RADHESHYAM v. MUNICIPAL COUNCIL — 1988 DIGILAW 213 (MP)

JUDGMENT : ( 1. ) THIS is plaintiffs second appeal under Section 100, Civil procedure Code against the judgment and decree, dated 12-11-1976, passed by Shri M. L. Sharma, Addl. District Judge, Mandsaur in Civil Appeal No. 96-A/76 reversing the judgment and decree, dated 16-7-1974, passed by Civil Judge, Class I, Mandsaur in civil Suit No. 43-A of J973, dismissing the appellants suit for declaration. ( 2. ) THE appellant was employed as a Nakedar in the respondent Municipal council and was dismissed from employment by an order dated 5-3-1969 (Ex. P-3) on proved misconduct. The appellant preferred an appeal against the aforesaid order before the Collector, Mandsaur, challenging the legality and validity of the same. It may be mentioned that the order, dated 5-3-1969 was passed by the Administrator of the Municipal Council, as the Municipal Council had been superseded/dissolved at that time. It however appears that fresh elections were held and elected committee was installed in the office during the pendency of the appeal before the Collector. It also appears that the appellant approached the elected councillors for reconsideration of his case and was assured re-consideration, if he withdrew his pending appeal. The appellant, therefore, filed an application, dated 4-10-1969 (Ex. P-4)intimating the appellate authority that the Standing Committee of the respondent municipal Council has assured re-consideration of the matter on the condition that he withdraws the appeal. He felt satisfied about the bona fide of the offer and prayed for withdrawal of appeal. By order, dated 9-10-1969 the appeal was dismissed as withdrawn (Ex. P-5 ). It further appears that the matter was re-considered by the Standing committee in its meeting, dated 13-5-1970 wherein it was decided to revoke the order dated 5-3-1969 and re-instate the appellant in employment (Ex. P-2 ). In compliance with the aforesaid resolution, the appellant was appointed on 22-5-1970 (Ex. P-6 ). It appears that the file containing these details went to the Collector in its normal routine where these proceedings were noticed The Collector, by his letter, dated 18-1-1971 (Ex. P-11) wrote to the Municipal Council that their resolution re-considering the matter was illegal as the order, dated 5-3-1969 had become final. The Collector, therefore, directed the respondent Municipal Council to terminate the appellants services immediately. P-11) wrote to the Municipal Council that their resolution re-considering the matter was illegal as the order, dated 5-3-1969 had become final. The Collector, therefore, directed the respondent Municipal Council to terminate the appellants services immediately. Pursuance to this order of the Collector, the matter was re-considered by the Standing Committee on 22-2-1971 which decided to accept the order of the Collector (Ex. P-9 ). Pursuance to the resolution of the Standing committee, the order dated 3-3-1971 was issued by the Chief Municipal Officer terminating the appellants employment (Ex. P-10 ). It is thereafter that the appellant served the statutory notice and filed the suit challenging the legality of his termination. The main grievance of the appellant was that order dated 3-3-1971 passed by the standing Committee or order dated 18-1-1971 passed by the Collector were illegal and void as he was not heard before passing the same. The defence of the respondent municipal Council was that the effect of order, dated 3-3-1971 was only to enforce order, dated 5-3-1969 (Ex. P-3) which had become final. It was also submitted that the standing Committee had no jurisdiction to reconsider the matter and recall the order, dated 5-3-1969. Learned trial Judge, on consideration of material placed by the parties on record held that the resolution of the Standing Committee, dated 13-5-1970 (Ex. P-2) recalling the termination of service of the appellant, dated 5-3-1969 (Ex. P-3) was legal and valid. It therefore, granted the declaration prayed for. In the appeal filed by the respondent Municipal Council, it was held that the Administrator appointed under section 328 of the M. P. Municipalities Act (hereinafter referred to as the Act) enjoys powers and status of the council itself and hence order, dated 5-3-1969 would be deemed to have been passed by the Council. According to the learned Judge, an order passed by the Council could not be reviewed or recalled by the Standing Committee. The learned Judge, also held that the order had become final and Could not be reviewed. The appeal was, therefore, allowed and suit filed by the appellant dismissed. That is how the matter is in this Court in the present second appeal. ( 3. ) THE submission of the learned counsel for the appellant is that the Collector had no authority or jurisdiction to require the respondent Municipal Council or its standing Committee to terminate the services of the appellant. That is how the matter is in this Court in the present second appeal. ( 3. ) THE submission of the learned counsel for the appellant is that the Collector had no authority or jurisdiction to require the respondent Municipal Council or its standing Committee to terminate the services of the appellant. According to him, since this order has evil consequences, the Collector was bound to give him an opportunity to present his case before taking such a decision. It is further submitted that the resolution of the Standing Committer being consequent upon this order, suffers