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Shivprasad Umashanker Vs. Municipality of Palitana - Court Judgment

LegalCrystal Citation
SubjectService
CourtGujarat High Court
Decided On
Judge
Reported in(1997)2GLR1460
AppellantShivprasad Umashanker
RespondentMunicipality of Palitana
Cases ReferredMcClelland v. Northern Ireland Health Board
Excerpt:
- - 1. this letters patent appeal raises an interesting question affecting the relationship of a municipality and its chief officer under the provisions of the gujarat municipalities act, 1963. the facts giving rise to the appeal are few and may be briefly stated as follows. the resolution did not show on the face of it what was the source of the power in exercise of which the service of the petitioner was terminated but pursuant to the resolution and with a view to giving effect to it, an office order was passed by the president of the palitana municipality on the same day, namely, 30th july 1969 in which it was clearly recited that the resolution terminating the service of the petitioner was passed by more than two-third of the members of the general body of the palitana municipality.....p.n. bhagwati, c.j.1. this letters patent appeal raises an interesting question affecting the relationship of a municipality and its chief officer under the provisions of the gujarat municipalities act, 1963. the facts giving rise to the appeal are few and may be briefly stated as follows. prior to the coming into force of the gujarat municipalities act, 1963, palitana municipality was governed by the bombay district municipal act, 1901. the petitioner was appointed chief officer of the palitana municipality in january 1959 and this appointment was approved by the collector by an order, dated 20th february 1965. though in the appointment the petitioner was designated as chief officer, there was no statutory office of chief officer under the bombay district municipal act, 1901. it was only.....
Judgment:

P.N. Bhagwati, C.J.

1. This Letters Patent Appeal raises an interesting question affecting the relationship of a Municipality and its Chief Officer under the provisions of the Gujarat Municipalities Act, 1963. The facts giving rise to the appeal are few and may be briefly stated as follows. Prior to the coming into force of the Gujarat Municipalities Act, 1963, Palitana Municipality was governed by the Bombay District Municipal Act, 1901. The petitioner was appointed Chief Officer of the Palitana Municipality in January 1959 and this appointment was approved by the Collector by an order, dated 20th February 1965. Though in the appointment the petitioner was designated as Chief Officer, there was no statutory office of Chief Officer under the Bombay District Municipal Act, 1901. It was only under the Gujarat Municipalities Act, 1963, that a statutory office of Chief Officer was created for the first time. Palitana Municipality, therefore, on the coming into force of the Gujarat Municipalities Act, 1963, passed a resolution, dated 22nd April 1965 appointing the petitioner as Chief Officer under Section 47 of the Act. The pay-scale of the Chief Officer was thereafter revised by Palitana Municipality with the approval of the State Government obtained under Clause (a) of the proviso to Section 271 and a fresh resolution was passed by Palitana Municipality on 10th June 1963 confirming the petitioner as Chief Officer in the revised pay-scale with effect from 2nd January 1967. The petitioner continued to occupy the office of Chief Officer until 31st July 1969 when his service was terminated pursuant to a resolution, dated 30th July 1969 passed by the General Board of Palitana Municipality. The resolution came to be passed in following circumstances. Palitana Municipality consists of 25 Councilors. Out of them, 16 Councilors sent a requisition, dated 25th July 1969 to the President requiring him to call a meeting of the General Board for the purpose of considering and passing a resolution that the service of the petitioner as Chief Officer be terminated forthwith or at any rate from 31st July 1969. Pursuant to the requisition the President convened a meeting of the General Board on 30th July 1969. The meeting was accordingly held at the Municipal Office on 30th July 1969 and at the meeting a resolution was passed unanimously by all 24 members present, without any discussion whatsoever, that the service of the petitioner as Chief Officer be terminated with effect from 31st July 1969. Though the petitioner was present at the meeting in his capacity as Chief Officer, he was not informed as to what were the reasons for which his service was sought to be terminated nor was any opportunity given to him to show cause against the proposed termination of his service. The resolution did not show on the face of it what was the source of the power in exercise of which the service of the petitioner was terminated but pursuant to the resolution and with a view to giving effect to it, an office order was passed by the President of the Palitana Municipality on the same day, namely, 30th July 1969 in which it was clearly recited that the resolution terminating the service of the petitioner was passed by more than two-third of the members of the General Body of the Palitana Municipality under Section 48 of the Gujarat Municipalities Act, 1963. The office order directed that the service of the petitioner was terminated with effect from 31st July 1969 and that the petitioner would be paid three months' notice pay from 1st August 1969 to 31st October 1969. The President of Palitana Municipality also addressed a letter, dated 30th July 1969 to the petitioner intimating to him that his service as Chief Officer was terminated with effect from 31st July 1969 under Section 48 and that he would be paid three months' salary in lieu of notice. The petitioner thereupon preferred the present petition challenging the validity of the resolution passed by the General Board of the Palitana Municipality as also the office order issued by the President in pursuance of the resolution and seeking a direction that the respondent should treat the petitioner as continuing in service as if the resolution and the office order had not been made at all.

2. Before we set out the ground of challenge against the validity of the impugned resolution and office order, it would be convenient at this stage to refer to the relevant provisions of the Gujarat Municipalities Act, 1963, which have a bearing on the determination of the controversy between the parties. The statutory office of Chief Officer of a Municipality is created for the first time by Section 47 Sub-section (1) and this sub-section provides that the Chief Officer shall be appointed by the Municipality. Section 48 confers protection inter alia on the Chief Officer and since a considerable part of the controversy has turned round the true scope and ambit of this section, it would be desirable to set it out in extenso. It reads:

48. No Chief Officer or officer appointed under Sub-section (4) or (5) of Section 47 shall be removable from office, reduced in rank or suspended except by a resolution passed by a majority of at least two-thirds of the total number of the then councilors and shall not be punishable with fine.

