ORDER
M.N. Rao, J.
1. The Municipal Council, Nalgonda in 1973 and 1980 passed two resolutions, by which certain extent of land belonging to it was alienated in favour of the employees of the Municipal Council on a nominal consideration Rs. 3/- per square yard and Rs. 6/- per square yard respectively. As seven more employees made similar requests in 1985, the Municipal Council by Resolution No. 692 dated 22-2-85 resolved unanimously to accord permission to allot 7 plots to the seven employees including the four petitioners herein, each plot admeasuring 380 square yards at the rate of Rs. 6/- per square yard and sought the approval of the Collector as required by Rule 4 of the Acquisition and Transfer of Immovable Properties Rules, 1967. The Collector by an order dated 26-6-86 in Proceedings No. B3/1662/85 recorded sanction with a modification that the price should be at the rate of Rs. 50/- per square yard but not Rs. 6/- as resolved by the Municipal Council. Thereafter the allottees made a representation to the Municipal Council saying that Rs. 50/-per square yard was too high a price they could afford and, therefore, requested that smaller extents of plots measuring 45′ X 39′ may be allotted to them. By Resolution No. 114 dated 23-11-86 the Municipal Council approved of there-quest of the employees. All the seven employees paid consideration at the rate of Rs. 50/- per square yard and the plots were also registered in their favour by the Municipal Council. Thereafter three employees-petitioners 1 to 3 herein had applied to the Municipal Council for permission to construct houses and it is claimed in the Writ Petition that pursuant to the sanction accorded by the Municipal Council, they completed construction of houses. It appears, one Sri Nandyal Narasimha Reddy and two other Councilors represented to the Director of Municipal Administration that contrary to the instructions of the Government allotments were made. The matter was referred to the District Collector who passed an order dated 24-6-89 in Proceedings El/12265/89 in exercise of his powers under Section 70 of the A.P. Municipalities Act read with Section 59 suspending the operation of the two Resolutions-Resolution No. 553 dated 27-6-86 and Resolution No. 114 dated 23-11-88 and sent a communication to the Government to cancel the allotments of the seven plots made in favour of the seven Municipal Employees. Challenging the legality of that order four of the allottees have filed the present Writ petition.
2. Sri Rajagopala Rao, learned counsel for the petitioners contends that when once the District Collector had approved of the resolution passed by the Municipal Council, no residuary power was left in him to suspend the operation of the resolutions. The impugned order was passed at the instance of Shri Nandyal Narasimha Reddy and two other Councillors who were parties to the earlier Resolution No. 553 dated 27-6-86 by which the Municipal Council has unanimously resolved, to lease out the seven plots for a period of five years on an annual rental of Rs. 200/- until the proposal to sell the plots in favour of the seven employees was approved by the Collector. After the houses were constructed in accordance with the permission accorded by the Municipal council, it is arbitrary on the part of the Collector to initiate action for cancelation of allotments.
3. In opposition to this the learned Government Pleader contends that the Director of Municipal Administration by a Memo dated 12-7-86 instructed all the Municipalities not to allot Municipal land in favour of employees and as the present action of the Municipal Council was contrary to the Memo of the Director of Municipal Administration, the Collector very rightly issued the impugned order suspending the two resolutions of the Municipal Council.
4. Shri Siva Reddy, learned counsel appearing for the Municipality while addressing arguments in support of the contentions advanced by the learned Government Pleader says that only Resolution No. 692 dated 22-2-85 was approved by the Collector and as the later Resolution No. 114 dated 23-11-86 was not approved by the Collector, the present impugned action is clearly sustainable in law.
5. Shri Bikshapathy, learned counsel for the fifth respondent-Vidya Committee of Government Upper Primary school-says that the entire land including the land allotted to the seven employees was originally donated by the Municipal Council to the School and, therefore, the District Collector had correctly taken initiative to cancel the allotments.
6. Rule 4 of the Acquisition and Transfer of Immovable Properties Rules, 1967 framed under the A.P. Municipalities Act reads :
“4. Transfer otherwise than by lease of immovable property belonging to Municipal Council :– (1) A municipal council shall not without the previous sanction of the Collector of the district, make or sanction any transfer except by way of lease, of any immovable property, belonging to it or create or sanction of the creation of any charge upon any such property. If the value of the property so transferred or the amount for which the charge is so created exceeds Rs. 10,000/- the previous sanction of the Government shall also be obtained for the transaction.
(2) The deed of transfer of immovable property shall be in the appropriate form in Schedule II appended to these rules with such variations as circumstances may require.”
