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Varvabhai Nathabhai Rabari and ors. Vs. State of Gujarat and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtGujarat High Court
Decided On
Case NumberLetters Patent Appeal No. 8 of 2002 with Civil Application No. 90 of 2002 in Special Civil Applicati
Judge
Reported in(2003)1GLR97
ActsAdministrative Law; Constitution of India - Article 226; Gujarat Agricultural Produce Markets Act, 1963 - Sections 46
AppellantVarvabhai Nathabhai Rabari and ors.
RespondentState of Gujarat and ors.
Appellant Advocate K.S. Jhaveri, Adv. for Appellant Nos. 1 to 11
Respondent Advocate Kamal B. Trivedi, Addl. Adv. General and; V.M. Pancholi, A.G.P. for Respondent Nos. 1 to 3
DispositionAppeal dismissed
Cases ReferredMadras v. P. S. Rajagopal Naidu
Excerpt:
- - 2.5 in response to the third allegation of the show-cause notice, it was contended that the earlier body had made attempts in the year 1996 as well as in the year 1994 to dispose of the shops to the traders. jhaveri, learned counsel for the appellants as well as mr. contended that the state government has passed the order on the basis of material available with it and the scope and ambit of power under article 226 of the constitution for judicial review is very restricted and they are like the powers, the appellate authority against the order of the state government. trivedi that the office-bearers of the market committee have not acted as wise persons and there is something more to cause financial loss to the market committee and in his submission when the state government on the.....jayant patel, j.1. the present letters patent appeal is directed against the judgment and order dated 6-11-2001 passed by the learned single judge of this court in special civil application no. 7443 of 2001.2. the facts of the present case, in short, are as under :2.1 an inquiry was made under section 44 of the gujarat agricultural produce markets act, 1963 (hereinafter referred ;to as 'the act') in respect of complaint against irregularities and corruption and as an outcome of such inquiry report the state government, in exercise of powers under section 46 of the act, issued a notice to show cause as to why the agricultural produce market committee, patan should not be superseded since as per the state government, the market committee had made persistent defaults in performance of its.....
Judgment:

Jayant Patel, J.

1. The present Letters Patent Appeal is directed against the judgment and order dated 6-11-2001 passed by the learned single Judge of this Court in Special Civil Application No. 7443 of 2001.

2. The facts of the present case, in short, are as under :

2.1 An inquiry was made under Section 44 of the Gujarat Agricultural Produce Markets Act, 1963 (hereinafter referred ;to as 'the Act') in respect of complaint against irregularities and corruption and as an outcome of such inquiry report the State Government, in exercise of powers under Section 46 of the Act, issued a notice to show cause as to why the Agricultural Produce Market Committee, Patan should not be superseded since as per the State Government, the Market Committee had made persistent defaults in performance of its duties and had abused its powers. The allegations made in the show-cause notice were that (i) though the Labour Court did not pass any order, the Market Committee, on its own, made its employees permanent with effect from 1992 and not only that but paid the back wages of Rs. 14,11,8227-, (ii) without holding any public auction various pieces of land situated at Nutan Ambica Vegetable Sub-yard have been sold away at a price of Rs. 1,0007- per sq.mtr. It is also alleged in the show-cause notice that though there was direction by the Director to get the valuation of the property made, no steps were taken by the Market Committee for getting valuation of the said property. It is also alleged in the show-cause notice that the lands initially was allotted on lease basis at the rate of Re. 1/- per sq.mtr. to the concerned traders holding shops adjacent to the land, and thereafter, the said lands were sold without holding any public auction and for the said actions the Director had issued direction for taking back the possession of the land, but said direction was also not implemented, (iii) by allotting shops to the traders at Sardar Patel Vegetable Sub-yard at the rate of Rs. 200/- p.m., with the development charges of Rs. 41,0007- per shop the Market Committee had caused loss to the funds of the Market Committee amounting to Rs. 17,42,1307-, (iv) though certain areas were already denotified and though it had come on the record of the Market Committee that the traders are dealing in denotified agricultural produce bodies unauthorisedly, no steps were taken for collection of market cess and thus unauthorised business were going on due to wilful inaction, on the part of the Market Committee, (v) the Director, Agricultural Marketing & Rural Finance (hereinafter referred to as 'the Director') had directed for giving two appointments on compassionate grounds to the legal heirs of the deceased two deceased employees of the Market Committee by relieving last two junior-most temporary employees that the said direction was not complied with.

