Darshan Lal and others vs The State of Punjab and others

D.S. Lamba, J.—The following notification by the Local Government Department (Committees Punjab dated 3rd September, 1975, was published in the Punjab Government Gazetted (Extraordinary),dated 4th September, 1975:-

LOCAL GOVERNMENT DEPARTMENT Committees Notification The 3rd September, 1975.

No. 9325-CI(ASO)-75/28674.-Whereas it had been brought to the notice of the Government that Municipal Committee, Adampur, in the Jullundur District, had become incompetent to perform and had made persistent defaults in the performance of its statutory duties and exceeded its powers within the meaning of Section 238 of the Punjab Municipal Act, 1911 ;

And whereas the Municipal Committee, Adampur, Vide Punjab Government Memo. No. 269-CI(ASO)-75/15667, dated the 4th May, 1975, was conveyed the various reasons calling upon it to show cause why the Committee should not be suspended u/s 238 of the Punjab Municipal Act, 1911 ;

And whereas, the Government has considered, the reply of the Municipal Committee and is of the opinion that for the reasons given in the Schedule below, considered jointly and severally, the Municipal Committee has been found to be incompetent to perform and has persistently made default in the performance of duties imposed on it by and under the Punjab Municipal Act, 1911, and has exceeded its powers;

Now, therefore, in exercise of the powers conferred by Section 238 of the Punjab Municipal Act, 1911, the Governor of Punjab hereby directs that the said Municipal Committee of Adampur in Jullundur district, shall be suspended with immediate effect for a period of one year and directs that all powers and duties of the said Committee shall, till the committee remains under suspension, be exercised and performed by an Administrator and hereby appoints the Deputy Director, Local Government, Jullundur as Administrator of the Municipal Committee, Adampur in addition to his duties till the appointment of a whole time Administrator.

SCHEDULE

(1) In accordance with the provisions of Section 25 of the Punjab Municipal Act, 1911, the Municipal Committee was required to hold at least twelve meetings, but, unfortunately it held only 8 meetings during the period 1st April, 1973 to 31st March, 1974. Again, during the period 1st April, 1974 to 30th September, 1974 only two meetings had been held the first meeting was held on 5th July 1974 and the 2nd on 22nd July, 1974 whereas, six such meetings should have been held.

No action was taken by the Committee for the amendment of business bye-laws and the Sub-Committee constituted for this purpose was very late. The Municipality has also failed to hold the election of its Vice-President. This shows that the Committee has made default in the holding of timely meetings.

(2) From the statement of the financial position, given below, it transpires that there has been progressive decrease of income of the Municipal Committee, showing that the Municipal Committee had loose financial control and lacked strict supervision of leadage of Municipal revenues:

1971-72

1972-73

1973-74

1974-75 (April, 1974 to (September, 74)

Opening Balance

43,996

63,456

l,45,l87

133,84

Income

229.796

2,93,747

1,(sic)8,681

96,372

Total

273,792

3,57,203

2,73,868

1,09,756

Expenditure

210,336

2,12,16

2,60,484

83,968

Closing Balance

63,456

1,45,187

13,384

25,788

The following statement for the year 1974-75 shows that the income of the Committee had been registering a dramatic fall, as compared to previous years and all this is attributed to loose grips of the committee over its finances

Nature of Tax

Income during 1971-72

Income during 1972-73

Income during 1973-74

Income during April 1974 to September 1974.

Rs.

Rs.

Rs.

Rs.

House Tax

42,694

89,400

25,279

30,312

Octroi

89,514

83,992

70,473

33,380

Toll Tax

15,950

14,265

13,054

6,175

Cycle Tax

6,614

5,471

5,272

2,360

Rent of Buildings

4,097

4,504

1,440

720

Income in respect of House Tax during the year 1972-73 was Rs. 89,400 whereas such income during the year 1973 74 was Rs. 25,279, showing an abrupt downward trend, whereas the income should have registered an appreciable rise.

(3) The Committee has not revised its previous rates of house Tax and thus, the Committee has failed to tap its own resources to augment its income. The Committee has also failed to realize its arrears on account of House Tax amounting to Rs. 55,036 upto 30th September, 1974. The Committee has, therefore, defaulted in this respect.

