Indra Prakash Kapoor v. State of U. P. — 1967 DIGILAW 158 (ALL)

JUDGMENT Satish Chandra, J. - This is a petition under Article 226 of the Constitution. It prays that the .order of the State Government superseding the Municipal Board of Jhansi on 11th October, 1966 be quashed and for a consequential mandamus to the respondents not to interfere with the petitioners functioning as the members of the Municipal Board. 2. General Elections for the Municipal Board were held in December, 1964 and the present board was constituted on 16th December, 1964. The petitioners and respondents 4 to 8 are the present members of the Board. Previously, the Board had a majority of Congress Party members. The President was also a Congressman. Now out of 32 members, 4 belong to the Jan Sangh, 8 were returned on Congress tickets and the rest twenty are independents. The members of the Congress Party had been making attempts to win over the in-dependent members of the present Board to join the Congress Party so that a Congress majority Board with a Congress President is constituted. On 1st April, 1966 a non-confidence motion was carried against Sri V.K. Sharma, the President of the Board. He resigned and under Section 47-A of the U. P. Municipalities Act a casual vacancy was declared. 3. On 6th June, 1966, the District Magistrate, Jhansi served on the Municipal Board a charge sheet asking the Board to show cause within two weeks as to why it should not be superseded on the ground that it has exceeded or abused its powers and has a made wilful defaults in the performances of the duties imposed upon it under the Municipalities Act. The accompanying charge-sheet ran as follows: "The financial condition of the Board has deteriorated to such an extent that the Board is not able to fulfil its statutory obligations. Under Section 7(i) (qq) of the U. P. Municipalities Act, 1916, it is an obligatory duty of a Municipal Board to maintain its finances in a satisfactory condition and meet its liabilities but the board has not only made wilful defaults in the performance of this duty but it has also committed serious financial irregularities and thus exceeded or abused its powers as will be evident from the following instances: 1. Under Section 101 of the U. P. Municipalities Act, 1916 read With the instructions below the rules printed on pages 325-26 of the Municipal Manual Volume I (1952 edition) the Municipal Board Jhansi is required to maintains a minimum working balance of Rs. 1,03,2001/- and a reserve balance of Rs. 21,0001/- but on October 31, 1965, the Board has a cash balance of Rs. 38,267.77 only, and the total balance including permanent advance, invested amounts and meter securities was Rs. 69,242.77, which was far below the amount of Rs. 1,24,2001/- comprising the minimum working balance and the reserve balance. 2. The Municipal Board, Jhansi was required to contribute an amount of Rs. 2,68,3641/- for road improvements as matching contribution to Government grant for the purpose. The Board failed to give the matching contribution in accordance with the conditions laid down in the orders sanctioning the grants. 3. The Municipal Board, Jhansi has failed to utilise in a proper manner the road grants and education grants given to it. Out of the Government grant sanctioned in the past, there ought to have been an unspent balance of Rs. 4,01,956 on October 1, 1965. But on this date there was a cash balance of Rs. 38,267.77- only with the Board, which proves that the Board misutilised the unspent balance of the Government grants for purposes other than those for which these were sanctioned. 4. The Municipal Board submitted an explanation on 19th of June, 1966 refuting the various charges made against it. Mean-while a notification was issued on 16th July, 1966 fixing 26th July, 1966 for nomination of candidates for the office of the President of the Municipal Board. 3rd August, 1966 was fixed for the poll. The petitioners allege that the local congressmen made great effort to impress upon the Members of the Board that they should joint the Congress Party and form a Congress majority Board and for this purpose materialised the notice of supersession served on the Board. It has been stated that the first petitioner who was the Vice-President of the Board received a letter from Sri Brahmanand Sharma. Secretary, City Congress Committee, Jhansi, advising the first petitioner that if he along with his associates joins the Congress and forms a Congress Board, then he felt that the Board will have no danger from Lucknow. It has been stated that the first petitioner who was the Vice-President of the Board received a letter from Sri Brahmanand Sharma. Secretary, City Congress Committee, Jhansi, advising the first petitioner that if he along with his associates joins the Congress and forms a Congress Board, then he felt that the Board will have no danger from Lucknow. It is alleged that when the state Government