2.2 In response to the said show-cause notice of the State Government, the Market Committee had filed reply and it may be stated that at the stage of show-cause notice the Market Committee had preferred Special Civil Application No. 3662 of 2001 on the ground that the principles of natural justice are not complied with since the copy of the inquiry report under Section 44 of the Act is not supplied. However, in the said Special Civil Application the learned single Judge of this Court had passed order dated 22-5-2001 whereby it was directed that the Market Committee may be permitted to inspect the report under Section 44 of the Act and it may be permitted to take the extract of the said report, if it so chooses. It may be stated that against the said order dated 22-5-2001 of the learned single Judge no appeal is preferred by the Market Committee and the Market Committee accepted the order and not only that but the inspection of the report was permitted by the State Government and the Market Committee was also permitted to take the relevant extract of the said report.

2.3 In reply to the show-cause notice, the Market Committee had contended, inter alia, that since a dispute regarding permanency benefit was raised by 8 employees, legal opinion was taken and it was decided to grant permanency benefit and to pay back wages.

2.4 In response to the second allegation of the show-cause notice, it was contended by the Market Committee that since the land was appurtenant and the traders were occupying as per the lease-hold rights the Market Committee found that no other buyer would come forward, and therefore, as per the valuation prevailing for the purpose of stamp duty (which is popularly known as 'Jantri') the lands have been sold to the traders who were having shops at the adjacent area.

2.5 In response to the third allegation of the show-cause notice, it was contended that the earlier body had made attempts in the year 1996 as well as in the year 1994 to dispose of the shops to the traders. However, no trader in agricultural produce was coming forward for the purpose of occupying the shops nor they were offering the price fixed by the earlier body, and therefore, with a view to see that new Market starts functioning a practical solution was found and the shops were allotted at the rate of Rs. 200/- per month by collecting the development charges of Rs. 41,000/- per shop.

2.6 In response to the 4th allegation of the show-cause notice, it was contended by the Market Committee that the Market Committee had taken effective steps to see that the traders may not deal in agricultural produce without obtaining licence or without payment of the market cess and it was contended by the Market Committee that they have filed number of prosecutions against the traders and they had also requested the police authorities for protection, but the police authorities did not provide protection, and therefore, the ground of showing grace to the traders is ill-founded.

2.7 As regards the 5th allegation of the show-cause notice, it was in substance, contended by the Market Committee that when the Market Committee wanted to terminate the services of Class II employees they preferred Special Civil Application No. 3433 of 2001 before this Court and the matter was sub-judice, and therefore, the direction could not be complied with. However, it is contended by the Market Committee that in any event before the final order of the State Government came to be passed the Market Committee had already made two appointments on compassionate grounds as directed by the Director and the aforesaid two employees who preferred writ petition are not relieved from service.

2.8 After considering the material on record the State Government had passed order on 13/18-8-2001 whereby it is found that there was no case before the Labour Court and the legal opinion was for conciliation under Section 2(P) of Industrial Disputes Act. However, an urgent extraordinary meeting is called by the Market Committee on 8-4-2001 and decision is taken to grant permanency benefits with effect from 1992 and the back wages amounting to Rs. 14,11,8227- are paid.

2.9 At this stage, though it is not a ground of the show-cause notice, it may be stated that a statement was made at Bar by the learned Additional Advocate General that the amount of Rs. 14,11,822/- is paid by drawing a cheque in the name of a single employee. It was also found by the State Government mat the Director had issued direction for recovery of said amount, but the Market Committee did not recover the said amount on the ground that these employees have preferred Special Civil Application No. 3575 of 2001 before the High Court and the matter is sub-judice though the fact remains that no interim order has been passed by the High Court prohibiting recovery by the Market Committee from these employees. The State Government found that in view of this material on record, it is clear that huge financial loss is caused to the Market Committee and the Management has acted arbitrarily and the manner in which the payment is made shows financial loss caused intentionally to the Market Committee.

2.10 As regards second ground of the show-cause notice it was found by the State Government that in spite of directions issued by the Director, no steps were taken by the Market Committee for getting back the possession of the land after the same was allotted on lease basis, but the Market Committee has, on the contrary, sold away the land without getting the valuation of the said land made by the approved valuer though it was specifically directed by the Director and that too without holding public auction, therefore, it was found by the State Government that the Market Committee has not complied with the directions and the instructions issued by the Director and the irregularities are committed in the matter of disposal of the land of Nutan Vegetable Sub-Yard.

