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Suresh Seth Vs. the State and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMadhya Pradesh High Court
Decided On
Case NumberMisc. Petn. No. 330 of 1968
Judge
Reported inAIR1970MP154; 1969MPLJ327
ActsConstitution of India - Article 226; Madhya Pradesh Municipal Corporation Act, 1956 - Sections 422 and 422(1)
AppellantSuresh Seth
RespondentThe State and anr.
Appellant AdvocateA.M. Mathur, Adv.
Respondent AdvocateK.P. Munshi, Govt. Adv.
DispositionPetition allowed
Cases ReferredIn State of Orissa v. Binapani Dei
Excerpt:
- - and (3) that indore city faced an unprecedented scarcity of water during the summer of 1966 on account of failure of monsoon. the state government after carefully considering the explanation furnished by the said corporation in regard to the above charges is of the opinion that the said corporation has failed to meet the charges satisfactorily. the state government are, therefore, satisfied that the said corporation has committed illegalities, irregularities and omissions and it is not competent to perform the duties imposed on it by or under the madhya pradesh municipal corporation act, 1956 (no. ' 7. it was first contended by the learned counsel for the petitioner that the order superseding the corporation was made in bad faith. 8. the allegations relied upon to prove bad faith.....singh, j.1. the petitioner by this petition under article 226 of the constitution seeks a writ in the nature of certiorari for quashing an order of the state government passed on 23rd april, 1968 under section 422 of the madhya pradesh municipal corporation act, 1956 superseding the municipal corporation indore for a period of one year with effect from 23rd april, 1968.2. the last elections to the corporation were held in february, 1965 in which the petitioner was elected as a councillor on the congress ticket for ward no. 31. had the corporation not been superseded, the petitioner and other councillors would have ordinarily continued in office till march, 1969.3. on 20th december, 1967 the state government proposed to supersede the corporation and issued a notice to it to show cause why.....
Judgment:

Singh, J.

1. The petitioner by this petition under Article 226 of the Constitution seeks a writ in the nature of certiorari for quashing an order of the State Government passed on 23rd April, 1968 under Section 422 of the Madhya Pradesh Municipal Corporation Act, 1956 superseding the Municipal Corporation Indore for a period of one year with effect from 23rd April, 1968.

2. The last elections to the Corporation were held in February, 1965 in which the petitioner was elected as a Councillor on the Congress ticket for ward No. 31. Had the Corporation not been superseded, the petitioner and other Councillors would have ordinarily continued in office till March, 1969.

3. On 20th December, 1967 the State Government proposed to supersede the Corporation and issued a notice to it to show cause why an order retiring all the Councillors and superseding it for one year should not be passed. The action proposed was based on the following three charges:

'(1) That on 29-8-1967 the Corporation was to take up no confidence motionagainst the Mayor but the Councillors created disturbance and pandemonium. Police had to rush to the spot to restore order. The action of the Councillors was not worthy of the office held by them and was not in the interest of the Corporation;

(2) That the Corporation met frequently to pass the budget but instead of passing budget the Councillors engaged themselves in acts of indiscipline as a result of which meetings were adjourned without transacting the business included in the agenda. This shows incompetence of the Corporation to carry out its duties; and

(3) That Indore City faced an unprecedented scarcity of water during the summer of 1966 on account of failure of monsoon. The scarcity continued in the year 1967 also, but in a less aggravated form. To tide over this scarcity the Indore Municipal Corporation and the P. H. E. Department of the State Government made various efforts to exploit new sources of water. Wells and tubewells were dug and pumps and pipe lines fitted wherever possible. The amount of money spent in the process by the Corporation was disproportionate to the quantity of water procured from those sources.'

4. These charges were accompanied by a statement in which allegations pertaining to each charge were separately stated. In answer to the show cause notice, the Corporation submitted its representation which ran into 37 pases. The charges were denied and explained and request was made for supply of complaints and Inquiry report against it, and for opportunity of oral hearing.