The powers and duties of the Chief Officer are enumerated in Section 49 but we need not refer to this section in detail since the question before us does not concern the powers and duties of the Chief Officer. Section 50 is the next material section and that may also be reproduced in full:

50. (1) Notwithstanding anything contained in Sections 47 and 48 it shall be lawful for the State Government on the recommendation of any Municipality supported by a resolution passed by a majority of the councilors present at a special general meeting called for the purpose to make in its discretion an order of discontinuance in office of the Chief Officer, or an officer appointed under Sub-section (4) or (5) of Section 47:

Provided that:

(a) notwithstanding anything contained in Clause (7) of Section 51, no resolution shall be passed by such meeting unless a quorum shall have been present throughout; and

(b) no order shall be made under this section unless an inquiry has been made into the matter by such officer and in such manner as the State Government may direct and unless the officer against whom such order is to be made has been given a reasonable opportunity at the inquiry of explaining the allegations made against him.

(2) The tenure of office of the officer who is discontinued in office under Sub-section (1) shall cease and determine on and from such date as may be appointed by the State Government, in that behalf.

The Palitana Municipality had made Rules relating to Municipal staff in accordance with the procedure prescribed in Section 41 of the Bombay District Municipal Act, 1901 and Rule 28 of these Rules laid down the age when a municipal employee should be made to retire. This Rule was substituted by a new Rule made by the Palitana Municipality under Section 46 of the Bombay District Municipal Act, 1901, and the new Rule so made was approved by the Commissioner, Rajkot Division, by an order, dated 4th December 1961. The material part of the new Rule 28 as translated was in the following terms:

28. The age of retirement of every Municipal employee except Class IV employees shall be 55 years. So far as Class IV employees are concerned, their age of retirement shall be sixty years. The Municipality may, in special circumstances, give an extension of one year on each occasion so as not to exceed the age of 58 years to class II and Class III employees, if it is necessary to fill in their posts, but other experienced persons are not available and the retiring employees produce a medical certificate from a Doctor certifying that they are physically fit for discharge of their duties.

The Bombay District Municipal Act, 1901, was repealed by Section 279 Sub-section (1) of the Gujarat Municipalities Act, 1963, but Clause (vi) of Sub-section (2) of Section 279 saved the Rules made by the Palitana Municipality in so far as they were not inconsistent with the provisions of the Gujarat Municipalities Act, 1963, and to the extent to which they were not inconsistent, these Rules were deemed to have been made under the Gujarat Municipalities Act, 1963. Rule 28 was thus, according to the petitioner, continued in force by Clause (vi) of Sub-section (2) of Section 279, though the Bombay District Municipal Act, 1901, under which it was made, was repealed.

3. The main ground on which the validity of the impugned resolution and office order was challenged on behalf of the petitioner was that the termination of service of the petitioner was null and void since it was effected without informing the petitioner of what was alleged against him and giving him an opportunity to show cause why his service should not be determined. The petitioner contended that by virtue of Rule 28 of the Rules made by the Palitana Municipality under Section 46 of the Bombay District Municipal Act, 1901, which Rules were continued in force after repeal of the Bombay District Municipal Act, 1901, by Section 279 Sub-section (2) Clause (vi) of the Gujarat Municipalities Act, 1963, the petitioner was entitled to continue in service as Chief Officer until the age of superannuation which was 55 years and the termination of his service prior to the age of superannuation constituted removal from service which could be effected only under Section 48 after holding an inquiry and giving an opportunity to the petitioner to make his defence in regard to the misconduct alleged against him. The petitioner also urged that, in any event, even if Rule 28 had no application to the office of the Chief Officer and the petitioner was accordingly not entitled to a tenure of service up to the age of superannuation, the termination of his service was effected by the Palitana Municipality in exercise of the power conferred under Section 48 and this power being a disciplinary power exercisable by way of punishment, the Palitana Municipality was under a duty to act judicially in exercising it and it could not validly terminate the service of the petitioner without complying with the principles of natural justice. The respondents sought to meet this contention of the petitioner by a three -fold argument. The first contention urged on behalf of the respondents was that Rule 28 had no application to the office of Chief Officer and even if it applied, it did not confer a right on the Chief Officer to continue in service up to the age of 55 years; it merely prescribed an age limit beyond which the Chief Officer could not be continued in service by the Palitana Municipality. The petitioner was, therefore, not entitled to continue in service as Chief Officer until he reached the age of 55 years and termination of his service prior to that date could not per se be regarded as removal from service by way of punishment so as to attract the observance of the principles of natural justice. The respondents also urged that the termination of service of the petitioner was not effected under Section 48 but it was in exercise of the power which an employer possesses under the general law of master and servant to terminate the service of his employee on giving reasonable notice or at any rate in exercise of the power implicit under Section 16 of the Bombay General Clauses Act, 1904 and there was accordingly no question of giving show- cause notice to the petitioner and holding an inquiry for the purpose of determining whether his service should be terminated. The words 'removable from office' in Section 48, according to the respondents, carried the same meaning as 'discontinuance in office' in Section 50: both referred to removal from service by way of punishment and, therefore, in the absence of any express provision in regard to termination of service of Chief Officer, the inherent power of the Municipality as a master to terminate the service on giving reasonable notice under the general law of master and servant as also the power of the Municipality to terminate the service under Section 16 of the Bombay General Clauses Act, 1904, remained unaffected and could be exercised by the Municipality without any fetter. The respondents also contended in the alternative that, in any event, the words 'removable from office' in Section 48 and 'discontinuance in office' in Section 50 meant termination of service simpliciter; in one case the service of the Chief Officer could be terminated by the Municipality while in the other, it could be terminated by the State Government. The Municipality could, in exercise of the power conferred under Section 48, terminate the service, if its action was supported by a majority of at least two-thirds of the total number of Councilors but if two-thirds majority was not available and termination was desired only by a bare majority, the Municipality had no power to terminate the service but it could, by a resolution passed by an ordinary majority of the Councilors present at the special general meeting called for the purpose, recommend to the State Government that Chief Officer be discontinued in office and the State Government would then, in its discretion make an order of discontinuance in office of the Chief Officer after complying with the procedure set out Section 50. There were thus two modes oftermination of service of the Chief Officer provided by the statute; one by two-thirds majority of the Councillors under Section 48 and the other by the State Government on the recommendation of an ordinary majority of the Councillors under Section 50. The termination of service of the petitioner in the present case was effected by a unanimous resolution passed by all the Councillors of the Palitana Municipality and, therefore, it was a valid exercise of power under Section 48 and being termination simpliciter, it did not require observance of the principle of natural justice. These were the different contentions urged on behalf of the parties and we shall now proceed to examine them.