(4) The Committee has not adopted the new Model Octroi Schedule which it was required to adopt within 45 days of the issue of Government instructions. This shows incompetence of the Municipal Committee to raise its own sources of income.

(5) Cases of lax evasion for the period April 1974 to September

1974 was simply eleven. The number of such cases is insignificantly low as compared to such cases, numbering 54 in 1971-72, twelve in 1972-73, and 28 in 973-74. This shows lack of supervision being exercised by the Committee.

The alidity of the above notification suspending the Municipal Committee, Adampur, is being challenged by the Petitioners in this writ petition under Article 226/227 of the Constitution, praying for the issuance of a writ in the nature of Certiorari, quashing the impugned notification and also for the issuance of a writ in the nature of Mandamus or any other appropriate writ, order or direction, directing res-pondents No. 1 and 2, i.e. The State of Punjab and the Deputy Commissioner, Jullundur, respectively, not to suspend the legally elected Committee and to do their duty in accordance with law.

The Petitioners have pleaded that they are the duly elected members of the Municipal Committee, Adampur, District Jullundur (hereinafter referred to as the Committee.) The elections were held on 18th June 1972 and the oath of office was administered to them on 7th July, 1972. Shri Swaran Singh, Respondent No. 3, was elected President of the Committee. Though the Petitioners were performing their duty for the benefit of the public and, in spite of various beneficial schemes, the income of the Committee was not allowed to dwindle and no fresh tax were imposed, yet a show-cause notice purporting to be u/s 238(3) of the Punjab Municipal Act, 1911 (hereinafter called the Act) was served on the President, Respondent No. 3. The Petitioners later on learnt that Respondent No. 3 had submitted a reply thereto to the Deputy Commissioner and the State Government controverting the charge in the show cause notice. There grievance was that the President did not call any meeting of the Committee to consider the show cause notice which he was duty-bound to do, and he sent the reply on his own without consulting the Petitioners. It has been further averred that the Deputy Commissioner commented on the show-cause notice and the State Government acted illegally and without jurisdiction in accepting the comments of the Deputy Commissioner without giving an opportunity to the Petitioners to independently explain the charges leveled against the Committee which is corporate body and has existence of its own. The State Government mis-stated in the impugned notification that notice had been issued to the Committee, and for uterior reasons issued the notification in question. The Petitioners claim that the work of the Committee was being supervised by the Sub Divisional Officer (Civil) and the Deputy Commissioner Jullundur, in the exercise of their supervisory control, from time to time, but neither of them had earlier in their reports ever pointed out the substance of any of the charges leveled against the Committee. The financial position of the Committee, according to them, was not correctly depicted in the notification. In paragraph 8 of the petit on the Petitioners have given facts and figures to show that the recovery of House-tax, and octopi income had progressively increased during the month of June, July, August and September for three years viz 1973, 1974 and 1975, and also in respect of toll-tax during these months in the years 974 and 975 Similarly the number of cases regarding vasion of taxes during the years 1971-72 1972-73 and 1973-74 has also been furnished. By quoting these figures an attempt has been made to show that there had been no acts of omission and commission on the part of the Committee in the performance of its functions, rather the Committee was vigilant in increasing its income and to check the evasion of taxes. The Petitioners have further challenged the impugned action on the following grounds:-

(1) That Shri Harbhjan Singh, M.L.A., who was elected as an independent candidate against Shri Kulwant Singh (who was being supported by the Congress and the Communist party of India), was opposed by the Petitioners also at the time of election, that after his election, Shri Harbhajan Singh joined the Congress and to wreck vengeance on the Petitioners, he, in league with the authorities, got the present show-cause notice issued, and that he being a favorite of the State Government and the Deputy Commissioner did not allow the Petitioners to function, the motive behind all this being that when an Administrator was appointed, he would have full say in the affairs of the Committee.

(2) That the show-cause notice purporting to be u/s 238(3) of the Act was served on the President, Respondent No. 3, and not on the Committee which is a corporate body and has existence of its own in the eyes of law.

(3) That Respondent No. 3 submitted a reply to the show-cause notice, but did not call any meeting of the Committee to consider the charges which he was duty bound to do before sending the reply.

(4) That the Committee has been suspended by simply repeating the charges as stated in the show-cause notice and without judicial apporach which the State Government while performing its quasi-judicial functions was bound to have and that no order giving the process of reasoning by which the explanation of the President was found unsatisfactory is indicated and the whole thing has been done in a cryptic and arbitrary manner.