felt that a Congress nominees cannot be elected as the President of the Board it directed that the notification fixing the date of nomination of elections for the office of the President be withdrawn. The District Magistrate consequently withdrawn the notification by an order passed on 25th July, 1966 just a day before the dated fixed for the nomination. On 11th October, 1966 the State Government passed impugned order superseding the Municipal Board, Jhansi, for the resides of its terms and directed that the District Magistrate will exercise and perform all the powers and duties of the Municipal Board. This action was taken under section 30 of the Municipalities Act. 5. This order has been challenged on many grounds. It was urged that the impugned order does not state the reasons for supersession and in that respect it contravenes the express provisions of Section 30 of the Municipalities Act. The order is hence without jurisdiction and void. The order has been characterised as a void. The order has been characterised as a mala fide exercise of power motivated by political considerations. The charges are stated to be irrelevant and not within the purview of Section 30 or Section 101 of the U.P. Municipalities Act. It has also been averred that there was no evidence in support of the charges and that they were vague and were explained away in the explanation furnished by the Board. 6. I have heard the learned counsel on the first point and having felt that the petition was liable to succeed on it, I did no her learned counsel on the other points raised in the petition. 6. I have heard the learned counsel on the first point and having felt that the petition was liable to succeed on it, I did no her learned counsel on the other points raised in the petition. Section 30 of the Municipalities Act provides: "If at any time the State Government is, after taking into consideration the explanation of the Board, satisfied that the board has made a wilful default in the performance of any duty imposed upon it by or under this Act or any other enactment or has exceeded or abused its powers it may, by order together with the reasons therefor published in the official Gazette, dissolve the board or supersede it for such period as may be specified." "Explanation: The period of super-session specified in the order may, if the State Government so considers expedient, be extended from time to time by notification." 7. It will be seen that the section treats the State Government's satisfaction as to the -matter mentioned in it insufficient for the action of dissolution or supersession of the Board. It directs that the order together with the reasons thereof shall be published in the official gazette. For the petitioner it was urged that the publication of the order together with the reasons thereof is an essential pre-requisite for the validity of the action. It is a condition precedent to the exercise of the power. For the respondents, however, it was submitted that the requirement of giving reasons is not mandatory and if in a given case the reasons are not stated the defect will be a mere irregularity. It will not vitiate the order. 8. In Collector of Manghyr v. Keshav Prasad Goenkal, A.I.R. 1962 S.C. 1694 : 1962 B.L.J.R. 863 the Supreme Court had occasion to consider the question whether a similar provision was mandatory. The Supreme Court was interpreting Section 5-A of the Bihar Private Irrigation Works Act, 1922. This section required the Collector for reasons to be recorded by him to forthwith cause the repair of irrigation works by such an agency as he thinks proper. The Supreme Court observed (paragraph 12) that the employment of the auxiliary verb 'shall' is inconclusive and similarly the mere absence of the imperative is not conclusive either. This section required the Collector for reasons to be recorded by him to forthwith cause the repair of irrigation works by such an agency as he thinks proper. The Supreme Court observed (paragraph 12) that the employment of the auxiliary verb 'shall' is inconclusive and similarly the mere absence of the imperative is not conclusive either. The question whether any requirement is mandatory or directory has to be decided not merely on the basis of any specific provision which, for instance, sets out the consequences of the omission to observe the requirement, but on the purpose for which the requirement has been enacted, particularly its. the context of the other provisions of the Act and the general scheme thereof. It would, inter alia, depend on whether the requirement is insisted on as a protection for the safeguarding of the right of liberty of person or of property which the action might involve. 9. The primary criteria for judging whether the giving of reasons in Section 30 of the Municipalities Act is mandatory or directory would be to see the purpose for which this requirement has been enacted and whether it is designed as a protection for safeguarding the rights of persons against whom the action is directed. 