JUDGMENT Hon’ble Mrs. Jayashree Tiwari, J.—The present petition has been filed by the petitioner seeking a direction in the nature of certiorari for quashing the order dated 28 October, 2003 passed by respondent No. 2. 2. Brief facts as mentioned in the petition are : The petitioner No. 2 Suraiya Begum , Chairman District Panchayat Kant of Shajahanpur from 1st December, 1995 to 30th November, 2000 and petitioner No. 1 Mohd. Idris is the Chairman Nagar Panchayat Kant from 1st , December, 2000 till date the petition has been filed. 3. It is submitted that a show cause notice under Section 48 of U.P. Municipalities Act was given by the State Government to the petitioner No. 1 containing three charges namely, that he got increased his financial power from Rs. 10000/- to 75000/-, secondly, excessive telephone expenditure on office of Rs. 11719/- during the tenure of Smt. Suraiya Begum and telephone charges of Rs. 3194/- in the tenure of petitioner No. 1 i.e. Mohd Idris, third charge the contract of the Tah Bazari was allowed on 5% increase and the public auction was stayed by the Hon. High Court. 4. Petitioner No. 1 upon the said notice replied that increase financial power was withdrawn in the subsequent meeting of board and he did not make expenditure of Rs. 75000/-. It is also replied that being public servant the telephone expenditure of Rs. 11719/- during the whole expend of his office i.e. five years is justified and further expenditure of Rs. 3194/- by the petitioner No. 1 is not excessive. In respect of third charge that auction for the year of 2001-02 was advertised on 14.3.2001 for 27.3.2001. As a result of the interim order Division Bench of Hon. High Court dated 21.3.2001 the said auction is stayed. A prompt counter-affidavit alleging that stay order had been obtained on forged document was filed with the prayer to vacate the stay. 5. It is alleged that District Magistrate without application of mind submitted a report regarding the charges No. 2 and 3 that a loss of Rs. 11719/- and of Rs. 3194/- has been caused by petitioner Nos. 1 and 2 respectively on office telephone and same is liable to be recovered from both the petitioners. 5. It is alleged that District Magistrate without application of mind submitted a report regarding the charges No. 2 and 3 that a loss of Rs. 11719/- and of Rs. 3194/- has been caused by petitioner Nos. 1 and 2 respectively on office telephone and same is liable to be recovered from both the petitioners. It is further contended in respect of third charge that the District Magistrate without application of mind submitted a report that contract of the Tah Bazari 2001-02 should have been given on increase of 15% on premium amount whereas it is given on 5% and thus a loss of 10% amount amounting to Rs. 48250/- was caused to the Board on 28th October, 2003. The State Government relying a report of District Magistrate issued an order for recovery as surcharge under Section 81 of the U.P. Municipalities Act, 1916. The amount of recovery of Rs. 59969/- from petitioner Nos. 1 and 2, it is alleged that aforesaid recovery is wholly illegal as it is in violation of Rule 3 and 4 of U.P. Municipal Board Surcharge Rule and further there is no report of examiner of local fund account who alone is the Competent Authority to consider the loss, waste or misuse of any money to the Board. It is only on his report that an order of recovery under Section 81 can be issued. It is further contended that there is no direct misconduct of the petitioners in the matter. It is further pleaded that no explanation whatsoever was called from the petitioners and no opportunity of hearing on the report of examination has been given to the petitioner which is in violation of natural justice. 6. Counter-affidavit has been filed by one Vijai Pal Singha on behalf of respondent No. 1. In the counter-affidavit while denying the contention raised in the petition it is submitted that the letter was issued by the respondent No. 1 to the answering respondent in compliance of which recovery proceedings were initiated. The recovery against the petitioners have been made on the ground of mis-utilisation of telephone facility at their residence for which they were not authorised and the same was used for their personal purpose. Similarly theka was expected to be 15% higher than the preceding year but the same was allowed with higher rate of 5% ahead only. Hence the Panchayat suffered net loss of 10%. Similarly theka was expected to be 15% higher than the preceding year but the same was allowed with higher rate of 5% ahead only. Hence the Panchayat suffered net loss of 10%. A show cause notice was issued to the petitioners by respondent No. 1 which is Annexure 1 to the writ petition and after considering the reply of the petitioners respondent No. 1 directed for recovery of the aforesaid amount to respondent No. 2. That petitioners were called to submit their explanation and petitioner No. 1 submitted his explanation on his behalf as well as on behalf of petitioner No. 2. Report of respondent No. 2 dated 20.11.2002 submitted to the State Government was passed on records available in the Nagar Panchayat and was well in accordance with the facts and evidence. That the aforesaid impugned order is in violation of Rules 3 and 4 of the Surcharge Rules is incorrect. That the petitioners failed to make any ground for interference. 