4. The first question which logically arises for consideration is whether the petitioner was entitled to continue in service until he reached the age of 55 years for, if he was so entitled, the termination of his service prior to that age would constitute removal from service by way of punishment and that would undoubtedly require that a charge of misconduct should be established against the petitioner after giving him a fair hearing according to the principles of natural justice. The petitioner relied on Rule 28 and urged that by virtue of that Rule, he was entitled to continue in service up to the age of 55 years. But we do not see how Rule 28 can be of any help to the petitioner. In the first place, Rule 28 was made under Section 46 of the Bombay District Municipal Act, 1901, which did not contemplate any statutory office of Chief Officer and, therefore, it can have no application to the office of Chief Officer statutorily created for the first time under the Gujarat Municipalities Act, 1963. Moreover, Rule 28, on a proper interpretation, applies only to 'servants' of the Municipality other than 'Officers'. The Rules clearly make a distinction between 'Officers' on the one hand and other 'servants' of the Municipality on the other and while almost every Rule refers both to 'Officers' as well as 'servants', as if they are distinct categories of persons dealt with by the Rules, 'servants' alone are mentioned in Rule 28 and there is no reference to 'Officers' in that Rule. The deliberate omission of reference to 'Officer' in Rule 28 cannot be regarded to be without significance, particularly when we find that prior to its amendment, this Rule did contain a reference to 'Officers' as well as 'servants'. It may also be noted that Rule 28 having been made under Section 46 of the Bombay District Municipal Act, 1901, was approved by the Commissioner, Rajkot Division, as required by the proviso to that section while a rule regulating the period of service of the Chief Officer would require to be approved by the State Government under Clause (a) of the proviso to Section 271 read with Section 273 of the Gujarat Municipalities Act, 1963. Rule 28 cannot, therefore, be held to govern the period of service of the Chief Officer and the petitioner cannot rely upon it. On this view, it is unnecessary to consider the question whether Rule 28 confers a right on an employee to continue in service until the age of superannuation is reached or merely fixes the upper age of employment beyond which the Municipality cannot continue an employee in service. We do not, therefore, propose to examine this question and express our opinion upon it. It is sufficient to hold that Rule 28 has no application to the office of Chief Officer. It is, therefore, clear that the petitioner was not entitled to continue in service until he reached the age of 55 years and termination of his service cannot be characterised as dismissal or removal by way of punishment on this ground.

5. We must then proceed to consider the question as to what was the power exercised by the Municipality in terminating the service of the petitioner. Was the service of the petitioner terminated in exercise of the power conferred under Section 48 or was it determined in exercise of the power which an employer has under the general law of master and servant to terminate the service of the employee on giving reasonable notice or the power implied under Section 16 of the Bombay General Clauses Act, 1904? The admitted and incontrovertible facts on record show that there could be only one answer to this question, namely, that the termination of the service of the petitioner was effected in exercise of the power conferred under Section 48. It is no doubt true that the resolution passed by the Municipality did not state in so many terms as to what was the source of the power under which the Municipality was terminating the service of the petitioner but the Officer Order issued by the President of the Municipality as also the communication addressed to the petitioner clearly stated that the service of the petitioner as Chief Officer was terminated by the Municipality under Section 48. The reference to Section 48 in the Officer Order as also in the intimation given to the petitioner indicated plainly and unmistakably the nature of the termination of service effected by the Municipality. Section 48 speaks of removal from office of the Chief Officer of a Municipality. The question is: What is the meaning of this expression? Does it take in every kind of termination of service including termination simpliciter or is it limited in its connotation to determination of service as a method of punishment for misconduct or other cause? Now it is well-settled that the words 'dismissal' and 'removal' in the context of the law of master and servant have acquired a definite well-recognised connotation and they mean termination of service by way of punishment. There are several decisions of the Supreme Court where this limited meaning has been given to the words 'dismissal' and 'removal' but it is not necessary to refer to all of them. It would be sufficient if we refer only to one, namely, S.R. Tewari v. District Board, Agra : (1964)ILLJ1SC . Shah, J. speaking on behalf of the Supreme Court pointed out in that case: 'In the law relating to master and servant the expression 'dismissal' has acquired a limited meaning - determination of employment as a method of punishment for misconduct or other cause'. What Shah, J., said in regard to 'dismissal' applies equally in regard to 'removal'. 'Dismissal' and 'removal' are in fact two of the major punishments which a master may inflict on a servant, the third being 'reduction in rank', Vide P. L Dhingra v. Union of India : (1958)ILLJ544SC . Removal from office referred to in Section 48 does not, therefore, mean any termination of service which might include termination simpliciter: it has a limited meaning, namely, termination of service by way of punishment 'for misconduct or other cause'. There is also inherent evidence in Section 48 which supports the view that the expression has been used in a limited sense. Section 48 refers to three kinds of action which may be taken by the Municipality against the Chief Officer. One is removal from office, the other is reduction in rank and the third is suspension. The last two are clearly punitive in character and if that be so, there is no reason why the first also should not be held to be of the same character. It is a well-settled rule of interpretation expressed in the maxim noscitur a sociis that where there are words grouped together, it is always permissible to determine the meaning of a word by reference to the associated words provided of course such reading is not inconsistent with the plain intention of the Legislature as manifested in the language used by it. Associated words can explain and limit the application of each other. Here the expression 'removal from office' is associated with the words 'reduction in rank' and 'suspension' and it must, therefore, be construed as referring to punitive action, namely, termination of service by way of punishment.

