V.R. Newaskar, J.
1. This is a petition under Article 226 of the Constitution for the issue of writ in the nature of certiorari, mandamus or any other kind of writ, direction or order against the State of Madhya Pradesh for securing the quashing of the order dated 7-12-1957 passed by the Government of Madhya Pradesh superseding the Municipality of Ujjain in purported exercise of its powers under Section 208 of the Madhya Bharat Municipalities Act, 1954.
2. The petitioner claims to be an elected President of the aforesaid Municipality and has submitted this petition both as a duly elected member and the President of the Municipality thus superseded.
3. The action of supersession taken by the Government was the out-come of the following circumstances:
4. Some time prior to June 1957 Government received complaints regarding the working of the said Municipality. In order to get itself informed about me propriety of these complaints and to know the truth about the matter the Government appointed the then Inspector General of Municipalities Mr. Sawant on 24-6-1957 to enquire into the said complaints and report.
The Inquiry Officer Mr. Sawant on 6-7-1957 sent three different questionnaires, one to the Standing, Committee, the second to the President and the third to the Municipal Council asking them to render explanations regarding the acts attributed to each or them making it clear that the same might not he taken as charge-sheets. Explanation was rendered, according to the petitioner, by the President and the Standing Committee.
The Inspector General of Municipalities then made some inquiry. Petitioner's allegation is that the said inquiry was conducted ex parte and with the help and instigation of some of the councillors who were bent on dislocating the Municipal administration or displacing the group in power. After the Inquiry Officer had left Ujjain the Government on 6-9-1957 returned, the budget of the Municipality for the year 1957-58, sent to it for sanction, requiring the Municipality to re-discuss the same.
The petitioner replied on 15-11-1957 with a view to clarify its stand upon the matter and taking the position that act of passing the budget was lawful and not contrary to rules and requested the Government to let him know in what particular the act was unlawful and contravened which provision of the Act or the Rules. Before this however on 15-10-1957 Government communicated by means of a letter to the President and through him to the Ujjain Municipality containing seven different charges and called for an explanation thereof.
These charges were said to indicate that the said Municipality had persistently made defaults in the performance of duties imposed upon it by or under the Madhya Bharat Municipalities Act, 1954, and exceeded or abused its powers.
5. These seven charges being the principal subject-matter of this petition it will be convenient to set them out here briefly:
1. The budget for the year 1957-58 was passed contrary to the Rules.
2. Government had sanctioned loan to the Municipality in connection with the Sinhastha fair of 1957. The Municipal Council in its meeting dated 22-4-1957 resolved not to accept that loan after having made a resolution earlier making a demand therefor; secondly after this resolution of 22-4-1957 the Council on 31-5-1957 passed a resolution accepting the loan. This latter act was contrary to Section 26 of the Act.
3. The Municipal Council passed a resolution for purchase of a jeep out of Municipal fund in the absence of provision therefor in the budget. This was contrary to Section 63 of the Act,
4. The President obtained leave as regards the performance of duty by him of acting as Chairman of the Standing Committee although he continued to act as the President. The Standing Committee elected Mr. Kureshi as Chairman of the Standing Committee. This was contrary to what Section 32 of the Act had meant to lay down.
5. No Government sanction was obtained for compromising the case of Mochi Masjid as was necessary.
6. The President and the Standing Committee accorded sanction for the grant of vehicle allowance to the Officers and servants of the Municipality out of Sinhastha fund without obtaining sanction from the Government for the purpose.
7. Contracts were given to contractors Manak-chand and Anandilal for asphalting the Arya Samaj Road and the road joining the Fire Brigade to Sarafa respectively without calling for the tenders.
5a. The President after calling for a Special Meeting of the Municipal Council on 21-10-1957 communicated to the Government the reply which had been formulated supported by the Resolution of the Council No. 215 dated 21-10-1.957. By this reply explanation was said to have been offered as regards all the charges except one relating to the compromise in the Mochi Masjid case.
As regards the last mentioned matter it was suggested that the relevant record was with the Government. In the covering letter of this reply, however, it was mentioned that after the Resolution No. 215 dated 21-10-1957 had been passed the relevant record had been received.
6. Elucidation or clarification of some of the points relating to the charges was also said to have been sought.
7. It was under these circumstances that the Government, by its order dated 7-12-1957, superseded the said Municipality. The order setting out the reasons was published in the Madhya Pradesh Government Gazette.
8. The petitioner's complaint is that without giving any further opportunity to the Council to explain the charges and without making any clarification as sought the Government ordered supersession of the Municipality.
9. The order of supersession, according to the petition, is illegal, without jurisdiction and void on the grounds firstly that no fair opportunity had been given to render explanation regarding the charges, secondly that the reasons given were beyond the scope of those contemplated for the exercise of the power of the Government under Section 208 of the Act and thereby were vague and indefinite in some cases.
10. It was also alleged that the action of the Government in superseding the Municipality was mala fide and had been actuated by ulterior motive referred to in para 3 of the petition.
11. The petitioner therefore prayed for quashing of the order after calling for the record and also asked for a direction against the Government not to enforce the same.
12. In the return on affidavit submitted on behalf of the State under the signature of the Deputy Secretary to the Government of Madhya Pradesh it was contended that the Government had appointed the Inspector General of Municipalities Mr. Sawant to inquire into the affairs of the Ujjain' Municipality in exercise of their power under Section 206 of the Act as a result of complaints received front some of the members of the Municipal Council.
Shri Sawant, it was admitted, called for the explanation of the President within three days but that it had been made clear that the period could have been extended on a request made to him for the purpose. It was asserted that Mr. Sawant held detailed inquiry wherein adequate opportunity had been given to the petitioner to render explanation as regards the allegations made personally against him and generally as against the Municipal administration.
It was asserted that although the files had been called by the Government they had been returned to Shri Auta-Ilahi, Octroi Superintendent, on 19-10-1957.
13. Regarding the return of budget for the year 1957-58 by the Government it was said that this was done in accordance with the Rules as there had been complaints before them that the budget had been passed without adequate discussion on the individual items.