from the same defect and is void for the same reasons. It is further submitted that the Collector was not,right in holding that the order, dated 5-3-1969 (Ex. P-3) had become final and could not be changed. The decision, according to the learned counsel, was administrative in nature and could be reviewed at any time in the interest of justice. It is also submitted that since review was done pursuance to the understanding reached during the pendency of the appeal, it must be held to be in discharge of the obligation of the Municipal Council It is also submitted that the decision of the learned lower appellate Court, that the order, dated 5-3-1969 being the order of the Council itself, could not be reviewed by the Standing Committee, is also incorrect. The learned counsel for the,respondents, however, submitted that the standing Committee had no power of review and therefore, it could not have re-considered the order, dated 5-3-1969. According to the learned counsel the letter dated 18-1-1971 (Ex. P-11) sent by the Collector is advisory in nature and therefore, it was not necessary for the Collector to give any opportunity to the appellant to present his case. Referring to Section 332 of the Act, it is submitted that the power of review contained in this provision is not available either to the Municipal Council or the standing Committee and therefore, resolution, dated 22-2-1971 (Ex. P-9) was void In view of these submissions it may be necessary to first notice the legal provisions available in the Act. ( 4. ) SECTION 94 of the Act deals with appointment of officers and servants of a municipal Council. P-9) was void In view of these submissions it may be necessary to first notice the legal provisions available in the Act. ( 4. ) SECTION 94 of the Act deals with appointment of officers and servants of a municipal Council. Sub-section (6) of this Section provides that the power of appointing Municipal officers and servants other than those specified in sub-sections (1) and (2) shall vest in the Standing Committee. In Municipal Committee, Dongargarh vs. Mainabai, 1961 MPLJ Note 113, it was clarified that power to appoint employees included the power to suspend of dismiss any employee. Standing Committee is constituted under Section 70 of the Act and exercises all the powers of the Council under the Act, the rules or bye-laws made thereunder. Rules framed under this section, however, limit the exercise 6f powers by the Standing Committee and provide that powers under Section 94 (1) and (2) of the Act would not be exercised by Standing committee. These provisions vest powers in the Municipal Council to appoint officers and employees specified therein. Under the circumstances, it is clear that the officers and employees specified in sub-sections (1) and (2) of Section 94 cannot be appointed by the Standing Committee. There is, however, no dispute that Nakedar is not the person included in these provisions and thererfore, the powers of the Standing committee to appoint the Nakedar are not effected by the. Rules framed under section 70 of the Act. As regards powers to terminate the services of employees, the same are governed by M. P. Municipal Employees (Recruitment and Conditions of service) Rules, 1968 framed under Section 95 of the Act. These rules provide for penalties to be imposed on ,a Municipal employe for proved misconduct Rule 56 of these Rules provides for an appeal to the Collector against an order imposing penalty. A second appeal to the Commissioner is also provided. It is therefore, clear that the appeal filed by the appellant before the Collector was a statutory appeal. Sections 322 and 323 of the Act deal with the powers of the State Government and the Collector to supervise the working of the Municipal Council and even stay the execution of order or resolution passed by the council or its committees. It is therefore, clear that the appeal filed by the appellant before the Collector was a statutory appeal. Sections 322 and 323 of the Act deal with the powers of the State Government and the Collector to supervise the working of the Municipal Council and even stay the execution of order or resolution passed by the council or its committees. In Municipal Council, Seoni vs. State, 1961 MPLJ 667 - AIR 1962 MP40, it was clarified by this Court that making of an order under Section 323 of the Act is an administrative or executive act but the same has been made dependent on certain conditions and exigencies. If the order of the Collector under this section be based on extraneous considerations or on considerations not included in this provision, the same would suffer from defect of want of jurisdiction. In Romanial vs. Municipal Committee, Piparia, 1963 MPLJ69, it was further clarified that the powers under this provision can be exercised only on the ground that the resolution passed by a municipality is likely to cause injury or annoyance to the public or is likely to lead to breach of peace or is not in conformity with law and is detrimental to the interests of the council. An order under this provision is, however not required to be based on hearing as would be clear from the decision in Municipal Committee, Seonis case (supra ). Section 332 of the Act provides for powers of review not only by the State Government, Commissioner and Collector but also by the prescribed authority or any other officer authorised under this Act the words "prescribed authority" have been defined under Section 3 (26) to mean the authority which