5. After receipt of the representation made by the Corporation, the State Government passed the impugned order on 23rd April, 1968. The order recites the fact that the Government issued a show cause notice to the Corporation and reproduces the three charges that we have already set out and then runs as follows:

'The State Government after carefully considering the explanation furnished by the said Corporation in regard to the above charges is of the opinion that the said Corporation has failed to meet the charges satisfactorily. The State Government accordingly finds that the charges have been fully established.

The State Government are, therefore, satisfied that the said Corporation has committed illegalities, irregularities and omissions and it is not competent to perform the duties imposed on it by or under the Madhya Pradesh Municipal Corporation Act, 1956 (No. 23 of 1956).

The State Government, therefore, in exercise of the powers conferred by Subsection (1) of the Section 422 of the Madhya Pradesh Municipal Corporation Act, 1956 hereby-

(i) Direct that all the Councillors shall with effect from the 23rd April 1968 retire from office; and

(ii) declares that the said Corporation shall stand superseded for a period of one year, with effect from the 23rd April, 1968.'

6. Section 422 of the Madhya Pradesh Municipal Corporation Act, 1956 under which the order of supersession was passed, and other connected sections viz. Sections 422-A, 423 and 424 which deal with dissolution, and reconstitution of Corporation read as follows:

'422(1). If at any time upon representations made or otherwise it appears to the Government that the Corporation is not competent to perform, or persistently makes default in the performance of the duties imposed on it by or under this Act or any other law for the time being in force, or exceeds or abuses its powers, the Government may, after having given an opportunity to the Corporation to show cause why such an order should not be made, issue an order directing that all the Councillors shall retire from office as and from such data as may be appointed and declare the Corporation to be superseded for a period, to be specified in the order. Such order shall be published in the Gazette and the reasons for making it shall be stated therein.

(2) The Government may from time to time, after any enquiry made by an order published in the Gazette, direct that the period of supersession with all the consequences aforesaid shall be continued until such date as is specified in the order.

(3) The total period of supersession under Sub-section (1) together with its extension under Sub-section (2), if any shall in no case exceed two years,

(4) Notwithstanding anything contained in Sections 20 and 23 all Councillors shall vacate their office from the date mentioned in any order, under Sub-section (1).'

'422-A. If at any time due to a large number of vacancies haying occurred in the Corporation, either simultaneously or in quick succession, the number of Councillors becomes less than the quorum fixed under Section 34, the State Government may dissolve the Corporation.'

'423(1). When the Corporation is superseded under Section 422 or dissolved under Section 422-A, the following consequences shall ensue, namely;

(a) all the Councillors of the Corporation shall vacate their office-

(i) in the case of supersession, as from the date appointed under Sub-section (1) of Section 422; and

(ii) in the case of dissolution, --

(a) where the Corporation is dissolved under Section 422-A as from the date of the order of dissolution;

(b) where the Corporation stands dissolved under Sub-section (4) of Section 20,as from the date of dissolution under the said sub-section;

(c) all powers and duties of the Corporation, the Standing Committee and the Appeal Committee under this Act, may, until the Corporation is reconstituted, be exercised and performed by such person or a Committee of persons as the State Government may appoint in that behalf;

(d) all property vested in the Corporation shall, until the Corporation is reconstituted, vest in such person or committee in trust for the purposes of this Act.

(2) The person or the Committee of persons appointed under Clause (b) of Subsection (1) shall be called the Administrator of the City and may sue and be sued in the name of the 'Administrator of the City.'

(3) The Administrator of the City shall be subject to the control of the Government and such other person or persons as it may direct and shall be subject also to all other restrictions, limitations and conditions imposed by this Act on the Corporation, and the Standing Committee and the Appeal Committee.

(4) Any person or persons appointed under Clause (b) of Sub-section (1) may at any time be removed by the State Government who shall have power to appoint another person or persons, as the case may be in his or their place or places.

(5) The person or persons appointed under Clause (b) of Sub-section (1) may, if the State Government so directs, receive payment for his or their services from the municipal fund.'

'424 (1) The Government may, if it thinks fit, at any time, during the period of supersession declare by notification, its intention to constitute a Corporation in place of the Corporation superseded under Section 422 or dissolved under Section 422-A,

(2) The Administrator of the City shall forthwith proceed to prepare a register of electors and to hold an election of Councillors in accordance with the provisions of this Act.

