollapudi complex in public interest. Thereafter, presumably acting as per the request of the General Secretary of the Merchants Association in his letter, dated 11.03.2005, the Vice Chairman of Urban Authority sent a notice to the wholesale merchants in I Town area on 31.03.2005 informing each member that the wholesale business has to be shifted to Gollapudi within one week from the date of receipt of the said order. The notice also informs that if the business is not shifted, the District Administration would take necessary action for shifting the business of the wholesale merchants. In all the writ petitions, it is alleged that on 19.04.2005 and 23.04.2005 the staff working in the office of the respondents went to respective business premises and pressurized them to shift to Gollapudi complex and threatened to seize/seal the shops if the shifting is not done. In W.P.No.10623 of 2005 filed by Vijayawada Daily Parcel Lorry Office Owners Welfare Association and its office bearers and in W.P.No.10799 of 2005 filed by Sri Rama Krishna Lorry Transport, it is alleged that on 26.04.2005 and 27.04.2005 the staff of Urban Authority and VMC sealed their offices by using police force. The writ petitions are therefore filed raising various grounds noticed infra. In all the writ petitions, the respondents filed counter affidavits opposing the writ petitions. As we presently see, reliance is placed on the provisions of Hyderabad Municipal Corporations Act, 1955 (HMC Act, for brevity), which is made applicable to VMC, Urban Development Act and Zonal Regulations and Rules framed there under to sustain the action taken by the authorities to shift wholesale merchants to Gollapudi Market Complex. The allegation made by the petitioners has been denied and necessary reply affidavits are also filed in some of the cases. However, having regard to the background of the cases and the question that falls for determination, it is not necessary to refer to these counter averments in detail. PART – III Learned counsel for the petitioners, M/s.A.Rajasekhara Reddy, M.Brahma Reddy, M.P.Chandra Mouli, K.S.Murthy and Gangadhar Chamarthy submit that the object of removing decongestion in I Town area cannot be a ground to defeat the fundamental right of the petitioners under Article 19(1)(g) of the CoI. The petitioners have been carrying on the wholesale business for a long time and if they are now allowed to shift to the outskirts of the city that would deprive them the right to do business, which is not prohibited by law especially when most of the petitioners own shops in I Town area. A serious objection is taken to the use of force by the authorities especially police to seize and seal the shops for non- shifting to the new complex. It is also alleged that Urban Authority or VMC failed to give prior notice to all the wholesale businessmen in I Town area and therefore the action of the authorities is unsustainable. Lastly, it is urged that even if the wholesale business carried on in I Town area is in contravention of the provisions of Urban Act and Zonal Regulations, the authorities can only impose penalty and they cannot prohibit the business in the area. The counsel in some cases also urge that carrying on a particular business like mini lorry parcel service or retail business is not prohibited under the Zoning Regulations. The learned counsel for the petitioners in W.P.No.10304 of 2005, Sri A.Rajasekhara Reddy, submits that in the absence of any law, the right under Article 19(1)(g) of CoI cannot be denied. According to the learned counsel, there is no law, which empowers any authority to seize and seal the shops of the petitioners. He placed strong reliance on State of Bihar v Project Utcha Vidya Shikshak[1]. Learned standing counsel for VGTM Urban Authority, Ms.K.Aruna; the learned standing counsel for VMC, Ms.Jhansi and the counsel for fifth respondent, namely, Merchants Association, Mr P.Srinivas, while opposing the writ petitions made elaborate arguments, which is summed up as follows. Ward Numbers 1 to 7 of Vijayawada Municipality (now the Corporation) were included in I Town area, which according to general town plan published in 1969 was earmarked for residential and light commercial purposes. Therefore, no wholesale business is permissible. After establishment of Urban Authority as per Hyderabad Urban Development Authority (HUDA) Rules and Regulations, which were initially adopted by Urban Authority in 1980 as well as the Zoning Regulations promulgated in 1993, I Town area is residential-cum-light commercial and as per these Regulations any wholesale business would be in contravention attracting various penalties. Learned counsel placed reliance on the provisions of HMC Act, Urban Development Act and Urban Authority Zoning Regulations and Rules, to which a reference is made infra. The learned counsel for Merchants Association submits that all the petitioners being members of Association are bound to abide by the decision taken by it in the presence of District Collector, Commissioner of Police, Vice Chairman of Urban Authority and the Commissioner of VMC. According to the learned counsel, having given undertaking to shift their businesses to Gollapudi market complex and having avoided the same, the petitioners are not entitled to seek relief from this Court under Article 226 of the Constitution of India. Indeed, the counsel submits that the petitioners who are members of the Merchants Association have no locus standi to file the writ petitions, as they participated in the meetings of the society. He submits that even now there are hundred shops vacant in Gollapudi market complex and the Association is willing to allot these shops to non-members. He also submits that members of Daily Parcel Lorry Association were also allotted shops in Gollapudi market complex and that all of them agreed to