the State Government may by notification generally or with respect to any provision of this Act, declare to be a prescribed authority. It is common ground that a Standing Committee has not been notified as the prescribed authority under this provision. The question requiring consideration in this appeal is whether this review power is also available to a Standing Committee constituted under Section 70 of this act. It has been submitted that the use of the word "officer" under this provision may entitle the Chief Municipal Officer to exercise powers of review but the same would not entitle the Municipal Council or the Standing Committee to exercise this power. It has been submitted that the use of the word "officer" under this provision may entitle the Chief Municipal Officer to exercise powers of review but the same would not entitle the Municipal Council or the Standing Committee to exercise this power. The submission of the learned counsel Tor the appellant, however, is that the order of the Collector requiring the Municipal Council and Standing Committee to terminate employment of the appellant was illegal and without jurisdiction and should not have been acted upon. In any case, it is submitted that if the Standing Committee wanted to deprive the appellant of benefit already granted, he should have been given a notice and opportunity to make his submissions. Since this has not been done, it is submitted that not only the order, dated 18-1-1971, Ex. P-11 but also the termination order, dated 3-3-1971 are illegal and void ab initio. As against this the learned counsel for the respondents vehemently submitted that the earlier order of termination, dated 5-3-1969 having become final, could not have been reviewed by the Standing Committee and hence there is no illegality committed by any one in directing the committee to act according to law. ( 5. ) IN the context of these submissions, the first question requiring consideration of this Court is whether the Standing Committee had power to review the decision of the Administrator, dated 5-3-1969 ? Logic of the learned appellate Court appears to be that an Administrator appointed under Section 328 of the Act functions as a Municipal council itself and therefore, his order could not have been reviewed by the Standing committee. This Court is unable to find any substance in this reasoning or the approach; Section 328 (6) (b) of the Act clarifies that whenever a Municipal Council dissolved or is superseded, the powers of the council may be exercised and performed by a person appointed by the State Government. This provision does not deal with the powers of the Standing Committee, particularly those powers which vest in the standing Committee because of the specific provision in this behalf in the Act itself. This provision does not deal with the powers of the Standing Committee, particularly those powers which vest in the standing Committee because of the specific provision in this behalf in the Act itself. Under the circumstances, if powers and duties of the council mentioned in this provision are not treated to be the powers and duties of the council including its committees and bodies, the administrator appointed under this provision will not be entitled to exercise powers and duties of other bodies i. e. Standing Committee. This is bound to create serious complications in running the Municipal Administration. If, however, the powers included in this provision are treated as including powers of other bodies also, the Administrator while exercising those powers must be deemed to be functioning as a substitute of those bodies. In such a situation, the powers of termination exercised by the Administrator would be referable to Section 94 (6) of the act and the subsequent resolution of the Standing Committee dated 13-5-1970, Ex. P-2, would be by the same authority and not the authority sub ordinate to the administrator. This Court is, therefore, not able to accept the logic of the learned lower appellate Court and sustain the impugned order on the basis. ( 6. ) THE proposition that a judicial or quasi judicial authority has no power of review unless specifically conferred by the statute creating the authority is well-established and beyond doubt. Supreme Courts decisions in P. N. Thakersi vs. Pradyumansinghji, AIR 1970 SC 1273 , Harbhajan Singh vs. Karam Singh, AIR 1966 sc 641 , Chunibhai vs. Narayanrao, AIR 1965 SC 1457 and the Division Bench judgment of this Court in J. C. Rishi vs. Union of India, 1967 MPLJ 532 = AIR 1968 mp 42 put this legal proposition beyond the pale of any controversy. This rule has, however, two broad exceptions viz. (1) when the order is a nullity, and (2) when there are clerical or similar mistakes, the correction of which does not involve any review on merits, Ambala Bus Syndicate vs. State Government, AIR 1963pun]. 92. The question whether this rule also applies to administrative authorities while acting in administrative capacity is however not free from doubt, not so much because of any ideological confusion but because of the difficulty in distinguishing between administrative and quasi-judicial functions. 