(3) The Councillors so elected and selected shall enter upon office as the Corporators on such day as the Government may appoint in this behalf, and subject to the provisions of this Act, shall continue in office for a period of four years from the date on which they enter upon office.'

7. It was first contended by the learned counsel for the petitioner that the order superseding the Corporation was made in bad faith.

8. The allegations relied upon to prove bad faith are these. In July, 1967 the Congress Ministry in the State resigned and gave place to the Ministry formed by the Sanyukta Vidhayak Dal. As the Corporation had the majority of Congress Councillors, the Government which wasanti-Congress, started undue Interference In the working of the Corporation and passed certain orders mentioned in para 8 of the petition. After the Corporationsubmitted its reply to the show cause notice, efforts were made to create defection amongst the Congress Councillors, but those efforts failed. A meeting of the Corporation was to be held on 23rd April, 1968 for election of Mayor and when it became apparent that defections were not possible and a person from the Congress Party would be elected as Mayor, the Government passed the order superseding the Corporation.

9. In the return filed by the State, the allegations of bad faith and undue interference with the affairs of the Corporation were denied. It was stated that the various orders referred to in paragraph 8 of the petition were issued in the normal course in the exercise of powers of the State Government vested in it under the Corporation Act. The allegations that the Government made an effort to create defection in the Congress Party in the Municipal Corporation, and that the notification superseding the Corporation was issued to avert the election of the Mayor were also denied. It was stated that the representation of the Corporation in answer to the show cause notice was received on 18th January, 1968 in the Local Self Government Department and after the matter was examined, the case was submitted on 22nd February, 1968 for consideration of the Government. Secretary of the Local Self-Government Department submitted the file to the Minister in-charge on 27th February, 1968. The file came back to the Department and was resubrnitted for orders on 10th April, 1968 and on the same day the Minister in-charge passed his orders. Thereafter, the file was submitted to the Chief Minister for approval of the proposed action on 12th April, 1968 bv the Chief Secretary and on 18th April, 19GS the Chief Minister approved the proposed order and the file was returned to the Local Self-Government Department and a draft notification was prepared on 19th April, 1968 and was sent to the Law Department for vetoing. On 22nd April, 1968 the Law Department returned the draft and on 23rd April, 1968 the Minister in-charge ordered the issuance of the notification, which was published in the Government Gazette on the same date. By narrating these facts, it was pointed out that it was only a matter of coincidence that the notification superseding the Corporation was published on the date when the Corporation was to hold its meeting for electing the Mayor.

10. It is no doubt true that the Corporation had a majority of Congress Councillors and in July, 1967 the Congress Ministry failed and was replacedby a Ministry formed by the Sanyukta Vidhayak Dal. It is also true that the Government issued the orders mentioned by the petitioner in paragraph 8 of his petition. These facts alone however, do not establish any bad faith on the part of the Government in supreseding the Corporation. It is not suggested that the orders that are referred to in paragraph 8 of the petition were in any way irregular or illegal, or that the Government had no power to pass those orders. Those orders mainly deal with the appointment of certain officers and stopping of payment of interim relief to the employees. In our opinion, mere passing of these orders cannot be taken to show any bias or bad faith on the part of the Government.

As regards the allegation that efforts were made to create defection amongst the Congress Councillors, the petitioner has neither disclosed the names of those Councillors who may have been approch-ed to defect nor has he disclosed the names of those persons who may have approached the Councillors for that purpose. The allegations are entirely vague and lacking in particulars, and in face of the denial in the return cannot be accepted as true. The order of supersession was passed by the Minister, Local Self-Government and was approved by the Chief Minister. To succeed on the ground of bad faith, the petitioner ought to have alleged facts, which would have shown the lack of good faith on the part of these two persons. There is absolutely no allegation against them in the petition. We must therefore, hold that the allegation that efforts were made by the Government to create defection in the Congress Party in the Corporation and that the order superseding the Corporation was passed as those efforts failed has not been established.

