TORAN SINGH THAKUR vs STATE OF CHHATTISGARH

1



2026:CGHC:26192
NAFR

HIGH COURT OF CHHATTISGARH AT BILASPUR
WPC No. 461 of 2018
Reserved on 24.04.2026
SHYNA
AJAY
Pronounced on 29.06.2026
Digitally signed
by SHYNA AJAY
Date:
2026.06.30
20:01:21 +0530
Cheman Kumar Deshmukh S/o Late Shri Parsadi Ram Deshmukh,
Aged 49 Years, R/o Village Umardah, Tahsil Balod, Post Belmand,
District Balod Chhattisgarh
--- Petitioner(s)
versus
1 - State Of Chhattisgarh Through The Secretary, Revenue And
Disaster Management Department, Mantralaya, Mahanadi Bhawan,
Capital Complex, Naya Raipur, District Raipur Chhattisgarh.
2 - Secretary, Urban Administration Department, State Of Chhattisgarh,
Mantralaya, Mahanadi Bhawan, Capital Complex, Naya Raipur, District
Raipur Chhattisgarh
3 - Collector, Balod, District Balod Chhattisgarh.
4 - Municipal Council, Balod, Through The Chief Municipal Officer,
Municipal Council, Balod, District Balod Chhattisgarh
--- Respondent(s)

2
WPC No. 489 of 2018
Rakesh Yadav S/o Shri Ram Kumar Yadav, Aged 48 Years,
Occupation Agriculturist, R/o Ward No. 13, Dalli Road, Balod, District
Balod Chhattisgarh
--- Petitioner(s)
Versus
1 - Union Of India, Through the Town and Country Planning
Organisation, Government of India, Ministry of Urban Development, E-
Block, Vikas Bhawan, I.P. Estate, New Delhi-110 002
2 - State Of Chhattisgarh, Through The Secretary, Revenue And
Disaster Management Department, Mantralaya, Mahanadi Bhawan,
Capital Complex, Naya Raipur, District Raipur Chhattisgarh
3 - Secretary, Urban Administration Department, State Of Chhattisgarh,
Mantralaya, Mahanadi Bhawan, Capital Complex, Naya Raipur, District
Raipur Chhattisgarh
4 - Director, Urban Administration and Development, Raipur, District
Raipur Chhattisgarh.
5 - Collector, Balod, District Balod Chhattisgarh
6 - Municipal Council, Balod, Through The Chief Municipal Officer,
Municipal Council, Balod, District Balod Chhattisgarh
7 - Chief Municipal Officer, Municipal Council Balod, District Balod
Chhattisgarh
--- Respondent(s)

3
WPC No. 492 of 2018
Kishore Kumar Yadu S/o Late Shri Tekram Yadu, Aged 51 Years R/o
Village Umardah, Post Belmand, Tahsil Balod, District Balod,
Chhattisgarh
--- Petitioner(s)
Versus
1 - State Of Chhattisgarh Through The Secretary, Revenue and
Disaster Management Department, Mantralaya, Mahanadi Bhawan,
Capital Complex, Naya Raipur, District Raipur, Chhattisgarh
2 - Secretary, Urban Administration Department, State Of Chhattisgarh,
Mantralaya, Mahanadi Bhawan, Capital Complex, Naya Raipur, District
Raipur, Chhattisgarh
3 - Collector, Balod, District Balod, Chhattisgarh
4 - Municipal Council, Balod, Through The Chief Municipal Officer,
Municipal Council, Balod, District Balod, Chhattisgarh
--- Respondent(s)
WPS No. 1699 of 2018
Toran Singh Thakur S/o S/o Late Keju Ram Thakur, Aged 65 Years,
Occupation Retired Government Servant, R/o Ward No. 19, Budha
Talab Road, Balod, District- Balod, Chhattisgarh
--- Petitioner(s)
Versus