6. The petitioner relied strongly on an unreported decision of the Supreme Court given on 2nd February 1971 in Civil Appeal No. 1492 of 1968: Workers employed in Hirakund Dam v. State of Orissa (Since reported in : (1971)ILLJ224SC , in an attempt to combat this conclusion, but we do not think that this decision, if properly scrutinised, lends any support to the contention of the petitioner. The rule which came up for consideration before the Supreme Court in this case was that contained in Paragraph 11 of the Central Public Works Department Code which provided inter alia: 'Members of the temporary and work-charged establishment who are engaged locally, are on the footing of monthly servants. If they are engaged for a specific work, their engagement lasts only for the period during which the work lasts. If dismissed, otherwise than for a serious misconduct, before the completion of the work for which they were engaged, they are entitled to a month's notice or a month's pay in lieu of notice; but, otherwise with or without notice, their engagement terminates when the work ends. If they desire to resign their appointments they must give a month's notice of their intention to do so, failing which they will be required to forfeit a month's pay in lieu of such notice'. The question was as to what was the connotation of the word 'dismissed' in this Rule. The appellants contended that the word 'dismissed' was used to denote 'only action taken against a workman as and by way of punishment' and it did not include termination simpliciter. This contention was negatived by the Supreme Court which construed the word 'dismissed' in its etymological sense to mean any termination of service whatever be the reason for termination and refused to give a limited meaning to that word in the context in which it was used. We fail to see how this decision can be of any help in interpretation of the expression 'removable from service' in Section 48. There are at least two features in which paragraph 11 stands apart from Section 48 and both these features were strongly emphasised by the Supreme Court for the purpose of reaching the conclusion that the word 'dismissed' was not used in a limited sense to mean only termination by way of punishment. In the first place, paragraph 11 occurred in the Central Public Works Department Code which was framed as far back as 1929 when the word 'dismissed' had not acquired a limited meaning as signifying or denoting termination of service by way of punishment. The word 'dismissal' was then used interchangeably with the word 'discharge' and both meant termination of service without anything more. It is only since the Government of India Act, 1935 that, as pointed out by the Supreme Court in P.L. Dhingra v. Union of India (supra) the word 'dismissal' has acquired a special meaning in the law of master and servant, namely, termination of service by way of punishment. There was, therefore, no compelling necessity for departing from the ordinary meaning of the word 'dismissal' and giving it a special meaning in the context of Paragraph 11 of the Central Public Works Department Code framed in 1929. The Supreme Court pointed out: 'the Code has been framed as early as 1929 long before the Government of India Act, 1935, came into force... it is clear that the word 'dismissal' has to be understood in the context in which it occurs and that it denotes the determination of an employment as a penalty is a matter of recent development since the Government of India Act, 1935 was enacted. In the case before us, we have already pointed out that the Code has been framed as early as 1929 and there is no warrant for assuming that the expression 'dismissed' has been used in the sense in which the word was understood since the Government of India Act, 1935'. The second feature which distinguishes Section 48 from Paragraph 11 is that paragraph 11 provided that if a workman was dismissed otherwise than for serious misconduct, he would be entitled to a month's notice or a month's pay in lieu of notice. Now, who ever heard of dismissal by way of punishment with one month's notice or one month's pay in lieu of notice? It would be wholly incongruous, as pointed out by the Supreme Court 'to hold that when a person is dismissed, though not for a serious misconduct but even for a minor misconduct, the workman will be entitled to a month's notice or a month's pay in lieu of notice.... So far as we could see no decision has laid down that even in cases of dismissal a workman will be entitled to a month's notice or a month's pay. If it is a dismissal by way of punishment, no question of a month's notice or a month's pay in lieu of notice ever arises. The fact that paragraph 11 provides for giving a month's notice or a month's pay when a workman is dismissed otherwise than for serious misconduct indicates that the word 'dismissed' has not been used in the sense of termination of service by way of punishment alone but it covers also other cases of termination of the service of an employee even before the completion of the work'. Here in Section 48 there is no requirement that when the Chief Officer is removed from office, he shall be entitled to notice of any particular period or salary in lieu of such notice. The decision of the Supreme Court in Hirakund Dam case (supra) does not, therefore, support the construction contended for on behalf of the petitioner, but on the contrary it suggests by necessary implication that the construction which we are placing on the expression 'removable from office' used in a statutory provision enacted in 1963 long after the Government of India Act, 1935, is the correct construction.

7. Now, the office order issued by the President of the Municipality as also the communication addressed to the petitioner stated in plain categorical terms that the service of the petitioner was terminated in exercise of the power conferred under Section 48. This was clear intimation to the petitioner from the Municipality that he was removed from office or, in other words, his service was determined by way of punishment. The question is whether it was competent to the Municipality to do so without holding an inquiry and hearing the petitioner. We do not think so. The Municipality was clearly, in our view, bound to observe the principles of natural justice in removing the petitioner from the office of Chief Officer. The power to remove a Chief Officer from office by way of punitive action is plainly and unmistakably a power of quasi-judicial character and the Municipality was under an obligation to act judicially in exercising it. The classic definition of what is a quasi-judicial power is to be found in the famous words of Atkin, L.J., in Rex v. Electricity Commissioners, Ex parte London Electricity Joint Committee Co., (1920) Ltd., 1924 (1) KB 171, where the learned Lord Justice said, describing the extent of the Certiorari jurisdiction of the Court of Queens Bench:

Wherever any body of persons having legal authority to determine questions affecting the rights of subjects, and having the duty to act judicially, act in excess of their legal authority, they are subject to the controlling jurisdiction of the King's Bench Division exercised in these writs.

