GOVERNMENT OF ANDHARA PRADESH MUNICIPAL ADMINISTRATION DEPARTMENT Ofo the Commissioner & Director of Municipal Administration, V Floor, Padmini Krishna Enclave, Gorantla, Guntur-522 034. CIRCULAR Roc.No.14037/2/2017-K SEC(827769/2017-K3) Date Sub: Municipal Administration Department ~ Revenue Improvement — Leasing out immovable properties and collection of rents, market leases etc - instructions issued — Regarding. 20. The attention of all the Commissioners of Urban Local Bodies in the State are invited to the subject cited. Therefore, all the Commissioner of ULBs in the State are hereby informed that, the following are the Act & Rule provisions deals with the leases of Municipal Immovable Properties; Act Provisior © According to Section 277 (4) of A.P.Municipalities Act, 1965, the Council may lease any land, shop, godown, building or terrace of a building owned by it and situated anywhere in the Municipality for any period not exceeding five years at a time and subject to such terms and conditions as the Council may deem fit. Provided that it shall be competent for the council to grant, with the pr sanction of the Government, any such lease for a period exceeding five years but not exceeding twenty-five (25) years at a time, 7 ‘© According to Section 148 (1) of the Municipal Corporation Act, 1955 (former GHMC Act), the Commissioner is the competent to lease out any immovable property belonging to the Corporation for a period not exceeding twelve months. © According to Section 148 (2) of Municipal Corporation Act, 1955, the Commissioner is competent to lease out any immovable property belonging to the Corporation for @ period not exceeding three years with the sanction of the Standing Committee. © According to Section 148 (3) of Municipal Corporation Act, 1955, in respect of cases not covered above, the Commissioner is competent to lease out immovable property belonging to the Corporation with the sanction of the Corporation and of the Government “provided that is no case lease period of immovable property shall exceed twenty five (25) years”. Rules: * According to Rule 5 of A.P. Municipalities (Acquisition and Transfer of Immovable Properties) Rules, 1967, a Municipal Council may lease out any immovable property belonging to it for a period of three years at any one time and if it is for a period exceeding three years but not exceeding twenty-five (25) years at a time it may lease ‘out, after obtaining the prior sanction of Government. P.T.O|2 According to Rule 7 of the AP Municipalities (Regulation of Receipts and Expenditure Rules, 1968, where the right to collect fees in respect of the use of any market, slaughter-house, fishery or sale of fish in fresh water tanks is proposed to be leased out by the Council, the Commissioner shall prepare preliminary notice setting forth the conditions and terms subject to which the lease will be granted. As per rules lease period shall commence on the 1*' April of every year. ‘The Collection of amounts due from the lessees shall be watched through Miscellanies Demand Register. Accordingly. lease amounts shall be collected from lessees before or on 5" of every month, after due date specified penalty shall be levied and collected as per lease agreement, According to Rule 12 (1) (¢) of the AP Municipalities (Regulation of Receipts and Expenditure Rules, 1968, the Municipal Council may leases of the buildings, or the terraces, of buildings, shops or godowns, and of land belonging to the Municipal Council, the rents of which are expected to exceed Rs.200/- per annum; Provided that in the case of sales of leases of properties referred to in clause (e), if at a public auction held, the bid is found to be lower than that obtained in the previous year and if the previous year's lessee desires the continuance of the lease at the old rate, concemed authority may not-withstanding the public auction held, grant to lease him; The Hon’ble High Court of A.P. In its judgment dt.25.08.2009 while disposing the W.P.6354/2009 has observed that, “the Municipality may not propose or recommend nor the Government accord sanction for renewal of lease of a Municipal Property, beyond a period of 25 years without conducting public auction™ Government in their Memo.No.18823/J1/2008-1 MA, dt.17.11.2009 have issued instructions to all the Commissioners of ULBs with a instruction to appraise the above orders of the Hon'ble High Court to their respective Chairpersons/Councils and go for public auction of all Mpl. Properties after completion of lease period of 25 years, G.0.Ms.No.56, MA&UD (J1) Dept., dated 5.2.2011 have issued certain amendments to the Andhra Pradesh Municipalities (Regulation or Receipts and Expenditure) Rules 1968, among which, the Sub-Rule (4) of Rule 12 (h) states as follows Renewal of lease of immovable properties: The Municipal Council may renew the lease of immovable properties for a period of three years at one time and with the prior sanction of the Government renew the lease for a period exceeding three years and not exceeding twenty-five years at a time without conducting public auction, if the present lessee agrees to renew the lease in his favour at the rent as fixed hereunder and for revision of the rent once in three year's as per the procedure specified below (@) Rent at 10% of the current market value of the property per annum ie., both building and land as per market value of the land and construction rates of the structures and building fixed by Registration Department under the Andhra Pradesh Revision of Market Value Guidelines Rules, 1998 (or) (¢) Rent at 33 1/3 percent above the earlier rent, or; O Prevailing rent of such properties in the vicinity whichever is higher: Contd... 36 m3 ‘The undersigned has noticed that: (@ in certain ULBs not conducting auctions to lease out markets, slaughter houses, fishery or sale of fish in fresh water tanks even after completion of lease periods, which resulting loss of revenue to the ULB. ii) in certain ULBs not entering the lease agreements within a specified period, which resulting advantage to lessees, in certain ULBs not collecting advance amount from lessees within a week from the date of confirmation of the lease. (iv) in certain ULBs not collecting the monthly rents and lease amounts within specified due date and also not collecting penalty after due date, which is resulting revenue loss to the ULBs and (v) in certain ULBs, the ULBs are not following the Act and Rules provisions strictly, which are leading to multiple legal litigations and resulting the lessees to continue even after completion of their lease period. In some cases, the lessees are continuing above 25 years also. ‘Therefore, all the Commissioners of ULBs in the State are hereby instructed to strictly follow the provision of Act and Rules, as the case may be, and they are also instructed to take action on following: ne (Conduct auctions to lease out markets, slaughter houses, fishery or sale of fish in fresh water tanks before completion of lease period and see that there is no renewal to old lessees. Probably, the lease period of one year will complete by 31° March of every year. (ii) Conduct auctions to lease out the shop rooms, which are nearing for completion of lease period as per G.O.Ms.No.56 MA&UD Department, dated.05.02.2011 ii) Collect the advance amount from lessees within a week from the date of confirmation of the lease and also enter into lease agreement. (iv) collect the monthly rents and lease amounts within due date and also collect penalty after due date. If, any long standing defaulters evict them from the leased property duly following the procedures laid in Act and rules. (v) Take steps to resolve the legal litigations in the respective Hon’ble Courts to evict the lessees who's lease period is above 25 year. Alll the Commissioners of ULBs in the State are hereby instructed to follow the above said instructions scrupulously, without any deviations. Any deviation noticed in disobeying the above instructions, suitable disciplinary action will be initiated against the responsible person as per APCS (CCA) Rules, 1991 To Sd/- Vijay Kumar G.Srkr Commissioner & Director. Alll the Commissioners of the Urban Local Bodies in the State. (through the RDMAs concerned). All the RDMAs in the State are requested to monitor above instruction during review meetings Copy submitted to the table of the CDMA / ADMA. Copy submitted to the Secretary to Govt., MA&UD Dept., AP Velagapudi, Guntur Dist. for favour of kind information. y Ite.£b.oll ¢ Gelecd PERINTENDENT