Dr. Brajendra Singh, Additional Deputy Commissioner, Jullundur, and Shri G. D. Bhasin, Deputy Secretary to Government Punjab, Local Government, have filed returns on behalf of Respondents Nos. 2 and 1 respectively. In reply to the written statement filed on behalf of Respondent No. 2, the Petitioners filed a replication. Dr. Brajendra Singh in his affidavit pleaded that the Committee could not perform its duties fully and its income was decreasing day by day. In paragraph 5 of his written statement he explained that no comments were given by him on the reply to the show cause notice, and that according to Clause 60 of the Bye-laws of the Committee, the President is the chief executive authority of the Committee, which bye-laws were published vide Notifications, dated 1st March 1966 and as there was no Secretary of the Municipal Committee in May 1975, Clause 72 (14) of the Bye-laws was not applicable. In paragraph 7 of his affidavit it has been stated by him that the Committee vide its resolution, No. 25, dated 14th February 1975, recommended that the Committee be superseded for one year and that the members Who are Petitioners in this writ petition were in favour of the said proposal which was passed with eight votes by majority, and that according to Clause 1 (b) twelve meetings were to be held in a year, but only eight meetings were held during the year; moreover, no sub-committee were constituted by the Municipal Committee as per provision in Clause 37 of the Business Bye-laws. In paragraph 8, he has stated that the figures given in Aanexures P. 1 and P. 3 showed a loss of income, but by giving the income for June, July, August and September, the Petitioners have tried to give wrong information, which also showed that the income for the year 1974 was less than the income of 1973. In the return filed by Shri G. D. Bhasin, it is denied that there was any mala fide intention or ulterior motive for issuing the impugned notification. It has been submitted that the State Government considered the reply of the Com-mittee and applied its mind to each of the charges levelled against in, and after thoroughly thrashing out each charge came to the conclusion that the Committee was incompetent to perform and had made persistent defaults in the performance of its statutory duties and hence was liable for being suspended under the previsions of law, and that reasons for suspending the Committee have been elaborately given in the impugned notification. It has been categorically denied that the Committee has been suspended u/s 238 of the Act by simply repeating the charges as stated in the show-cause notice and without judicial approach which the State Government while performing its quasi-judicial functions was bound to have. On the other hand, the State Government judicially approached and considered each charge and after being satisfied that the Committee had committed default in the performance of its statutory duties and bad exceeded its powers within the meaning of Section 238 of the Act, issued the impugned notification. In reply to the allegation that the Petitioners could not be made to suffer for what the President of the Committee omitted to do, it has been stated that the Committee and its members are jointly and severally liable for their acts of commission and commission. In regard to the allegations made against Shri Harbhajan Singh, M.L.A., it has been categorically denied that he had anything to do with the suspension of the Committee and that the show-cause notice was issued because of the merits of the case and not at the instance of any political leader or party. In the end and it has been pleaded that the explanation submitted by the President was in fact the explanation of the Committee itself, meaning thereby the explanation of the members thereof. Maintaining that the impugned notification was not liable to be struck down on any of the grounds taken by the Petitioners, it has been prayed that the writ petition be dismissed with costs.

Before appreciating the rival contentions of the parties, it is necessary to examine the relevant provisions of the Act. "Committee" has been defined in Section 3(4) of" the Act to mean "a municipal committee established by or under this Act" Section II relates to the constitution of committees, and reads - "There shall be established for each municipality a committee having authority ever the municipality and consisting of such number of members not less than five as the State Government may fix in this behalf... ". Section 13 (2) provides for the term of office of the elected members and says that "save as otherwise provided under this Act, the term of office of the elected members shall be five years ; Provided that an outgoing member shall, unless the State Government otherwise directs, continue in office untill the date fixed for the meeting at which his successor is required to take oath of allegiance," and then Section 13(3)says that "No committee shall hold office for a term exceeding five years and the Stats Government shall cause fresh elections to be held and completed before the expiry of its term. Section 16 deals with the powers of the State Government as to the removal of member of the Committee on the grounds inter alia of flagrantly abusing his position as a member of the Committee or through negligence or misconduct he has been responsible for the loss or misapplication of any money or property of the committee. Section 18 provides that every Committee shall be a body corporate, and shall have perpetual succession and a common seal Section 22 gives the power to the State Government to remove the President or Vice-President from office on the ground of abuse of his powers or of habitual failure to perform his duties or in pursuance of a resolution requesting his removal passed by two-thirds of the members of the committee. The proviso to this section reads thus -