Lord Hewart, C.J., put a gloss on this definition in Rex v. Legislative Committee of the Church Assembly, Ex parte Haynes Smith, 1928 (1) K.B. 411, by interpreting it to mean that: 'In order that a body may satisfy the required test, it is not enough that it should have legal authority to determine questions affecting the rights of subjects. But.....there must always be something more to impose on it a duty to act judicially before it can be found to observe the principles of natural justice.' This gloss added by Lord Hewart bedevilled the law for a long number of years and many a power conferred on a statutory authority was characterised as administrative as distinguished from quasi-judicial on the ground that though the statutory authority had power to determine questions affecting the rights of subjects, there was not 'superadded to that characteristic the further characteristic that the body has the duty to act judicially.' The Judicial Committee of the Privy Council also in Nakkuda Ali v. Jayaratne, 1951 AC 66, accepted this gloss as if it were 'a general principle that is beyond dispute.' It was only in the year 1964 when the famous case of Ridge v. Baldwin, 1964 AC 40 went to the House of Lords that Lord Reid boldly cast aside this gloss and freed the law from its inhibiting influence. Lord Reid expressed his dissent from Lord Hewart's gloss and observed that: 'this part of the judgment in Nakkuda's case (supra), was given under a serious misapprehension of the effect of the older authorities'. The duty to act judicially, said Lord Reid, need not be expressly superimposed on the statutory body; it may be implied from the nature of the power conferred or the nature of the decision to be reached by the statutory body. No sooner Lord Reid had made this pronouncement breaking out of the shackles of Lord Hewart's gloss and expanding the horizon of quasi-judicial power, our Supreme Court, quickly following the example adopted the test formulated by Lord Reid in Associated Cement Companies v. P.N. Sharma, : (1965)ILLJ433SC and Shri Bhagwan v. Ram Chand : [1965]3SCR218 . Gajendragadkar, C.J., speaking on behalf of the Supreme Court pointed out in the latter case at page 1770 of the report:

An obligation to act judicially may, in some cases, be inferred from the scheme of the relevant statute and its material provisions. In such a case, it is easy to hold that the authority or body must act in accordance with the principles of natural justice before exercising its jurisdiction and its powers; but it is not necessary that the obligation to follow the principles of natural justice must be expressly imposed on such an authority or body. If it appears that the authority or body has been given power to determine questions affecting the rights of citizens, the very nature of the power would inevitably impose the limitation that the power should be exercised in conformity with the principles of natural justice... The question has been considered by this Court on several occasions. In the Associated Cement Companies Ltd. - Bhupendra Cement Works, Surajpur v. P.N. Sharma (supra), it has been held adopting the view expressed by the House of Lords in Ridge v. Baldwin, 1964 AC 40, that the extent of the area where the principles of natural justice have to be followed and justicial approach has to be adopted, must depend primarily on the nature of jurisdiction and the power conferred on any authority or body by statutory provisions to deal with the questions affecting the rights of citizen.

This position in law was reiterated by the Supreme Court in A.K. Kraipak v. Union of India : [1970]1SCR457 and Mr. Justice Hegde delivering what may rightly be regarded as a historic judgment, pointed out in that case that the concept of quasi-judicial power has been undergoing a radical change in recent years and the dividing line between administrative power and quasi-judicial power is being gradually obliterated and added that 'in order to determine whether a power is an administrative power or a quasi-judicial power, one must look to the nature of the power conferred, the person or persons on whom it is conferred, the frame work of the law conferring that power, the consequences ensuing from the exercise of that power and the manner in which that power is expected to be exercised'. It would, therefore, be seen that where a statutory authority is given power to make a decision or perform an act which affects the rights of individuals or imposes obligations on them, the duty to act judicially need not be expressly super-imposed. It may be inferred from the nature of the power conferred, the impact on the rights of citizens and such other relevant circumstances.

8. Now, here Section 48 confers power on the Municipality to remove a Chief Officer from the office by way of punishment that is, for mis-conduct or other similar cause and such a removal would inevitably cast a stigma on the Chief Officer seriously prejudicing his prospects of future employment. It is, therefore, necessary that the decision of the Municipality in this respect must be arrived at justly and fairly and not arbitrarily or capriciously. Having regard to these considerations, a duty to act judicially must be implied in the exercise of the power to remove a Chief Officer from office and it must be held to be a quasi-judicial power. This view receives considerable support from the decision of the Supreme Court in Dock Labour Board, Calcutta v. Jaffar Imam : 1966CriLJ189 where Gajendragadkar, C.J., pointed out, speaking on behalf of the Supreme Court:

There can be no doubt that when the appellant purports to exercise its authority to terminate the employment of its employees such as the respondents in the present case, it is exercising authority and power of a quasi-judicial character. In cases where a statutory body or authority is empowered to terminate the employment of its employees, the said authority or body cannot be heard to say that it will exercise its powers without due regard to the principles of natural justice. The nature or the character of the proceedings which such a statutory authority or body must adopt in exercising its disciplinary power for the purpose of terminating the employment of its employees, has been recently considered by this Court in several cases... and it has been held that in ascertaining the nature of such proceedings with a view to decide whether the principles of natural justice ought to be followed or not, the tests laid down by Lord Reid in Ridge v. Bapdwin, 1964 AC 40, are relevant.