2.11 So far as the third ground of show-cause notice is concerned, it was found by the State Government that the Market Committee has not got the valuation of the shops made as directed by the Director and had the proper steps been taken by the Market Committee, such a huge financial loss would not have been caused to the Market Committee.

2.12 So far as the fourth ground of show-cause notice is concerned, it was found by the State Government that after 1996 for a period of four years no steps are taken by the Market Committee for ensuring that unauthorised trading of agricultural produce are not made and it was found by the State Government that it appears that a view to take shelter in the matter of supersession, the Special Civil Application No. 3412 of 2001 is preferred by the Market Committee, that too on 9-5-2001 against non-supply of police protection for the purpose of stopping of unauthorised trading activities by the traders.

2.13 So far as the fifth ground of show-cause notice is concerned, it was found by the State Government that even though no stay against termination has been granted by the High Court in the proceedings of Special Civil Application No. 3433 of 2001 preferred by the employees, the Market Committee has not taken any steps, and therefore, the instructions of the Director are not complied with.

2.14 Ultimately, the State Government has found that various actions taken by the Marketing Committee shows that the instructions issued by the Director are not complied with and the management of the affairs of the Marketing Committee is arbitrary in performance of its duties and huge financial loss is caused to the Market Committee. It was also observed by the State Government that regarding the illegalities committed by the office-bearers of the Market Committee a writ petition is preferred by certain persons being Public Interest Litigation and in the said petition this Court has directed for status quo, but it was found by the State Government that such status quo would not create a bar against the State Government in taking action against the Market Committee for supersession, and ultimately the State Government passed the order for superseding the Market Committee and appointed the Administrator.

2.15 The appellants herein preferred writ petition which ultimately for the reasons recorded by the learned single Judge has been dismissed against which the present appeal is preferred.

3. We have heard Mr. K. S. Jhaveri, learned Counsel for the appellants as well as Mr. Kamal B. Trivedi, learned Addl. Advocate General with Mr. V. M. Pancholi, learned A.G.P., for the respondents.

4. Mr. Jhaveri, learned Counsel appearing for the appellants has raised contention that the instructions issued by the Director under Section 47 of the Act are not mandatory in nature and it is open to the Market Committee not to follow the instructions issued by the Director. The contention of Mr. Jhaveri, is that the duties confined on the Market Committee are only those which are provided under Sec; 26 of the Act and not beyond that. It is contended by him that the scope and ambit of Section 46 of the Act is restricted to default in performance of those duties which are narrated under Section 26 of the Act, and therefore, in his submission when the grounds of supersession do not fall within the purview of Section 26 of the Act, and when it is not obligatory on the part of the Market Committee to comply with the instructions given by the Director, it cannot be said that there is any default in performance of duties. Mr. Jhaveri also submitted that when two views are possible in respect of any subject-matter or the grounds of supersession and when the Market Committee has opted for one of the views, it cannot be said that there is any abuse of power or such decision would not attract the power of supersession alleging that there is any default in performance of duties. In the -submission of Mr. Jhaveri the grounds of supersession are beyond the scope and ambit of Sec. 46 of the Act, and alternatively, he submitted that when two views are possible regarding the grounds of supersession, it cannot be said that the office-bearers of the Market Committee have abused their power or have committed any default in performance of their duties which would call for the action of supersession by the State Government.

5. On the other hand, Mr. K. B. Trivedi, learned Addl. A.G. contended that the State Government has passed the order on the basis of material available with it and the scope and ambit of power under Article 226 of the Constitution for judicial review is very restricted and they are like the powers, the appellate authority against the order of the State Government. It is also submitted by Mr. Trivedi that the office-bearers of the Market Committee have not acted as wise persons and there is something more to cause financial loss to the Market Committee and in his submission when the State Government on the material available with it has found that there are defaults in performance of duties and there are illegalities which caused huge financial loss to the Market Committee and when the learned single Judge has not interfered with the decision of the State Government, this Court should not interfere with the decision of the State Government or of the learned single Judge which, in his submission, are perfectly legal and valid.

