Case Note & Summary
The petitioner, Aftab Khan Jalil Khan, challenged an order dated 17.02.2016 passed by the Collector, Wardha, under Section 308 of the Maharashtra Municipal Councils, Nagar Parishads and Industrial Townships Act, 1965, suspending a resolution dated 24.08.2009 of the Municipal Council, Hinganghat. The resolution had accepted the petitioner's highest bid of Rs.1,26,000/- in an auction for leasing out plot no.67 (895 sq. ft.) owned by the Council for 30 years. The Collector's order was passed on a complaint by Afsar Ali, brother of respondent no.2, alleging that the market value was higher. The petitioner also challenged a subsequent communication dated 20.10.2018 from the State Government directing the Council to reassess the market value and take fresh steps for higher revenue. The High Court held that the Collector's power under Section 308 is limited to examining legality or propriety, not to substitute his own commercial wisdom. Since the Council had followed due process of auction and the bid was the highest, the Collector exceeded his jurisdiction. The court quashed both the Collector's order and the State Government's communication, allowing the writ petition with no order as to costs.
Headnote
A) Municipal Law - Section 308 of Maharashtra Municipal Councils, Nagar Parishads and Industrial Townships Act, 1965 - Scope of Revisional Powers - The Collector's power under Section 308 is limited to examining the legality or propriety of a resolution and does not extend to substituting his own commercial wisdom regarding the adequacy of the bid amount or market value - Held that the Collector exceeded his jurisdiction by suspending the resolution on grounds of inadequate revenue, as the Council had followed due process of auction and the bid was the highest (Paras 6-8).
B) Municipal Law - Lease of Municipal Property - Auction Process - Validity of Resolution - The Municipal Council's resolution dated 24.08.2009 to lease out plot no.67 for 30 years after a public auction, accepting the highest bid of Rs.1,26,000/-, was valid and not illegal or improper - The Collector's order suspending the resolution was set aside as it was based on a reassessment of market value without any allegation of illegality (Paras 3-8).
C) Municipal Law - Communication Dated 20.10.2018 - Direction to Reassess Market Value - The State Government's communication directing the Municipal Council to reassess market value and take fresh steps was also quashed as it was based on the same erroneous reasoning and lacked any legal basis (Para 9).
Issue of Consideration
Whether the Collector, in exercise of powers under Section 308 of the Maharashtra Municipal Councils, Nagar Parishads and Industrial Townships Act, 1965, could suspend a resolution of the Municipal Council for leasing out land after an auction, and whether the subsequent communication directing reassessment of market value was valid.
Final Decision
The writ petition is allowed. The order dated 17.02.2016 passed by the Collector, Wardha, and the communication dated 20.10.2018 issued by the State Government are quashed and set aside. Rule is made absolute in those terms. No order as to costs.
Law Points
- Section 308 of the Maharashtra Municipal Councils
- Nagar Parishads and Industrial Townships Act
- 1965
- Scope of revisional powers
- Jurisdictional error
- Auction of municipal land
- Lease of property
- Market value reassessment
Case Details
2019 LawText (BOM) (07) 192
WRIT PETITION NO. 4130/2016
V.P. Panpalia (for petitioner), M.P. Kariya (for respondent no.1), A.M. Haque (for respondent no.2), V.A. Thakare (for respondent nos.3 and 4)
Municipal Council, Hinganghat; Muzaffar Ali s/o Mohammad Ali; Collector, Wardha; State of Maharashtra
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Nature of Litigation
Writ petition challenging the order of the Collector under Section 308 of the Maharashtra Municipal Councils, Nagar Parishads and Industrial Townships Act, 1965 suspending a resolution of the Municipal Council, and a subsequent communication from the State Government directing reassessment of market value.
Remedy Sought
Quashing of the Collector's order dated 17.02.2016 and the State Government's communication dated 20.10.2018.
Filing Reason
The petitioner's highest bid in an auction for lease of municipal land was accepted by the Council, but the Collector suspended the resolution on grounds of inadequate revenue, and the State Government directed reassessment of market value.
Previous Decisions
The Municipal Council passed a resolution on 24.08.2009 accepting the petitioner's bid; the Collector suspended that resolution on 17.02.2016; the State Government issued a communication on 20.10.2018.
Issues
Whether the Collector acted within jurisdiction under Section 308 of the Act in suspending the resolution on grounds of inadequate market value.
Whether the State Government's communication directing reassessment of market value was valid.
Submissions/Arguments
Petitioner argued that the Collector exceeded his jurisdiction under Section 308, which is limited to examining legality or propriety, and cannot substitute his own commercial wisdom.
Respondent no.2 supported the Collector's order, contending that the market value was higher and the Council should have obtained better revenue.
Ratio Decidendi
The power of the Collector under Section 308 of the Maharashtra Municipal Councils, Nagar Parishads and Industrial Townships Act, 1965 is limited to examining the legality or propriety of a resolution and does not extend to substituting his own commercial wisdom regarding the adequacy of the bid amount or market value. Since the Municipal Council followed due process of auction and accepted the highest bid, the Collector's order suspending the resolution was without jurisdiction.
Judgment Excerpts
The power under Section 308 of the said Act is a power of revision and the same can be exercised by the Collector to satisfy himself as to the legality or propriety of the resolution. The said power does not enable the Collector to substitute his own commercial wisdom in place of the decision taken by the Municipal Council.
In the present case, the Municipal Council had followed the due process of auction and the bid of the petitioner was the highest. The Collector could not have suspended the resolution on the ground that the market value was higher.
Procedural History
The Municipal Council passed a resolution on 24.08.2009 accepting the petitioner's bid. On a complaint by Afsar Ali, the Collector initiated proceedings under Section 308 and passed an order on 17.02.2016 suspending the resolution. The petitioner filed the present writ petition on 23.08.2016. Subsequently, the State Government issued a communication on 20.10.2018 directing reassessment of market value, which was challenged by amendment. The petition was heard and decided on 22.07.2019.
Acts & Sections
- Maharashtra Municipal Councils, Nagar Parishads and Industrial Townships Act, 1965: 308