7. Against the aforesaid counter-affidavit a rejoinder affidavit has been filed on behalf of the petitioners in which they have repudiated the contentions raised in the counter-affidavit and have stated that letter dated 28.10.2003 issued by respondent No. 1 is wholly illegal as it is in contravention of the provisions of Section 81 made thereunder known as “Surcharge Rules 1948”. It is further stated that ground for alleged recovery are untenable and the telephone was used for official purpose. That the financial loss in context of tehbazari contract is misconceived. That no such agreement has been executed on 11.4.2000 and an agreement in this respect was made on 14.3.2001 fixing the date of auction as 27.3.2001 against which the contractor obtained stay order from the Hon’ble High Court in writ petition No. 10355 of 2001, Maharajuddin v. State of U.P., in which immediately stay vacation application was filed and it was stated that no agreement was executed between the contractor and the Municipality etc. 8. We have heard learned counsel for the petitioners and the respondents. It is submitted by the petitioners that according to Section 81 of the Municipality Act which lays as follows: “(1) The President, the .. 8. We have heard learned counsel for the petitioners and the respondents. It is submitted by the petitioners that according to Section 81 of the Municipality Act which lays as follows: “(1) The President, the .. and every member, officer and servant of the Municipality shall be liable to surcharge for the loss, waste and misapplication of any money or property of the Municipality, its such loss, waste or misapplication is a direct consequence of his neglect or misconduct while acting as such President , ..member, officer or servant: Provided that such liability shall cease to exist after the expiry of ten years from the occurrence of such loss, waste or misapplication or after the expiry of five years from the date on which such President,.. member, officer or servant ceases to hold his office, whichever is later. (2)the amount of surcharge so imposed shall be recoverable as if it were an arrear of land revenue and the Collector on being satisfied that the sum is due shall proceed to recover it as such an arrear. (3) The procedure of surcharge and the manner of the recovery of the amount involved in loss, waste or misapplication shall be such as may be prescribed. (4) Where no surcharge proceedings are taken the Municipality, with the previous sanction of, or on being directed by, the Prescribed Authority, may institute a suit for compensation against such person.” 9. Thus according to the aforesaid Section it is provided that for any financial loss as a result of negligence of the President, proceeding under Section 81 can be initiated. In this respect learned counsel for the petitioners referred to the provisions of United Provinces Municipal Board Surcharge Rules, 1948 in which procedure for initiation of proceedings is duly prescribed. 10. Thus according to the aforesaid Section it is provided that for any financial loss as a result of negligence of the President, proceeding under Section 81 can be initiated. In this respect learned counsel for the petitioners referred to the provisions of United Provinces Municipal Board Surcharge Rules, 1948 in which procedure for initiation of proceedings is duly prescribed. 10. Under Section 3 of the aforesaid Rules it is provided that In any case where the Examiner considers that there has been a loss, waste or misuse or any money or other property belonging to the Board [as a direct consequence of the misconduct or negligence of the President or a member or a servant] he may call upon the President, member or servant, to explain in writing why such President, member or servant should not be surcharged with the amount misused or which represents the loss or waste caused to be Board or to its property and such explanation shall be furnished within a period not exceeding two months from the date such requisition is communicated to the person concerned : Provided that an explanation from the President shall be called through the District Magistrate and from a member or a servant through the person who for the time being is the President: Provided also that no explanation shall be called from any President or member who is recorded in the minutes of the Board as having been absent from the meeting at which the expenditure objected to, was sanctioned or who voted against such expenditure. 