shift to the new market. Learned counsel placed strong reliance on Daman Singh v State of Punjab[2], Dr.A.L.N.Prasad v State of Andhra Pradesh[3], A.P.Gunnies Merchants Association, Hyderabad v Government of Andhra Pradesh[4], M.C.Mehta v Union of India[5], State of Gujarat v Mirzapur Moti Kureshi Kassab Jamat[6] and Krishna Kumar v Municipal Committee[7]. The learned counsel also submits that if the State resorts to certain steps keeping in view the larger interest of the public and community, the same is justifiable under Directive Principles of the State Policy. Therefore, it is reasonable restriction imposed on the wholesale merchants of I Town area to shift to outskirts of the city, which cannot be faulted. Finally, the learned counsel placing strong reliance on the latest Judgment of the Supreme Court in M.C.Mehta II v Union of India[8] submits that the authorities have power to seize and seal the shops especially when the Merchants Association, which is espousing the cause of wholesale merchants itself requested the authorities to take necessary steps to compel the merchants to shift to the new market complex. PART – IV REGULATING ENACTED LAW The broad question that requires to be considered is whether the respondent authorities can compel the petitioners to shift from out of I Town area on pain of facing coercive action. At the outset, relevant provisions of the relevant statutes may be noticed to know the statutory environment and legal dispensation dealing with the rights of the property owners in the Municipal area and the duties and powers of the authorities entrusted to enforce the law. The relevant Statutes, Rules, Regulations and Bye-laws, to which a reference requires to be made, are as follows. (i) Hyderabad Municipal Corporations Act 1955; (ii) Municipal Corporation of Hyderabad (MCH) (Layout) Rules 1965; (iii) Municipal Corporation Building Bye- laws 1981; (iv) A.P. Municipalities Act 1965 (Municipalities Act, for brevity); (v) A.P. Municipalities (Layout) Rules 1970; (vi) A.P. Town Planning Act 1920; (vii) A.P. Urban Areas (Development) Act 1975 (Urban Development Act); (viii) Zoning Regulations to Master Plan of Vijayawada Municipality 1980; and (ix) Zoning Regulations for VGTM UDA* Region, 1993. Hyderabad Municipal Corporations Act 1955 Vijayawada city was long back constituted as Municipality under A.P. Municipalities Act, 1965 (the Municipalities Act, for brevity). The State Legislature enacted Vijayawada Municipal Corporation Act in 1981 (for short, VMC Act). By reason of Section 3 thereof, the local area included in Vijayawada Municipality shall be deemed to be an established Municipal Corporation by the name of VMC. Section 7 of VMC Act extends and applies the provisions of HMC Act mutatis mutandis to VMC as if the provisions of HMC Act formed part of VMC Act. Therefore, all the provisions of HMC Act and all the rules and regulations thereof are applicable to Vijayawada Corporation. There is also no dispute that requisite statutory orders are already promulgated by the Government of A.P. adopting and applying all the bye-laws, rules and regulations made in relation to HMC to Vijayawada Corporation. The HMC Act contains twenty three (23) Chapters and twenty two (22) schedules i.e., A to V. Chapter XII (Sections 428 to 463) contains Building Regulations and Chapter 13 deals with Development Regulations. Apart from this, in exercise of their powers, the Government of A.P. promulgated Rules touching upon various aspects of Municipal Administration and MCH promulgated different sets of bye-laws including land layout bye-laws and building bye-laws. By reason of the notification issued by the Government of Andhra Pradesh vide G.O.Ms.No.661, Municipal Administration and Urban Development, dated 02.11.1993 under Section 7(2) of VMC Act, the HMC Building Bye-laws shall apply to VMC. A brief reference to some of the Provisions, Rules and Byelaws is made infra. The words ‘building’, ‘land’ and ‘market’ are defined in dictionary clause of HMC Act as under. 2(3) ‘building’ includes a house, out-house, stable, latrine, godown, shed, hut, wall, fencing, platform and any other structure whether of masonry, bricks, wood, mud, metal or of any other material whatsoever; 2(28) ‘land’ includes land which is being built upon or is built upon or covered with water, benefits to arise out of land, things attached to the earth or permanently fastened to anything attached to the earth and rights created by legislative enactment over any street; 2(32) ‘market’ includes any place where persons assemble for the sale of, or for the purpose of exposing for sale, livestock, food for livestock, meat, fish, fruit, vegetables, animals intended for human consumption or any other article of human food whatsoever with or without the consent of the owner of such place, notwithstanding that there may be no common regulation of the concourse of buyers and sellers and whether or not any control is exercised over the business carried on, in or on the persons frequenting such place by the owner thereof, or any other person. A conspectus of Chapter XII of HMC Act containing “Building Regulations” is as follows. Every person, who intends to erect or re-erect a building, has to issue a notice of intention to the Commissioner. Such notice should specify the position of the building to be erected, the description of the building, the purpose for which it is intended and its dimensions. Sub-section (2) of Section 428 of HMC Act defines the term ‘to erect or re-erect a building’ means inter alia conversion of a building into a stall, shop, warehouse or godown not originally constructed for use as such or vice versa. It is also competent for the Commissioner to require the submission of plans drawn by a licensed surveyor and such additional information as necessary regarding the sections of every floor