14. Regarding the action taken by the Government under Section 208 of the Act it was contended, that due opportunity had been given to the petitioner and the Municipal Council to render explanation of all the charges levelled against them. The Government, it is asserted, is not required to act in a quasi-judicial manner and that the order of supersession is purely executive in nature.
The Government, it is said, did fulfil all the statutory requirements and the order therefore is not liable to be assailed in these proceedings. It was also said that the reasons given in the order of supersession do fall within the purview of Section 208 of the Act. Regarding the complaint made in the petition that the reasons set out for supersession do not pertain to either the competency of the Munich pality or its duties and powers, it was said that it could not be said that the Municipality can in no case be held responsible for the acts of its President or its statutory bodies.
As regards the specific charges which were made the grounds for supersession of the Municipality it was said that the Government had power of control, scrutiny and sanction over the budget, the Municipality in question being declared as indebted Municipality under Section 62 of the Act.
15. Regarding the Government loan for Sinhastha fair it was said that the Resolution dated' 22-4-1957 showed lack of co-ordination on matters essential for Municipal administration. The passing of second Resolution on 31-5-1957 involved violation of the provisions of Section 26 of the Act. Municipal Council's power to sanction purchase of a jeep out of Municipal fund without budgetary provision was questioned and it was asserted that Section 49 (1) of the Act cannot except the Council from the provision of Section 63 and that Government sanction for such a purchase was necessary.
Regarding President taking leave from his duties as Chairman of the Standing Committee it was said that the reason about his ill-health given by the President was self-contradictory and misconceived in as much as he did attend every meeting of the Council. It was also said that at every meeting of the Standing Committee at which the President is absent a Chairman had to be elected in accordance with Section 32 of the Act and no election could have been made of Mr. Quereshi on a semi-permanent basis.
In assertion of the alleged unauthorised compromise of Mochi Masjid case it was said that the Government sanction was necessary in that case as the compromise involved transfer of Municipal land. On the question of illegal grant of allowance it was said that although they were getting conveyance allowance and although some of them were making use of Municipal carriages yet the allowance had been sanctioned out of Sinhastha fund.
As regards contracts given to Manakchand and Anandilal it was said that sanction of the Municipal Council was not obtained and 110 tenders had been called.
16. At the end it was generally contended that the grounds urged in the petition raised disputed questions of fact and could not afford the basis for the exercise of powers under Article 226 of the Constitution.
17. This being a petition invoking powers of this Court under Article 226 of the Constitution questions which arise for consideration are:
Firstly, Whether the order of supersession is purely administrative and for that reason could not be called in question in these proceedings and whether the order being so any kind of writ or direction could not be issued by the Court?
Secondly, Assuming that the order in question involved exercise of quasi-judicial power do the circumstances of this case justify interference by this Court with that order?
18. On behalf of the petitioner it was contended that the power conferred upon the Government under Section 208 of the Madhya Bharat Municipalities Act, 1954, involved exercise of quasi-judicial function. Reference in this connection was marie to the terms of that Section and it was said that in order to enable the Government to act for superseding the Municipality certain objective conditions ought to exist.
It was further pointed out that there is a provision therein requiring the Government to allow opportunity to render explanation as regards the grounds on which the power is sought to be exercised and further the order ought to state reasons which prompted the Government to act. The presence of the words in the beginning of the section 'in the opinion of the Government' had not, it was said, the effect of converting it into a provision depending purely upon the subjective satisfaction of the Government.
It could not be said that the objective conditions were meant purely as the basis for formation of opinion and once the opinion is formed the propriety of that opinion cannot be challenged. In the context in which the word 'opinion' is used it should only mean 'conclusion'.
19. The order under Section 208 is required to be speaking order and the reasons given should both be adequate and sufficient and that their adequacy or sufficiency could be examined by this Court and that in case this Court is of opinion that the same are not so it could set aside the order. Reliance was placed in this connection upon the decision of the Full Bench of this Court in Municipal Commitee Kareli v. State of Madhya Pradesh, L. P. A. No. 58 of 1957: (AIR 1958 M. P. 323) (A).
The decision is said to have been given with reference to the provisions of Section 57 (2) of the Central Provinces and Berar Municipalities Act, 1922, which are practically similar to Section 208 of the Act in question. Reliance was also placed upon the observations of Wanchoo C, J. in Madhoram v. The State, AIR 1953 Raj 149 at page 151 (B).
20. In the alternative it was contended that, even on assumption that the provision requires only subjective satisfaction of the Government, the circumstances in which the present action of supersession was taken do not disclose that the Government had applied its mind to relevant and essential matters which it had to consider and had reached its conclusion with reference to them bona fide.
21. Alluding to the grounds on the basis of which the order was passed it was contended that excepting in the case of purchase of jeep it could not be said that there was any violation of the Act or the Rules. The budget for the year 1957-58 had been discussed fairly for long time. It was discussed for three clays.
Regarding Commissioner's absence from the Council-meeting it was said that that was his default and that the work of the Municipal Council's meeting could not be suspended for that purpose. Regarding the Government loan it was contended that in the meeting of 22-4-1957 there was dispute regarding who should be authorised to take the loan on behalf of the Municipality and the resolution accepting the loan therefore failed but that such a failure did not involve any positive resolution and when the Council agreed on 31-5-1957 as to who should be authorised to accept the loan the resolution accepting the loan was passed on 31-5-1957.
This in no way involved transgression of Section 26 of the Act. Regarding failure of the President to act as Chairman in spite of his not being absent from his duties as the President it was said that this in no way involved transgression of the rules. As regards compromise of the Mochi Masjid case it was said that this was done in pursuance of the statutory authority vesting in the Standing Committee by reason of power delegated to that body under the rules.