7. The Resolution No. 692 dated 22-2-85 passed by the Municipal Council was to the effect that seven plots each admeasuring 380 Square yards should be allotted to seven employees on a nominal consideration of Rs. 6/- per square yard. Sanction to that resolution was accorded by the District Collector with a modification that the price should be collected at the rate of Rs. 50/- per square yard. The sanction accorded by the District Collector on 26-6-86, it is evident, clearly needed the approval of the Government if it was to be acted upon since the value of each of the plot exceeded Rs. 10,000/- but it is implict in the sanction accorded by the District Collector that he was agreeable for the sale of smaller extents of land. When a resolution sanctioning smaller extents of land, each of the value of less than Rs. 10,000/- was passed by the Municipal Council-Resolution No. 114 dated 23-11-88-it did not require prior sanction of the Collector nor prior approval of the Government. The previous sanction of the Collector as contemplated by Rule 4 (1) must be inferred and shall be deemed to have been accorded for Resolution No. 114 dated 23-11-88 passed by virtue of the sanction already given by the District Collector on 26-6-86 in Proceedings No. B3/1662/85 aggreeing for sale of larger extents of land at the enhanced price of Rs. 50/- per square yard. Therefore, the contention advanced by Shri Siva Reddy, learned counsel for the Municipal Council that as Resolution No. 114 did not receive the prior sanction of the District Collector, the present impugned order must be sustained, is unacceptable.
8. The three grounds on which the impugned order is passed are : (1) The Municipal Council acted beyond the scope of Rule 4 (1) since the value of the land allotted exceeds Rs. 10,000/-; (2) The ban imposed by the Government prohibiting transfer of land in Municipal areas is in force, and (3) The orders of the Director of Municipal Administration dated 12-7-86. All the three grounds are unsustainable. G.O.Ms.No. 696, Revenue, dated 24-6-85 refers to ban or alienation of Government vacant lands. The ‘and in question not being a Government land the said G.O. has no application. G.O.Ms.No. 911 dated 1-8-85 also deals with Government Lands ; a copy of that G.O. has not been made available and, therefore, it is not possible to state specifically what was the nature of the ban imposed by the Government in the said G.O.
9. The Memo of the Director of Municipal Administration dt. 12-7-86 in ROC No. 35752/86-G3 says that the Government had already directed by Memo dated 9-7-86 that in future no proposal for allotment of Municipal lands to Municipal employees or private individuals shall be entertained and that public lands have to be used for public purposes like parks, playgrounds, schools etc. The above instructions of the Government have not been incorporated in the form of a rule. Rule 4 of the Acquisition and Transfer of Immovable Properties Rules, 1967 confers power on the Municipal Council to alienate Municipal Lands after obtaining previous sanction of the Collector if the value of the land does not exceed Rs. 10,000/- and if it so exceeds, the previous sanction of the Government is also necessary for such transaction. So long as Rule 4 (1) is in force, it is not open to the Director of Municipal Administration or the Government to give instructions contrary to what is laid down in Rule 4.
10. Three of the four petitioners, it is asserted, have applied to the Municipal Council for construction of houses and after the permission was accorded they completed construction of the houses. It is also asserted that they are using the houses for residential purposes. Even if the Collector had power to suspend the resolutions of the Municipal council, with the consequence of taking away the allotted lands, such power must be exercised within a reasonable period. In a case of the present nature, when houses were already constructed, even if there was power vested in the Collector, the exercise of such a power nearly after four years would clearly be arbitrary. It is unnecessary to further deal with this aspect since I have already held that the Collector has no power under Rule 4 (1) to suspend the resolutions of the Municipal Council.
11. As regards respondent No. 5, Vidya Committee of Government Upper Primary School, the contention advanced is that as early as 1969, the school was permitted to construct building on the land and, therefore, any part of that land should not be alienated. lam unable to accept this contention. The Municipality in 1969 has permitted the school to construct a building on the Municipal land. The Municipal Council passed a Resolution No. 226 dated 29-7-89 resolving to donate 5033 square yards of site including the site on which the school building stands to the District Educational Officer. The resolution clearly mentions that the site of 5033 square yards was exclusive of 1715 Square Yards of site which was already given to the Municipal Employees. The plan filed before me also clearly shows the land given to the Municipal Employees and the school. It is, therefore, not correct to say that the land allotted to the Municipal Employees was originally formed part of the land donated by the Municipal Council to the School.
12. For the foregoing reasons, the writ petition is allowed. The Proceedings issued by the second respondent, District Collector, in Proceedings No. E1/12265/89 dated 24-6-89 are quashed. It is made clear that the allottees of the Municipal land-the petitioners and three others-shall not put the land to any commercial purpose. It shall be used only for residential purpose No costs. Advocate’s fee Rs. 350/-.