10. The Municipalities Act, 1916 provides for the constitution of Municipal Boards to subserve local self government. The members of the Board are elected on the basis of adult suffrage. The members as well as the Board has a fixed term (Sec. 10-A). The Act confers on the State Government various powers to control a Board. Under Section 34 (1) (b) the State Government can prohibit the further execution of resolution or order of a Board if in its opinion such resolution or order is prejudicial to the public interest. Under Section 35 the State Government can fix a period for the Board to perform any duty in performance of which the board had made default. These two provisions enable the State Government to supervise the working of the Board. Under Section 30 the State Government can dissolve or supersede a Board. If the Board is superseded then under Section 31 all Members of the Board including the President vacate their offices, and the powers and the duties of the Board are to be performed by a person appointed by the State Government. Under Section 30 the State Government can dissolve or supersede a Board. If the Board is superseded then under Section 31 all Members of the Board including the President vacate their offices, and the powers and the duties of the Board are to be performed by a person appointed by the State Government. A fresh Board is constituted after the expiry of the period of supersession. If a Board is dissolved all members including the President vacate their offices. A fresh Board is to be elected as soon as may be thereafter. The power of the State Government to dissolve or superseded a Board is drastic in nature and effect. In case of supersession it brings to an end local self Government by the elected representatives of the citizens for the period of supersession. The members vacate their offices and local sell Government can be resumed only by fresh elections. The consequences of an order of supersessions of dissolution are serious not only on the members but also on the citizens. The members immediately vacate their offices losing all statutory rights under the Act. The Board itself comes to an end. The State Government can exercise the power on its subjective satisfaction that the Board persists in making defaults in performance of any duty or is exceeding 01 abusing its powers. The subjective satisfaction is not a justiciable issue. 11. Section 30 is not in terms attracted to a situation where actually the mentioned grounds exist but only when the State Government is satisfied. The mere existence of the grounds will not show that the State Government was satisfied. The factual existence of reasons for the State Government's conclusion would not be relevant where the requirement of publishing the reasons along with the order has not been fulfilled. It is apparent that the requirement that reasons for the order shall be published in the official gazette is to provide a safeguard against arbitrary action on the one hand and to convince the citizen and the members of the Board, of the grounds on which the State Government reached the requisite satisfaction to deprive them of their right to Local self Government. The purpose of the requirement that reasons shall be stated is to ensure that the reasons which have impelled the action are germane and relevant to the content and scope of the power vested in the State Government. The purpose of the requirement that reasons shall be stated is to ensure that the reasons which have impelled the action are germane and relevant to the content and scope of the power vested in the State Government. This object of the legislature would be defeated and the safeguard will become nugatory if it were held that the requirement was directory. In my opinion this requirement is mandatory and constitutes a condition precedent to the exercise of power. If this condition is violated the action will be without jurisdiction and a nullity in the eye of law. 12. For the petitioner it has been urged that the impugned order does not state the reasons for the supersessions of the Board. It does not show in any manner how the explanation by the Board was inadequate or the reasons given by the Board were in effective to explain the charge (paragraph 34 of the petition). The counter-affidavit filed on behalf of the State Government says that the notification specifically states the relevant reasons for the action (paragraph 40). The impugned order runs as follows: GOVERNMENT OF UTTAR PRADESH NAGARPALIKA (KA) VIBHAG "In pursuance of the provisions of clause (3) of Article 348 of the Constitution of India, the Governor of Uttar Pradesh is pleased to order the publication of the following English translation of notification No. 69931M-81011965, dated October 11, 1966. NOTIFICATION No. 69931X1-A-81011965 Dated Lucknow, October 11, 1966. Whereas steady