All that the Council did was to approve the Standing Committee's resolution for compromise. As regards grant of allowance out of Sinhastha fund it was said that this was done as a result of the decision taken by the high-power committee appointed by the State and that in this meeting Hon'ble Revenue Minister was present. As regards the contracts to Manakchand and Anandilal it was said that there were mere segment roads and the contractors were asked to construct the roads merely as extension of work already granted to them after duly calling for the tenders and that this could be done under Clause 54 of the Schedule to the Ujjain Nagar Palika Rules read with Clauses 40 and 41 of the Model agreements Ex. P. This was done under the resolution of the Standing Committee Exs. Q and Q/l.
22. In the end it was said that the most of the grounds are not tenable. Some of them do not have any connection with the Municipal Council and relate either to the President personally or to the Standing Committee and that even on assumption that there is some default on their part or either of them those grounds cannot be used for superseding the Municipality.
It was then said that even assuming that in the case of one or two grounds there be technical transgression of the Act or the Rules it could not be said had the Government been cognizant of the fact that it is these alone which could be taken into-account it could have come to the same conclusion namely of supersession of the Municipality. The order, as it was passed, being based merely on grounds which were unsupportable by law or unrelated to the Municipal Council ought to be quashed.
23. Lastly the learned counsel referred to the Privy Council decision in Emperor v. Sibnath Banerji, AIR 1945 PC 156 (C); and those of the Supreme Court in' Dr. Ram Krishna Bhardwaj v. State of Delhi, AIR 1953 SC 318 (D); and Shibban Lal Saksena v. State of U. P., AIR 1954 SC 179 (E). The last mentioned case was relied upon for the view held in that case that even if one of the two grounds be unsubstantial or irrelevant the order of detention would be vitiated.
It was contended that what applied to an executive order for detention ought to apply to other executive orders in as much as it would not be proper for the Court to substitute its own opinion in place of that of the Government and as it is not certain how the Government would have acted had irrelevant grounds been not before it there would remain no alternative but to quash the order.
24. On the 6ther hand the learned Government Advocate contended that most of the grounds were substantial and related to the working of the Municipality as a whole including the President and the Standing Committee. Section 208, according to him, requires merely subjective satisfaction of the Government and the objective matters referred to therein were intended merely for the purpose of formation of its opinion.
In this case it is said all the statutory requirements were fulfilled. The Municipality was given opportunity to explain the charges at two different stages, once before the Inquiry Officer Mr. Sawant and the second time by the Government. The Municipality rendered whatever explanation it could and with that explanation in view the order in question was passed.
There are, it is said, no materials to suggest mala fides on the part of the Government. The order of supersession in these circumstances is unassailable. The Full Bench decision of Kareli Municipality, it is said, is inapplicable as in the first place there are no words 'In the opinion of in Section 57 (2) of the Central Provinces and Berar Municipalities Act, 1922.
It was further contended that the Standing Committee is a Committee formed out of the general body and was subject to the control of the Council. The President too is a part of the Council. The lapses or defaults on the part of either of these two could be taken into account in considering the question as to whether the Municipality deserves to be superseded or not.
The learned counsel then dealt with the individual charges and tried to show that each of them involved breach of one or the other of the provisions of the Act and the Rules. He reiterated the stand taken by the Government in the return and relied upon the decisions reported in Brij Lal v. The State of Patiala, AIR 1957 Punj 100 (F); Pratap Singh v. Shri Krishna Gunta, AIR 1956 SC 140 (G), and Chaturbhuj v. State, Madh BLJ 1955 HCR 2102 (H).
25. The first question, on these submissions, which deserves to be considered is whether the order in question being purely executive in character could not be called in question. In order to appreciate the question it is useful to consider the terms of this section and further to see whether there is any material difference between this provision and Section 57 (2) of the Central Provinces and Berar Municipalities Act, 1922, which was considered by the Full Bench of this Court in L. P. A. No. 58 of 1957: (AIR 1958 MP 323) (A).
26. Section 208 (1) of the Madhya Bharat Municipalities Act, 1954, is as follows:
'If, in the opinion of the Government a, Municipality is not competent to perform, or persistently makes default in the performance of, the duties imposed on it by or under this Act, or others wise by law, exceeds or abuses the powers, the Government may, after giving the Municipality an opportunity to render an explanation, by an order published, with the reasons therefor, in the Gazette declare the Municipality to be incompetent or in default, or to have exceeded or abused its powers, as the case may be, and may dissolve such Municipality or supersede it for a period to be specified in the order; provided such period shall not exceed two years or the remaining term of the Municipality, whichever is greater.'
27. Section 57 (2) of the Central Provinces and Berar Municipalities Act, 1922 is as follows:
'If after fresh election the new committee continues to be incompetent to perform, or to make default in the performance of, such duties or exceeds or abuses its powers to a grave extent the Provincial Government may, by an order stating the reasons therefor published in the Gazette, declare the committee to be incompetent or in default, or to have exceeded or abused its powers, as the case may be, and supersede it for a period to be specified in the order.'
28. It will be clear from the wordings of these two Sections that but for the words 'in the opinion of in the beginning of Section 208 (1) of the Madhya Bharat Municipalities Act there is no substantial difference. The word 'persistently' appears to take place of 'to a grave extent' in the Central Provinces and Berar Municipalities Act.
The underlying principle of both the provisions is to enable the Government to act in case there is found to be incompetency in the body or if there are cases of persistent defaults, excesses or abuses of powers. Both the provisions require the Government to give sport unity to the Municipality believed to be in default to render explanation and when the Government reaches the conclusion that it should be superseded on the basis of certain reasons then these reasons have got to be published in the Gazette along with the order.
Not only this but while making the declaration in the Gazette it has to specify whether the reasons given lead to one or the other of the grounds on the basis of which it is authorised by the Act to take action. Now with the close resemblance in the two Sections can it be said that the words in the opinion of make a difference? In my opinion they do not.
In the context in which the words are used the presence or absence of those words does not make any difference as is said by Wanchoo C. J., in AIR 1953 Raj 149 at p. 151 (B), where the learned Chief Justice had to consider the provisions of Section 372 of the Bikane r Municipalities Act That section did not provide for calling for an explanation from the Board (Council.)