This statement of the law includes within its sweep all cases of public employment. It applies in relation to all employees of a statutory body or authority where the statutory body or authority is conferred power to determine the employment by way of punishment for misconduct or other similar cause and thus cuts across the artificial distinction made in English law between a holder of an office and an ordinary servant. The former, according to English law, being removable only for cause, has an implied right to prior notice and opportunity to be heard while the latter has no such right. Lord Reid, in the course of his judgment in Ridge v. Baldwin (supra), divided cases of dismissal into three classes. We are not concerned with the second class which comprises cases where a man holds office at pleasure: such an officer has no right to be heard before he is dismissed and he has equally no remedy for dismissal. The first class of cases is of dismissal of a servant by his master. These are pure cases of master and servant where the master can terminate the contract at any time and for any reason or for none. But if he does so in a manner not warranted by the contract, he must pay damages for breach of contract. So the question in such a case 'does not at all depend on whether the master has heard the servant in his own defence; it depends on whether the facts emerging at the trial prove breach of contract'. The Court would in such a case determine whether there existed any grounds justifying dismissal of the servant. But in the third class of cases where the occupant of an office is removable only for cause -and these cases would ordinarily arise only in the field of public employment - the occupant of the office would have an implied right to be heard in his defence or explanation before the employer determines that grounds of dismissal exist and takes action against him. The case of Ridge v. Baldwin (supra) belonged to the third class of cases. Lord Reid was careful to point out that the Chief Constable was holder of an office and the case was one of dismissal from an office. On the other hand Vidvoday University Council v. Silva, was a case falling within the first class of cases. There it was held by the Privy Council that the University Professor could not demand to know the na1965 (1) WLR 77ture of the accusations against him or to be heard in his own defence when his appointment was terminated, though under Section 18(e) of Ceylon Act 45 of 1958 he was liable to be dismissed only for incapacity or conduct rendering him unfit. The case of Fisher v. Jackson, 1891 (2) Ch. 48 was cited before the Privy Council but it was of no avail. In that case, there was a deed of trust establishing an endowed school and under the deed of trust the master of the school could be removed by three Vicars for certain specified causes. The Court of Chancery held that the school master was entitled to a hearing before he could be removed. This case was strongly relied upon by the University Professor but it was distinguished by the Privy Council by saying that it was a case where the plaintiff was the holder of an office. The University Professor was treated as an ordinary servant of the University and not as an occupant of an office and was, therefore, denied the right to a hearing. Now, the rule applicable in the first class of cases may be defensible in cases of private employment where the Court determines what constitutes wrongful dismissal, but so far as cases of employment by statutory authorities or bodies or what may conveniently be called public authorities are concerned -which constitute the field of public employment - there is no reason in principle why a distinction should be drawn between a holder of an office and an ordinary servant. It would be merely attaching a label to the relationship which does not affect the substance of the matter. Some of the recent distinctions drawn between public office on the one hand and service on the other are somewhat abstruse and they have led to highly refined subtleties and served to confound the law. Moreover, if an office holder who is removable only for cause is impliedly entitled to be heard in his defence before dismissal, it is difficult to see what reason there can be for denying a similar implied right to a mere servant who is dismissible on identical grounds. The employer determines the grounds of dismissal in both cases and if in one case, justice and fairplay require that the employee should be given an opportunity to make his defence or explanation before action is taken against him, it should equally be so in the other case. There can be no real distinction between public office on the one hand and service on the other. The distinction should rather be between ordinary case of master and servant in private employment where the Court determines what constitutes wrongful dismissal and case of employment by public authorities where the employer determines the grounds of dismissal and this distinction is of vital importance to the question of procedure before dismissal. Where the Court determines the grounds for dismissal, the servant has an opportunity to put his case before the Court. Where, on the other hand, the employer is conferred power to determine the ground for dismissal which would necessarily be the case where power is statutorily conferred on the employer to dismiss for misconduct or other proper cause, the servant cannot agitate the grounds for dismissal in Court and ask the Court to redetermine the issue de novo and, therefore, it is but fair and just that the employer should observe the principles of natural justice so that the servant is afforded an opportunity to put forward his case, before action is taken against him. We must, therefore, conclude in all humility that the law enunciated by the Supreme Court in Dock Labour Board v. Jaffar Imam (supra) is far more rational than the English law on the subject and it rightly refuses to recognise a distinction between a holder of an office and a servant employed by a public authority in so far as the public authority may seek to terminate the service for misconduct or other similar cause in exercise of power conferred upon it. The power conferred on the Municipality under Section 48 to remove a Chief Officer from office must in the circumstances be held to be a quasi-judicial power and it must be concluded that the Municipality was bound to afford an opportunity to the petitioner to make his defence or explanation before removing him from office.

9. But even if we accept the distinction between a holder of an office and a mere servant which prevails in English law, we should yet be inclined to hold that the Municipality was bound to observe the principles of natural justice before removing the petitioner from his office as Chief Officer. The office of a Chief Officer is a statutory office under the Act. It is created by Section 47 Sub-section (1). What should be the qualifications possessed by a person in order to be eligible to be appointed as Chief Officer is laid down in Section 47 Sub-section (2). Section 48 provides the mode of removal from office, reduction in rank and suspension of the Chief Officer. The powers and duties of the Chief Officer are set out in Section 49. Section 50 prescribes the manner in which a Chief Officer may be discontinued in office. The petitioner as Chief Officer was, therefore, manifestly a holder of a public office like the Chief Constable in Ridge v. Baldwin (supra) and he was removable under Section 48 only for cause. The case of the petitioner accordingly fell within the third class of cases described by Lord Reid and like the Chief Constable, he was entitled to prior notice and opportunity to be heard before he could be removed from office under Section 48.