deterioration in the administration of Municipal Board, Jhansi has been a matter of considerable concern to Government for some time past and complaints of serious nature, revealing that the Board has made wilful default in the performance of its duties and has also committed serious financial irregularities and thus exceeded and abused its powers have been received by Government. And, whereas the Municipal Board, Jhansi, has failed to maintain the prescribed minimum working balance of Rs. 103,200 and a reserve balance of Rs. 21,0001/- and on checking on October 31, 1265, it was found that the Board had a cash balance of Rs. 38,267.77 Paise only and the total balance including permanent advance invested amounts and matter securities was Rs. 69,242.77 only. And, whereas the Municipal Board, Jhansi failed to contribute the matching contribution of Rs. 2,68,364/- to Government Grants for road improvement in breach of the conditions laid down in the orders sanctioning the grants. 38,267.77 Paise only and the total balance including permanent advance invested amounts and matter securities was Rs. 69,242.77 only. And, whereas the Municipal Board, Jhansi failed to contribute the matching contribution of Rs. 2,68,364/- to Government Grants for road improvement in breach of the conditions laid down in the orders sanctioning the grants. And, whereas the Municipal Board, Jhansi failed to utilise in a proper manner the road grants and education grants given to it. On October, 31 1965 the unutilised Govt. grants representing the unspent balance ought to have been Rs. 4,01,956.00 excluding the matching contribution of the Board but the Board had a balance of Rs. 38,267.77 paise only and the rest was misutilised by it on purposes other than those for which the Government Grants were given. Now, therefore, in exercise of the powers under Section 30 of the U. P. Municipalities Act, 1916 (U. P. Act No. II of 1916) , the Government of Uttar Pradesh, after taking into consideration the explanation of the Municipal Board, Jhansi to the charges set forth against it and having found it unsatisfactory and having been satisfied that the charges or any one or more of them are sufficient to entail the supersession of the Board and that the Board has made wilful default in the performance of its statutory duties and has also exceeded and abused its powers, is pleased to supersede the Municipal Board of Jhansi in Jhansi District for the reminder of the term of the Board with effect from October 12, 1966 from which date all members of the Board including the President shall vacate their offices. The Governor is further pleased to appoint under clause (b) Section 31 of the said Act, the District Magistrate, Jhansi to exercise and perform, so far as may be the powers and duties of the Board, so long as the supersession of the Board lasts." 13. The charges framed against the Board have been set out earlier. A comparison shows that the impugned order is practically a verbatim copy of the charges. The charges framed against the Board have been set out earlier. A comparison shows that the impugned order is practically a verbatim copy of the charges. In the penultimate paragraph of the order it is stated that the explanation furnished by the Board has been found unsatisfactory and that the State Government was satisfied that the charges or any one or more of them are sufficient to entail the supersession of the Board on the ground that the Board has made wilful default in performance of its statutory duties and has also exceeded its powers. 14. The question is, is this statement a statement of reasons? In the Collector of Monghyr v. Keshav Prasad Goenka, A.I.R. 1962 S.C. 1694 : 1962 B.L.J.R. 863 the Supreme Court in paragraph 15 emphasised. "There are two matters, which though somewhat inter-related are nevertheless distinct and separate. One is the conclusion or finding of the Collector that the state of circumstances set out in Section 5-A (1) exists, and the other the reasons why and the grounds upon which the Collector reaches that conclusion." The Court further observed, "To suggest that by a recital of the nature of the repairs required to be carried out and employing the language of Section 5-A (1) the Officer has recorded his reasons for invoking Section 5-A is to confuse the recording of the conclusion of the officer with the reasons for which he arrived at that conclusion." 15. These observations are apposite in the instant case. The impugned order states the finding or the conclusion. It does not deal at all with the substantial points raised in the explanation of the Board. 16. At this stage observations of Megaw, J. in Re : Poyser and Mills' Arbitration, (1963) 1 All England Law Report 612 may be usefully noticed. Section 12 (1) of the Tribunals and Inquiries Act reputed a tribunal giving a decision to furnish a statement of the reasons for the decision. 