92. The question whether this rule also applies to administrative authorities while acting in administrative capacity is however not free from doubt, not so much because of any ideological confusion but because of the difficulty in distinguishing between administrative and quasi-judicial functions. In A. K. Kraipak vs. Union of India, AIR 1970 SC 150 , the Supreme Court held that the dividing line between an administrative power and quasi-judicial power is quite thin and" is being gradually obliterated. The thinness of the line indicated by the Supreme Court aforesaid tends to blur the distinction between quasi-judicial and administrative action. This, however does not mean that there is no distinction between the two. The Courts have recognized that where the powers exercised are administrative in nature, the principles applicable to the exercise of judicial or quasi-judicial power cannot be applied. In Rewa Coal Fields vs. C. G. I. T, 1969 MPLJ 146 - AIR 1969 MP 174 , a Division Bench of this court held as under :- "in case of a judicial power, once that power is exercised and a dispute is decided, the decision operates as res judicata and cannot be reviewed at a subsequent stage unless a power of review is specifically conferred by statute. But in case of an administrative power, the doctrine of res judicata has no application and an order made in the exercise of that power can be reviewed by the same authority. " (para 4) This view finds support in Supreme Court decision in Western India Match Co. Ltd. vs. Western India Company Workers Union, AIR 1970 SC 1205 at page 1209. The question for consideration of the Supreme Court in this case was whether the government having refused to refer an Industrial Dispute for adjudication to a tribunal under Section 10 (1) of the Industrial Disputes Act, could re-consider its own decision subsequently* and make the reference. The Court held that the power conferred on the Government is administrative and the action of the Government in making the Government is an administrative act. The Court held that the power conferred on the Government is administrative and the action of the Government in making the Government is an administrative act. The Court, therefore, held as under :- "in the light of the nature of the function of the Government and the object for which the power is conferred on it, it would be difficult to hold that once the Government has refused to refer, it cannot change its mind on a re-consideration of the matter either because new facts have come to light or because it had misunderstood the existing facts or for any other relevant consideration and decide to make the reference. " Relying on the aforesaid observations, the Supreme Court in A. S. Production agencies vs. Industrial Tribunal, Haryana, AIR 1979 SC 170 , held that "this is an administrative function of the Government as the expression is understood in contradistinction to judicial or quasi-judicial function. Merely because the government rejects a request for a reference or declines to make a reference, it cannot be said that the industrial dispute had ceased to exist nor could it be said to be a review of any judicial or quasi-judicial order or decision". The settled legal position, therefore, is that judicial or quasi-judicial orders cannot be reviewed subsequently unless the power of review is specifically conferred on the authority by statute creating it. But an administrative authority exercising administrative powers does not suffer from this legal limitation and can review its own orders. On the authority of A S. Production Agencies case (supra) it may appear that it is not even necessary that there should be some fresh material available subsequent to the first decision. Under the circumstances, it is clear that if the order, dated 5-3-1969 could be treated to be administrative order of the Standing Committee, its re-consideration on 22-2-1971 (Ex. P-9) would not be invalid. ( 7. ) EARLIER in para 5 of this judgment is has Been held that the order dated 5-3-1969 though passed by the Administrator, would be the order referable to Section 94 (6) of the Act and hence an order of the Standing Committee. P-9) would not be invalid. ( 7. ) EARLIER in para 5 of this judgment is has Been held that the order dated 5-3-1969 though passed by the Administrator, would be the order referable to Section 94 (6) of the Act and hence an order of the Standing Committee. In case it was to be held otherwise, the order would be void for want of authority as the Administrator would as much be bound by Section 94 (6), as any one else and simply because he is vested with the powers of the Higher Authority, it will not cure the defect in his jurisdiction. Under the circumstances, the order dated 5-3-1969 can legitimately be assumed to be an order of the Standing Committee. The question, however, is whether it was administrative or quasi-judicial ? In A. K. Kraipaks. case (supra) it was held that for determining whether a power is an administrative power or a quasi-judicial power, one has to look to the nature of the power conferred, the person or persons on whom it is conferred, the framework of law conferring that power, the consequence ensuing from the exercise of that power and the manner in which that power is to be exercised. These guidelines are, however, not easy to apply because their application may yield different answers depending on the facts and circumstances of the case. That is why the Supreme Court observed that the dividing line was quite thin and was being gradually obliterated. The power of dismissal is, however, accepted as the power of internal management and discipline of the undertaking. Though it affects the employee, it has no other consequences. That this power has to be exercised in accordance with the principles of natural justice is now beyond