11. Thus in accordance with the procedure prescribed under Rules 3 there must be the examination report of the examiner who will examine the loss, waste or misuse and upon such report he may call upon explanation. It is provided that explanation from the President should be called through the District Magistrate and for any other member through the Presiding President. 12. It is provided that explanation from the President should be called through the District Magistrate and for any other member through the Presiding President. 12. In Sub Clause (2) of the aforesaid Rules it is provided that without prejudice to the generality of the conditions contained in Sub Rule (1) examiner may call for explanation in the following cases : (a) Where expenditure has been incurred in contravention of the provisions of the Act or of the rules or regulations made thereunder; (b) Where loss has been caused to the Board by acceptance of a higher tender without sufficient recorded reasons; (C) Where any sum due to the Board has been remitted in contravention of the Act or the rules or regulations made thereunder; (d) Where the loss has been caused to the Board by neglect to realise its dues; and (e) Where loss has been caused to the funds or other property of the Board on account of want of reasonable care for the custody of such money or property. 13. Thus, it is submitted that there must be the report of the examiner regarding the loss, waste or misuse or any of the property belonging to the Board, he pointed out that there is on record no material document to show that there was ever any report of the examiner in this regard. In counter-affidavit too this fact has not been specifically pleaded that there was a report of the examiner and on the basis of the aforesaid report the District Magistrate has called for the explanation. 14. Learned counsel for the petitioners further pointed out that Procedure after explanation or when no explanation is furnished which is mentioned under Section 4 of the Surcharge Rules lays down as follows: “After the expiry of the period prescribed and after considering the explanation, if any, received within time, the Examiner, in the case of loss, waste or misuse which occurred exclusively due to the negligence or misconduct of a servant and the amount of which does not exceed Rs. 2,000 and the Government to whom the Examiner shall submit the papers alongwith the report in all other cases, may surcharge the President , member or servant, as the case may be,with the whole or part of the sum for which such President, member or servant may in his or their opinion be liable: Provided firstly, that no President , member or servant of a Board would be liable to surcharge, if from the explanation of the President, member or servant concerned or otherwise, the Government or the Examiner, as the case may be, are satisfied that the loss was caused by an act of the President, member or servant in the bona fide discharge of his duties as such; Provided secondly, that in the case of loss, waste or misuse occurring as a result of resolution of the Board, the amount of surcharge will be divided equally among all the members including the President who are recorded in the minutes of the Board as having voted for or remained neutral in respect of such resolution: Provided thirdly, that no President, member or servant shall liable for any loss, waste or misuse after the expiry of six years fro the occurrence of such loss, waste or misuse or after the expiry of three years from the date of his ceasing to be President, member or servant of the Board whichever is later.” 15. Thus in accordance with this provision no finding has been recorded as to whether the alleged loss was in bona fide discharge of his duties or whether it was directly a result of negligence etc. 16. Under Section 5 of the said Act, it is provided that any servant of the Board aggrieved from an order of surcharge passed by the Examiner under Rule 4 may appeal to the Government through the District Magistrate within thirty days from the date on which such order is communicated to him and the Government may confirm, rescind or vary the order passed by the Examiner or may pass such order as they may consider fit 1 as and the order of surcharge passed by the Government under Rule 4 shall be final and no appeal shall lie against it. 17. 