Provided that before the State Government notifies his removal, the reason for his proposed removal shall be communicated to him by means of a registered latter in which he shall be invited to tender within twenty-one days an explanation in writing and if no such explanation is received in the office of the appropriate Secretary to Government within twenty-one days of the despatch of the said registered letter, the State Government may proceed to notify his removal.

Then Section 238, as amended, provides:-

(1) If, in the opinion of the State Government a committee is not competent to perform, or persistently makes default in the performance of, the duties imposed on it by or under this Act or any other law or exceeds or abuses its powers, the State Government may, by an order published, together with the statement of reasons thereof, in the official Gazette, declare the committee to be incompetent or in default or to have exceeded or abused its powers of the case may be, and suspend it for such period, not exceeding one year, as may be specified in the order.

Provided that the State Government may, by notification, for reasons to be specified therein, extend the aforesaid period of suspension, from time to time, for a period not exceeding one year in aggregate.

(2) If. at any time after the expiry of the period of suspension the committee again acts in the manner referred to in Sub-section (1), the State Government may. by a like order, supersede the committee for such period as as may be specified in the order.

(3) Before making an order of suspensions or supersession, opportunity shall be given to the committee to show cause why such an order should not be made.

(4) When a committee is suspended or superseded by an order under Sub-section (1) or Sub-section (2),-

(a) in the case of an order of suspension, all members of the committe shall from the date of order, cease to be members during the period of such suspension ;

* * *

From the plain reading of the aforesaid provisions it becomes clear that "committee" is a corporate body having authority over the municipality and consisting of such number of members not less than five as the State Government may fix in this behalf. The members are elected and their terms of office shall be five years. An individual member of the Committee can be removed by the State Government on the grounds given in Section 16. The ''consequences that flow from the suspension of the Committee as given in Sub-Section 1(a) of Section 238 are that all the members of the Committee shall from the date of order cease to be members during the period of such suspension. Now, it has to be examined whether the show-cause notice, copy Annexure P. 1 with the petition, purporting to be u/s 23S of the Act, which was served on the President, Respondent No. 3, was sufficient compliance of Sub-section (3) of that section to give opportunity to the Committee to show cause why an order of suspension should not be made. It was not a case of removal of a member or the President alone on account of some misconduct. The present was a case of suspension of the Committee, which in the opinion of the Government was not competent to perform or persistently made default in the performance of the duties imposed on it by or under the Act or any other law or exceeded or abused its powers. The show-cause notice is not directed against an individual; it is directed against the Committee for the collective acts of omission and commission on the part of the members, the vice-president and the president. The question then arises as to whom the show-cause notice should be addressed. In the present case it was addressed to the President of the Committees, and we have to see if there is any such provision in the Act, the Rules or the Bye-laws In regard to the mode of service of the show-cause notice before making an order of suspension of the Committee. Obviously there is none in the Act, the Rules or the Bye-laws. An attempt has been made to take the aid of Bye-law 60 framed by the Committee u/s 31(1) of the Act, the Bye laws having been approved, as required by Sub-section (2) of that section, by the Deputy Commissioner, Jullundur, in exercise of the powers delegated to him by the State Government. This bye-law is reproduced below:-

Bye-lew 60. The President shall be the Chief executive authority of the Committee and shall be responsible for the administration of the municipality in all its departments.