6. Learned Additional Advocate General has also relied on the judgment of the Supreme Court in the case of Joint Registrar of Co-operative Societies, Madras v. P. S. Rajagopal Naidu and Govindarajulu, reported in AIR 1970 SC 992 for contending that even if some default is pertaining to the past committee and those actions are further carried by the present elected body, the same makes no difference and the order of supersession is in order to set the working of the committee right and when the mala administration is there which has adversely affected the functioning of the committee, it is essential that the committee remains under control of a neutral authority.

7. The learned Additional Advocate General has also relied on the decision of the Supreme Court in the case of State of Maharashtra v. Babulal Kriparam Takkamore, reported in AIR 1967 SC 1353 to contend that in any case even if the order of supersession stands on one ground, the same is sufficient for maintaining the order and this Court would not sit in appeal over the said decision. The learned Counsel submitted that in any event, in view of the decision of the Supreme Court in the case of State of Maharashtra (supra) if one ground is sufficient to lake decision of supersession and if the State Government exercised powers of supersession, the order of supersession would not be rendered illegal or beyond the scope and ambit of Section 46 of the Act.

8. Before we deal with the rival contentions, it is necessary to consider the scheme of the Act.

Section 4 of the Act provides that the State Government shall appoint the Director of Agricultural Marketing and Rural Finance, Gujarat State who shall exercise such powers and perform such functions and duties as are conferred or imposed on him by or under this Act and shall subject to such general or special orders as the State Government may pass, superintend the administration and carry out the purposes of this Act. Section 10 of the Act provides that every market committee shall be competent to acquire, hold, lease, sell or otherwise transfer property subject to the limits and other requirements including guarantees prescribed by rules and to contract and do all other things necessary for the purpose for which it is established. Section 22 of the Act provides for appointment of servants of the market committee and the conditions of service. Section 26 of the Act provides for the duties of the market committee to maintain and manage the market and to provide such facilities in the market as the Director may, from time to time, direct, and it also provides for enforcement in the market area the provisions of the Act, the rules, bye-laws and the conditions of licence granted under the Act. It also provides for the duty of the market committee to collect and maintain such information relating to market intelligence as may be prescribed and to supply the same to the Government. A perusal of Section 26 shows that it is obligatory for the market committee to enforce in the market area the provisions of the Act, the rules and bye-laws. Section 32 of the Act provides for the market committee funds and Section 33 provides that the fund of the market committee shall be expended for various purposes, namely, for acquisition of sites, maintenance and improvement of market, constructions and repair of buildings etc., Section 44 of the Act enables the market committee to hold inquiry into the affairs of the market committee. Section 45 of the Act provides for the power of Director for performance of duties in default of market committee.

A perusal of Section 46 of the Act shows that 'if in the opinion of the State Government a market committee is either not competent to perform or persistently makes default in performing the duties imposed on it by or under the Act or abuse its powers, the State Government may supersede such market committee'.

Section 47 of the Act provides for the powers of Director to call for proceedings of the market committee and to require the market committee to take into consideration any objections and to do certain filings and to call upon the market committee to make written reply to the Director within reasonable time stating its reasons for not doing or desisting from doing anything.

Section 50 of the Act provides that every member of the market committee shall be personally liable for any misapplication of its moneys to which he shall have been a party or which shall have occurred through or been facilitated by gross neglect of his duty as a member. It further provides that such a member may be sued for recovery of the moneys so misapplied as if such moneys had been the property of the State Government.