The further allegation that the order was passed to avert the election of Mayor, does not also appear to be correct. From, the facts stated in the return, it is clear that the order superseding the Corporation was passed by the Minister concerned on 10th April, 1968 and was approved by the Chief Minister on 12th April, 1968. Some time was taken in the Secretariate in formulating the notification which was issued on 23rd April, 1968. It, therefore, appears that it was a matter of coincidence that the notification was issued on the very date when the election to the office of Mayor was to be held. It was open to the Government to issue the notification even after the election of the Mayor and the fact that the date of issuance of the notification coincided with the date of election of the Mayor does not appear to have much significance. We have no hesitation in holding that the petitioner has failed to establish bad faith on the part of theGovernment in making the impugned order.

11. It was next contended that the charges on which the Government came to the conclusion that the Corporation was not competent to perform its duties bear no connection with the competency of the Corporation. According to the learned counsel, the competency means the legal qualification for performing the duties. It was therefore, argued that the Corporation being throughout legally qualified to perform its duties, it cannot be said that it was not competent to perform its duties within the meaning of Section 422 of the Act. We do not find any force in this contention. The word 'Competent' may no doubt be used to signify the sense of being legally qualified, but it is not the only sense in which this word is used. The word 'competent' also means: 'possessed of or characterised by marked or sufficient aptitude, skill, strength or knowledge; satisfactorily or moderately able without marked weakness or demerit: possessed of knowledge, judgment, strength or skill needed to perform an indicated action.' (Webster's Third New International Dictionary p. 463). A public authority is not competent when it is not possessed of knowledge, judgment, strength, ability or skill needed to perform the duties imposed on it. It is in this sense that the word 'competent' has been used in Section 422 of the Act. A duly elected Corporation is always legally qualified to perform its duties and if the word 'competent' means legally qualified then in no case the power under Section 422 of superseding the Corporation on the ground that it is not competent to perform its duties can ever be exercised. It is, therefore, clear that the word 'competent' in Section 422 does not refer to the legal qualification of the Corporation, but to its skill or ability in performance of its duties. The three charges on which the Corporation has been superseded cannot be said to be irrelevant if the word 'competent' is understood in the sense indicated above.

12. It was then contended that the power conferred by Section 422 on the Government to supersede the Corporation was quasi-judicial in nature, and that the Government was bound to follow the requirements of natural justice and in terms of the section to give an opportunity to the Corporation to show cause why an order superseding it should not be made. It was submitted that as the return showed, the show cause notice was preceded by an inquiry by the Commissioner, Indore and it was on the basis of this inquiry that the charges were formulated against the Corporation and therefore, the inquiry report, which was demanded by the Corporation, ought to have been made available to it. It was also pointed out that theCorporation had requested for an oral hearing to explain the charges, but that opportunity was denied. On these grounds, it was a submitted that the Government did not follow the requirements of natural justice and did not give adequate opportunity to the Corporation to show cause against supersession and, therefore, the order was invalid and void.

13. The question whether a power similar in nature to that conferred on the Government by Section 422 of the Corporation Act was quasi-judicial in nature or purely administrative arose before the Supreme Court in two cases but was left undecided; (see State of Maharashtra v. B. K. Takkamore, AIR 1967 SC 1353 at p. 1355 and State of Assam v. Gauhati Municipal Board, AIR 1967 SC 1398 at p, 1399). In earlier case Radheshyam v. State of Madhya Pradesh, AIR 1959 SC 107, their Lordships considered the nature of the power of appointment of an executive officer conferred by Section 53-A of the C. P. and Berar Municipalities Act, 1922 which was held to be purely administrative in nature. An order under Section 53-A of the Central Provinces Act was not drastic in nature as it did not result in the retirement of the members of the Municipal Committee and its effect merely was to vest temporarily all or some of the powers of the Municipal authorities in an executive officer appointed by the Government. Contrasted to Section 57 of the same Act, which dealt with an order of dissolution or supersession of a Municipal Committee and which expressly provided that no order under that section shall be passed until reasonable opportunity was given to the Committee to furnish an explanation. Section 53-A of the Act did not provide for an opportunity to submit an explanation before an order was passed under that section. These considerations, which weighed with their Lordships in Radheshyam's case, AIR 1959 SC 107 (Supra) in holding that the power under Section 53-A of the Central Provinces Act was administrative, do not apply to Section 422 of the Madhya Pradesh Municipal Corporation Act with which we are concerned and Radheshyam's case, AIR 1959 SC 107 is, therefore, distinguishable. It may here be pointed out that the language employed by Section 422 of the Corporation Act is somewhat similar to Section 57 of the Central Provinces Municipalities Act and in Radheshyam's case, AIR 1959 SC 107, Kapur, J. observed that a kind of quasi-judicial approach was intended in Section 57: AIR 1959 SC 107 at p. 127. That again is, however, not decisive.