4
1 - State Of Chhattisgarh Through the Secretary, Revenue and Disaster
Management Department, Mantralaya, Mahanadi Bhawan, Capital
Complex, Naya Raipur, District : Raipur, Chhattisgarh
2 - Collector, Balod, District- Balod Chhattisgarh
3 - Municipal Council, Balod, Through the Chief Municipal Officer,
Municipal Council, Balod, District- Balod, Chhattisgarh
4 - Chief Municipal Officer, Municipal Council, Balod, District- Balod,
Chhattisgarh
--- Respondent(s)
WPC No. 743 of 2018
1 - Ashok Kumar Sahu S/o Guman Singh Sahu, Aged About 58 Years,
R/o Ward No. 13, Aamapara, Balod District- Balod, Chhattisgarh
2 - Chetan Kumar Yadav S/o Krishna Kumar Yadav, Aged About 53
Years, R/o Ward No. 12, Aamapara, Balod District- Balod, Chhattisgarh
3 - Jaikumar Verma S/o Romnath Verma, Aged About 38 Years, R/o
Behind Jems Garage, Nalipar, Kundrupara, Balod District- Balod,
Chhattisgarh.
4 - Loman Kumar Rana S/o Ishwar Lal Rana, Aged About 41 Years, R/o
Ward No. 09, Mararpara, Balod, Mokhla Majhi Temple, Behind Tavri
Ashram, Balod District- Balod, Chhattisgarh
5 - Smt. Kamla Bai W/o Ram Singh Janghel, Aged About 55 Years, R/o
Village- Gaiji, Post- Sahgaon, Doundilohara, District- Balod,
Chhattisgarh

5
6 - Anil Janghel S/o Ramsingh Janghel, Aged About 35 Years R/o
Village- Gaiji, Post- Sahgaon, Doundilohara, District- Balod,
Chhattisgarh.
7 - Smt. Sushila Gupta W/o Beni Prasad Gupta Aged About 60 Years
R/o Village Sahgaon, Doundilohara, District- Balod Chhattisgarh.
8 - Smt. Indrani Chandrakar W/o Mahendra Kumar Chandrakar, Aged
About 51 Years R/o P. W. D. Colony, Balod District- Balod Chhattisgarh.
9 - Smt. Usha Thakur W/o Eman Singh Thakur Aged About 36 Years
R/o P. W. D. Colony, Balod, District- Balod Chhattisgarh
10 - Smt. Shakuntala Bhuarya W/o Janak Lal Bhuarya, Aged About 41
Years R/o Village And Post- Bhaisbod, Tahsil- Balod, District- Balod,
Chhattisgarh.
11 - Smt. Seema Kridant W/o Rajeshwar Rao Kridant, Aged About 46
Years, R/o Near Devarchana, Station Road, Balod, District- Balod,
Chhattisgarh
12 - Smt. Indumati Sahu W/o Ashok Kumar Sahu, Aged About 51
Years R/o Ward No. 13, Aamapara, Balod District- Balod, Chhattisgarh.,
13 - Smt. Paraldas Narang W/o Khiyal Das Narang, Aged About 63
Years R/o Sindhi Colony Balod District- Balod, Chhattisgarh
14 - Ramnarayan Rana S/o Ishwar Lal Rana Aged About 38 Years R/o
Mararpara Balod, Mokhlamanjhi Mandir, Behind Tavri Ashram, Balod,
District- Balod, Chhattisgarh
15 - Khorbahra Ram Urvasha S/o Sunder Ram Urvasha, Aged About
50 Years R/o Village- Khaira, Post Koba, Tahsil- Doundilohara, District-
Balod, Chhattisgarh