I regret my inability to accept the contention of the Learned Counsel for the Respondents that by virtue of the aforesaid bye-law it can be held that it was sufficient compliance of Sub-section (3) of Section 238 of the Act regarding giving of show-cause notice to the Committee before making an order of suspension. The bye-laws made under s 31 of the Act cover an entirely different field for the purposes of carry-ing on the day-today administrative functions of the Committee. They provide for the time and place of meetings of the Committee, the quorum necessary for the transaction of business at ordinary meetings ; the conduct of proceedings and the adjournment of meetings ; constitution of sub-committees, etc. S. 31 of the Act in fact gives powers to the Committee to frame bye-laws with regard to the matters specified in Clause (a) to (k) under Sub-section (1) of that section and from individual as well as collective examination of all the subjects enumerated therein, it cannot be gathered that under Bye-law 60 the President of the Committee was competent to handle a show-cause notice of the type in question independently without even consulting the numbers of the Committee. True that the President of the Committee is the chief executive authority of the Committee, but it appears that the term" chief executive" has been used for a mere description of the office and not of the character or extent of the powers confined to that office. His functions are primarily executive as provided under the Act, the Rules and the Bye-laws. Being the head of the Municipality he is responsible for the general supervision over all its departments, and he takes nothing beyond the powers expressly conferred or necessarily implied. Bye-law 60 thus cannot be construed to mean that the President of the Committee is vasted with such powers as are exercised by the Administrator when a committee is suspended or superseded, and that he can alone furnish reply to the charges in the show cause notice issued to the committee without consulting and taking into confidence its members. It is the admitted case that the President of the Committee before submitting, his reply to the show-cause notice did not convene any meeting of the members of the Committee to discuss the charges levelled against it and the reply of the members thereto. Nor he formally or informally consulted the members before submitting the reply. The proper course in the absence of any specific provision in the Act, the Rules and the Bye-laws, would have been to place the show-cause notice in a meeting of the Committee specially convened for the purpose and then a resolution passed as to what reply was to be furnished to the charges contained in the show-cause notice. Unfortunately this was not done in the present case. Without following the above course, if the explanation or reply submitted by the President would mean the explanation or reply of the Committee itself, that would lead to disastrous consequences. For instance, if the President of the Committee for personal, political or other reasons, wants the Committee to be suspended, he may not even submit any reply to the show-cause notice within the period fixed for the purpose and in that case will it be safe to presume that the Committee has nothing to reply, leaving the Gov-ment to decide in whatever way it liked. The obvious result in that case would be the suspension of the committee even without the knowledge of its elected members. Similarly, if the President of the Committee accepts rightly or wrongly all the charges contained in the show cause notice issued to the Committee, he would thereby be indirectly inviting the order of suspension. So it cannot be envisaged that the Legislature intended to vest all such powers in the hands of a single elected member, the President, ignoring the rights of all the other elected members of the Committee. Keeping all these circum-stanes in view, must hold that in the absence of specific provisions in the Act, the Rules or the Bye laws, the show cause notice for the suspension of the Committee issued to its President, cannot be implied to mean notice to be replied by the President without consulting the Committee as that would not amount to efficient compliance of the mandatory provisions of Sub-section (3) of Section 2 8 of the Act. As observed by their Lordships of the Supreme Court in The Vice-chancellor, Utkal University and Others Vs. S.K. Ghosh and Others, though an incorporated body is a legal entity, it has neither a living mind nor voice. It can only express its will in a formal resolution and so can only act in its corporate capacity by resolutions properly considered, carried and duly recorded in the manner laid down by its constitution.

Now let me examine this matter from another angle. An elected member of a Municipal Committee has been conferred by law a very valuable right to represent his constituents in the Municipal Committee till the expiry of his term of office as prescribed by law. So if a member of the Committee is to be removed on charges of flagrantly abusing his position as a member of the Committee or on charges of other nature enumerated in Section 16 of of the Act. he has to be given an opportunity of tendering an explanation, and reasons for his proposed removal have to be communicated to the member concerned. It would, therefore, be wrong to presume that the intention of the Legislature would be that the elected members of the Committee would have no say even against the proposed action involving the suspension of the Committee. So it cannot be said that after the election of the President, the remaining elected members of the Committee are placed at his mercy, and the President is at liberty to decide their fate in whatever manner he likes. A similar situation arose before a Devis on Bench consisting of I. D. Dua and R. S. Narula, JJ. (as their Lordships then were) in the case reported as The Municipal Committee and Others Vs. The State of Punjab and Others, In paragraph 36 of the report, Narula, J., observed thus:

A mere reference to the provisions of Section 238(2)(a) of the Act shows that the impugned notification directly affects the members of the Municipality who are citizens of this country and who are automatically made to vacate their seats as members of the Municipality. The effect of the notification is to extinguish or to put an end to the Municipality itself. Such an order directly in-terfers with the democratic way of life to which our Republic is committed It interferes with a very important right of citizens. The decision to supersede a Municipality must be preceded by one of the findings enumerated in the section. The statute further requires that the finding must be supported by reasons which themselves must be contained in that notification Thus the statutory requirement is that a notification u/s 238() of the Act is requred to be made a speaking one. This appears to cast a duty on the State Government to act in accordance with the principles of natural justice while coming to an objective finding on some objective material placed before it which should justify the supersession of a Municipality. When an action of this kind has to be taken it is necessary that the Municipality concerned should be taken into confidence a d associated with the inquiry which is likely to lead to its supersession.