14. In considering the question whether the State Government's power under Section 422 of the Corporation Act is quasi-judicial in nature, we need not go back to older cases in search for principles. We can begin with a recent landmark, Ridge v. Baldwin, 1964 AC 40 (HL) which has been acclaimed as 'the MagnaCharta of Natural Justice'; (Alien, Law & Order, 3rd Edition p. 242). This case reaffirmed that when an authority or body is given power by statute to determine questions affecting rights of individuals, the very nature of the power implies a duty to act judicially requiring it to observe the rules of natural justice, and that the duty to act judicially need not be separately imposed by the statute. This case also demonstrated that the contrary dicta of Hewart, C. J. in Rex v. Legislative Committee of the Church Assembly, 1928-1 KB 411 at p. 415 which were applied with approval by the Privy Council in Nakkuda Ali v. Jayaratne, 1951 AC 66 were erroneous. The principles laid down in 1964 AC 40 (supra) have been accepted as correct by the Supreme Court in Associated Cement Companies v. P. N Sharma, AIR 1965 SC 1595 at p. 1601 and Bhagwan v. Ramchand, AIR 1965 SC 1767 at p. 1770. These principles have also been applied where the right dealt with by the statute is not the right of individuals but the right of a public authority.

A case directly in point is a recent decision of the Privy Council in Durayappah v. Fernando, 1967-2 AC 337. In this case one of the questions before the Judicial Committee was whether the Minister of Local Government, Ceylon while exercising his power under Section 277 of the Ceylon Municipal Ordinance of dissolving a Minicipal Council was to observe the rules of natural justice. Section 277 of the Ceylon Municipal Ordinance is worded in similar larguage as Section 422 of the Madhya Pradesh Municipal Corporation Act, except this that the former does neither contain any express provision that an opportunity will be given to the Municipal Council to show cause against Proposed action of dissolution nor does it contain any provision that the order of the Minister shall state the reasons on which it is made. Even in the absence of such provisions, which find place in Section 422 of the Madhva Pradesh Act, the Judicial Committee held that the Minister before passing an order of dissolution under Section 277 of the Ceylon Ordinance was bound to observe the principle audi alteram partem. Their Lordships negatived the argument that when a statutory provision opens with the words such as 'where it appears to .....' or 'if itappears to the satisfaction of .....'or 'if the ..... considers it expedient .....' or 'if the .....is satisfied', a duty to act judicially is excluded; it was observed that these various formulae are introductory of the matter to be considered and are given little guidance upon the question of audialteram partem. Outside the well-known classes of cases, their Lordships said:

'There are three matters which must always be borne in mind when considering whether the principle should be applied or not. These three matters are first, what is the nature of the property, the office held, status enjoyed or services to be performed by the complainant of injustice. Secondly, in what circumstances or upon what occasions is the person claiming to be entitled to exercise the measure of control entitled to intervene. Thirdly, when a right to intervene is proved, what sanctions in fact is the latter entitled to impose upon the other. It is only upon a consideration of all these matters that the question of the application of the principle can properly be determined,'

On a consideration of these matters It was pointed out that no one would consider that the activities of a Municipal Council should be lightly interfered with, that the grounds on which Minister could take action, (which are similar to those contained in Section 422 of the Madhya Pradesh Municipal Corporation Act) implied a duty to act judicially and that the consequences of dissolution were so drastic that they pointed in the same direction. Their Lordships, therefore, held that the Minister was bound to observe the rule audi alteram partem before dissolving the Municipal Council. We fully accept the decision in Durayappah's case, 1967-2 AC 337 on this point; there is another point of importance decided in that case, which we will take up later.

