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1963 DIGILAW 209 (MAD)

K. Chidambaram Mudaliar v. A. P. Arunachala Mudaliar

1963-07-17

K.S.RAMAMURTI, S.RAMACHANDRA IYER

body1963
JUDGMENT Ramachandra Iyer, C. J.- This appeal is filed against the judgment of Anantanarayanan, J., who confirmed the decree for damages passed against the President and certain members of the Sembanarkoil Panchayat. The respondent is a trader in that village in safety fuse for blasting gunpowder. He also manufactures and’ sells fireworks. The necessary licences for storing such goods and also for vending them had been obtained by him during the years 1950 to 1956. He applied for a renewal of the licence for the next year on 12th May, 1956. The Panchayat Board at first delayed passing any orders on the application; subsequently it totally rejected the application. At the same time, the Board passed a resolution at the instance of the President, viz., the first appellant herein, with whom the five other appellants joined, requesting the Collector to withhold the licence. That attempt succeeded in the first instance ; but, on appeal to the higher authorities, the respondent was able to obtain a renewal of the licence on 29th October,. 1956. It has now been found,-and that finding has not been challenged before us-that the appellants, although they purported to act in their official capacity, did so for their ulterior object. The real reason which prompted them to do what they did was the malice and private grudge which the first appellant bore to the respondent. The latter then instituted the suit which has given rise to this appeal for recovery of damages against the appellants personally. The suit was dismissed by the trial Court on a technical ground. But, on appeal, the learned Subordinate Judge found that the appellants had misused their powers for personal reasons and awarded a sum of Rs.100 as damages to the respondent. This decree has been affirmed by Anantanarayanan, J., who, while so doing, granted leave under clause 15 of the Letters Patent for filing this appeal. There can be no doubt that, when the appellants refused to grant a renewal of the licence and further passed a resolution, acting as members of the Board, to request the Collector to withhold it, they did a corporate act which they were authorised to do under the Madras Panchayats Act, 1950. There can be no doubt that, when the appellants refused to grant a renewal of the licence and further passed a resolution, acting as members of the Board, to request the Collector to withhold it, they did a corporate act which they were authorised to do under the Madras Panchayats Act, 1950. It is equally clear that, in so doing, they were not exercising such powers for the purposes for which they were vested in them but for extraneous reasons, mala fide and actuated by indirect motives. As Anantanarayanan, J. has expressed, “it is a well-known principle that, where, under cloak of an official authority or status, a person acts mala fide and causes injury due to ill-will, abusing his powers, he is liable to be sued for damages in the civil. Courts of the land under the common law.” The appellants would, under the circumstances, be prima facie liable in damages for the injury caused to the respondent by reason of their act which resulted in his being compelled to suspend his business for a period. But it is contended on their behalf that section 108of the Madras Village Panchayats Act gives them an immunity. The learned Judge has rejected this interpretation of the provision, differing from a contrary view expressed by Kunhamed Kutti, J., in his judgment in S.A. No. 602 of 1958 (unreported). Before considering the respective reasons which occasioned this difference of judicial opinion, we shall first refer to section 108, which runs: “No suit or other legal proceeding shall be brought against the President, Executive Authority or any member, officer or servant of a Panchayat, or any person acting under the direction of a Panchayat or of such President, Executive Authority, member, officer or servant, in respect of any act done or purporting to be done under this Act, or in respect of an alleged neglect or default on his part in the execution of this Act, or any rule, by-law, regulation or order made under it, if such act was done or such neglect or default occurred in good faith ; but any such proceeding shall, so far as it it maintainable in a Court, be brought against the Panchayat except in the case of suits brought under section 110.” Section no declares that the President, Executive Authority and members of the Panchayat shall be liable for the loss, waste or misapplication of property. The former section provides statutorily an immunity to the officers and authorities specified therein who act in good faith in the performance of their official duties. Implicit in such a provision is that the immunity declared will not be available in respect of acts purported to be done under the authority but mala fide. Mr. T. R. Ramachandran, appearing for the appellants, contends that, while that would be so, the right of the injured party in such a case of mala fide exercise of power, will, on the terms of the section, be transferred to the Panchayat and would not subsist against the erring members. This contention is subversive of the common Jaw rule of non-liability of a corporation for the acts done by its members in excess of their authority