17. Thus it is contended by the petitioners that the order of the District Magistrate or the Government was never communicated to them and proceeding for recovery of loss as arrears of land revenue has been initiated. In this connection he referred to a case reported in 2002 (3) AWC 2530 in Civil Misc. Writ Petition No. 23928 of 1998 and 40892 of 1999 Algu v. District Magistrate, Azamgarh and others decided on 1st February, 2002 wherein it has been held by the Hon’ble Division Bench of this Court in para 4 that procedure followed in issuance of recovery certificate against the petitioners is not in accordance with the Rules. It is averred in para 4 that the explanation submitted by the current President of Nagar Panchayat may be treated to be on behalf of the petitioner. Learned counsel for the petitioner has also made a statement that the explanation of the current President may be treated to be filed by the petitioner himself. We are therefore of the opinion that the explanation given by the current President should be considered by the State Government in accordance with the Rules and thereafter a final order should be passed. In the result the writ petition succeeds and is hereby allowed. The order passed by the District Magistrate, Azamgarh is quashed. The Examiner, Local Fund shall submit the explanation of the current President of Nagar Panchayat alongwith his report and other papers to the State Government in accordance with Rule 4 and thereafter the State Government will pass a final order in the matter. The Examiner may forward necessary papers to the State Government within one month of the production of certified copy of the order and the State Government may pass final order within two months of the receipt of the paper. 18. In another case Samsussalam Quddusi v. State of U.P. and others, 2007 All CJ 341 (DB) the Division Bench of this Hon’ble High Court has held that Recovery-Petitioner being a President of certain period-If any appointment was made and the salary paid- No recovery can be made against the petitioner-Unless and until a responsibility to that effect as fixed- Even if it is presumed that there is any responsibility of petitioner-The same cannot be recovered as arrears of land revenue. In this judgement learned Division Bench relied on case in Titu Singh v. District Magistrate/Collector, Mathura and others, 2003 All CJ 1154, wherein it is held in paras 6 and 7 as under : “6. From perusal of the aforesaid provisions of the Municipalities Act and Town Area Act, it is clear that the contention of the learned counsel for the petitioner is well founded. Under Section 173-A of the Municipalities Act, it is provided that any sum due on account of tax, other than octroi or toll or any similar tax payable upon immediate demand, from a person to a board, the board may, recover as arrears of land revenue. In the instance case the amount in question became due from the petitioner as a result of default in payment of Theka money between the parties. Similarly Section 21 of the Town Areas Act provides that arrears of any tax imposed under this Act may be recovered and no other amount. Therefore, the provisions of Section 173-A of the Municipalities Act, and Section 21 of the Town Areas Act are not attracted. The amount in question is not a tax imposed under the aforesaid two Act and as such the amount due from the petitioner could not be recovered as arrears of land revenue. Besides the aforesaid decisions, there are two recent decisions also in Bisheshwar Singh @ Kalloo v. District Magistrate Collector, Shahjahanpur and others, 2001(4) AWC 2556 and Rakesh Shukla v. District Magistrate Sub-Divisional Magistrate Phoolpur, Allahabad and another, 2002(3) AWC 2397 . In these decisions also the Division Bench found that the Theka money could not be recovered as arrears of land revenue. However, the Bench did not interfere on the ground that the equity was not in favour of the petitioner.” “7 Therefore, in view of the decisions of the Division Benches, clearly holding that only taxes imposed under the Municipalities Act, and Town Areas Act can be recovered as arrears of land revenue, we are of the opinion that the amount in question cannot be recovered as arrears of land revenue and the recovery certificate as well as the citation are liable to be quashed.” 19. It is also contended on behalf of the petitioners that the amount as alleged cannot be recovered as arrears of land revenue. It is also contended on behalf of the petitioners that the amount as alleged cannot be recovered as arrears of land revenue. In this connection he referred to provisions as annunciated in Section 173A of the U.P. Municipalities Act which is laid down as below. “173-A Recovery of taxes as arrears of land revenue.—( 1) Where any sum is due on account of a tax, other than any tax payable upon immediate demand, from a person to a Municipality, the Municipality may without prejudice to any other mode of recovery apply to the Collector to recover such sum together with costs of the proceedings as if it were an arrear of a land revenue. (2) The Collector on being satisfied that the sum is due shall proceed to recover it is an arrear of land revenue.” 20. It is contended that the amount which is directed to be recovered as arrears of land revenue could not be recovered as such. 21. Accordingly, the writ petition succeeds and is allowed and the order of recovery contained in the letter of respondent No. 1 dated 28.10.2003 is hereby quashed. ————