15. Now we revert to Sections 422 to 424 of the Corporation Act which we have set out earlier. The grounds on which a Corporation can be superseded which find place in Section 422 are: (a) the Corporation is not competent to perform its duties, or (b) it persistently makes default in the perfoimance of the duties or (c) it exceeds or abuses its powers. The section expressly provides that opportunity will be given to the Corporation to show cause against proposed order of supersession and reasons for making the order will be stated. The consequences of supersession are drastic. The order results in the retirement of all the Councillors from a date mentioned in the order. The powers and duties of the Corporation until the Corporation is reconstituted are to be exercised by a person or committee (called Administrator' appointed by the Government in that behalf and all property of the Corporation also vests in such person or committee until the reconstitution of the Corporation. The reconstitution of the Corporation takes place by fresh elections if the Government 'if it so thinks fit' declares its intention to reconstitute theCouncil by issuing a notification. Having regard to these provisions and the principles stated in 1964 AC 40 (supra) and 1967-2 AC 337 (supra) it has to be held that the power conferred by Section 422 of the Corporation Act to supersede a Corporation is quasi-judicial in nature. Indeed, in Section 422, the quasi-judicial nature of the power is more easily discernible as compared to Ceylon Ordinance dealt with in Durayappah's case, 1967-2 AC 337 for in Section 422 the legislature has 'superadded' in express terms a duty to act judicially by providing that opportunity will be afforded to the Corporation to show cause against proposed order of supersession and reasons shall be stated for making the order.

16. The question then is whether there was violation of the rules of natural justice or in terms of the section denial of opportunity to the Corporation to show cause in making the order of supersession. The first complaint of the petitioner in this connection is that the inquiry report on which the Government formulated the charges, was not made available to the Corporation. It appears from para 19 of the return filed by the State Government that a preliminary inquiry against the Corporation was held by the Commissioner Indore Division and the inquiry report submitted by him was against the Corporation. This report led to the formulation of charges and issue of show cause notice. After the explanation of the Corporation was received, there was no further inquiry and the case was only re-examined resulting in the order of supersession. On these facts it cannot be disputed that the inquiry report made by the Commissioner was an important material which was taken into account by the Government in taking action against the Corporation. In fairness, therefore, the Corporation should have been furnished with a copy of that report. If there is a fresh inquiry after the show cause notice and receipt of representation and inquiry report of the preliminary inquiry is not considered in the second inquiry or in taking the final action, withholding of the report of preliminary inquiry may not result in the infraction of the rules of natural justice or denial of opportunity to show cause. But in cases where there is no fresh inquiry after the show cause notice, the explanation furnished is bound to be judged in the light of the earlier inquiry report on which the charges were based. Therefore, when the charges are based on an inquiry report not shown to the Corporation, and there is no further inquiry after submission of representation, the non-disclosure of the adverse inquiry report, which is an important material taken into account in making the final order, must necessarily result in denialof adequate opportunity to show cause. It cannot be disputed that the 'opportunity to show cause' contemplated by Section 422 of the Act must be a reasonable opportunity and not a bare formality and all adverse material to be used against the Corporation must be disclosed. Principle of fairness is implicit in the statutory protection that the Corporation shall be given an opportunity to show cause. That is also the requirement of natural justice. In our opinion, the Government should have disclosed to the Corporation the Commissioner's report.

