1. By order dt. 13-10-1971 passed by the State Government in exercise of powers under Section 328 of the Madhya Pradesh Municipalities Act, 1961, the Municipal Council, Dhamtari, was dissolved. The Council has, therefore, filed this petition under Article 226 of the Constitution for quashing that order.
2. Dhamtari Municipality has an annual income of more than Rs. 5,00,000/-. As such it can have an engineer for the efficient discharge of its duties as is provided for in Section 88 of the Municipalities Act (hereinafter referred to as the Act). That section further provides that the engineer shall belong to the State Municipal Service and shall be appointed by the State Government. Section 94 of the Act also provides that the specified officers, which expression also includes an engineer, cannot be appointed by the Municipal Council without the previous sanction of the State Government. It appears that no engineer was appointed by the State Government in spite of repeated requests of the Council. It also appears that an overseer in the employment of the Council was suspended and there was no one to look after the construction work. The Council, therefore, requested the State Government that some overseer from State Service should be deputed for the time being. Even this request was not granted.
3. It further appears that the Municipal Council was keen on constructing a cement road in the town of Dhamtari. As it required technical assistance, it employed in the abovesaid circumstances a retired engineer on daily wages of Rs. 12 and subsequently appointed him temporarily for a period of, six months on Rs. 300/- per month. The Council had also sought ex post facto permission of the State Government for this appointment. The Council also purchased certain quantity of gitti required for the construction of the road. The charges on the basis of which the Council was dissolved refer to irregularities committed by the Council in the two matters, namely, appointment of the engineer and purchase of the gitti.
4. The first charge relates to appointment without sanction of the engineer. The other six charges refer to the irregularities committed by the Council in inviting tenders and granting certain rates to the contractors from whom the gitti was purchased on the allegation that certain instructions contained in the P. W. D. Manual which a Council is generally required to follow were disregarded.
5. The Municipal Council gave a detailed reply to the charges and also prayed that it be given opportunity to adduce evidence in support of its case, The explanation of the Council was to the effect that, because of the situation referred to above, it had no technical assistance and hence it was forced to employ the engineer to start with on daily wages and, when it found that it was more economical to employ him on monthly basis, he was appointed only for a limited period of six months. The explanation thus was that, though the appointment was not in conformity with, the provisions of the Act, the circumstances forced the Council to make a temporary arrangement. As to other charges, it was urged that the instructions contained in the P. W. D. Manual are required to be followed as far as possible and that they are not obligatory. It was also submitted as to under what circumstances the Council acted in the manner it did.
6. The State Government after considering the explanation of the Municipal Council passed the impugned order dated 13-10-1971. In the first part or the order, the charges are enumerated and thereafter findings on each charge are recorded. A perusal of these findings will disclose that, in substance, they consist of reproduction of the charges with stray sentences here and there that the provisions of the Act and the instructions contained in the P. W. D. Manual were binding on the Council and that, if they would have been followed, the Council would not have been put to loss. This is a very unsatisfactory method of recording findings. There is nothing to indicate in those findings as to why the explanation given by the Council was not accepted. In Municipal Council, Kharsia v. State of M. P., 1971 MPLJ 905 = (AIR 1972 Madh Pra 34) it has been held that the power given to the State Government under Section 328 of the Act of superseding or dissolving a Municipal Council is a drastic power and must be exercised strictly in conformity with the procedure laid down in the section and that the provision of Section 328 (1) mandatorily requires that the reasons leading the State Government to take the action in question have to be stated in the notification published In the Gazette dissolving the Council. That provision means that the premises on the basis of which an adverse decision against a Municipal Council is desired to be reached must be found to have been established and those reasons must be stated in the order.