9. A perusal of the above scheme of the Act read with relevant Rules clearly shows that it is like other local body which is constituted for the purpose of providing facilities to agriculturists and such facilities are to be created as provided under the Act from the funds which inter alia may be created from the cess which may be collected by the market committee. The status of the elected members of the market committee is more or less like, the status of other elected members holding the office under the local authorities or statutory authorities. It is true that the market committee has been given powers to purchase and sell its properties, but its powers to purchase and sell the properties are coupled with the duty to ensure that such powers are used for enforcement of objects of the Act, rules and bye-laws. These powers are coupled with the public duty and such powers are not like powers of individual persons managing their own affairs, but there is something more about the accountability. It is needless to point out that when any representative is elected by the voters, some faith is reposed on such elected representative by the voters that the so elected representative would exercise his powers under respective Statutes for the larger interest of institution or the local body by acting as a wise person keeping in view the pros and consequences of the action to be taken and keeping in view the interest of institution or the body. The scheme of the Act is that the Director enjoys the supervisory control over all the market committees and it is the duty of market committees to enforce the provisions of the Act and Rules and if any default is committed by the market committee, the Director has power to issue instructions subject to limitation as provided under the Act and if the State Government finds that there is any persistent default in performance of duty or abuse of power the legislature has given power to the State Government to supersede the market committee. Therefore, Section 26 cannot be read in isolation, and in any case, under Sec, 26 of the Act it has been provided, inter alia, that it is the duty of the market committee to enforce the provisions of the Act, rules and bye-laws. The duty of the market committee is to ensure that the funds of the market committee are used for the purpose provided under Section 33 of the Act, and such powers are to be read subject to the control of the Director. If any default is committed by the market committee of the instructions or directions, then it is true that the market committee can communicate, to the Director such reasons for not following the instructions. However, by showing the reasons the directions issued by the Director shall not be rendered nugatory for the purpose of deciding the matter as to whether the market committee defaulted in performance of duty. Therefore, considering the aforesaid relevant provisions of the Act and considering the powers to be exercised by the elected members of the market committee, we cannot accept the submission made by Mr. Jhaveri that the grounds of supersession are beyond the scope and ambit of Section 46 of the Act.

10. The next contention of Mr. Jhaveri is that when two views are possible the decision for opting for one view cannot said to be default in performance of duty or abuse of power. We have seen the order of the State Government and the whole tenor of the order of the State Government is that the officebearers of the market committee have not acted as prudent officers of the market committee with wide vision when the State Government has found, on the material available with it, that there is something more in respect of the financial irregularities which has caused huge financial loss to the market committee, this Court will not sit in appeal over such decision of the State Government. Therefore, the judgment of the Bombay High Court in the case of Narayandas Jaskaranji Rathi v. State of Maharashtra, reported in 1981 Bom. CR 508 cited by Mr. Jhaveri is of no help to Mr. Jhaveri. It is well settled that in the matter of supersession of any elected body the scope of judicial scrutiny and review under Article 226 of the Constitution is not that of exercising powers of the Court of appeal, but is only restricted to procedural aspects on the point of principles of natural justice or in a case where the order is so perverse that no authority will form such an opinion on the basis of the record available with it. In this regard, Mr. Jhaveri has submitted that the inquiry report under Section 44 of the Act was not supplied by the State Government, and therefore, there is breach of principles of natural justice. However, we cannot agree with the submission made by Mr. Jhaveri since the order passed by the learned single Judge in Special Civil Application No. 3662 of 2001 dated 22-5-2001 was for the purpose of giving inspection and for allowing the market committee to have the extract of the report, and there is no dispute on the point that the inspection was permitted and the relevant extracts have been allowed to be taken by the State Government. The market committee has submitted its reply on the basis of the same, and it cannot be said that any prejudice has been caused to the members of the market committee in putting forward their defence to the grounds of show-cause notice.

11. Mr. Jhaveri has contended that the State Government while exercising powers of supersession has not taken into consideration the findings of the Inquiry Officer recorded in the inquiry report, more particularly, regarding ground No. 3 in respect of allotment of shops of Sardar Patel Vegetable Sub-yard. On a perusal of the order, findings recorded by the State Government in the order of supersession, cannot be said to be perverse because even if the Inquiry Officer has given any opinion in his inquiry report, it is always open to the State Government while considering the case for supersession to arrive at its own finding because the perusal of the inquiry report is for the purpose of factual examination of allegations and it cannot be said that merely the opinion of the Inquiry Officer is not accepted as correct by the State Government, the finding of the State Government in respect of the same is perverse to the record of the case.

12. However, Mr. Jhaveri has further contended that as regards ground No. 5 of the show-cause notice before the order came to be passed, the market committee had already granted appointments on compassionate grounds to two persons as directed by the Director, and therefore, on the date on which the order came to be passed, the said ground was not in existence, A perusal of the impugned order show that the Director had not only given direction for giving appointments to two persons on compassionate grounds, but had given further direction to relieve last two junior-most employees and the fact remains that no stay order was passed by the learned single Judge of this Court in Special Civil Application No. 3433 of 2001 preferred by the employees against the market committee, but still however, the market committee has not relieved those two junior-most employees though it was the case of the market committee from the very beginning that since 8 employees have been made permanent the establishment expenses have exceeded 40%. It may be noted that Rule 41A of Gujarat Agricultural Produce Markets Rules, 1965 provides for salary of staff of the market committee for which it has been inter alia provided in approving the pay-scales and making payment including the wages of daily-rated or casual employees it should normally not exceed 40% of the income on the property. Therefore, it cannot be said that the ground No. 5 of the show-cause notice was totally not existing.