The second objection of the petitioner in this respect is that the Corporation had requested for an oral hearing to explain the charges and this opportunity was denied. Oral hearing is not an essential attribute of natural justice; Local Govt. Board v. Arlidge, 1915 AC 120; and A. K. Gopalan v. The State, 1950 SCR 88 at p. 124=(AIR 1950 SC 27 at p. 44), Whether the opportunity to show cause should be by written representation or by personal hearing depends on the facts of each case and ordinarily it will be in the discretion of the tribunal or authority passing the final order; Madhya Pradesh Industries Ltd, v. Union of India, AIR 1966 SC 671. It was therefore, open to the Government in the exercise of its discretion to refuse the request of the Corporation for an oral hearing. The learned counsel for the petitioner has failed to satisfy us that in the circumstances of the case the discretion to refuse oral hearing was improperly exercised. However, we have already held by accepting the first objection raised in this connection that the non-disclosure of the inquiry report has led to the denial of opportunity to show cause within the meaning of Section 422 of the Corporation Act,

17. It was lastly contended that the reasons stated for making the order are inadequate, as they do not contain any reason why the explanation submitted by the Corporation failed, in the opinion of the Government, to meet the charges.

18. Section 422 of the Corporation Act requires that the order of supersession shall be published in the Gazette and the reasons for making it shall be stated therein. The contention raised by the learned counsel raises the question as to the true content of this requirement. We have already held that the power under Section 422 is not purely administrative, but quasi-judicial in nature. An order of supersession cannot be made before the Corporation is given an opportunity of showing cause which implies that cause shown by the Corporation should be duly considered before making the order. In this context, thefurther requirement that the reasons for making the order shall be stated, must be understood to mean that reason for rejection of the explanation of the Corporation must also be stated. The statutory requirement of stating the reasons is not satisfied simply by narrating the charges and the opinion of the Government that the explanation of the Corporation has failed to meet the charges; in our view it is also necessary that reasons for that opinion should be stated. In considering Section 12(1) of the Tribunals and Inquiries Act, 1958 (6 and 7 Eliz, 2 of 66) which lays down that where tribunal, gives any decision, it shall be the duty of the tribunal, if requested, to furnish a statement of the reasons for the decision, Megaw, J. in Re Poyser and Mills Arbitration, (1963) 1 All ER 612 at p. 616 observed as follows:

'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.'

The above view of Section 12 of the Tribunals and Inquiries Act, 1958 was also taken by the Court of Appeal in Iveagh v. Minister of Housing and Local Govt., (1964) 1 QB 395, where Lord Denning, M. R., expressed himself as follows:

'Section 12 of the Tribunals and Inquiries Act, 1958 says that the Minister must give his reasons, and his reasons are to form part of the record. The whole purpose of the enactment is to enable the parties and the Courts to see what matters he has taken into consideration and what view he has reached on the points of fact and law which arise.' (p. 410).

In Collector of Monghyr v. Keshav Pra-sad, AIR 1962 SC 1694 at p. 1702 para 6 It was held in the context of Section 5-A of the Bihar Private Irrigation Works Act, 1922 that a statutory requirement of recording of reasons is not satisfied by merely recording conclusions. In our opinion, similar considerations apply in construing the statutory requirement of stating the reasons contained in Section 422 of the Corporation Act. The Corporation is entitled to know for what reasons the representation submitted by it in opposition to charges is rejected by the Government. The reasons stated must therefore, deal with points of fact and law raised in the representation. As already expressed by us, it is not enough to state that the Corporation has failed to meet the charges satisfactorily; reasons for this conclusion must also be stated. Such a course will also ensure that the Government has really applied its mind to therepresentation submitted by the Corporation and has not merely stated that it has done so. Take for instance the second charge, which was to the effect that meetings called for passing the budget were adjourned without transacting any business. Apart from other details the reply of the Corporation was that it disposed of 537 cases in those meetings. Why was that statement not accepted, which was a matter verifiable from record? The order states no reasons and is silent on this point. Then take the third charge. Briefly stated the charge was that the amount of money spent by the Corporation to tide over water shortage was disproportionate to the quantity of water procured when compared to the amount spent by the Public Health Engineering Department for the same purpose. In reply, the Corporation gave details of the expenditure incurred by it and claimed that it was not disproportionate as compared to the expenditure incurred by the Public Health Engineering Department. The order again is silent why the explanation of the Corporation was not accepted. The representation of the Corporation raised issues of fact which have not been met in the order by stating the reasons why the charges were true and the representation not acceptable. In our opinion, the order does not satisfy the statutory requirement of stating the reasons for making the order.