The question which was pressed before the learned Judges was that in as much as objective tests are provided for acting and there are no words to tbe effect in the opinion of in the Section the action taken thereunder would be quasi-judicial and that although tie Section did not provide for calling for an explanation it was implicit in it by reason of the nature of the provision.
In refusing this contention the case of Rex v. Secretary of State, (1942) 1 KB 87 (I), was referred to and relied upon for the view that the presence or absence of words 'in the opinion of did not make any difference and that these words ought to be understood to be implicit in the provision. In that case no doubt it was held that the order of supersession was purely administrative and could not be interfered with by the High Court but this view was based on the absence of provision for calling for explanation from the Board with regard to the action of supersession proposed to be taken.
29. In Income-tax Commr. v. MacMillan and Co., AIR 1958 SC 207 (J), their Lordships of the Supreme Court had occasion to consider the affect of the presence of the aforesaid phrase in Section 13 of the Indian Income-tax Act. It was held ty them that in the context in which the phrase is used it did not mean that the opinion of the Income-tax Officer was inviolate and that the determination was not merely subjective.
Their Lordships held that that phrase is aptly used in that Section as the Income-tax Officer in the first instance has to make the determination. It is clear from the observations of their Lordships in that case that the significance of the phrase, such as one under consideration, depends upon the context.
30. In the present case under Section 208 three different stages and contemplated in the action of supersession of the Municipality. First is the formation of opinion or tentative conclusions with regard to all or any of the objective matters referred to in the Section as a result of preliminary inquiry held by an officer appointed by Government under Section 206 of the Act, the second is the giving of opportunity to the Municipality to render an explanation with respect to defaults, excesses or abuses attributed to it and the third is the formation of final conclusions based on reasons which ought to be published.
It is therefore clear that the words 'in the opinion of in the context mean not purely subjective determination by the Government but have a reference to tentative conclusions reached at an early stage. This view appears to me as correct for the reason that opportunity has to be given to the Municipality to establish to the contrary so as to induce the Government to modify the opinion and at the final stage reason are to be given for the ultimate conclusion reached in taking the action of supersession.
I, therefore, am not inclined to agree with the contention of the learned Government Advocate that the words 'in the opinion of leave the matter entirely at the subjective will of the Government and this Court cannot interfere in appropriate cases even where there is failure to comply with the legal requirements or principles of natural justice are not followed or there is an error apparent on the face of the record,
31. Reverting to the Full Bench decision therefore we have to consider what that decision in effect laid down.
32. Their Lordships in Para 5 of the judgment posed a question in the following form:
Where the charges have been framed and the explanation of the Municipal Committee is in, whether the reasons given for superseding the Committee can be examined by the Court?
33. Their Lordships accepted the view, that the High Court can interfere in its writ jurisdiction where the order of the Government is mala fide, arbitrary, without jurisdiction or in utter violation of the principles of natural justice, as correct but they proceeded further and held that the High Court is not incompetent to consider the sufficiency or adequacy of the material upon which the charges were regarded as proved.'
34. Their Lordships have made it clear that the adequacy or sufficiency has not to be examined by the High Court in its jurisdiction under Article 228 of the Constitution as by a Court of appeal nor can it substitute its own opinion on merits in place of that of the Government. While considering the question as to adequacy or sufficiency of reasons their Lordships had in view cases where the same 'may be entirely unrelated to the facts proved'. It was emphasised by them that the reasons, for the exercise of powers by the Government under Section 57 (2), must have relation to the conditions laid down in the section and must be held to be of such a nature as to give rise to an inference that the necessary power flows to the Government for the act of supersession.
35. The observations of their Lordships have got to be considered in the context of that case. In that case after the charges were intimated to the Committee the latter rendered full and complete explanation of the same but in spite of such an explanation the order of supersession was passed without verifying that explanation. The exercise of powers under those circumstances was considered to be not reasonable as according to its view the necessary power for supersession of the Municipality did not flow to the Government in view of the charges and their explanation as rendered by the Committee.
36. In thus stating and applying the view as applicable to those cases where an administrative authority is required to act only where specified conditions for its acting exist and where it has to give opportunity to the body or person likely to be affected by its act and has to give reasons their Lordships were in no way departing from the principles applicable to such cases as laid down in Veerappa Pillai v. Raman and Raman Ltd., AIR 1952 SC 192 (K), by their Lordships of the Supreme Court. In that case their Lordships stated the law as follows:
'Such writs as are referred to in Article 226 are obviously intended to enable the High Court to issue them in grave cases where the subordinate tribunals or bodies or officers act wholly without jurisdiction, or in excess of it, or in violation of principles of natural justice, or refuse to exercise a jurisdiction vested in them, or there is an error apparent on the face of the record, and such act, omission, error or excess has resulted in manifest injustice.
However extensive the jurisdiction may be, it seems to us that it is not so wide or large as to include the High Court to convert itself into a Court of appeal and examine for itself the correctness of the decisions impugned and decide what is the proper view to be taken or the order to be made.'
37. In considering the adequacy or sufficiency of reasons for the exercise of the powers by the Govt. under Section 57 (2) of the Central Provinces and Berar Municipalities Act, 1922, their Lordships were obviously considering the same from the point as to whether there was or there was not an error apparent on the face of the record. Such patent error did appear to their Lordships on the face of the record having regard to the charges and their explanation rendered by the Kareli Municipality.
The error amounted to one of law as the Government, according to its view, had not applied its mind to the explanations rendered which were satisfactory,
38. It has to be borne in mind that the High Court while exercising its jurisdiction under Article 226 of the Constitution acts in supervisory capacity. It does not review or reweigh the materials on which the conclusions of the administrative authority or tribunal are based. All that it can do is to demolish the order which, according to its view, is without jurisdiction or palpably erroneous. It cannot substitute its own view for those of the inferior tribunal. The patent error must be an error of law revealed on the face of the order; vide T. C. Basappa v. T. Nagaupa, AIR 1954 SC 440 (L).
39. With these principles in view we shall now proceed to consider whether the order in question superseding the Municipality of Ujjain is open to attack on any of these principles.