of the building intended to be erected or re-erected. Even while undertaking the work of alteration or additions to the building, a notice has to be given to the Commissioner and the non-compliance would entail any penal action against the person contravening the provisions. It is only after obtaining permission granted under Section 437 of HMC Act that a person can commence construction strictly in accordance with the building plan as approved by the Commissioner. Needless to point out that every building plan should be strictly in accordance with the building bye-laws regarding the height, dimensions, set back, ventilation, sanitation and the like. Even after completion of the building, a person is required to inform the Commissioner the completion of the building and then occupy the building constructed. Section 441 of HMC Act prohibits the use of a building for any purpose for which it was not intended nor approved earlier. The same reads as under. 441. Building not be converted to other purposes without the permission of the Commissioner:- No person shall, without the written permission of the Commissioner- (a) use or permit to be used for human habitation any part of a building not originally constructed or authorized to be used for that purpose; or (b) convert into, or use, or permit to be used, as a chawl or building intended to form a range or separate rooms for lodgers, a building not originally designed or authorized to be so used. Sections 442 and 443 of HMC Act are relevant and are read as under. 442. Buildings of human habitation not to be used as godown, etc:- No person shall without written permission of the Commissioner or otherwise than in conformity with the terms of such permission use or permit to be used any building or any part of a building originally constructed, or authorized to be used for human habitation as a godown, warehouse, workplace, factory, stable or a motor garage. 443. No alterations to be made in buildings for human habitation without written permission of Commissioner:- No person shall without the written permission of the Commissioner or otherwise than in conformity with the terms of such permission make any alteration or cause any alteration to be made in an existing building originally constructed or authorized to be used for human habitation for the purpose of using it or causing it to be used as a godown, warehouse, workplace, factory, stable or motor garage. The above three provisions are couched in negative language and suggest that a building constructed for human habitation cannot be converted into a commercial purpose or into factory, warehouse etc. The conversion into a godown, workplace, motor garage is also prohibited. Section 450 of HMC Act confers powers on the Commissioner to cancel the permission granted on the ground of material misrepresentation or fraudulent statement by the person who obtained permission. For instance, if permission is obtained for construction of residential house and construction was made for altogether a different purpose, it is always open to the Commissioner to cancel the permission and take such other action. Sections 452 to 454 of HMC Act provide for the procedure regarding the proceedings to be taken in respect of a building, which is constructed or used in contravention of the building plan. This power includes pulling down the illegally constructed house. Section 636 of HMC Act provides for such power and reads as under. 636. Work or thing done without written permission of the Commissioner to be deemed unauthorized:- (1) If any work or thing requiring the written permission of the Commissioner under any provisions of this Act, or any rule, regulation or bye-law is done by any person without obtaining such written permission or, if such written permission is subsequently suspended or revoked for any reason by the Commissioner, such work or thing shall be deemed to be unauthorized and subject to any other provision of this Act the Commissioner may at any time, by written notice, require that the same shall be removed, pulled down or undone as the case may be, by the person so carrying out or doing if the person carrying out such work or doing such thing is not the owner at the time of such notice then the owner at the time of giving such notice shall be liable for carrying out the requisitions of the Commissioner. (2) If within the period specified in such written notice the requisitions contained therein are not carried out by the person or owner, as the case may be, the Commissioner may remove or alter such work or undo such thing and the expenses thereof shall be paid by such person or owner as the case may be. Sub-section (1) of Section 636 of HMC Act is worded in such broad terms that it confers vast power on the Commissioner of the Corporation to direct a person to remove, pull down or undo anything, which was done without obtaining any permission. When the Commissioner takes action under Section 636 of HMC Act, it not only obliges the owner of the premises but the tenant as well and if such person fails to comply with the notice under Section 636(1) of HMC Act, it shall be open to the Commissioner to remove or alter such work or undo such thing duly collecting expenses from the owner. Therefore, the provisions of HMC Act confer power on the Commissioner to set right anything which is done illegally or in contravention of the permission granted by the Commissioner. Municipal Corporation of Hyderabad (Layout) Rules 1965 These Rules are made by the Government in exercise of powers under Section 585(1) of HMC Act. They deal with the procedure for sanctioning of layout and the conditions which a layout plan must satisfy. Rule 10 provides that the roads proposed in the layout shall have width with reference to the length as provided in the development plan and that the roads, open spaces,