10. This should be sufficient to dispose of the petition in favour of the petitioner rendering it unnecessary to consider the other points raised in the petition but since the other points were discussed before us at length and they are of some importance, we think it desirable to express our opinion upon them. We have already held on the basis of the office order issued by the President of the Municipality as also the communication addressed to the petitioner, that the termination of service of the petitioner was effected under Section 48 and it was, therefore, not a termination simpliciter but a termination by way of punishment, but we must proceed to consider what would be the position if, as contended on behalf of the respondents, the termination were held not to be effected under Section 48. The first question which arises for consideration on this postulate is whether the Municipality has power to terminate the service of Chief Officer otherwise than under Section 48. Now, two powers are invoked in this connection; one is the power which an employer possesses under the general law of master and servant to terminate the service of his employee on giving reasonable notice and the other is, the power implied under Section 16 of the Bombay General Clauses Act, 1904. Both these powers are, in our opinion, excluded by the scheme of the relevant provisions of the Act. Sections 47 to 50 are the relevant provisions applicable to the office of Chief Officer and they constitute a self-contained Code providing for creation of the office of Chief Officer, qualifications for its incumbent, mode of removal from office, reduction in rank and suspension of Chief Officer, powers and duties of Chief Officer and mode of his discontinuance in office. We have already discussed Section 48 which refers to punitive action which may be taken by the Municipality. Section 50 uses a different nomenclature from Section 48. It speaks not of 'removal from office' but 'discontinuance in office'. This expression is a neutral expression which takes in every case of termination of service, whether it be termination simpliciter or termination by way of punishment. 'Discontinuance in office' cannot be equated with 'removal from office' as was sought to be contended on behalf of the respondents. The Legislature has deliberately departed from the expression 'removable from office' employed in Section 48 and instead, used an innocent expression 'discontinuance in office' to connote every kind of termination of service. Where, therefore, the Municipality wants to terminate the service of the Chief Officer simpliciter without any punitive accent, the Municipality may pass a resolution by ordinary majority recommending to the State Government to terminate the service of Chief Officer and the State Government may then, on such recommendation, terminate the service after following the procedure set out in Section 50. This provision clearly excludes the power of the Municipality to effect a simple termination of service of Chief Officer. If the Municipality had such power, the provision in Section 50 would be meaningless. There would be no point in that case in providing that the Municipality may recommend and on its recommendation the State Government may terminate the service of Chief Officer. Why - for what reason - should the Municipality be given power to recommend when it can itself take action for terminating the service? The power of recommendation would be clearly futile. We can appreciate if the State Government were given power to terminate the service of Chief Officer without any recommendation of the Municipality. It could have been convincingly argued, if that had been the case, that a concurrent or additional power was conferred which the State Government could exercise, irrespective of any action which the Municipality may or may not take. But the State Government cannot act under Section 50 except on recommendation of the Municipality and the provision for recommendation by the Municipality clearly indicates that the Municipality cannot itself terminate the service of Chief Officer except of course in cases falling within Section 48. Section 50 is exhaustive of the mode of termination simpliciter of the service of Chief Officer and termination of service of Chief Officer which is not by way of punishment can be effected only in the manner prescribed by that section. The rule that a master may terminate the employment of his servant by giving reasonable notice is not an inflexible rule of law. It is an implication of the law of master and servant - term to be implied in order to give 'the transaction the efficacy that both parties must have intended it to have'. Now, it is evident that the term can be implied only where the contract is silent. If there is a specific provision on the subject either in the contract or in the statute which governs the relationship, there can obviously be no room for implication. The implication would be wholly unnecessary; it would be excluded by the specific provision on the subject. Here in Section 50 there is clearly a specific provision on the subject of termination of service of Chief Officer and it is, therefore, not possible to imply a power in the Municipality to terminate simpliciter service of Chief Officer by giving reasonable notice. Section 16 of the Bombay General Clauses Act, 1904, also cannot help the respondents. That section provides that where, by any Bombay Act or Gujarat Act power to make any appointment is conferred on an authority, the power to appoint shall include power to suspend or dismiss any person appointed in exercise of that power, but this provision is by the express language of the section subject to a contrary intention. The rule enacted in this section is merely a rule of construction and it must yield place to the manifest intention of the Legislature. The Legislature has here made its intention abundantly clear that though the Municipality is given power to appoint Chief Officer, it shall not have power to terminate the service of Chief Officer except in cases falling within Section 48 or, in other words, termination of service of Chief Officer simpliciter shall not be effected by the Municipality, but if the Municipality wants to terminate the service of Chief Officer simpliciter, the Municipality may by a resolution make a recommendation to the State Government and it would be for the State Government to effect termination simpliciter of the service of Chief Officer. The Legislature obviously did not intend that the tenure of service of Chief Officer should be dependent on the will of a fleeting majority in the Municipality. The Legislature wanted to give security of tenure to the Chief Officer and it, therefore, deliberately and advisedly, entrusted the power to terminate the service of Chief Officer to the State Government. If there was proper cause for removing the Chief Officer from office by way of punitive action, the Municipality could, of course, take action, though, even in such a case, the Legislature introduced the safeguard of two-thirds majority but, for termination simpliciter, the Legislature made it clear that the Municipality shall not have any power and such power shall reside only in the State Government. It must, therefore, follow that if the termination of service of the petitioner was not effected under Section 48, it would be outside the power of the Municipality and would accordingly be null and void.

11. Even if we assume with the respondents that the Municipality had power to terminate the service of Chief Officer without resort to Section 48, the result would be no different. Since the office of Chief Officer is a statutory office under the Act and the petitioner as Chief Officer was the holder of a public office, his case would be governed wholly by the decision of the Supreme Court in Dr. Bool Chand v. Kurushetra University : (1968)IILLJ135SC . Dr. Bool Chand was appointed Vice-Chancellor of Kurukshetra University by order of the Chancellor under the Kurukshetra University Act, 12 of 1956. The office of the Vice-Chancellor was a statutory office under Section 7 and Sub-clause (vii) of Clause 4 of Schedule I provided that the Vice-Chancellor shall hold office ordinarily for a period of three years. Though the period of three years had not expired, the Chancellor terminated the service of Dr. Bool Chand and the question arose whether the Chancellor was entitled to do so and if he was so entitled, whether he could do it without observing the principles of natural justice. The Supreme Court held that the tenure of office of a Vice-Chancellor under the Act can be determined before the expiry of the period for which he is appointed, because a power to appoint ordinarily would include a power to determine the employment but since the office of the Vice-Chancellor is a statutory office under the Act, the Vice-Chancellor can be removed from office only for good cause and after holding an inquiry consistent with the rules of natural justice. Shah, J., speaking on behalf of the Supreme Court, observed:

But once the appointment is made in pursuance of a Statute, though the appointing authority is not precluded from determining the employment, the decision of the appointing authority to terminate the appointment may be based only upon the result of an inquiry held in a manner consistent with the basic concept of justice and fairply... The power to appoint a Vice-Chancellor has its source in the University Act; investment of that power carries with it the power to determine the employment; but the power is coupled with duty. The power may not be exercised arbitrarily; it can be only exercised for goods cause, i.e., in the interests of the University and only when it is found after due enquiry held in manner consistent with the rules of natural justice, that the holder of the office is unfit to continue as Vice-Chancellor.

