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Nagar Panchayat Jhajha (Nagar Sabha) Bhuj Vs. the State of Punjab - Court Judgment

LegalCrystal Citation
CourtDelhi High Court
Decided On
Case NumberRegular Second Appeal No. 170 of 1967
Reported inILR1968Delhi90
ActsCode of Civil Procedure (CPC), 1908 - Sections 80
AppellantNagar Panchayat Jhajha (Nagar Sabha) Bhuj
RespondentThe State of Punjab
Advocates: Chabildas and; M.M. Madan, Advs
Cases ReferredDistrict School Board of North Kanara v. Parameshwar Gattu Naik
.....panchayat to sue. ; where a ntoice under section 80 c.p.c., was served on the state of punjab by nagar panchayat jhajha and the lower appellate court holding that nagar sabha alone could file the suit and the ntoice served by the nagar panchayat jhajha was invalid, dismissed the suit: held, that the validity of ntoice depends upon the identity of the person serving the ntoice with that of the person instituting the suit, and that in the instant case there was a clear identity between the two persons, the addition of 'nagar sabha' in the name of the plaintiff being merely a further description of the nagar panchayat indicating that the nagar panchayat filing the suit is the nagar panchayat of nagar sabha.; thereforee, that the ntoice in question was valid and that the elaboration in the.....s.k. kapur, j. (1) nagar panchayat jhajha (nagar sabha) filed a suit against the state of punjab for recovery of rs. 1,365-22 paisa on the allegations that the nagar panchayat (nagar sabha) jhajha became the owner of shamlat-deh area in chabri, shakog, mihani and toher villages by virtue of the pepsu village common lands act (act no. 15 of 1955) and all rights, title and interest in the shamlat-deh lands vested in the plaintiff; that the forest department auctioned some trees in october/november 1956 of which the plaintiff had become owner without any right and without the consent of the plaintiff; that the sale proceeds amounting to rs. 2,730-44 paisa were recovered by the forest department from the auction purchasers and out of the amount so realized only rs. 1,365-22 paisa were paid to.....

S.K. Kapur, J.

(1) Nagar Panchayat Jhajha (Nagar Sabha) filed a suit against the State of Punjab for recovery of Rs. 1,365-22 Paisa on the allegations that the Nagar Panchayat (Nagar Sabha) Jhajha became the owner of Shamlat-Deh area in Chabri, Shakog, Mihani and toher villages by virtue of the Pepsu Village Common Lands Act (Act No. 15 of 1955) and all rights, title and interest in the Shamlat-Deh lands vested in the plaintiff; that the Forest Department auctioned some trees in October/November 1956 of which the plaintiff had become owner without any right and without the consent of the plaintiff; that the sale proceeds amounting to Rs. 2,730-44 Paisa were recovered by the Forest Department from the auction purchasers and out of the amount so realized only Rs. 1,365-22 Paisa were paid to the plaintiff; that the balance amount of Rs. 1,365-22 Paisa was nto paid to the plaintiff inspire of repeated requests and that the Forest Department Kandaghat had adjusted this amount illegally towards royalty.

(2) The defendant contested the suit and inter alias raised the questions of the competence of the Nagar Panchayat Jhajha (Nagar Sabha) to institute the suit and the validity of the ntoice under section 80, Civil Procedure Code.

ONthe pleadings of the parties, the following issues were framed:-

1.Who is the proper plaintiff?

1.A.Is the ntoice under section 80, Civil P.O., valid? If nto, what is its effect?

2.Does the plaint require amendment?

3.Were the trees sold by Forest Department at the instance of plaintiff? If so, what is the effect on the suit?

4.Has the Forest Department deducted Rs. 1,365-22 nP on account of royalty lawfully (Onus objected to).

5.To what relief is the plaintiff entitled

(3) The trial Court found all the issues in favor of the plaintiff and granted a decree for Rs. 1,365-22 Paisa. The State of Punjab preferred an appeal before the District Judge Ambala. The District Judge by his judgment dated 4/6/1963, decided that the Nagar Sabha and nto the Nagar Panchayat Jhajha could institute the suit and that the ntoice under section 80, Civil Procedure Code was had in law. The Nagar Panchayat has now come up in appeal against the decision of the learned District Judge.