7. The learned counsel for the State urged that, in the abovesaid cast, no findings at all were recorded, but that is not the case here. In this case, the findings were recorded though the reasons are not given very elaborately. He, however, urged that the findings do disclose that the State Government had applied its mind to the explanation given by the Municipal Council. It is no doubt true that the order passed by the State Government need not be as elaborate as an order passed by a judicial authority, but even so, under the requirements of the statute, the reasons must disclose clearly that the explanation given by the Council was considered and rejected on justifiable grounds. In our opinion, the impugned order does not satisfy this test.
8. We are, however, satisfied that, for another reason, the impugned order is liable to be quashed. Section 328 (i) (a) of the Act reads as under:--
'328 (1) If at any time upon representation made or otherwise it appears to the State Government that--
(a) the Council 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 or fails to carry out any order passed by the State Government under this Act;...
the State Government may, by an order stating the reasons therefor published in the Gazette, dissolve such Council and may order a fresh election to take place'.
From the impugned order. It would appear that on the findings recorded by the State Government, it was satisfied that the 'Council has abused its powers and for that reason it is not competent to perform its duties'. Now to 'abuse' means to misuse once talent or position. It does not consist of mere infraction of a rule of law. It has also an element of lack of bona fide and causing harm to others, or undeservedly benefiting another. No such finding has been recorded by the State Government. Apart from this, the expression used in Section 328 (1) (a) is 'or abuses its powers'. The use of the expression 'abuses' clearly indicates that there must be some amount of persistent continuity or a habit of abusing. We have already pointed out that all the charges in this case were confined to only one activity, namely, construction of the cement road for which the engineer was temporarily appointed and the gitti was purchased. In our opinion, the So called disregard of the instructions contained in the P. W. D. Manual or the provisions of the Act is not sufficient to constitute a habit of disregarding the said provisions. The instances are not sufficient to bring the case within the expression 'or abuses'.
9. Charge No. 2 consists of two parts, namely, that the tender notice was not confined to the registered contractors only and that a tender form was sold to a near relative of the President of the sub-committee dealing with Public Works. It is, however, clear that the contract was given to a registered contractor and though the near relative had purchased the tender form, it was not at all considered. In substance, therefore, there was not any breach of the rules relied on by the State. Charges Nos. 3 and 6 relate to failure of deduction of 7 1/2 per cent. in the measurements towards void. Part of Charge No. 3 also refers to accepting a conditional tender which was not in terms of the tender notice. A perusal of the record discloses that, in the tenders submitted by the contractors, they had given their rates on condition that no void at the abovesaid percentage would be allowed to be deducted. In these circumstances, there was no question of deducting the void. The finding on this point is, therefore, baseless. Similarly, reference to Appendix 34, form B paragraph 3 of the P. W. D. Manual is misconceived. In giving the rates in the particular manner the contractors had given no question of effecting any change in the tender notice arises.
10. Similarly, Charge No. 7 appears to be ill-founded inasmuch as the contractor was only to supply material and nothing remained to be done by the contractor once the material was supplied and also utilised. It was not a works contract in which further defects may be detected after the completion of work in which case it may become necessary to detain the security amount for being adjusted against the defects found. The Municipal Council therefore, does not appear to have committed any breach of the rules when the security amount was returned immediately after the full quota of supply was made. As to the Charge No. 4, the Municipal Council has given explanation, as to why gitti was required to be purchased from Raipur and not from neighbouring areas. No finding has been recorded that the explanation was false. That leaves only Charges Nos. 1 and 5, namely, the appointment of an engineer without the previous sanction of the State Government and purchasing some gitti not by inviting tenders but by inviting quotations. We have already referred to the circumstances in which the Municipal Council was required to appoint the engineer. Even if it is held that in these two matters, the Municipal Council had committed a breach of statutory rules, the act of the Council does not come within the expression 'abuses' as indicated above.
11. For the aforesaid reasons, the petition is allowed. The order of the State Government dated 13-10-1971 (Annexure A-48) is quashed. The petitioner shall get its costs from the State. Hearing fee is fixed at Rs. 100/-. The amount of security deposit shall be refunded to the petitioner.