Municipal Council Neemuch vs Mahadeo Real Estate

3. The factual background, in brief, giving rise to the present appeals is as under.

The appellant, which is a Municipal Council, duly constituted under the Madhya Pradesh Municipality Act, 1961 (hereinafter referred to as the “said Act”) had invited tenders for allotment of land on lease, for a period of 30 years. The land was ad­measuring 163176 sq. ft. situated in Scheme No.1A (Commercial­cum­Residential Use), Neemuch. The Notice Inviting Tenders (“NIT” for short) was published in the daily newspapers, viz., Nai Duniya, Dainik Bhaskar, Free Press and Dashpur Express. Respondent No.1, which is a registered partnership firm along with other bidders had submitted the tender thereby giving an offer of Rs.5,81,00,106/­. It had also deposited the earnest money amounting to Rs. 47,00,000/­. The bids of the participants were opened in presence of the representatives of all the bidders. The bid of respondent No. 1 herein was found to be highest.

4. The appellant issued a letter dated 27.09.2008 thereby informing respondent No. 1 that its bid was accepted. Respondent No.1 was directed to deposit an amount of Rs.1,45,25,050/­, i.e., 25% of the bid amount within a period of 3 seven days. Respondent no.1 in accordance therewith deposited the aforesaid amount on 01.10.2008.

6. Thereafter, it appears that, there was certain correspondence between the Urban Administrative and Development Department, on one hand, and the Divisional Revenue Commissioner of Ujjain, respondent No.3 herein, on the other hand. Finally, respondent No.3 passed an order dated 03.07.2010 observing therein that, the tenders invited in connection with transfer of the said land were not competitive. He further observed in the said Order, that the NIT was published only in Indore edition of two Hindi Newspapers at Indore and as such there was no wide circulation. As such, he 4 rejected the proposal of the Municipal Council and returned the same with the direction to invite the tenders again by publishing the NIT in at least one National level English newspaper and one State level reputed Hindi newspaper. Being aggrieved thereby, respondent No. 1 herein approached the Madhya Pradesh High Court in Writ Petition No.12204 of 2010. The Division Bench vide Order dated 31.08.2017 allowed the writ petition thereby quashing and setting aside the Order dated 03.07.2010 passed by respondent No.3 and further directing him to grant approval on behalf of the State Government for allotment of the land on lease in favour of respondent no.1. The appellant, thereafter, preferred Review Petition No. 1072 of 2017. The same was rejected. Hence, the present appeals challenging both the Orders dated 31.08.2017 and 05.07.2018.

18. In the light of the aforesaid principles, let us examine the facts of the present case. Undisputedly, in the present case, before inviting the bids, prior approval of the State Government 13 as is required under Section 109 of the said Act was not taken. It appears, that only after the tender process was finalized and the Municipal Council had taken a decision to accept the bid of Respondent No.1, two municipal counsellors raised objection under the provisions of Section 323 of the said Act, before the Collector, Neemuch. The Collector, Neemuch on 18.07.2008 had granted stay to the proceedings. Finally, the Collector, vide Order dated 23.12.2008 held that for granting the said land on lease for a period of 30 years, the approval of the State Government is necessary. Pursuant to the said order by the Collector, the matter was sent to respondent No. 2­ State Government. The Principal Secretary to the Government of Madhya Pradesh addressed a communication to the Commissioner, Ujjain Division, Ujjain (hereinafter referred to as “the Commissioner”) thereby authorising him to transfer the land in question. While doing so, the State Government also directed the Commissioner to inspect that the utilisation of the land was for the purposes as provided under Neemuch Development Plan 2011.

26. In the result, the impugned Orders are not sustainable in law. The appeals are, accordingly, allowed and the impugned orders dated 31.08.2017 and 05.07.2018 are quashed and set aside. The petition of respondent No. 1 stands dismissed.

27. However, the Municipal Council is directed to refund the amount deposited by respondent No. 1 herein along with interest at the rate of 6% per annum forthwith. 21

28. In the facts and circumstances of the case, there shall be no order as to costs.

SEPTEMBER 17, 2019.