(4) The learned counsel for the respondent concedes that in case the questions regarding the competence of the plaintiff to institute the suit and the validity of ntoice under section 80, Civil Procedure Code, are decided in favor of the plaintiff the suit must succeed. I will, there- fore, confine my decision to these two points.

(5) Ntoice under section 80 was served by Nagar Panchayat Jhajha. The District Judge held that since Nagar Sabha alone could file a suit the ntoice under section 80 served by the Nagar Panchayat jhajha was invalid. This is precisely the contention raised on behalf of the State of Punjab before me. The learned District Judge relied on S. N. Dutt v. Union of India(`1) In that case ntoice under section 80 was served by M/s S. N. Dutt and Company. The suit was, however, filed by S. N. Dutt, the sole proprietor of M/s S. N. Dutt and Company. It was held that the ntoice was had because there was no identity of the person issuing the ntoice with the person filling the suit. In this case the ntoice was served by Nagar Panchayat Jhajha. The said Nagar Panchayat Jhajha is admittedly the Nagar Panchayat of the Nagar Sabha of the Sabha area concerned. Nagar Panchayats and Nagar Sabhas are constituted under the Pepsu Panchayat Raj Act, 2008 (Act No. Viii of 2008). Clause (h) of section 2 defines Panchayat' to mean 'the executive committee of the Nagar Sabha constituted under section 11.' Nagar Sabha is constituted by the Government for every Sabha area under section 4 of the said Act. Sub-section (2) of section 4 provides that :

'EVERYNagar Sabha shall, by the name ntoified, under sub-section (1), be a body corporate having perpetual succession and a common seal, and subject to and restriction or condition imposed by or under this Act or any toher law, shall have power to acquire, hold, administer and transfer property, movable or immovable and to enter into contracts and shall by the said name sue or be sued and do all such things as are necessary for the purposes for which it is constituted.'

(6) Under section 11 of the said Act the Nagar Sabha elects from its members a President and a Vice-President respectively called Sarpanch and Naib-Sarpanch and after the election of the President and VicePresident the Sabha elects in the same meeting from amongst its members an executive committee styled as Nagar Panchayat. In case it be held that the present suit could be instituted only by Nagar Sabha and nto the Nagar Panchayat the suit would fail on that ground. That has, however, no bearing on the validity of the ntoice. The validity of the ntoice depends upon the identity of the person serving the ntoice with that of the person instituting the suit. The suit was instituted by 'Nagar Panchayat Jhajha (Nagar Sabha)'. The ntoice was also given by 'Nagar Panchayat Jhajha.' There is, thereforee, a clear identity between the two persons. Addition of the word 'Nagar Sabha' in the name of the plaintiff is merely a further description of the Nagar Panchayat indicating that the Nagar Panchayat filing the suit is the Nagar Panchayat of Nagar Sabha. That elaboration in the description does nto render the ntoice invalid. The learned District Judge, thereforee, was in error in applying the decision of their Lordships of the Supreme Court mentioned herein to the facts of this case.

(7) That takes me to the question whether or nto the Nagar Panchayat could sue. Under the Pepsu Village Common Lands (Regulation) Act, 1954 (Act No. 15 of 1955) the Shamlat-Deh lands are vested nto in the Nagar Sabha but in the Panchayat. It is appropriate to read section 3 of the Act 15 of 1955. It runs thus :

'NtoWITHSTANDINGanything to the contrary contained in any toher law for the time being in force, and ntowithstanding any agreement, instrument, custom or usage or any decree or order of any court or toher authority, all rights, title and interest whatever in the land-

(A)which is included in the Shamlat deh of any village, shall, on the appointed date, vest in a panchayat having jurisdiction over the village;

(B)which is situated in the Abadi Deh of a village and which is under the house owned by a non-proprietor, shall at the commencement of this Act vest in the said non-proprietor.'