6
16 - Smt. Madhu Thakur W/o Yashwant Kumar Thakur, Aged About 38
Years R/o Village Kumhalori, Post- Koba, Tahsil- Doundilohara, District-
Balod, Chhattisgarh.
17 - Shyam Pal Jaiswal S/o Ramsukh Jaiswal Aged About 56 Years R/o
Ward No. 1, Pandardalli, Near Rajbahra Baba Mandir, Rajhara, District-
Balod, Chhattisgarh
18 - Smt. Madhukanta Sen W/o Santosh Kumar Sen, Aged About 48
Years R/o Sonuram Bada, Near Vinay Talkies, Ward No. 03, Nayapara,
Balod, District- Balod, Chhattisgarh
19 - Ishwar Lal Khobragade S/o Manna Lal Khobragade Aged About 55
Years R/o Main Road Chikhlakasa Ward No. 02, Block- Daundilohara,
District Balod, Chhattisgarh
20 - Hemlal Sahu S/o Hagruram Sahu, Aged About 49 Years R/o
Village Tamora, Post- Nipani, Tahsil Balod, District- Balod, Chhattisgarh
21 - Rohit Kumar Sahu S/o Chovaram Sahu, Aged About 48 Years, R/o
Village Dhobanpuri, Post – Sorar, Tahsil Gurur, District- Balod,
Chhattisgarh.
22 - Deendayal Rajput S/o Ranjan Singh Rajput, Aged About 48 Years,
R/o Village- Surra, Post- Nipani, Tahsil- Gurur, District- Balod,
Chhattisgarh
23 - Smt. Sangeeta Magar W/o Laxman Rao Magar Aged About 46
Years R/o Banspara, Dhamtari, District- Dhamtari, Chhattisgarh.
24 - Smt. Putli Bai Narang W/o Paraldas Narang Aged About 68 Years
R/o Sindhi Colony, Balod District- Balod, Chhattisgarh.

7
25 - Smt. Manju Narang W/o Ashok Kumar, Aged About 48 Years, R/o
Sindhi Colony, Balod, District- Balod, Chhattisgarh.
--- Petitioner(s)
Versus
1 - State Of Chhattisgarh, through Secretary, Revenue Department,
Mahanadi Bhawan, Mantralay, New Raipur, District : Raipur,
Chhattisgarh
2 - State Of Chhattisgarh, Through Secretary, Nagriya Prashasan
Department, Mahanadi Bhawan, Mantralaya, New Raipur, District-
Raipur, Chhattisgarh
3 - Deputy Secretary, State Of Chhattisgarh, Revenue & Disaster
Management Department, Raipur, District- Raipur, Chhattisgarh.
4 - Commissioner, Durg, District- Durg, Chhattisgarh.
5 - The Collector, Balod, District- Balod, Chhattisgarh
6 - Sub Divisional Officer (Revenue), Balod District- Balod,
Chhattisgarh
7 - Municipal Council, Through Chief Municipal Officer, Balod, District-
Balod, Chhattisgarh.
--- Respondent(s)
(Cause Title downloaded from CIS Periphery)
For Petitioner(s)
i n WPC Nos.
461/2018,
489/2018, 492/2018
& WPS No.
1699/2018
For Petitioner(s)
in WPC
No.743/2018
: Mr. Rajeev Shrivastava, Senior Advocate with
Ms. Anu Mishra, Advocate
Mr. Awadh Tripathi, Advocate
For Respective
Respondents
: Mr. Anand Dadariya, Dy. Advocate General
and Mr. Anmol Sharma, Advocate

8

SB: Hon’ble Mr. Justice Amitendra Kishore Prasad
C A V Order

1. The Writ Petitioners in all the captioned petitions are aggrieved by the
impugned order dated 10.1.2018, whereby, Respondent -State of
Chhattisgarh cancelled the lease/Patta granted in favour of the
Municipal Council, Balod and directed initiation of proceedings against
the then Chief Municipal Officer namely Toran Singh Thakur (Petitioner
in WPS No.1699/2018) and the then President namely Rakesh Yadav
(Petitioner in WPC No.489/2018) of the Municipal Council, Balod. The
order also directed that the lease amounts diverted to different
accounts be recovered so that they may be returned to the respective
beneficiaries. Furthermore, the impugned order directed the registration
of criminal cases against both the then Chief Municipal Officer and the
then President of the Municipal Council, Balod for allegedly committing
illegalities and irregularities by deviating from the terms of the original
lease deed. Aggrieved by these directions, the allottees, who were
granted lease, have filed WPC No.461/2018, WPC No.492/2018 &
WPC No.743/2018, whereas, the then Chief Municipal Officer as well
as the then President have filed two separate writ petitions bearing
Nos. WPC No. 489/2018 & WPS No.1699 of 2018 respectively,
challenging the order of criminal prosecution. Pertinently, vide an
interim order dated 28.2.2018 passed in WPC No.489/2018, this Court
directed the respondents not to take any coercive steps against both
the then Chief Municipal Officer and the then President of the Municipal
Council, Balod.

