SAHKAR OCTROI COMPANY Vs. RAJULA NAGAR PANCHAYAT

JUDGEMENT

(1.) . This petition is directed against an order passed by the respondent No.2- the Appellate Committee of the Amreli District Panchayat by which the resolution dated September 30, 1985 passed by respondent no.1- Rajula Nagar Panchayat (hereinafter referred to as `the Panchayat') has been cancelled. Pursuant to the aforesaid resolution, the petitioner and respondent No.1-Panchayat had entered into a contract for collection of octroi duty for a period commencing from 1-10-1985 to 31-12-86 (for 15 months). Consequent upon the cancellation of the resolution, the contract would also stand cancelled.

(2.) . The respondent No.1 is a statutory autonomous Corporation constituted under the Gujarat Panchayats Act, 1961. The respondent no. 1-Panchayat is empowered to impose and levy certain taxes as per the provisions of the Act. As provided in Section 117(8) of the Act, the Panchayat can collect octroi on animals, goods or both which may be brought within the limits of Nagar for consumption, use or sale therein. As per the provisions of Section 118 of the Act, the Panchayat can lease by public auction or by private contract the collecting of octroi duty. The Panchayat passed a resolution dated July 17, 1985 and decided to give contract of collection of octroi. The reason mentioned in the resolution provides interesting reading. It is stated in the resolution that the Panchayat was running Octroi Department and there was corruption in the administration thereof. That octroi income was not commensurate with the expenditure on Department and, therefore, after framing rules and regulations regarding the service conditions of the employees of the Panchayat as not to adversely affect them and with a view to see that the income from octroi is increased, the necessary contract be given after in forming the District Development Officer, Amreli. The Panchayat decided to give contract from the period commencing from October 1, 1985 to December 31, 1986 and also decided that for this purpose, notice be affixed on the notice board and the offer should be invited at least from more than 3 registered contractors. It is also mentioned in the resolution that in case of necessity, the ijara amount be decided even by negotiation. As per resolution, all the powers for entering into the contract were given to the executive committee of the Panchayat. Pursuant to the aforesaid resolution, notice dated September 16, 1985 appears to have been affixed on the notice board of the Panchayat and the last date for submitting the offers was September 25, 1985 upto 3.00pm. it is stated that on that day on account of insufficient corum, the meeting of the executive committee could not be held. It was adjourned to September 30, 1985. On the day offers were examined. In all there were five offers. The offer of the petitioner was highest, i.e. Rs. 16,51,000/-. After negotiating with the petitioner, the contract was given for Rs. 17 lacs. It is contended that the petitioner and the Panchayat entered into the contract on the same day.

(3.) . The respondents no. 3,4 and 5 preferred an appeal under the provisions of section 290 of the act before the district panchayat, Amreli. After hearing the parties, by its order dated 14/15-10-1985, the Appellate Committee of the District Panchayat held that resolution no. 4 of the executive committee dated September 30, 1985 by which the executive committee decided to give contract to the petitioner firm was illegal and, hence, ordered it to be cancelled. The appellate committee also found that the respondent no.1 panchayat had flouted the direction given by way of stay order by the appellate committee and, therefore, the action under section 297 for supersession of the panchayat be taken.