In a significant judgment reinforcing the accountability of local authorities, the Gujarat High Court has ruled that the State and municipal bodies cannot act in a manner that benefits a private party at the expense of public resources. Presiding over a case involving the Mangrol Nagar Palika, the High Court emphasized that public property is held in "trust" for the citizens and must be disposed of only through transparent, fair, and public-oriented processes.

Justice J.C. Doshi, while allowing a second appeal, set aside the concurrent findings of two lower courts that had previously ordered the municipality to hand over land to a private individual based on a decades-old resolution.

The case, titled Nagar Seva Sadan, Mangrol v. Motivarash Premjibhai Damabhai, dates back to a resolution passed by the General Body of the Nagarpalika in July 1973. The original plaintiff (the private party) claimed that the municipality had resolved to sell him a specific piece of municipal land.

However, the suit for the actual transfer of the land (specific performance) was filed nearly 37 years after the resolution was passed. Despite this massive delay, both the Trial Court and the First Appellate Court ruled in favor of the private individual, directing the municipality to execute the sale deed.

The Nagarpalika (now Nagar Seva Sadan) challenged these orders in the High Court, raising two primary arguments:

Lack of Authority: The General Body of a Nagarpalika does not have the legal power to unilaterally sell land. Under state government circulars and the Gujarat Municipalities Act, such powers often vest solely with the Collector.
The "Yawning Hiatus": The suit was filed after more than three decades, making it "ex-facie barred by limitation"—meaning it was legally filed too late to be considered.

The Doctrine of Public Trust

The High Court’s judgment goes beyond technicalities and touches upon a profound constitutional principle: the Doctrine of Public Trust.

Justice Doshi observed that municipal property is not the "private estate" of the elected members of a local body. Instead, it is held in trust for the benefit of the general public. The Court noted:

"The Government should not act in a manner which would benefit a private party at the cost of the State. Such an action would be both unreasonable and contrary to public interest."

The Court reiterated that the disposal of state-owned or public-owned property should not be left to the absolute discretion of the executive. To ensure fairness and prevent "bias, jobbery, or nepotism," the preferred method of selling public property is through public auction or inviting tenders, rather than private deals.

Ordinarily, in a "Second Appeal," the High Court does not interfere with the factual findings of lower courts. However, Justice Doshi clarified that if a lower court’s finding is "perverse" (completely illogical) or ignores a "statutory mandate," the High Court is duty-bound to step in.

In this instance, the Court found that the lower courts had ignored:

Statutory Restrictions: They overlooked government notifications that required the Collector's sanction for land sales.
The Law of Limitation: They failed to address why a suit filed after 37 years should be entertained when the limit for such cases is typically three years.
Constitutional Mandate: They treated the case as a simple private contract dispute, ignoring the fact that public land and Article 14 (Right to Equality) were involved.

The Gujarat High Court’s decision serves as a stern reminder to local bodies across the state that they must act as guardians, not owners, of public assets. By setting aside the previous orders, the Court has ensured that municipal land remains available for public utility rather than being handed over to private interests through backroom resolutions.

The ruling underscores a simple but powerful legal truth: in a democracy, the State acts as a trustee of public resources, and every action involving public property must stand the test of transparency and public interest.

Case Details:

Case Title: Nagar Seva Sadan, Mangrol v. Motivarash Premjibhai Damabhai
Case No.: R/Second Appeal No. 272 of 2022
Bench: Justice J. C. Doshi
Court: Gujarat High Court