9
2. Since all the writ petitions involve a common question of law and are
founded on similar facts and circumstances, they have been clubbed
together, heard analogously and are being disposed of by this common
order.
3. For the sake of convenience, WPC No. 489 of 2021 is treated as the
lead case, and the facts of the said petition are being referred to for the
purpose of adjudication. The decision rendered herein shall, however,
govern the connected writ petitions as well, as the issues raised therein
are identical in nature. In WPC No. 489 of 2021 , the petitioners have
prayed for the following reliefs :
10.1The Hon'ble Court may kindly be pleased
to call for the entire records leading to passing
of the impugned order, for the kind perusal of
this Hon'ble Court.
10.2 The Hon'ble Court may further kindly be
pleased to quash the order impugned Annexure
P-1 dated 10.01.2018 bearing No F 4-41/7-
1/2014 passed by the respondent No.2
communicated to the petitioner by the
respondent No.3 vide letter dated 25/01/2018.
10.3 Cost of the petition may also be granted to
the petitioner.
10.4 Any other relief which this Hon'ble Court
deems fit and proper may also kindly be
granted to the petitioner, in the interest of
justice.
4. The factual matrix advanced by the petitioner(s) is that the Central
Government prepared a Centrally Sponsored Scheme named
‘Integrated Development of Small and Medium Towns’ (henceforth

10
‘IDSMT’) in the Sixth Five-Year Plan in the year 1979-80. The primary
object of the Scheme was to slow down migration from rural areas and
smaller towns to large cities by developing selected small and medium
towns capable of generating economic growth and employment. In the
year 1995, revised guidelines were issued for the Scheme. Under the
said revised guidelines, one of the objectives set out under the scheme
was (E) promoting resource-generating schemes for the urban local
bodies to improve their overall financial position and ability to undertake
long-term infrastructure development programmes on their own as well
as to repay borrowed capital and usher in necessary municipal reforms.
Under the IDSMT Scheme, a plan was prepared by Municipal Council
Balod on 26.2.1996 and sent to the State Government for approval.
Subsequently, the Scheme prepared by the Municipal Council, Balod
received approval from the Government of India, Ministry of Urban
Affairs and Employment vide its order dated 6.4.1999.
5. During the tenure of the then President, except for one component of
the project i.e. development of residential plots, all other components of
the project had taken final shape. On 27.1.2006, the State Level
Screening Committee, in its meeting, decided to prepare a revised
project under the IDSMT scheme. To complete the project, the
Municipal Council, Balod was directed to submit a revised plan under
the IDSMT Scheme. In compliance with the directions issued by the
State Government, the Municipal Council, Balod prepared a revised
Detailed Project Report (DPR) under the IDSMT scheme and forwarded
the same for approval to the State Government vide its letter dated
18.9.2006. On 1.12.2006, the Town and Country Planning Organisation,

11
Government of India, sanctioned the revised project submitted by the
Municipal Council, Balod under the IDSMT scheme. On 10.6.2008, the
concerned Collector, District Durg sanctioned Government land
situated at Patwari Halka No.5/1, Khasra No.918/1, admeasuring 22.02
acres and directed the Municipal Council, Balod to pay the applicable
lease rent and premium for the said land. In pursuance of the directions
issued by the Collector, Durg, the Municipal Council, Balod deposited
the requisite payment on 2.7.2008. The Municipal Council, Balod, in its
meeting dated 25.8.2008, unanimously passed a resolution to develop
and auction the said plots. On 17.09.2008, a lease deed was executed
between the Government of Chhattisgarh and the Municipal Council,
Balod with regard to the subject plots. In accordance with the
unanimous resolution of the Municipal Council, Balod, the plots were
put to auction. Subsequently, the Municipal Council, in its meeting
dated 9.9.2008, passed another unanimous resolution resolving to
utilize the revenue generated from the auction of the plots towards the
payment of salaries of its officers/employees, settlement of electricity
bills and the provision of basic civic amenities. The Municipal Council,
Balod vide its letter dated 4.2.2009 sought approval of the auction from
the State Government. The State Government vide its order dated
20.7.2009 duly approved the auction conducted by the Municipal
Council, Balod. Further, as various local bodies within the State were
facing huge arrears of electricity bills, the State Government vide its
order dated 4.1.2007 allowed a One Time Settlement of these dues
and directed timely payment of future electricity bills regularly w.e.f.
31.5.2006. Additionally, the payment of electricity bills was made the