and mala fide. Support for the argument is however sought in the concluding terms of the section, which says that any proceeding shall, so far as it is maintainable in a Court, be brought against the Panchayat except in the case of suits brought under section no. It is argued that, as a mala fide corporate act would not come within the protection afforded by the main part of the section, the action by the aggrieved party could be sustained in a Court, but such an action should, on the terms of the section, be brought only against the Panchayat. Section 108, to say the least, is unhappily worded. But, as we shall show presently, it would not have been the intention of the Legislature to create a new liability on the Corporation which it did not under the ordinary law suffer, viz., that of being made liable for acts done by its officers in bad faith and in excess of the authority conferred by the statute. Quite recently, in Tiruvaraimuthu v. Municipal Commissioner of Shencottah1, Jagadisan, J., had to consider the extent of liability of a corporation for the tortious acts of its servants. But that was not a case where the officer concerned did not do the act to vindicate any personal spite. The recent case decided by Kunhamed Kutti, J., went even further. The learned Judge was of the view that, even if the act of the Corporator was done mala fide, the liability to the aggrieved person would be that of the Corporation. The recent case decided by Kunhamed Kutti, J., went even further. The learned Judge was of the view that, even if the act of the Corporator was done mala fide, the liability to the aggrieved person would be that of the Corporation. The learned Judge considered that the use of the word ‘such’ in the latter part of section 108would refer to proceedings arising out of acts done or purported to be done when they were found to be in excess of the authority and for ulterior purposes. This interpretation, the learned Judge held, flowed from the scheme of the Act which contained a provision like section 110, enabling the Panchayat to sue its own members for loss occasioned to it. With great respect to the learned Judge, we consider that the interpretation is not warranted by the terms of the section. That provision, as its marginal note indicates is intended to give protection to the President and other Officers of the Panchayat when acting in good faith. In effect, the section attempts a balancings between two principles ; (1) that the party aggrieved by reason of neglect or default in the performance of the duty by an officer of the Corporation, should have a remedy, and (2) that the officers of a corporation discharging their duties bona fide should be immunised from claims against them for neglect or default during the proper performance of their duties. The section has therefore provided that, in such cases, the officers will not be liable where they discharged their duties in good faith, though negligently, for the injuries caused to the individual. But, at the same time, there is a remedy to the aggrieved party as against the Panchayat, for, it is in essence its acts that caused the injury. Naturally enough, this vicarious liability is made subject to two important exceptions: (1) where the nature of the act, neglect or default is such that the Corporation will not be liable under the common law and (2) where the officer concerned is himself liable to the Panchayat for the loss, under section 110, there would not be any liability. Naturally enough, this vicarious liability is made subject to two important exceptions: (1) where the nature of the act, neglect or default is such that the Corporation will not be liable under the common law and (2) where the officer concerned is himself liable to the Panchayat for the loss, under section 110, there would not be any liability. In other words, where by reason of a bona fide act, default or neglect on the part of an officer of the Corporation, a person suffers an injury, he would have a right, subject to the exceptions mentioned above, against the Corporation and not the individual officer. This would show that the injury contemplated under section 108which gives rise to a cause of action for the individual should be one done in good faith by the officer. Section 110gives the Panchayat a right of recourse against the officer concerned. Thus, section 108is intended to regulate the right of a person aggrieved by an act of an officer of the Panchayat when such act is done bona ide. The immunity giving thereunder is in respect of such acts alone and the right of action conferred under it as against the Panchayat is also with “respect to such acts, i.e., those done in good faith. Mr. T. R. Venkataraman, learned counsel for the respondent, contends that section 108does not touch the remedy available under the common law to an aggrieved individual arising out of ultra vires and mala fide acts on the part of the officers of the Panchayat and that the right of action given to the injured party by the last paragraph of the section as against the Panchayat could not cover those acts. We accept that contention as a sound one. A contrary conclusion will lead to inconvenient results, and, indeed, the remedy given by section 108will be illusory. That provision itself says that the right to sue would arise only when it is otherwise maintainable under the law. No Corporation is ordinarily made liable under the common law for acts or