40. Now in order to consider this question it will be necessary to understand the scope of Section 208 of the Madhya Bharat Municipalities Act, 1954.
41. That Section as quoted in the earlier part of this judgment on analysis is found to have different stages. First is the stage at which the Government is to form an opinion regarding four objective matters viz., competency of the Municipality, persistent commission of defaults by it in performance of the duties imposed on it by the Act or otherwise by law or excesses or abuses of power on its part.
After this opinion is formed, may be on complaints received, or as a result of an inquiry under Section 206 of the Act, the second stage is reached. The Government is to formulate charges with regard to all or any of those matters on the basis of certain grounds. It has then to afford adequate opportunity to the Municipality to render explanation as regards these charges.
If after applying its mind to the charges and their explanation the Government ultimately forms an opinion which at this stage takes the shape of conclusions based on reasons it can act by exercising the power of dissolving or superseding the Municipality.
42. The alleged incompetency must be that of the Municipality and not of any other or lesser authority. The other defaults, abuses or excesses of its powers must have been committed by the Municipality and not by any lesser authority. The Government must give adequate opportunity to the Municipality to render explanation and it must apply its mind in arriving at its conclusion in face of the explanation.
The application of mind must be evinced by the Government having resorted to the process of reason in arriving at its ultimate conclusion.
43. One more thing to be borne in mind is that under Section 208 the term 'Municipality' in the context means the authority known as 'Municipal Council' under the Act. The term Municipality as defined in Section 3 (3) of the Act means 'any local authority or area which is at present a Municipality and any local authority or area which may hereafter be constituted as such under Section 5'.
It therefore follows that the term is used with reference to a local authority functioning as a Municipality at the time the Act came into force or constituted as such thereafter. It is also used with reference to area of a Municipality Obviously in Section 208 it is with reference to the former meaning that the term is used. But it has to be further seen what particular authority it connotes. For this purpose we have to refer to certain Sections in which the term is used.
44. In Section 26 (12) the term 'Municipality' is used with reference to Municipal Council. So also in Section 27 (1) it is used with reference to Municipal Council and distinguished it from the Standing Committee. In Section 36 the term is used to represent the Municipal Council and there is a provision therein for delegation of its power to the President, Vice-President or Chairman of the Standing Committee in accordance with the rules made by it.
Section 43 (2) of the Act deals with the matter regarding appointment and removal of officers of the Municipality and therein the term is used to denote Municipal Council. Similarly throughout the Act the term is used with reference to Municipal Council and not with reference to either the President or the Standing Committee and in Section 208 of the Act the term is used in that sense.
45. It is therefore necessary that the acts of defaults, excesses or abuses which can be taken into account by the Government while acting in exercise of its powers under Section 208 ought to be the acts, defaults, excesses or abuses of powers on the part of the Municipal Council and not those of either of the President or the Standing Committee, or the Chairman of the Standing Committee.
46. It therefore follows that where under the Act the Standing Committee is authorised to act without reference to the Municipal Council by reason of the Act or the Rules made thereunder then any error in the discharge of such functions cannot be taken into account as against the Municipal Council. So also where the President is empowered to act independently under the Act or the Rules and commits errors they cannot be said to be the errors of the Municipal Council or the Municipality.
47. We shall now consider the various charges with their explanation to find whether the action of the Government in superseding the Ujjain Municipality is assailable in view of the principles and matters discussed above.
48. Now out of the seven charges some of the charges are totally unrelated to Municipal Council.
49. Charge No. 4 is as regards an alleged default committed by the President in the performance of duties imposed by law. Had it been necessary I would have considered the merits of the charge to find out whether any provision of the Act or any Rule made thereunder is violated of not. But a bare reading of the charge and the material part of the return would show that the default alleged is that of the President or at the most of the Standing Committee. It was said that the President when continues to work as such should not absent himself from the Standing Committee but ought to act as its Chairman and that for any particular meeting he is unable to come the Standing Committee ought to elect a Chairman for that meeting alone and that departure from this involved transgression of Section 32 of the Act.
But it is clear that transgression if any cannot be by the Municipal Council. The State Government realised this position and it was therefore contended that it could not be said that the Municipality can in no case be held responsible for the acts of its President or the Standing Committee. But to my mind this is nothing but evading the issue. The act in question, in not working as Chairman, cannot be Said to bear on any of the Blatters referred to in Section 208 of the Act vis-a-vis the Municipal Council.
50. In fact at the early inquiry by Mr. Sawant who had given different charges to these different authorities viz., the Municipal Council, the President and the Standing Committee, this particular charge was not included in the charge-sheet of the Municipal Council.
51. Charge No. 6 is directly regarding the default alleged to have been committed by the President and the Standing Committee in sanctioning the allowance out of the Sinhastha fund without proper sanction (from the Government).
52. Obviously if the charge itself is directed against the President and the Standing Committee it is incomprehensible as to how can it be said to be related to any of the matters in Section 208 vis-a-vis the. Municipal Council.
53. Reference was made at the time of argument to resolution of the Municipal Council in its general meeting dated 10-9-1957. But that resolution by itself does not indicate that the sanction was given to the grant of allowance referred to in this charge by the Council. But whatever that be the charge was as regards the acts of the President and the Standing Committee and in face of it any extraneous matter at variance with the charge cannot be called in aid for supporting the ultimate action.
54. Charge No. 7 relates to the action of the Standing Committee in sanctioning contracts by its resolutions Exs. Q and Q/1 dated 8-6-1957. Apart from the fact that the power to sanction contracts below Rs. 5000/- vested in the Standing Committee under Clause 54 of the Schedule 'Ka' to the Ujjain-nagar Palika Nigam which are made and sanctioned under Sections 45, 82 and 190 of the Municipal Act, there is this further fact that with the defaults, if any, the Municipal Council cannot be held responsible as the defaults do not relate to it.
Section 56 of the Municipal Act no doubt casts a duty upon the Chief Executive Officer of a City Municipality to' call for tenders in the case of those contracts which involve an expenditure exceeding Rs. 250/- and which relate to execution of any work or supply of any material and when this is not done in any case the proper person to be required to explain this departure would not be Municipal Council but the Chief Executive Officer who is charged with that duty under the Act.