12
personal responsibility of the Commissioner/Chief Municipal Officer of
the concerned local body. In pursuance of the order dated 4.1.2007, the
Chhattisgarh State Power Distribution Company Limited (CSPDCL)
adjusted an amount of Rs.32,92,528/- against an outstanding demand
of Rs.47,72,781/- from the Municipal Council, Balod. Under severe
financial strain, the Municipal Council requested the Superintending
Engineer, CSPDCL, Durg vide a letter dated 4.6.2009, to waive the
remaining demand, highlighting that the Council was continuously
struggling under a heavy financial burden. Thereafter, the Municipal
Council, Balod utilized the funds generated from the auction only to
strengthen the basic civic amenities and meet unavoidable operational
liabilities. Without utilizing these funds, the Municipal Council would
have been unable to provide essential civic services to the public.
However, without taking into consideration these material facts, the
State Government vide its impugned order dated 10.1.2018 arbitrarily
held that the Municipal Council was not permitted to develop and
auction the plots under the IDSMT Scheme and further that the revenue
generated could not be utilized for salaries, electricity bills or basic
amenities. Hence, the impugned order was passed without giving any
opportunity of hearing, issuing any show cause notice or seeking any
explanation from the petitioner(s) and thereby, violating the principles
of natural justice.
6.
Mr. Rajeev Shrivastava, learned Senior Advocate along with Ms. Anu
Mishra, Advocate appearing on behalf of the respective petitioners i.e.
the then Chief Municipal Officer and the then President of the Municipal
Council, Balod submit that the subject leases were granted to the

13
concerned private parties (allottees) pursuant to the approval granted
by the State Government and subsequent execution of the lease
agreement. They submit that the decision to grant the said leases was
not an individual act but a collective corporate decision adopted by the
entire body of the Municipal Council through a duly passed resolution
by the office-bearers concerned, including the President, Vice
President and the Councillors. Furthermore, the revenue generated
from granting these Pattas was utilized for payment of employees’
salaries, outstanding electricity dues and for the basic civic amenities
of the Municipal Council, Balod. The expenditures incurred by the
authorities were entirely genuine. They also submit that allocating funds
to fulfill these essential statutory duties cannot, by any stretch of
imagination, be construed as an illegality committed by the authorities.
Had this been a case where sanction was withheld by the Municipal
Council, such allegation might have been justified. However, given that
a valid approval was obtained, the allegations does not have any legal
merit. Even otherwise, since the decision was adopted by the entire
body of the Municipal Council through a resolution, individual liability
cannot be fastened upon two individuals for an act committed by the
collective body. They further submit that the impugned notice directing
action against the concerned President as well as the concerned
Chief Municipal Officer of the Municipal Council, Balod is per se illegal.
Since the State Government itself approved the lease, it cannot
subsequently challenge its execution in favour of the private parties. So
far as the alleged violation of the conditions of the lease is concerned,
learned Senior Counsel submit that the petitioners have complied with