omissions of its officers done mala fide and outside their authority. Therefore, that provision which confers a right of suit against the Panchayat can refer only to the bona fide acts or defaults done by the officer. No Corporation is ordinarily made liable under the common law for acts or omissions of its officers done mala fide and outside their authority. Therefore, that provision which confers a right of suit against the Panchayat can refer only to the bona fide acts or defaults done by the officer. Liability to the injured party by corporate acts not done bona fide will not exist under the common law and will not therefore be affected or taken away by section 108. In S.A. No. 602 of 1958, the learned Judge, on the authority of the decision in D. Lakshminarasimharaju v. E. Satyanarayana and others1, laid down that the criterion of the section is whether the wrongful act was in the course of the discharge of statutory duties, and not whether it was wrongful or mala fide. It is undoubted that, the act that was done is authorised by the statute and has been done in the manner prescribed by it, no question of motive can at all arise. But, where it is not so done, i.e., where it is done negligently, etc., there would be a liability. The decision referred to above was one where the act complained of was done bona fide. Secondly, section 108, in terms, gives immunity only with respect to bona fide acts and neglect, and not those done for ulterior purposes. We are therefore unable with great respect to agree with Kunhamed Kutti, J., that merely because an act has been done in the course of the discharge of a duty, there would be no liability of the person doing the act, even though he might have acted with ulterior motives with a view to injure somebody. Learned counsel would, next contend that the right of suit conferred by section 108against the Panchayat is a comprehensive one and will be an exclusive remedy in respect of acts purported to be done bona fide or otherwise on behalf of the Panchayat and the conferment of such a remedy would impliedly exclude all other remedies available to the subject under the common law. It is argued that, having regard to the intention of the Legislature as disclosed in section 108, the Court should apply the word ‘alone ‘after the words “ be brought against the Panchayat”. It is argued that, having regard to the intention of the Legislature as disclosed in section 108, the Court should apply the word ‘alone ‘after the words “ be brought against the Panchayat”. This argument can lead nowhere, for, if any one word is to be supplied, one might as well supply the word ‘also ‘instead of the suggested one ‘alone ‘as that would be more consistent with pre-existing rights under the ordinary law. But we are of opinion that there is no occasion in this case to supply any word to the statute. It is a rule of interpretation that where the intention of the Legislature is clear, mere unskilfulness in the drafting of a statute cannot prevent effect being given to its true intent. In Maxwell's Interpretation of Statutes, nth edition, page 221, dealing with the subject of modification of the language to meet the intention of the Legislature, it is stated: “Where the language of a statute, in its ordinary meaning and grammatical construction, leads to a manifest contradiction of the apparent purpose of the enactment, or to some inconvenience or absurdity, hardship or injustice, presumably not intended, a construction may be put upon it which modified the meaning of the words, and even the structure of the sentence. This may be done by departing from the rules of grammar, by giving an unusual meaning to particular words, by altering their collocation, or by rejecting them altogether, under the influence, no doubt, of a irresistible conviction that the Legislature could not possibly have intended what its words signify, and that the modifications thus made are mere corrections of careless language and really give the true meaning.” But the Court will not ordinarily supply the words to a statute, where the intention of the Legislature is otherwise clear. It will do so also in cases where, but for the addition of the words, the section would become meaningless and would lead to manifest absurdity or repugnance to good sense. There is, in this case, no such absurdity or repugnance. Section 108, as it stands, is perfectly intelligible. It. provides an immunity to the officials of the Corporation for acts honestly done, and, in such cases, gives the party aggrieved a remedy against the Panchayat, subject, of course, to the two general principles, to which we have referred earlier. There is, in this case, no such absurdity or repugnance. Section 108, as it stands, is perfectly intelligible. It. provides an immunity to the officials of the Corporation for acts honestly done, and, in such cases, gives the party aggrieved a remedy against the Panchayat, subject, of course, to the two general principles, to which we have referred earlier. As we said, the intention disclosed by the section is not to cover the case of mala fide acts and it would not be open to any Court to supply any word to the section so as to bring about such a construction. We are in entire agreement with Anantanarayanan, J. ‘that section 108of the Madras Village Panchayats Act would not afford an answer to the claim of the respondent. The appeal fails and is dismissed with costs. K.S.-----Appeal dismissed.