### Statutory Rules Override Executive Circulars in Municipal Allotments for Reserved Categories

The petitioners in the Crl.M.C. (Accused Nos. 2, 3, 4, 5, and 7) and the petitioner in the Writ Petition (P.S. Vinod) are embroiled in a dispute regarding the allotment of Room No. 10 in the Rajiv Gandhi Shopping Complex, Kottayam.

This room was specifically reserved under a 10% quota for the SC/ST community as per Government circulars.

The prosecution alleged that in 1995, the room was illegally allotted to Accused No. 3 (V. Vijayan) via competitive bidding/public auction rather than the "draw of lots" method prescribed by Circulars dated 1990, 1991, and 1996.

Subsequently, the room was allegedly transferred through a power of attorney and eventually to Accused No. 7, but physical possession was found to be held by Accused No. 6 (Josco Jewellery), who integrated the room into their business premises.

A final report was filed under sections 13(1)(d) r/w 13(2) of the PC Act and 120B IPC.

Whether the initial allotment of the SC/ST reserved room via competitive bidding instead of a draw of lots was illegal and remains so despite subsequent renewals.

Whether the Government Circulars of 1990-1996 were superseded by the Kerala Municipality (Amendment) Act, 1999, and the Kerala Municipality Rules, 2000.

Whether the criminal proceedings against the petitioners should be quashed following the quashment of the case against the primary beneficiary (Accused No. 6).

The court primarily applied Section 215 of the Kerala Municipality Act, 1994 (as amended in 1999), which governs the power of Municipalities to dispose of property and requires such acts to be in the "manner prescribed."

It further relied on Rules 10 and 11 of the Kerala Municipality Rules, 2000; Rule 10 mandates a 10% reservation for SC/ST categories in shop allotments.

Rule 11 stipulates that all transfers (except renewals) must be through public auction or tender.

Section 575 of the Kerala Municipality Act was considered regarding the saving of prior circulars.

The court found that at the time of the initial allotment in 1995, the Municipality was bound by the 1990, 1991, and 1996 circulars which mandated a "draw of lots" to ensure members of the SC/ST community were not excluded by high competitive bids they could not afford.

By adopting a highest-bidder approach, the Municipality committed an initial illegality.

Although the 1999 Amendment and the 2000 Rules later superseded the *procedure* of the circulars—replacing "draw of lots" with "public auction/tender" under Rule 11—the court held that renewals cannot validate an allotment that was void *ab initio*.

Regarding the criminal case, the court noted that despite the previous quashment of the case against Accused No. 6, the prosecution records prima facie showed that municipal officials and internal parties obtained pecuniary advantages by facilitating the integration of an SC/ST reserved room into a private jewellery business, thus satisfying the elements of the PC Act.

WP(C) No. 38420/2024 was disposed of with a direction to the Kottayam Municipality to: (a) refrain from renewing the license of Accused No. 7 upon its expiry; (b) restore Room No. 10 to its original physical position; and (c) re-allot the room to a member of the SC/ST community within one month of the current agreement's expiry, following the procedure in Rule 11 of the Kerala Municipality Rules.