doubt. But for this very reason alone, it does not cease to be administrative power. In State of Orissa vs. Dr. Binapani Dei, AIR 1967 SC 1269 , it was held that even administrative orders having evil consequences have to be passed in accordance with the principles of natural justice. The fact, however, remains that the relationship between an employee and employer is treated to be a contract and under the old English Common Law the courts were hot entitled to enforce this contract. The fact, however, remains that the relationship between an employee and employer is treated to be a contract and under the old English Common Law the courts were hot entitled to enforce this contract. Though with the passage of time unrestricted powers of an employer to terminate employment of his servant have been curtailed, the basic concept of relationship has not changed. In such a situation it is difficult to hold that power to terminate employment is either judicial or quasi-judicial. No employer has a duty to act judicially while exercising this power. In Radhey Shyam vs. State of M. P. , AIR 1959 SC 107 , the Supreme Court considered this question in relation to supersession of a Municipal Council and held that duty to determine judicially is the distinguishing feature. This very principle was applied by the Supreme court in Jaswant Sugar Mills vs. Laxmichand, AIR 1963 SC 677 , a case involving discharge of workmen with the approval of the Conciliation Officer. The Court applying this test held that the primary function administrative and not judicial. It is, however, not to say that administrative orders are not supposed to be just and proper like a judicial order. Legal authority to determine questions effecting right of citizens does not by itself make the determination judicial. Under the circumstances, though an order of dismissal is required to be passed in accordance with the principles of natural justice and has to be just and proper, it does not cease to be a matter of internal administration and discipline and therefore, administrative in nature. In Smt. S. R. Venkataraman vs. Union of India, AIR 1979 SC 49 , the order of compulsory retirement was treated to be administrative. In Union of India vs. J. P. Mitter, AIR 1971 SC 1093 , the determination of the age by the President was also held to be administrative. It would, therefore, appear that the matters relating to internal management are administrative in nature and do not cease to be so only because they have to be exercised in accordance with the principles of natural justice or have to be just and fair. This Court is, therefore, of the opinion that the order, dated 5-3-1969 was passed by the Administrator in exercise of its administrative powers and therefore, the restriction regarding review thereof does not apply. This Court is, therefore, of the opinion that the order, dated 5-3-1969 was passed by the Administrator in exercise of its administrative powers and therefore, the restriction regarding review thereof does not apply. In this view of the matter, it cannot be accepted that the order dated 5-3-1969 had either become final or resolution dated 22-2-1971 was without authority of law. ( 8. ) THE same conclusion could be reached by reading Section 332 of the Act with the aid of Section 21 of the M. P. General Clauses Act. In Balabhadra Prasad vs. State ofm. P. , 1968 MPLJ 651 , a Division Bench of this Court read this provision with the help of Section 21 of the General Clauses Act and held that an executive or administrative order can also be amended or varied in exercise of this power. It is true that Section 332 of the Act does not mention either the Municipal Council or its standing Committee, but Section 21 of the M. P. General Clauses Act would confer such a power on these bodies. Section 332 of the Act is not the substitute of Section 21 -of the General Clauses Act and hence this provision would be available to give such power to the Municipal Council and the Standing Committee. Powers available under this provision are wider than powers under Section 332 of the Act and can be resorted to by the Council or Standing Committee. In Rambali vs. State of West Bengal AIR 1975 SC 623 , it was held that powers under Section 14 of the Maintenance of Internal security Act were wider than powers under Section 21 of the General Clauses Act and can be resorted to. The ratio and logic of this decision should help the Standing committee, in the present case to utilise powers under Section 21 of the General clauses Act and amend or vary the order dated 5-3-1969. This Court has, therefore, no hesitation in holding that Section 94 (6) of the Act read with Section 21 of the M. P. General Clauses Act gives the Standing Committee the necessary authority to amend, vary or rescind its earlier order. ( 9. ) IN spite of it, it may be examined if powers of review under Section 332 are not available, to the Municipal Council and its committees like the Standing committee ? ( 9. ) IN spite of it, it may be examined if powers of review under Section 332 are not available, to the Municipal Council and its committees like the Standing committee ? That such a power is given by this provision to prescribed authority and officers of the Council is not in dispute. It therefore, appears that the President, Vice-President, Chief Executive Officer and other officers may review their orders if necessary, but the council itself could not do so. These officers work either for or under the council and hence