In any case the charge has no relation to competency of Municipal Council in the performance of duties imposed upon it by law nor to commission of defaults, excesses or abuses of power by it in such performance. No provision of the Madhya Bharat Municipalities Act or the Rules made there under make it the duty of the Municipal Council to call for tenders.
Had the Government sought explanation from proper quarters perhaps it would have got a satisfactory answer. Be that as it may the ground is totally unrelated to Municipal Council and cannot be availed of for exercising power of supervision under Section 208.
55. Charge No. 5 is is regards compromise of Mochi Masjid case without the sanction of the Government Section 53 (2) of the Act requires sanction of Government for leasing out Municipal land for over 10 years, or for sale or other transfer. It is said that the compromise needed the sanction of Government as it involved transfer of Municipal land to the Masjid.
Section 197 (2) confers power upon the Municipality to effect a compromise in respect of any suit instituted by or against it. Can it then be said- that Section 197 (2) is controlled by Section 53 (2) so that even if the claim to Municipal land be a disputed one still the sanction will be necessary. Proviso to Section 197 (2) indicates that the sanction 'to which it refers relates to contracts in the making of which the sanction is needed under the Act.
Had the power of compromise of the Municipality been intended to be controlled further so as to require sanction even in the cases of disputed claims the legislature would have said, so. In the absence of any limiting words in Section 197 (2) it cannot be said that the power of compromise is restricted and previous Government sanction is necessary.
But, there may be a case of compromise where an admittedly Municipal land is sought to be sold to the other party by way of compromise. In that case of course Section 53 (2) will apply and prior sanction of the Government will be necessary.
56. In the present case facts on record do not disclose the nature of the dispute between the Municipality and the Masjid. But even, assuming that Government sanction is necessary still para 22 of the return discloses as to who was being considered as the defaulting party, whether the Municipal Council, the Standing Committee or the President. It was stated in the return in Para 22:
'The compromise in this case was not made by the Council or the Standing Committee. Only a Chit was issued on 9-3-1957 by the petitioner. Construction of shops was allowed before Government sanction had been obtained. The whole matter was rushed through by the President during a period when he was on leave from the Standing Committee due to his supposed ill-health.
The Council was not consulted prior to effecting a compromise. The Standing Committee was not allowed to effect the compromise as is essential as per Rule 74, Section 197, Para 2.'
57. It is clear from the return that the person sought to be blamed is the President for his alleged usurpation of the power of the Standing Committee who under the rules is authorised to effect a compromise.
58. Accepting this to be the correct position the Municipal Council or the Municipality cannot be held individually responsible for failure to obtain sanction. If the power under the rules vested in the Standing Committee if is that body which is responsible to see that everything is done in accordance with the legal requirements and not the Council,
59. The resolution of the Council No. 13 dated 15-1-1957 Ex. N indicates that the Standing Committee had recommended a compromise and the Council accepted the said recommendation by means of a resolution. The resolution incorporated the main terms of the compromise and gave a direction that lawful steps might be taken for bringing about the compromise on those lines.
60. The matter then rested with the StandingCommittee which under the Rules was authorisedto effect compromise.
61. In the complaint made by the dissident group before the Inquiry Officer it was alleged that the President had sacrificed Municipal interest to please the party of Maulana Masud Ahmad. It was also asserted that the ultimate draft compromise was never submitted to the Council for approval. In the Charge-sheet given by the Inquiry Officer to the Municipal Council or the Municipality this charge was not included.
62. All this reveals that this charge was not related to any of the objective matters with which, under Section 208, the Municipal Council was concerned.
63. We are thus left with three charges Nos. 1, 2 and 3.
64. As regards charge No. 1 although outwardly the charge is vague there is some force in the contention raised on behalf of the opponent that the exact significance of the charge was not unknown to the Municipal Council and the petitioner. At the time of inquiry by Mr. Sawant the details of objection were set out and attempted to be relied on.
The main objections were that there was undue hurry in passing the budget for the year 1957-58 within five minutes on 22-3-1957 without there being proper opportunity to discuss the budget and without considering the same item-wise and that this was contrary to Rule No. 40 of Budget Rules and also Rule No. 47. During the inquiry stage there was also an allegation that the clock of the Council was made fast by five minutes with a view to prevent certain members from taking part in the meeting. There were other objections besides this on this point.
65. It is not clear as to how many and which of these objections were meant to be included in charge No. 1 which evidently is vaguely worded. But even assuming that objections regarding transgression of Budget Rule Nos. 40 and 47 of the Rules of Ujjain Municipality at least survived the question is whether the passing of the budget was contrary to the aforesaid provisions.
At the time of argument it is conceded that reference to Rule No. 40 in Annexure III which was a charge-sheet to the President at the time of inquiry is incorrect and that by reference to Ex. E it is Rule No. 7 of Budget Rules which was said to have been transgressed. By reference to Rule 47 (b) of the Rules of Ujjain Municipality it appears clear that it is open for the President to include the whole question regarding the budget into a single resolution if he finds that, according to the opinion of the members present, it is unnecessary to consider the question with reference to different heads' or sub-heads of estimated receipts and expenditure.
66. Rule 7 of the Budget Rules known as ^^rRdkfyd ctsV fu;e**published in the Madhya Bharat Government Gazette dated 11-3-1954 contains two clauses. Clause first provides for consideration of the Budget in the general meeting of the Municipal Council before the 15th of February of every year and further lays down that the Municipality should accept the budget by means of a special resolution and that the same he sent to the Government for information without delay.
The second Clause deals with a case where the budget is not balanced one, or the same is in respect of an indebted Municipality and provides for a sanction either from the Government or the Inspector General of Municipalities according to the nature of the Municipality. There is nothing in this Rule providing for the obligation on the part of the Municipal council to discuss the budget item-wise.