13. In respect of ground Nos. 1 and 2, it is contended by Mr. Jhaveri that the market committee upon the legal opinion decided to settle the matter with the 8 employees. It is surprising that on one hand in reply to ground No. 5 the market committee itself has admitted that on account of granting permanency benefits to 8 employees the establishment expenses have already exceeded 40% and if that is the situation there may not be justifiable reason for the market committee to enter into settlement with these 8 employees, that too by making payment of back wages amount to Rs. 14,11,8227- even to the stage of commencement of conciliation proceedings under Industrial Disputes Act and further such settlement is not recorded during the conciliation proceedings so as to make it binding to the employees concerned. The finding of the State Government that undue haste is shown in entering into settlement and in making payment of huge amount and it is found by the State Government that the manner in which the payment is made shows the intentional financial loss, and therefore, there is abuse of power.

14. As regards allotment of land to the shop holders of Nutan Ambica Vegetables Sub-yard is concerned, the contention of Mr. Jhaveri is that the lands have been disposed of as per the valuation made by the State Government for the purpose of stamp duty, but the State Government has found that initially the action of the market committee to allot the land on lease basis at the rate of Re. I/- per sq.mtr. was not proper, approved or illegal and though it was directed by the Director to get back the possession of the land instead of taking action in this regard the market committee has sold away the land without getting valuation of the land by the approved valuer of the Government and without inviting any offer from the public at large. It is well settled that normally for the disposal of public property as far as possible the public auction must be held with a view to see that the public body gets maximum market price and all the citizens get equal opportunity to purchase the same. Any prudent and wise responsible office-bearer of the elected body would see to it that all get sufficient opportunity and the market committee gets maximum price of the land. No attempts have been made to get the land valued through the approved valuer nor any attempt has been made to invite offers from interested public by holding public auction of the land. The land was initially allotted on lease basis at the rate of Re. 1/- per sq.mtr., and thereafter, is sold away by private negotiations which shows something more than the error of judgment. Prima facie, the aforesaid actions on the part of the market committee cannot be said as mere error of judgment, particularly, when the same committee earlier handed over the possession of the land at a throwaway rate of Re. 1/- per sq.mtr., and when the Director issued instructions to gel back the possession of the land, instead of acting in the interest of market committee, further step of disposal of land at a price without inviting offers from the public at large was taken without following all the norms. Therefore, the same, by no stretch of imagination can be said to be only error of judgment, but it shows the intentional act to create irreversible situation and more. Therefore, we cannot agree with the contention of Mr. Jhaveri that in respect of ground Nos. 1 and 2, two views are possible and when the elected body has opted for one view it cannot be said that there is default in performance of duty. As indicated earlier, the elected members of the market committee have to act as responsible, wise and prudent office-bearers and have to exercise the powers keeping in view the sense of public accountability. Prima facie, it appears that no wise or prudent officebearer would dispose of the property in such a manner without even making attempt to avoid the financial liability of the back wages and without making attempt to procure maximum price of the property of the market committee.

15. At this stage, Mr. Jhaveri relied upon the judgment of the Apex Court in the case of Tarlochan Dev Sharma v. State of Punjab, reported in AIR 2001 SC 2524 to support his submission that for removal of the elected representative there should be something more than the error of judgment. Firstly, the judgment of the Supreme Court would not be applicable to the facts of the instant case because the aforesaid case of Tarlochan (supra) was the case pertaining to the removal where as a result of removal stigma is attached upon the elected representative and such removal may also call for further disqualification. Whereas, the present case is of a supersession. We are of the view that the degree of abuse of power in the matter of supersession would not be the same in comparison to abuse of power may call for action of removal. It may happen that in a given case the abuse of power may invite the action of supersession, removal or both, but since the Supreme Court had expressed the view considering the case of removal, we are of the view that the said judgment of the Supreme Court in the case of Tarlochan (supra) would not be applicable to the facts of the present case and we leave it at that without expressing any opinion further on the question of degree of abuse of power which would attract the action of removal from the post of a member of market committee.