Then in paragraph 49 of the report, Dua, J., while agreeing with Narula, J. further observed as under:-

The order of supersession, it may be remembered, very seriously affects the members of the Committee concerned and incidentally also the electorates who have duly elected the municipal Councillors. I am not unmindful of the fact that the Punjab Municipal Act was enacted apparently in pursuance of the policy of developing localself governing institutions as a part of the larger policy of establishing in this country democratic Government by elected representatives and training the people in the art of local-self Government. An effective and close supervision and control over the working of local bodies like the Municipal Committee was thus considered necessary to a considerable extent. But this aspect induces me further to hold that the power conferred by Section 238 which entails drastic consequtances(sic) of superseding a self governing elected body calls, in its exercise, proper observance of the rules of natural justice so that the other side of the picture is adequately presented before the State Government by the party affected. This seems to me to be essential if local self Government is to develop on healthy lines and our democratic set up is to have strong and deep roots in the community at large.

(i) In a decent democratic society of our pattern it could not be the intention of the legislature that the President of a Committee, who is only first among equals, would be given arbitrary and unfettered powers so as to submit an explanation on behalf of all the members in reply to a show-cause notice for the proposed suspension of the Committee without even consulting them, which on the face of it appears to be highly undemocratic: and

(ii) A very heavy duty is cast on the State Government to act in accordance with the principles of natural justice while ordering the suspension of a Municipal Committee. Furthermore when an action of this kind has to be t"ken, it is necessary for the authorities to see that all the members of the Committee are taken into confidence by the President before submitting reply to the show-cause notice to the charges involving the suspension of the Committee.

in view of the above, I have no hesitation to hold that the impugned action of the State Government is violative of the principles of natural justice and that there was not sufficient compliance of the mandatory provisions of Section 238(3) of the Act when the state Government considered the reply of the President to the show-cause notice treating it to be that of the Committee.

Mr R. K. Chhibbar, Learned Counsel appearing for the State, has placed reliance on The State of Maharashtra and Another Vs. B.K. Takkamore and Others, ., and Lachhman Dass and Ors. v. The State of Punjab (1967)69 PLR 145., and has urged that in these two cases the show-cause notice for superseding the Municipal Corporation and the Municipal Committee was given to the Mayor and Prendent respectively, and their explanations were considered and action thereon was taken by the respective Governments. An attempt has been made to show that the show cause notice issued to the Mayor or the President would be sufficient compliance in the eyes of law. I regret my inability to accept this contention of the Learned Counsel, the facts of the two cases cited above do not show that it was agitated before their Lordships that reply to the show-cause notice was given by the Mayor and the President respectively without consulting or taking into confidence the members concerned and thus there was not sufficient compliance of the provisions of law. Hence be cannot derive any benefit from the ratio of these two rulings. Since I am deciding this petition on the short ground and for the reasons recorded earlier that the reply of the President alone to the show-cause notice issued to the Committee was not sufficient compliance of Section 238(3) of the Act, as the President alone was not competent to act as the mouthpiece on behalf of all the members of the Committee, I need not go into the other grounds of attack taken in this petition.

For the foregoing reasons, I accept this writ petition, and quash the impugned notification, dated 3rd September, 1975, copy Annexure P. 3 to the petition, purporting to suspend the Committee, u/s 238 of the Act, being ultra vires and non existent in the eye of law. In the circumstances of the case, however, I make no order as to costs.

Before parting with this judgment I may observe that 1 do Dot want to say anything on the merits of the charges against the Committee. 1 may only make it clear that nothing stated by me in this judgment would debar the Government from proceeding against the Committee u/s 23a of the Act afresh in accordance with law if it is considered necessary to do so.