it does not appeal to reason that the Council would not be able to do what its officer could admittedly do. This could not have been intended by the legislature. Municipal Council being the statutory authority charged with the responsibility of running the local government could not have been intended to be deprived of such an important power. That such a power is necessary not only for doing justice but also for running the administration efficiently cannot be seriously doubted. Since Standing Committee exercises those powers of the Council which are required for day-to-day running of the local administration, it could not have been denied this power. Such an interpreation would also lead to strange results. The order dated 5-3-1969 though passed under Section 96 (6) of the Act, could have been reviewed by the Administrator as he was an officer within the meaning of the term under Section 332 of the Act, but the Standing Committee whose powers the administrator exercised could not do so. It would therefore, appear that such an interpretation would enlarge the powers of the Administration during supersession dissolution of the Council, which is not intended by the Act. And yet, if the words prescribed authority are given the same meaning as assigned to them by Section 3 (26)of the Act, these results would follow. Since this would neither effectuate the object and purpose of the provision nor would give full effect to legislative intent, it is the duty of the Court to interpret it in a manner that meets the requirements of common sense and justice and gives full effect to legislative intent. The words "prescribed authority or any other officer under this Act" are wide enough to include "authority prescribed under the Act" and if read by themselves would permit exercise of these powers, by every authority under the Act. The words "prescribed authority or any other officer under this Act" are wide enough to include "authority prescribed under the Act" and if read by themselves would permit exercise of these powers, by every authority under the Act. But if the words prescribed authority are given the restricted meaning as under Section 3 (26) of the Act, the ambit and scope of these words would be curtailed and the Council and its committees would not be able to exercise this power. It is therefore, clear that giving restricted meaning to these words as appearing in Section 3 (26) of the Act would not be in the interest of justice and may defeat the object and purpose of the provision. It is well settled that where the context makes the definition given in the interpretation clause inapplicable, a defined word when used in the body of the statute may have to be given a meaning different from that contained in the interpretation clause. That is the reason why all definitions are enacted subject to the qualification - unless the context otherwise requires. In vanguard Fire and General Insurance Co. Ltd vs. Fraser and Ross, AIR 1960 SC 971 at $75, applying this rule the Supreme Court interpreted the word insurer appearing in section 33 of the Insurance Act, 1938 differently and gave it a meaning wider than given in the interpretation clause. G. P. Singh in his principles of Statutory interpretation, (3ed Ed.) at pp. 46-50 has cited cases where applying this principle, words in the statute have been assigned a meaning different from the meaning given by the interpretation clause. This is therefore, a settled principle of interpretation and there exists no justifiable reason why it should not be applied in the instant case. This court would therefore, not like to limit the meaning and scope of Section 332 of the act by reading it with the aid of Section 3 (26) of the Act. The section, by itself, in the opinion of this Court would be able to provide the necessary authority and jurisdiction to the municipal council and the standing committee to review its own orders. ( 10. ) THERE is yet another question why this court would like to uphold the validity of the impugned resolution. The section, by itself, in the opinion of this Court would be able to provide the necessary authority and jurisdiction to the municipal council and the standing committee to review its own orders. ( 10. ) THERE is yet another question why this court would like to uphold the validity of the impugned resolution. It is admitted that the order of the Administrator, dated 5-3-1969 was under challenge before the Collector in appeal under rule 56 mentioned above. A notice of the appeal had also been given to the Municipal council. If parties to the appeal reached an understanding and agreed to decide their dispute amicably between themselves, it will be a procedure in accordance with law. It is common ground that the appeal was withdrawn on the assurance of re-consideration of the matter by the Standing Committee. If in such a situation the Standing committee re-considered the order and passed the resolution, dated 13-5-1970, it would not be an exercise of reviewing the order but it would be an attempt to give effect to the understanding arrived at during the pendency of the appeal. Having promted the appellant to get his appeal dismissed, the respondent Municipal Council would be estopped from challenging the legality of the aforesaid exercise. The question whether such an understanding could be given or could not be given was a matter to be decided by the respondent Municipal Council before the appellant had withdrawn his appeal. Similarly, if the Collector while