16. Mr. Jhaveri has also relied upon the judgment of the Supreme Court in the case of Labha Ram & Sons v. State of Punjab, reported in AIR 1998 SC 2086 in support of his submission that public auction is not a sine qua non while disposal of public property, to support his submission that the Market Committee is competent to dispose of the property. It is true that the public auction is not a sine qua non for disposal of public property, but at the same time it cannot be forgotten that normally as far as possible public auction may be held with a view to ensure that the authority gets maximum price and everybody gets equal opportunity to participate. Further, it is also to be remembered that the market committee has power to dispose of the property but as stated above such powers are coupled with the public duty. We find that there is something more than acting as a prudent, wise and responsible office-bearers of the market committee. When the State Government had in totality of the circumstances and on the material available with it found that there are defaults in performance of duties and abuse of powers by causing huge financial loss to the market committee. We are unable to accept the submission of Mr. Jhaveri that order of supersession is passed on the ground beyond the scope of Section 46 of the Act, and therefore, the judgment of the Apex Court in the case of Labha Ram & Sons (supra) would be of no help to the appellants.

17. The contention of Mr. Jhaveri that the ground No. 3 is wrong because the market committee wanted'to find out practical solution with a view to convince the traders for starting their business at the market yard and to earn revenue and the ground No. 4 is also ill-founded because the market committee had filed prosecutions against the traders and the police authorities did not provide effective protection for implementing the provisions of the Act, and therefore, it cannot be said to be different in performance of duty. Prima facie, we are of the view that even if the Inquiry Officer has opined that the market committee had found practical solution so as to start the functioning of new market, it was open to the State Government to form different opinion on the same facts of the inquiry report while taking decision for supersession and the State Government was competent to form the opinion on the material available with it, and therefore, the said contention of Mr. Jhaveri deserves to be rejected.

18. At this stage, it is worthwhile to refer to the judgment of the Apex Court in the case of Joint Registrar of Co-operative Societies, Madras v. P. S. Rajagopal Naidu & Govindarajulu and Ors., reported in AIR 1970 SC 992. In the said case in the matter of supersession of Co-operative Society, the Supreme Court in Para 9 of its judgment observed as under :

'The single judge laid a great deal of emphasis on the Committee being an elected body and the prejudice that would be caused to its members if they are visited with the consequences of supersession on account of irregularities and improper functioning of the previous members of the Committee. What was argued before the High Court was that one-third members of the Committee have to retire every year and fresh members have to be elected. If certain grave irregularities are committed, say in the years 1964, 1965, it would be unfair to the new members who have been elected to supersede the committee in 1968. We do not consider that would be the correct approach in construing Section 72 which is meant for superseding the Committee as a whole when its working discloses such irregularities or improprieties as would justify its supersession. Normally, it would be expected that only that Committee would be superseded whose functioning has been found to be highly defective. The object of supersession apparently is to appoint a Special Officer or a Managing Committee in order to set the working of the society right. It is not difficult to envisage a situation where maladministration by a committee has so adversely affected the functioning of the society that it is essential in the interest of the society itself to give temporarily the control of its affairs to a neutral authority. At any rate, if the operation of Section 72 in certain circumstances is likely to operate harshly so far as certain members of the Committee are concerned, it is not possible to read into it other provisions of the Act which are not incorporated in the Section expressly or by necessary implication.'

19. In view of the observations of the Supreme Court in the aforesaid case, it is clear that the order of supersession is apparently to appoint a Special Officer in order to set the working of the market committee right and where maladministration by an elected committee has so adversely affected the functioning of the market committee, it is essential in the interest of the market committee that temporarily the control of the affairs of the committee is given to a neutral authority.

20. Considering the overall facts and circumstances of the case and in view of the observations made by us earlier, we find that the State Government had sufficient material on record to form an opinion that the market committee had made persistent defaults in performance of its duties and has committed financial irregularities which has resulted into huge financial loss to the market committee and when the learned single Judge of this Court has also upheld the legality and validity of the decision of the State Government of superseding the market committee, we do not find any case for interference. We are in agreement with the view expressed by the learned single Judge and accordingly we dismiss this appeal with costs which are quantified at Rs. 10,000/-.

21. Since, main appeal is dismissed the Civil Application No. 90 of 2002 is rejected with no order as to costs.


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