14
all the terms of the agreement executed between the between the
Municipal Council, Balod and the State. The petitioners have acted
entirely within the framework of the lease and no condition has been
breached. Hence, the impugned order, including the direction for
initiating criminal prosecution against the then President and the then
Chief Municipal Officer, does not have any legal basis and is liable to
be quashed.
7. Turning next to the second limb of the arguments, advanced on behalf
of the private allottees/petitioners, Mr. Shrivastava, learned Senior
Advocate assisted with Ms. Mishra, Advocate and Mr. Awadh Tripathi,
Advocate appearing on their behalf, jointly submit that the respective
petitioners/allottees have entered into a bonafide agreement with the
Municipal Council, Balod, after paying the requisite lease rent. The
petitioners/allottees have not committed any illegality or irregularity in
obtaining lease and as such, the cancellation is not in accordance with
law. They submit that since the time of allotment, the petitioners have
been deprived of the fruits of their investment. On the contrary, the
lease was cancelled without affording them any opportunity of hearing.
They also submit that prior to cancellation of an executed lease where
the petitioners are the beneficiaries, the respondent authorities were
bound to grant them an opportunity of hearing. Having failed to do so,
the impugned cancellation violates the well-settled principles of natural
justice and audi alteram partem . Thus, on this ground alone, the
respective petitions filed by the petitioners/allottees deserve to be
allowed.
8. On the other hand, Mr. Anand Dadariya, learned Dy. Advocate General

15
appearing on behalf of the State submits that there is apparent
violation of lease agreement executed between the parties. It is
categorically argued that the lease was executed by the Municipal
Council, Balod on 17.9.2008 specifically for construction of residential
houses. Under the clear terms of the allotment, the land was restricted
to residential use and prohibited from being utilized for any other
purpose. He submits that the lessee has breached this vital condition,
which has rendered the lease liable to cancellation. He further submits
that the Municipal Council was directed to construct residential houses
and allot the same in accordance with the IDSMT Scheme. The lease
(patta) was granted for a fixed period up to 31.3.2038, subject to an
annual premium of Rs.47,960/-. Significantly, the allotment was made
to the concerned Municipal Council specifically for residential
construction under the IDMST Scheme and the Council was restrained
from sub-leasing or transferring any portion of the land to any person
without the prior permission of the Governor, State of Chhattisgarh.
He further submits that it was a condition of the lease that upon
violation of any term, the respondent authorities would be at liberty to
cancel the lease with immediate effect. Furthermore, the agreement
contained a negative covenant prohibiting any commercial use of the
leased land, commissioning that it be utilized only for construction of
residential houses under the IDSMT Scheme. It was also directed that
the houses were to be allotted only to the eligible beneficiaries who
met the criteria prescribed under the scheme. The conditions further
stipulate that if at any point of time the State finds that the land is not
being utilized for the purpose for which it was allotted, the land, along

16
with all superstructures and other properties attached thereto, shall be
forfeited to the State without any liability for compensation. On the
strength of these conditions, learned counsel for the State submits that
the Municipal Council, Balod has deviated from the terms of the grant
by sub-leasing portions of the land in a manner completely prohibited
under the subject lease agreement. He further submits that while the
Municipal Council, Balod was enjoined to construct houses and allot
them to eligible beneficiaries under the IDSMT Scheme, it acted
contrary to the agreement by allotting individual plots of vacant land
instead. Further, the terms of the lease explicitly prohibit the diversion
of scheme funds for any other purpose. However, this condition was
also flagrantly violated, as the revenue generated from the lease was
diverted towards payment of salaries, electricity bills and other civic
amenities, which were the uses entirely disallowed under the lease
agreement executed between the parties. He also submits that since
the authorities concerned i.e. the then Chief Municipal Officer as well as
the then President of the Municipal Council, Balod have illegally and
irregularly granted leases of land to individuals/allottees and have
further deviated the funds for purposes entirely foreign to the conditions
of the lease executed between the parties, the State by the impugned
order has rightly cancelled the lease granted in favour of the Municipal
Council, Balod. He also submits that the State has further rightly
directed initiation of criminal proceedings against the authorities of the
Municipal Council, an action which cannot be faulted. In view of the
aforesaid, learned counsel for the State submits that all the petitions
are liable to be dismissed, as there is apparent violation of the lease