67. The position taken by the petitioner is that there was no haste and that after the initial discussion on the 19th and 21st and in view of the opinion of the members present on 22nd there was no haste and that five minutes were quite sufficient. Assuming however that this position is not correct who was it who was at fault in All this? Was it the Council or the President?
Rule 47 casts some duty upon the President to divide the budget into different heads and subheads for convenience of discussion and to place a resolution for acceptance with reference to each sub-head. Where he does not thus divide the budget into heads and sub-heads where convenience of the matter requires it, according to the opinion of the Government, and also does not put it in the form of a resolution with reference to each sub-head the default in acting contrary to the object behind the rule can at the most be said to be that of the President and not of the Municipal Council.
What can be expected of the Municipal Council in such a situation? Can it be said that it should have refrained from voting? Does any role require or suggest this?
68. It is not without significance that in the charge sheet given to the Council by the Inquiry Officer this particular charge was not included in it. It was included in the charge-sheet given to the President.
69. Thus in the first place the action is not wholly beyond the scope of Rule 47 as Sub-rule (b) of Rule 47 is sufficiently wide. Assuming that it is contrary to the spirit of Rule 47 still the blame cannot be laid at the door of the Council. There is misunderstanding and mis-application of the Rules in considering this matter to have a bearing on any of the grounds in Section 208 for supersession of the Municipal Council.
70. I consider it beyond the scope of powers of this Court to examine the merits of this controversy and to determine whether the passing of the budget was in fact hurried and improper or was wholly proper.
71. It is also unnecessary to consider the propriety of the further action of the Government in sending back the budget for re-discussion. It may be that the Government could exercise control, the Ujjain Municipality being an indebted Municipality, by reasons of its powers under Section 62 of the Act and power to remit may be assumed to exist in its power to vary or alter the budget but as I discussed earlier the failure to follow Rule 47 in letter and spirit is not the fault of the Municipal Council.
72. As regards Charge No. 2 it seems that the Government has taken contradictory positions. The Municipality of Ujjain is accused of incompetency in the performance of duties imposed upon it by law refusing to accept the loan which it had asked for from the Government by its resolution dated 22-4-1957 because according to the view of the Government taking of such loan was quite necessary due to special requirements of Sinhastha fair.
The Municipal Council due to internecine conflict or want of unanimity amongst the members of different political affiliations might not have agreed as regards the persons who should be authorised to draw the loan. The effect was that the resolution to draw the loan failed. The resolution was composite and contained two matters. One to accept the loan and second to draw it through a body authorised by the Council. Each part was not voted separately and the resolution as a whole failed.
If this was wrong, according to the Government, later resolution accepting the loan and deciding to draw through a body different in composition from the first will amount to correction of that mistake and in so doing if there be a flaw it would be technical indeed, if the need for the loan was urgent it would be improper to wait till three months elapse.
Moreover it is a possible view that the second resolution of 31-5-1957 authorising the accepting and drawing of the loan is an independent resolution and is not a modification or cancellation of the same. Even assuming that that view is not correct and that second resolution is assumed to modify or cancel the first still on ultimate analysis the mistake on the part of the Council is technical.
Had the Municipal Council, having committed the initial mistake persisted in the same the municipal administration would have come to grief.
73. The charge however is related to the Municipal Council and also to the performance of its duty under law. What weight is to be attached to this circumstance rests upon the discretionary power of the Government under Section 208 of the Act.
74. As regards the charge (No. 3) regarding purchase of a jeep out of municipal funds without budgetary provision it has to be conceded that by reason of Section 50 of the Act the proceeds resulting from the sale of unwanted and useless material would be municipal fund. There are two provisions regarding spending in the absence of budgetary grant. Section 53 (2) (b) of the Act provides that in the case of every contract which will involve expenditure not covered by the budget grant the sanction of the Municipality by a resolution passed at a general meeting is required.
Section 63 (1) on the other hand provides that after the budget is passed the Municipality shall not incur expenditure under any of the heads' of the budget without making provision for such excess by variation or alteration of the budget.
75. It therefore seems by reading Section 53 (3) (b) and Section 63 (1) along with Section 60 (3) that where contracts have to be entered into involving expenditure not covered by budget grant a resolution of the Council in its general meeting authorising the same ought to be passed. Then as provided in Section 60 (3) there should be a special resolution modifying the supplemental or revised budget.
76. In the present case there is a resolution of the Council dated 31-1-1957 Ex. L but there seems to be no special resolution sanctioning the revised budget. To this extent there is departure from the statutory requirement. The learned counsel for the petitioner has frankly conceded that this is so as regards this charge but it is submitted that in as much as there is the resolution of the Council the breach is technical and had the mistake been pointed out in time it could have been promptly corrected.
77. Thus considering all the charges it appears that barring Charges Nos. 2 and 3 none of the charges are related to the Municipal Council. They cannot be taken aid of for accusing the Municipal Council of incompetency in the discharge of its duty nor for holding it responsible for any excess or abuse of powers.
I cannot accept the argument of the learned Government Advocate that in as much as the President or the Standing Committee are the lesser authorities than the Municipal Council the Council can be held responsible for an action under Section 208 of the Act for the defaults or transgression of law committed not by it but by the Standing Committee or the President.
78. As indicated above even as regards charge No. 2 besides the default being technical the charge involves contradictory, positions for the Government, It is asserted that loan was necessary, The Municipality committed mistake in not agreeing to take the loan. But it further committed mistake in agreeing to take the loan by passing a resolution.
Whatever may be said of the technicality of the matter where ultimate action is the one which the Government thought it advisable to take for the Municipality it should hardly afford a handle for supersession merely because a mistake is corrected in time but irregularly.
79. But even assuming that charges Nos. 2 and 3 afford lawful grounds the question is where large number of charges are unrelated to the Municipal Council should the order stand. In my opinion in such a situation it should be held that there is an error apparent on the face of the record and in as much as this Court cannot put itself in the position of the Government and substitute its views, arrived at by ultimate examination and analysis, in place of that of the Government, the order ought to fall as a whole.