permitting withdrawal of the appeal, had any objection to this procedure he should not have accepted the application and dismissed the appeal on that basis. Once the appellant had acted on the basis of the aforesaid undertaking and had withdrawn his appeal, the respondent would be estopped from doing anything contrary to the aforesaid undertaking, particularly when they had carried out their obligation on the aforesaid basis. In this view of the matter, this Court would think that the legality of the resolution dated 13-5-1970 (Ex. P-2) was not open to challenge at the instance of the respondent Municipal council. Under the circumstances,, if the submission that the Standing Committee has no jurisdiction to review its earlier decision is to be accepted, it would have to be held that resolution dated 22-2-1971 (Ex. P-9) is without jurisdiction. Since the impugned order of termination (Ex. P-2) was not open to challenge at the instance of the respondent Municipal council. Under the circumstances,, if the submission that the Standing Committee has no jurisdiction to review its earlier decision is to be accepted, it would have to be held that resolution dated 22-2-1971 (Ex. P-9) is without jurisdiction. Since the impugned order of termination (Ex. P. 10) is based on the aforesaid resolution, the said order will also be held without jurisdiction. ( 11. ) THE submission of the learned counsel for the respondent, however, is that in a case where the Standing Committee had no jurisdiction to give an undertaking the only remedy of the appellant was to make efforts to revive his appeal before the collector and since he has not done so, he cannot succeed in this suit. This Court is unable to accept the submission. If the respondent Municipal Council is estopped from going back on the understanding, the remedy suggested by the learned counsel would not be a justification for their illegal order. Then it is also not possible to believe that the Municipal Council, who were party to the appeal had no authority to enter into such an understanding and get the appeal disposed of on that basis. Once the order, dated 5-3-1969 (Ex. P-3) was under challenge, it will be illogical to treat it as final. It became final if at all, subject to the undertaking given by the respondent council and not without it. Under the cir6umstances, even assuming that the appellant could have moved the Collector and get his appeal revived that cannot be the answer to the illegality committed by the respondent. ( 12. ) THIS Court is also not able to appreciate the advice of the Collector contained in his letter, Ex. P-12. There is no specific provision in the Act authorising the Collector to give such a direction to the respondent Municipal Council. Powers of inspection and supervision mentioned in Section 332 and the power to suspend execution of the order etc. provided under Section 323 of the Act have been noticed earlier. The facts of the case do not justify exercise of powers under Section 323 of the act. The basis of the powers of the Collector should therefore, be Section 323 of the act, as according to him, the resolution of the Standing Committee re-instating the appellant would be contrary to law. The facts of the case do not justify exercise of powers under Section 323 of the act. The basis of the powers of the Collector should therefore, be Section 323 of the act, as according to him, the resolution of the Standing Committee re-instating the appellant would be contrary to law. Sub-section (2) of this section makes the order of the Collector subject to the order of the State Government. Nothing whatsoever seems to have been done to secure compliance of this provision. It is also not the case of the respondent that the order of the Collector was an order under Section 323 of the Act. Under the circumstances, the Collector would not be entitled to pass the order, as he has done in the instant case. The Collector should have also noticed that his order was likely to cause serious prejudice to the appellant and hence it was his obligation to provide the appellant a reasonable opportunity of defending himself. Since this had not been done, the order was also in contravention of the principle of natural justice, as per decision in State of Orissa vs. Binapani Dei (supra ). The respondent Municipal council seems to have obeyed this order only because it did not like to incur the official wrath of the Collector. This, however, is not sufficient to clothe its resolution with any legality. The said resolution would suffer from the same defect of breach of principle of natural justice as the order of Collector. This court would, therefore, not find any lawful authority to support either the order of the Collector (Ex. P-11) or subsequent resolution (Ex. P-9) of the Standing Committee or subsequent termination order (Ex. P-10 ). A valuable right had vested in the appellant by earlier resolution of the Standing Committee (Ex. P.-2) and appointment order (Ex. P-6) which could not be taken away so arbitrarily as not to even inform him of its reasons and give reasonable opportunity to plead otherwise. ( 13. ) IN view of the discussion aforesaid, the appeal succeeds and is allowed. The impugned judgment and decree are set aside and the judgment and decree passed by civil Judge, Class I, Mandsaur on 16-7-1974 in Civil Suit No. 43-A of 1973, is restored. In view of peculiar facts and circumstances of the case, the parties will bear their own costs of this appeal. Appeal allowed.