19. In our opinion, therefore, the order of supersession suffers from two defects:First, that the Corporation was not given a fair opportunity to show cause before the order was made and secondly, that the reasons for making the order were not stated. What is the effect of these infirmities? Is the order void or nullity, or merely voidable? Is it liable to be quashed at the instance of a Municipal Councillor, who was made to retire before the expiry of his term? These questions bring us back to the decision of the Privy Council in Durayappah's case, 1967-2 AC 337 (supra). In that case a Municipal Council was dissolved by an order of a Minister without following the requirements of natural justice and it was held by the Privy Council that the order of dissolution was not a nullity but merely voidable at the instance of the Council and was not liable to be set aside at the instance of the Mayor; although if challenged and avoided at the instance of the Council, the order would be void ab initio. This new concept of voidable administrative order has invited criticism; (see Wade Unlawful Administrative Action: Void or voidable, 83 Law Quarterly Review 499 and 84 Law Quarterly Review 95; De Smith Judicial Review of Administrative Action, 2nd Edition, p. 227; 30 Modern Law Review 701). Prof. Wade on a thorough analysis if the earliercases and principles of administrative law has shown that the view taken in Durayappah's case, 1967-2 AC 337 (supra) proceeds on wrong principles and on a wrong reading of the speech of Lord Morris in 1964 AC 40 (supra). Prof. Wade's conclusions, so far as relevant for our purpose, are:

(a) Acts of public authorities 'are either lawful and valid or unlawful and void. That is why Voidable' has never played a part in administrative law and should play no part now;'

(b) 'The question whether a third party can challenge a void Governmentalact not aimed primarily at himself is governed, by settled rules which vary according to remedy sought. These rules have long been in operation without any such question as Void or voidable' being thought relevant';

(c) 'It is erroneous to suppose that an unlawful administrative act can have legal effect only if it is called voidable as opposed to void. If not challenged in law, or if the Court will not grant a remedy under the usual rules, a void act may have the effect of a valid act, since it cannot be opposed'. (83 Law Quarterly Review p. 529); and

(d) 'The Courts have always held that failure to give a fair hearing makes the decision void, not voidable.' (84 Law Quarterly Review p. 115).

In State of Orissa v. Binapani Dei, AIR 1967 SC 1269 at p. 1271, a case which is in line with the decision of the House of Lords in 1964 AC 40 (supra), the Supreme Court held that a Governmental order made without following the requirements of natural justice was a nullity. In AIR 1962 SC 1694 at p. 1701, it was held that an administrative order, which could be made only 'for reasons to be recorded,' would be void if no reasons were recorded for making it or if reasons recorded were totally irrelevant. Having given our anxious consideration to the problem, we accept as correct the analysis and the conclusions of Prof. Wade, which we have already set out and in this respect we respectfully decline to follow the theory of 'voidable' administrative order expounded by the Privy Council in Durayappah's case, 1967-2 AC 337 (supra). In our opinion, because of the two defects, which we have already pointed out, the order of supersession made in the instant case was a nullity or void. This leaves the question whether the petitioner who was a Councillor is entitled to challenge the order by claiming a writ of certicrari. It cannot be disputed that the petitioner, who was made to retire by the order of supersession before expiry of his term, has a 'grievance of his own' and fulfils the character of an 'aggrieved party'. We cannot also lose sight of the fact thatwhen after order of supersession immediate effective control is taken over by an Administrator appointed by the Government (as happened in the present case), it is practically impossible to take steps at the instance of the Corporation to challenge the order. Having regard to the circumstances of this case, we hold that it would not be a sound exercise of our discretion under Article 226 of the Constitution to refuse interference at the instance of the petitioner. In our opinion, the petitioner is entitled to succeed.

20. We allow the petition and issue a writ in the nature of Certiorari and quash the order superseding the Municipal Corporation, Indore, issued by the State Government on 23rd April, 1968. We also issue a writ in the nature of Mandamus directing the respondent not to give effect to the order of supersession in any manner whatsoever. The petitioner will have his costs of this petition including counsel's fee, which we fix at Rs. 250/-. The security amount shall be refunded to the petitioner.


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