It was held in AIR 1954 SC 179 (E), that where one of the two grounds for detention is nonexistent or unsubstantial, to hold that the other ground which still remains is sufficient to sustain the order, would be to substitute an objective judicial test for the subjective decision of the executive authority.
80. There is one more aspect of the impugned order. The order of supersession stated the grounds as the reasons and the order is couched in the same manner as if it were a charge-sheet. The explanations rendered have not found place in dealing with the ultimate conclusions and reasons therefor are treated as synonymous with grounds or charges. Then there is this further defect namely that the Section requires the Government to state which of the objective matter is covered by which of the charges found by it to be correct against the defaulting Municipality.
In the present case the order dated 7-12-1957 superseding the Ujjain Municipality lumps together all the charges and practically quotes the Section so far as defaults, excesses or abuses are concerned. This shows want of proper application of mind or absence of understanding regarding true significance of the provision.
81. I am therefore inclined to hold that the present action of supersession being in pursuance of an executive order, the order, when found to be based on charges, majority of which are unrelated to the Municipal Council and also shows absence of application of its mind to relevant matters referred to in Section 208 of the Act, ought to fall as a whole.
It is difficult to accept the suggestion in such cases that the order could hang by the peg of few out of several grounds when it cannot be told with precision how the mind of the Government would have worked had it been cognizant of the irrelevancy of the grounds more especially where it can only act when there is to be persistency in the defaults committed by the Municipality.
82. The result is that this petition is allowed with costs and the order dated 7-12-1957 superseding the Ujjain Municipality is hereby quashed. Counsel fee shall be taxed at Rs. 100/-.
P.C. Shrivastava, J.
83. I agree that the petition should be allowed and the order dated 7-12-1957 should be quashed. However, I would prefer to base the decision on narrower grounds.
84. I find some difficulty in subscribing to the proposition that action under Section 208 of the Madhya Bharat Municipalities Act cannot be taken against a Municipal Council for the acts and omissions of the Standing Committee or the President. The Standing Committee is only an agency of the Municipality which exercises certain functions on its behalf.
The powers are exercised by virtue of a statutory delegation in accordance with Section 27 (2) ofthe Act. Those are not independent powers orfunctions of the Standing Committee but onlypowers of the Municipality which are exercised bya smaller body for convenience. It is significantto observe that the Act does not provide anywherefor any power of supervision or control over theStanding Committee and no action can be takenagainst that Committee as such.
In fact, there is no provision to enable the Government or the Inspector General, Municipalities, to enter into correspondence with the Standing Committee or the President individually regarding their wrong actions. Section 202 which provides for powers of inspection and supervision refers only to the 'Municipality'. It would thus appear to me that all correspondence must be addressed to the Council and all explanations must be demanded from it.
This is also in consonance with the scheme of the Act which recognizes the Municipality alone as a body corporate. The division of functions between the Council on the one hand and the other authorities like the Standing Committee or the President on the other, is only an internal matter. The ultimate responsibility for their acts must rest on the Council.
Otherwise, the incompetency, persistent defaults or abuse of powers by the subordinate bodies will be without any remedy and the Council can, in this view, escape, all consequences by simply passing on the responsibility for defaults to them. I need not, however, discuss the matter further as I agree with the final conclusion on other grounds.
85. In this case, the Inspector General of Municipalities addressed separate communications to the President, Standing Committee and the Council demanding explanation on different charges from them. This was wrong as all correspondence should have been in the name of the Council alone. However, his doing so in fact, justifies an argument from the Council that it was not asked about the charges addressed to other bodies and was not bound to reply to them.
Further, the charges as served on the Council are incomplete and vague and reference has to be made to the correspondence addressed to other bodies in understanding their real nature. The charges should be complete in themselves so as to give precise notice to the Municipality of every fact that is sought to be used against it.
86. The Municipality gave an explanation to the charges preferred but it does not appear from the impugned order that the Government applied its mind to the explanation at all. The order passed by the State Government is nothing more than a mechanical reproduction of Section 208 of the Act. That section requires that the Government should form an opinion, after considering the explanation, on these points namely: (a) that the municipality is not competent to perform its duties; or (b) that it makes persistent defaults in the performance of its duties or (c) that it exceeds or abuses its powers.
It must come to any one or more of these conclusions before action can be taken. Now, it is not difficult to see that these diverse conclusions require different types of acts or omissions on the part of the Council to justify action. The impugned order is so worded as to imply that each one of the seven charges leads to an inference about all the three conclusions.
Or it may be said that all the charges read cumulatively lead to the inference that the Municipality is incompetent, is making persistent defaults and is also abusing its powers. If the charges had been considered satisfactorily, each one of them would have led to one of those three opinions, or possibly to more than one of those three conclusions in some cases.
However, it is unusual to think that every one of them leads to all the three conclusions. It is obvious that no effort has been made to analyse the charges to form an opinion intelligently and all the conclusions have been put down together mechanically. This appears to be a most unsatisfactory manner of dealing with a matter which requires public statement or reasons.
87. It is contended by the learned Government Advocate that an inference of incompetence arises from the fact that the Council has two parties having equal strength and the body cannot come to any decision of a lasting nature. He points to the proceedings relating to the budget and the report of the President that the budget cannot be satisfactorily reconsidered on account of the obstruction of the opposite party.
He points to the voting on the resolution relating to Sinhast loan and how the fate of the resolution is affected by one party having one member more or one member less in attendance in different meetings. All this is true; but this is not stated in the supersession order. It is difficult to see from it that the opinion regarding incompetence of the Council was arrived at by the Government on those considerations. When the law requires reasons to be stated for a particular conclusion, it is only those reasons which have to be considered in deciding the validity of the order.
88. As I have said, the order shows the Government did not consider the charges in arriving at a conclusion about the incompetency etc., of the Municipal Council. The necessary opinion, which is a condition precedent to the order of supersession does not exist in this case. This is an error apparent on the face of the record. The order must therefore be set aside.
By The Court
89. The result is that this petition is allowedwith costs and the order dated 7-12-1957 superseding the Ujjain Municipality is hereby quashed. Counsel fee shall be taxed at Rs. 100/-.