17
conditions executed between the parties, and the actions of the
petitioners cannot be countenanced.
9. I have heard learned counsel for the parties, considered their rival
submissions made herein-above and went through the records with
utmost circumspection.
10. A perusal of the record, particularly the lease agreement dated
17.9.2008, would show it is not in dispute that the subject lease was
executed between the Municipal Council, Balod and the State of
Chhattisgarh, in the name of Governor. Under the terms of the lease,
the parties agreed that the Municipal Council would pay a lease amount
of Rs.1 per sq. ft. Accordingly, a total premium of Rs.9,59,192/- along
with an annual land rent of Rs.47,960/- was to be paid. The terms of
the lease further show that the Municipal Council, Balod was granted
the subject land on lease under the IDSMT Scheme specifically for
construction of residential houses, which were to be allotted exclusively
to the beneficiaries concerned for residential purposes only. The lease
agreement categorically covenants that the demised premises shall not
be utilized for any purpose other than the residential purposes under
the Scheme. The lease deed unequivocally provides that upon violation
of any of the conditions, the lease shall stand cancelled. Furthermore,
any construction raised over the land, along with all articles lying
thereon, shall be forfeited to the State without any right of reclamation
or compensation by any means.
11. When parties enter into an agreement, they are bound to follow its
terms and conditions in letter and spirit. Any deviation from the agreed
conditions renders the agreement liable for cancellation. In the present

18
matter, under a special Scheme formulated by the Central
Government, the State Government allotted land to the Municipal
Council, Balod for construction of housing units to be allotted to the
eligible beneficiaries. Further, any funds accruing from this initiative
shall be utilized by the Municipal Council mainly for construction and
maintenance of residential buildings thereon and for purposes
incidental and ancillary thereto, in accordance with the conditions/terms
prescribed under the lease agreement. It has been explicitly stipulated
in the subject agreement that the land shall not be utilized for any other
purpose (commercial). Prior to the construction of the residential
houses, the requisite permission must be obtained from the concerned
Department that has granted the 30-year lease. In the event that the
land is used for any other purpose other than what is permitted, the
possession thereof shall be resumed by the Department and the party
concerned shall be deemed an unauthorized occupant. Though the
constructed residential houses were intended solely for the designated
beneficiaries, however, the Municipal Council allotted the lands to the
respective private allottees in complete deviation from and contrary to
the terms of the agreement.
12. Furthermore, the submission advanced by the petitioners claiming that
the State Government approved the allotment is of no consequence, as
the Municipal Council is bound by the conditions of the subject
agreement executed between the concerned Municipal Council and the
State. Even assuming that the conditions were violated with the
knowledge/ consent of the concerned authorities, such consent does
not alter or override the terms of the agreement. The terms of the

19
agreement remain unchanged, valid and binding upon the parties.
Where an agreement stipulates a specific mandate, it must strictly be
adhered to as executed. Any deviation therefrom empowers the
appropriate authorities to cancel the agreement pursuant to its terms.
13. In the present matter, it is apparent that in utter violation of the
conditions of the subject agreement, the respondent-Municipal Council
has allotted undeveloped plots of land to the allottees instead of
constructing residential houses for them as mandated under the
Scheme. In addition to this violation, the funds received from the said
allotments were expended for purposes not envisaged in the
agreement and that too without the prior permission of the competent
authorities. In view of the clear contractual infractions, the impugned
order regarding cancellation of the allotment cannot be held to be
illegal. Instead, it can be safely said that the same is in accordance
with law.
14. In light of the foregoing discussion, the writ petitions filed by allottees
i.e. WPC No.461/2018, WPC No.492/2018 and WPC No.743/2018 are
hereby dismissed, as the plots of land were allotted to them in direct
contravention of the subject agreement executed between the State
Government and the concerned Municipal Council. Accordingly, the
impugned order, so far as it relates to cancellation of the allotments, is
hereby affirmed and all such allotments stand cancelled. Any premium,
deposit or other amounts paid by the allottees or any other party shall
stand forfeited to the State in accordance with the default clauses of
the subject lease agreement, without any right of refund, reclamation,
and the allottees shall be free from any liability for further recovery.