16. At this stage observations of Megaw, J. in Re : Poyser and Mills' Arbitration, (1963) 1 All England Law Report 612 may be usefully noticed. Section 12 (1) of the Tribunals and Inquiries Act reputed a tribunal giving a decision to furnish a statement of the reasons for the decision. Megaw, J. observed at p. 616 that, "The whole purpose of Section 12 of the Tribunals and Inquiries Act, 1958, was to enable persons whose property or interests were being affected by some administrative decision or some statutory arbitration to know, if the decision was against them, what the reasons for it were." He then held, (Page 616) , "Now Parliament having provided that reasons shall be given, in my view that must clearly be read as meaning that proper, adequate, reasons must be given; the reasons that are set out, whether they are right or wrong, must be reasons which not only will be intelligible, but also can reasonably be said to deal with the substantial points that have been raised ..........." Further on it was observed. (at p 617). "I do not want it to be thought for a moment that I am saying that any minor or trivial error, or failure to give reasons in relation to every particular point that has been raised at the hearing, would be sufficient to invoke the jurisdiction of this Court. Far from it, there must be something wrong and inadequate in the reasons that are given in order to enable the jurisdiction of this court to be invoked." 17. These observations provide the standard which the statement of reasons should comply. It has been seen that the impugned order purports only to state the ultimate conclusion. It does not give any reasons because of which the conclusion was reached. It does not at all deal with the explanation except in a laconic way by saying that the explanation was unsatisfactory. That is not an intelligible way of dealing with the points raised in the explanation. It leaves the matter in obscurity and confusion. I am unable to say that this expression constitutes proper or adequate reasons for the finding. The petitioner does not rely upon an idle technicality. The first charge stated that under the rules printed at pages 325 and 326 of the Municipal Manual, Vol. It leaves the matter in obscurity and confusion. I am unable to say that this expression constitutes proper or adequate reasons for the finding. The petitioner does not rely upon an idle technicality. The first charge stated that under the rules printed at pages 325 and 326 of the Municipal Manual, Vol. 1 the Municipal Board, Jhansi is required to maintain the prescribed minimum working balance of Rs. 1,03,2001/- and a reserve balance of Rs. 21,0001/-. On October 31, 1965 the Board had cash balance of Rs. 38,267.77 only and the total balance including permanent advance invested amounts and meter securities was Rs. 69,242.77 only. It was far below the amount of Rs. 1,24,2001/-, comprising the minimum working balance and the reserve balance. In its explanation the Board stated that the rule mentioned in the charge requires the mentioned minimum as the closing balance on 31st March. The Government was not justified in checking up the balance on a date in the middle of the year i.e. 31st October, 1965. It stated that on 31st March, 1966 the closing balance was Rs. 2,24,719.82 paise. The board, therefore, did not commit any default in respect of this matter. It also stated that ever since 1953-54 the Board had been providing for the minimum closing balance at Rs. 21,0001- and minimum reserve balance of Rs. 8,0001- which was in force till 1952 when it was increased by the Commissioner to the figures mentioned in the charge-sheet. In spite of the Board had been providing for the closing balance on the old scales and the Commissioner has been sanctioning it every year and the Government never objected it and hence the Board was led to conclude that the Board's request in that respect had been accepted. Both these points cannot be said to have been dealt with at all, by stating merely that they are unsatisfactory. The requirement of the section that reasons must be stated would be satisfied only if it is mentioned why and how the explanation is incorrect. The contention on behalf of the State Government that the impugned order specifically states the relevant reasons cannot be accepted. It is unnecessary to multiply instances. The impugned order was without jurisdiction and void. 18. In the result, the petition succeeds and is allowed. The order of the State Government passed on October 11, 1966, is quashed. The contention on behalf of the State Government that the impugned order specifically states the relevant reasons cannot be accepted. It is unnecessary to multiply instances. The impugned order was without jurisdiction and void. 18. In the result, the petition succeeds and is allowed. The order of the State Government passed on October 11, 1966, is quashed. The petitioner will be entitled to his costs from the first respondent. Petition allowed.