The learned Judge then referred to the case of Ridge v. Baldwin (supra) and after quoting the passage from the speech of Lord Reid where the learned law-Lord divided the cases of dismissal into three classes, the learned Judge proceeded to add:

The case of the appellant falls within the third class mentioned by Lord Reid, and the tenure of his office could not be interrupted without first informing him of what was alleged against him and without giving him an opportunity to make his defence or explanation.

The Chief Officer of a Municipality under the Act stands in an identical position with the Vice-Chancellor of the Kurukshetra University in so far as the present question is concerned and the above observations made by the Supreme Court while dealing with the case of termination of service of the Vice-Chancellor of Kurukshetra University are applicable wholly in relation to a case of termination of service of Chief Officer of a Municipality under the Act. The power to appoint a Chief Officer has its source in the Act; investment of that power carries with it the power to terminate the service; but the power is coupled with duty; it cannot be exercised arbitrarily; it can be exercised only for good cause, that is, in the interests of the Municipality and only when it is found after due enquiry held in manner consistent with the rules of natural justice, that the holder of the office is unfit to continue as Chief Officer.

12. It will, therefore, be seen that, from whichever angle we look at the problem, it is clear that the Municipality was not entitled to terminate the service of the petitioner except for good cause and without first informing him of what was alleged against him and giving him an opportunity to make his defence or explanation. The termination of service of the petitioner effected by the Municipality was admittedly in breach of this requirement and it was, therefore, null and void but, even on this conclusion, the respondents contended that the petitioner should not be given a declaration that the termination of his service is null and void and he continues to be the Chief Officer of the Municipality because to do so would be to enforce specific performance of a contract of personal service which the Court cannot grant. We do not think this contention is well-founded. Where the termination of service is null and void for any reason, it does not have the effect of putting an end to the contract and the employee is continuing. The doctrine that a contract of personal service cannot be specifically enforced cannot in such a case stand in the way of the employee, because the termination being null and void there being no repudiation at all in the eye of the law there is no question of enforcing specific performance of the contract of employment. What the employee claims in such a case is not enforcement of a contract of personal service but declaration of statutory invalidity of an act done by the employer. Where the termination is outside the powers of the statutory body either because the statutory body has no power to terminate the employment or because the termination is effected in breach of mandatory obligation imposed by law which prescribes that the termination shall be effected only in a particular manner and no other, it is a nullity and the employee is entitled to ignore it and ask for being treated as still in service. Vide Life Insurance Corporation of India v. Sunil Kumar Mukherjee : (1964)ILLJ442SC ; Mafatlal Barot v. Divisional Controller, State Transport, Mehsana : (1966)ILLJ437SC and the decision of a Full Bench of this Court given on 7th September 1971 in Special Civil Application No. 1470 of 1968. Now, the audi alteram partem rule which a statutory authority is bound to follow in terminating the service of the employee is clearly a mandatory requirement of law. It is a rule which is so vital and fundamental to the basic concept of justice that where it is infringed, the Courts do not pause to inquire whether there has been any miscarriage of justice as a result of its breach. The breach of natural justice is itself miscarriage of justice which entitles the applicant to succeed. Where there is failure of natural justice by non-observance of audi alteram partem rule, the order is a nullity and the party aggrieved is entitled to have it set aside ex debito justitiae in exercise of the extraordinary jurisdiction of the Court. Vide East India Co. v. O. L Raj Ratna Mills, 1970(11) GLR 457. It is for this reason that the House of Lords gave a declaration to the Chief Constable in Ridge v. Baldwin, (supra) that the termination of his service was null and void because he was removed by the Watch Committee without informing him of what was alleged against him and giving him a proper opportunity to present his case in defence. The Supreme Court also for the same reason set aside the order passed by the Government of Orissa compulsorily retiring Miss Binapani Dei because it was made without giving her an opportunity to correct or controvert the evidence in the possession of the Government of Orissa and to put forward her own case as regards her correct date of birth. The case of McClelland v. Northern Ireland Health Board, (1957) 2 All ER 129 was a much weaker case but even there, a hospital services board clerk who was dismissed for reasons unauthorised by the relevant conditions of service was held entitled to a declaration that her employment had not been validly terminated and she continued in service. The principle seems to be that it is the function of the Courts to keep public authorities within the limits of their statutory powers: if, therefore, a public authority purports to terminate the service of an employee otherwise than in accordance with mandatory procedural requirements, or on grounds other than those expressly sanctioned by statute, the Courts have jurisdiction to declare its act to be a nullity. The petitioner must, therefore, be held entitled to relief on the basis that the termination of his service by the Municipality is null and void and he continues in service as Chief Officer.

13. We, therefore, allow the petition and make the rule absolute by issuing a writ of Mandamus quashing and setting aside the resolution passed by the General Board of the Municipality as also the Officer Order issued by the President terminating the service of the petitioner and direct the respondents to treat the petitioner as continuing in service as if the Resolution and the Office Order had not been made at all. The respondents will pay the costs of the petition to the petitioner.

14. Mr. Vakharia, learned Advocate appearing on behalf of the respondents applies for leave to appeal to the Supreme Court under Article 133(1)(c) of the Constitution. We do not think this is a fit case for appeal to the Supreme Court since the decision given by us rests primarily and substantially on principles which are well settled as a result of decisions of the Supreme Court to which we have referred in the course of this judgment. We have not laid down any new law on the subject. We have merely applied the principles formulated in the decisions of the Supreme Court. We do not, therefore, see any reason why we should grant a certificate to the petitioner under Article 133(1)(c) and we accordingly reject the application.

15. We, however, stay the operation of the order made by us for a period of three weeks from to-day in order to enable the respondent to apply for special leave to appeal to the Supreme Court, if he so desires.


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