20
15. Now, so far remaining two petitions i.e. WPC No. 489/2018 & WPS
No.1699/2018 regarding the liability fastened upon the then President
(Petitioner- Rakesh Yadav) as well as the then Chief Municipal Officer
(Petitioner -Toran Singh Thakur) respectively of the Municipal Council,
Balod are concerned, the documents appended to the petitions would
show that the decision was predicated on a resolution passed by the
Local Body. The entire Body of the office bearers, including the
President, Vice-President and Councillors, unanimously agreed to the
diversion of the funds for the payment of employee salaries,
outstanding electricity bills and the provision of basic amenities. Thus,
Petitioner – Toran Singh Thakur and Petitioner – Rakesh Yadav cannot
be singled out or held exclusively liable for what was undeniably a
collective institutional decision. Where a resolution represents a joint
decision of the entire municipal body, individual liability cannot be
restrictively imposed upon only two of its members.
16. In the matter of Ravi Yashwant Bhoir Vs . District Collector, Raigad
and others reported in (2012) 4 SCC C 40 7, the following was held by
the Hon’ble Supreme Court in para 66 :
66. So far as the other charges regarding laying down
the pipelines at a much higher rate are concerned, it
has been a positive case of the appellant that as the
earlier contractor had abandoned the work in between
and there was a scarcity of water in the city, the Chief
Officer, the Junior Engineer considered the technical
aspect and then recommendations were forwarded
under the signatures of the appellant, the Chief Officer
and Junior Engineer to the Council, which ultimately
passed the resolution accepting the said tenders. In

21
such a fact situation, it was a collective consensus
decision of the House after due deliberations.
Admittedly, it was not even the ratification of contract
awarded by the appellant himself. Thus, even by any
stretch of imagination it cannot be held to be an
individual decision of the appellant and the competent
authority failed to appreciate that the tenders were
accepted by the Council itself and not by the appellant
alone. Therefore, he could not be held responsible for
acceptance of tenders.
17. In WA No.109/2026 ( Smt. Soni Ajay Banjare Vs. State of
Chhattisgarh and others ), decided on 5.2.2026, a Division Bench of
this Court has held the following in para 30 :
30. The Hon’ble Supreme Court in Ravi Yashwant
Bhoir (supra) has categorically held that where a
decision is taken collectively by a statutory body,
individual liability cannot be imposed unless there is a
specific finding of dominant role, mens rea, or
manipulation of the decision-making process. The
learned Single Judge, with respect, failed to
appreciate this settled position of law and erred in
upholding the impugned order by attributing personal
responsibility to the appellant for a collective decision
of the Council.
18. Reverting to the facts of the present case, in light of the principles laid
down in the aforementioned cases, with respect to the fixation of
personal responsibility and initiation of criminal proceedings against
Petitioner – Toran Singh Thakur, the then Chief Municipal Officer and
Rakesh Yadav, the then President of the Municipal Council, Balod, this
Court is of the opinion that the impugned action did not constitute

22
individual acts by the concerned petitioners. Rather, the decision to
divert the funds was a collective responsibility shared by all members of
the Council who voted for the resolution. As such, a collective corporate
decision cannot be converted into an individual criminal culpability.
19. Accordingly, WPC No.489/2018 & WPS No.1699/2018 are allowed to
the extent that the petitioners therein shall not be held individually or
personally liable. Consequently, the impugned order, insofar as it
directs the initiation of criminal proceedings against them, is hereby
quashed.
20. At this juncture, learned Senior Counsel for the petitioners/allottees
submits that no construction of any nature has been raised on the
subject land and the same remains completely vacant.
21.
Consequent upon the confirmation of the cancellation of the allotments
by this Court, the State Government is at liberty to resume possession
of the said vacant land and utilize it for any permissible purpose in
accordance with law.
22. Resultantly, WPC No.461/2018, WPC No.492/2018 & WPC
No.743/2018 are Dismissed and WPC No.489/2018 & WPC
No.1699/2018 are Partly Allowed.
Sd/-
(Amitendra Kishore Prasad)
Judge
Shyna Ajay