(8) There is no provision either in Act 15 of 1955 or under Act Viii of 2008 that with respect to the lands vested in the Panchayat the suits must be instituted by Nagar Sabhas. No doubt under the definition of 'Panchayat' Nagar Panchayat is an executive committee of the Nagar Sabha but that alone does nto confer any right on the Nagar Sabha to institute suits on behalf of Nagar Panchayat with respect to properties vesting in the Nagar Panchayat. The learned District Judge seems to have been influenced by the fact that under Act Viii of 2008 Nagar Sabha has been constituted as a body corporate and, thereforee, that body alone could sue. This process of reasoning overlooks the fact that this conferment of corporate status on the Nagar Sabha is for the purposes of suing or being sued with respect to the rights and liabilities etc. of the Nagar Sabha. This does nto by itself confer any right to sue or create liability for being sued with respect to matters with which Nagar Sabha is nto concerned. In the absence of any provision in any of the two Acts, referred to herein- before, conferring any right on Nagar Sabha to sue with respect to property or rights of Nagar Panchayat it must follow that Nagar Sabha could nto file the present suit. There is also no provision in the said Acts vesting the unrealised sale proceeds of the trees as in the present case in the Nagar Sabha. Section 33 of Act Viii of 2008, which reads as under, has also nto gto that effect:

'33(1)Subject to any special reservation made by the Government, all public property situate within its local limits shall vest in the Sabha and shall, with all toher property which may become vested in the Sabha, be under the direction, management and control of the Panchayat who shall maintain a register and a map of all such property and of the immovable Property which the Sabha owns.

(2)All markets and fairs held upon public land shall be managed and regulated by the Panchayat and the receipts derived there from shall be credited to the Sabha Fund.'

(9) Section 33 vests in the Gaon Sabha all public property situate within its local limits. It is nto the case of any of the parties that the Shamlat-Deh lands and the trees thereon vested in the Panchayat were 'public property'. Section 116 of the Act Viii of 2008 also deserves attention in connection with this question. It constitutes a Sabha Fund and sub-section (1) thereof provides:

'THEREshall be a Sabha Fund and all moneys realised by the Panchayat shall form part of that Fund, and shall be applied by the Panchayat in accordance with the provisions of this Act.'

(10) SUB-SECTION (2) enumerates the various realizations made by the Panchayats to be credited to Sabha Fund such as grants from the Government or local bodies, fines in respect of offences under the Act, balance and proceeds of all funds including malba which were or are being collected for the common purposes of the villages comprised in the Sabha area, all donations, taxes, duties and fees imposed and realised under the Act, the sale proceeds of all dust, dirt, dung or refuse and the balance standing to the credit of any panchayat constituted before the commencement of the Act. Under this section also only those moneys which are realised by the Panchayat form part of the fund.

(11) Rule 47 prescribed the duties of the Sarpanch and clause (g) thereof authorized him :

'TOfile suits and launch prosecutions on behalf of the Panchayat '

THISalso indicates that the Panchayat can in its own right institute suits and prosecutions and that right must necessarily extend to the matters where Panchayat itself is the proper plaintiff This takes me to the toher question whether or nto the Panchayat can sue. Sub-Section 31) of section 3, General Clauses Act, defines local authority' to mean 'a municipal committee, district board, body of port commissioners or toher authority legally entitled to, or entrusted by the Government with the control or management of a municipal or local fund'. That it is an authority is nto disputed. The question is whether it is entrusted by the Government with the control or management of a municipal or local fund.

