MUNICIPAL COUNCIL NEEMUCH versus MAHADEO REAL ESTATE AND ORS.

Citation: [2019] 12 S.C.R. 532 · Decided: 17-09-2019 · Supreme Court of India · Bench: ARUN MISHRA · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2019] 12 S.C.R.
MUNICIPAL COUNCIL NEEMUCH
v.
MAHADEO REAL ESTATE AND ORS.
(Civil Appeal No. 7319-7320 of 2019)
SEPTEMBER 17, 2019
[ARUN MISHRA, M. R. SHAH AND B. R. GAVAI, JJ.]
Constitution of India – Art.226– Administrative action–
Judicial review of – Appellant invited tenders for allotment of land
on lease, for 30 years – Bid of respondent no.1 found to be highest
– Objection raised with regard to the tender process– Respondent
no.3-Divisional Revenue Commissioner, Ujjain passed order dtd.
03.07.10 that the tenders invited were not competitive as there was
no adequate publicity and there was possibility of cartel of bidders
– Direction to invite the tenders again by publishing the Notice
Inviting Tender (NIT) in at least one National level English
newspaper and one State level reputed Hindi newspaper– High Court
quashing the order dtd. 03.07.10, directed respondent no.3 to grant
approval on behalf of the State Government for allotment of the
land on lease in favour of respondent no.1 – Review – Dismissed –
On appeal, held: Under clause (iii) of sub-sec.3 of s.109, no land,
exceeding fifty thousand rupees in the value shall be sold or
otherwise conveyed without the previous sanction of the State
Government – In the present case, before inviting the bids, prior
approval of the State Government as required u/s.109 of the 1961
Act was not taken – Division Bench of the High Court by only
referring to the communication dtd. 21.12.09 came to the conclusion
that the sanction contemplated u/s.109 was granted by the State
Government – Commissioner, instead of blindly accepting the
directions contained in the communication dtd. 21.12.09, acted in
larger public interest so that the Municipal Council earns higher
revenue by enlarging the scope of the competition – State
Government also, after the Commissioner pointed out anomalies,
re-examined the issue and authorised the Commissioner to pass
appropriate orders including invalidating the tender process and
directing initiation of fresh tender process – In this background,
   [2019] 12 S.C.R. 532
532
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the finding of the Division Bench that the action of the Commissioner
is arbitrary and illegal, is not correct – High Court, while exercising
its powers of judicial review of administrative action, could not
have interfered with the decision unless the decision suffers from
the vice of illegality, irrationality or procedural impropriety – Both,
the Commissioner as well as the State Government acted in the larger
public interest – Scope of judicial review of an administrative action
is very limited – Interference by the High Court was improper –
Impugned orders set aside – However, appellant to refund the amount
deposited by respondent no.1 with interest @ 6% p.a.– Madhya
Pradesh Municipality Act, 1961– ss.109, 323– Municipal
Corporation (Transfer of Immovable Property) Rules, 1994– rr.3,
7– Principle of Wednesbury Unreasonableness.
Allowing the appeals, the Court
HELD: 1.1 No land, exceeding fifty thousand rupees in the
value shall be sold or otherwise conveyed without the previous
sanction of the State Government. The immovable property which
yields or is capable of yielding an income shall not be transferred
by sale or otherwise conveyed, except to the highest bidder at
the public auction or by inviting offers in a sealed cover. No doubt,
with the previous sanction of the State Government such a transfer
could be effected without public auction or inviting offers in a
sealed cover. The second proviso further provides that, the
Corporation may, with the previous sanction of the State
Government and for the reasons to be recorded in writing, transfer
any immovable property to a bidder other than the highest bidder.
 It is thus amply clear that, whenever any land which is having a
value exceeding fifty thousand rupees is to be sold the same
cannot be done without the previous sanction of the State
Government. The scope of judicial review of an administrative
action is very limited. Unless the Court comes to a conclusion,
that the decision maker has not understood the law correctly
that regulates his decision-making power or when it is found that
the decision of the decision maker is vitiated by irrationality and
that too on the principle of “Wednesbury Unreasonableness” or
unless it is found that there has been a procedural impropriety in
the decision-making process, it would not be permissible for the
MUNICIPAL COUNCIL 

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