(12) Under section 28 the Panchayat is competent, with respect to the Sabha area, to enter into contracts with the Government or local body to collect land revenue or taxes or dues payable to the Government and with any proprietor to collect rent on his behalf. Under sections Iii to 113 the Panchayat can levy various taxes and the Government has to assign every year to every Panchayat a portion of the land revenue realised within the limits of the Sabha area. By section 116 a Panchayat is enjoined to apply the Sabha funds in accordance with the provisions of the Act. Rule 120 forbids a Panchayat from transfering any immovable property vested in it except by way of lease without complying with certain conditions. Rule 129 forbids the Panchayat from transferring any immovable property belonging to a Panchayat by sale, gift, mortgage etc except by a resolution of the Panchayat and with the sanction of the Director. Under Rule 145 the administration of the Sabha funds is vested in the Panchayat subject to the general control of the Director. Panchayat is a creation of Legislature. It has a name, a place and a certain quantum of designation of persons. It has statutory powers. The absence of specification of a seal or a name in which to sue or be sued would be indifferent if it be a corporation toherwise. It appears from the scheme of the Act that the members of the Panchayat have to act collectively and are capacitated to act as an individual. Panchayat is, in my opinion, a local authority possessed of capacity to sue. The following definition of 'corporation' given in Halsbury's Laws of England (Hailsham Second Edition), Volume 8, paragraph I (page 3), was approved by the Bombay High Court in the District School Board Bijapur v. Bhagwan Vasudeo Marathe, (2)

'Acorporation aggregate has been defined as a collection of individuals united into one body under a special denomination having perpetual succession under an artificial form and vested by the policy of the law with the capacity of acting in Several respects as in individual '

(13) In the Bombay case it was held that School Board of the District Local Board was a corporation liable to be sued. Barlee, J., after referring to the definition of corporation in the Halsbury's Laws of England. observed:

'THEbody set up by the legislature called the School Board answers to this description and it is immaterial that they are controlled in many respects by the District Local Board, the parent body. It is also immaterial that their powers are very limited. If they are corporate . bodies and act as a corporation then the fact that they are nto called a corporation in the Act also seems to me to be immaterial. We must look to the substance of the Act and find out what the legislature really mean and nto to the description or rather want of description as in this case. It has been argued that this corporation, though they have powers, cannto be sued for their liabilities in asmuch as the legislature has neglected to insert in the Bombay Primary Education Act any provision of the nature of the provision made in the Bombay Local Boards Act under section 47, which provides that a District or Taluka Local Board may sue and be sued in its corporate name. But, when the legislature gave these corporate bodies of their creation rights and duties, they gave them powers which might be used and also be abused and if they abuse their powers given to them it is a part of the general law that they may be liable to be sued whether in contract or in tort. I do nto know whether it is possible for a local legislature to create a body and give it powers and to provide that it shall nto be liable to be sued for abuse of such powers. But certainly it cannto be presumed that the bodies set up by the local legislatures are free from the jurisdiction of the Courts. It is quite clear that the legislature to free the School Board from the jurisdiction of the Courts.'

(14) This decision was again approved in District School Board of North Kanara v. Parameshwar Gattu Naik, (3) In Parmeshwar Dayal v. the Barh Local Board, (4) it was held that the Local Board of the District Board constituted under Bihar and Orissa Local Self Government Act, 1885, was nto the agent of the District Board for all purposes and the former could institute a suit to remove a trespass over a land transferred to it Chatterji, J., observed:

'THEnext point argued is that The Local Board is nto a corporation and, thereforee, it could nto sue through its Chairman but all the members constituting the Board should have sued. It is said that section 29 of the Act makes the District Board a corporate body, but there is no such provision relating to the Local Board. It cannto be disputed that the Local Board is a body of individuals which can act collectively. It cannto possibly be suggested that the members can do anything except as representing the Board. Though a Local Board is nto treated by the Act as a corporate body, there can be no doubt that it is a quasi-corporation. A quasi-corporation is well recognised in Law. That asuit can be brought against a Local Board is expressly provided in section 146 of the Act. If, thereforee, a suit may be brought against the Local Board, there is no reason why, when the suit is by the Local Board, all its members and nto the Board, must sue.'

(15) In these circumstances, it must be held that the Panchayat could sue for recovery of the amount claimed. The appeal is, thereforee, allowed and the judgment of the District Judge set aside and that of the trial Court restored. As a result, a decree for Rs. 1,365.22 Paisa is passed in favor of the plaintiff against the defendant. The parties will bear their own costs in this Court. The amount will be paid within two months from to-day.

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