P.S. Kailasam, J.
1. Writ Petition No. 233 of 1966 is filed by the petitioner, who filed the nomination to the Bhavani Panchayat from Ward No. 8 against the order of the Election Court in O.P. No. 9 of 1965 setting aside the election to the Ward and ordering fresh election. Writ Petition No. 234 of 1966 is filed by the petitioner who filed the nomination for election to the Bhavani Town Panchayat from Ward No. 10 against the order of the Election Court in O.P. No. 11 of 1965 setting aside his election and ordering fresh election to the Ward. C.R.P. No. 323 of 1966 is filed by the petitioner who filed the nomination for Ward No. 9 against the order of the Election Court, Erode, in O.P. No. 10 of 1965 setting aside his election and directing fresh election.
2. The two writ petitions and the civil revision petition raise the same question and can be dealt with together. The petitioners in the writ petitions and the Civil Revision Petitioner filed nominations for Ward Nos. 8,10 and 9 respectively. The 1st respondent filed his nomination for all the three wards. At the time of the scrutiny of nomination papers, the Executive Officer of the Bhavani Town Panchayat reported to the Returning Officer that a sum of Rs. 634-78 was due from the 1st respondent to the Panchayat as per the final decree dated 16th October, 1963 in O.S. No. 416 of 1954 on the file of the Court of the District Munsif, Erode. The Returning Officer accepted the objection and rejected the nomination of the 1st respondent on 18th January, 1965. The 1st respondent preferred an appeal to the Revenue Divisional Officer, which was also dismissed on 22nd January, 1965. The other contesting respondents in all the wards withdrew their nominations and the petitioners in W.P. Nos. 233 and 234 of 1966, and C.R.P. No. 323 of 1966 were declared elected for the respective wards. The 1st respondent filed O.P. Nos. 9, 10 and 11 of 1965 challenging the rejection of his nomination in the three wards. The Election Court held that the decree amount due by the 1st respondent cannot be held to be arrears of any kind as envisaged under Section 25(2)(g) of the Panchayat Act. It also found that the amount due by the 1st respondent was in a fiduciary capacity and as such he was exempted from the disqualification under Section 25(2)(g). It further held that no notice as contemplated under Section 25(2)(g) was given to the 1st respondent. The correctness of the decision of the Election Court is challenged in these writ petitions and Civil Revision Petition on various grounds.
3. In 1950 the 1st respondent was a member of the Panchayat. He took an advance of Rs. 500 on 28th December, 1950, from the Executive Officer of the Panchayat for the purchase of lamps and for their speedy and safe transport to Bhavani. The 1st respondent received a further sum of Rs. 1,156. The 1st respondent did not fulfil the obligations undertaker by him and misappropriated the amounts entrusted to him. In spite of several demands the 1st respondent did not make good the amounts. The Bhavani Panchayat filed a suit against the petitioner in O.S. No. 416 of 1954. The suit was decreed in favour of the Panchayat for Rs. 541-75 with interest and costs. The 1st respondent took the matter up to the High Court, which remanded it. After the remand, a decree was passed in favour of the Panchayat for a sum of Rs. 634-78. On the date of the nomination admittedly this decree amount was due by the 1st respondent to the Panchayat. It may also be mentioned that several demands were made on the 1st respondent by the Panchayat to make good the amount due by him. But he failed to do so whereupon the Panchayat instituted a suit. From the records it is not clear whether any notice calling upon the 1st respondent to pay the amount was issued after the decree was passed. On these facts, it has to be decided whether the rejection of the nomination of the 1st respondent is in accordance with law.
4. Section 25 of the Panchayats Act enumerates the disqualifications of candidates for election as members to the Panchayat. Section 25(2)(g) provides that;
A person shall be disqualified for election as a member if, at the date of nomination or election, he is in arrears of any kind due by him (otherwise than in a fiduciary capacity) to the Panchayat or the Panchayat Union Council 'up to and inclusive of the previous year,' in respect of which a bill or notice has been duly served upon him and the time, if any, specified therein for payment has expired.
The view of the Election Court was that the words 'arrears of any kind' would only refer to arrears by way of tax. In support of this conclusion, the words 'up to and inclusive of the previous year' are relied on. It was submitted that the reference to the arrears 'up to and inclusive of the previous year' was only to tax payable up to the previous year, as if arrears apart from taxes were to be included, there was no necessity for the use of the words 'up to and inclusive of the previous year.' Though these words may normally refer to the arrears of tax, they do not exclude arrears of other kind due up to and inclusive of the previous year. If the intention of the Legislature was to include only arrears of tax, it could have said so specifically. The words 'arrears of any kind' are of wide import and would include arrears of any kind, whether by way of tax or otherwise, which are payable to the Panchayat. Apart from the tax arrears, the Panchayat is also entitled to other arrears, for example, for recovery of costs from the owner for removing dangerous structures under Section 79, for recovery of contributions from persons having control over places of pilgrimage under Section 90, for recovery of costs from the owner for measures taken for preventing danger from tank, pond etc. under Section 95 of the Act, for recovery of expenses for removal of filth, noxious vegetation, etc. from lands and buildings under Section 96, for recovery of fees for public markets under Section 99, for recovery of fees for cart-stands, etc., under Section 106, for recovery of rents and fees for slaughter-houses under Section 108 and for levy and recovery of local cess and local cess surcharges under Sections 115 and 116. It may be noted that Notification 52 made under Section 178, Sub-section (2) Clause (22) provides that all costs, damages, compensation, penalties, charges, fees, expenses, rents, contributions and other sums due by any person may be demanded by bills which shall be served on the persons concerned and recovered in the manner provided for in the rules for the collection of tax under the Panchayat Act. The words 'arrears of any kind due' cannot on a natural construction be restricted to arrears of tax and not to arrears due to the Panchayat under the several sections mentioned above. There is no warrant for holding that any amount that may be due by a person to the Panchayat could not be covered by the words' arrears of any kind due' by him. No doubt the amount payable should be an ascertained sum due and unpaid. If a person is liable to pay an ascertained sum, there is no reason for excluding it from 'arrears of any kind'
5. Learned Counsel for the 1st respondent submitted that the exemption given to arrears due 'otherwise than in a fiduciary capacity' would exclude the operation of the section in the present case. The contention is, as the amount was admittedly entrusted to the 1st respondent and he misappropriated the same, this would establish that the 1st respondent, retained the amount in a fiduciary capacity and the amount payable by him would also be in a fiduciary capacity and therefore would not come within the mischief of Section 25(2)(g). The proper meaning to be given to the words 'otherwise than in a fiduciary capacity' would be that the arrears should be payable by the person in his individual capacity and not in a fiduciary capacity as a trustee, guardian, executor or a Receiver, where the amount is payable from out of the estate of someone else. The words could not have been intended to cover a case where a person was entrusted with the money and he misappropriated it. Though the money was entrusted to him in a fiduciary capacity, when he misappropriates it, the person becomes liable personally and so far as the debt is concerned, the debt is not owed in a fiduciary capacity. When the amount misappropriated is ascertained and a demand is made, the person cannot any further plead that his liability is only in fiduciary capacity. To accept such a contention would mean that persons who had misappropriated moneys belonging to the Panchayat and who are criminally liable would not be disqualified, whereas a person who is in arrear of some amount without committing misappropriation and breach of trust would be disqualified. Such a construction cannot be put unless the wording of the section clearly demands it.
6. Learned Counsel for the 1st respondent strongly relied on a Bench decision of the Andhra Pradesh High Court in Narayan v. Thirpathi Reddy (1962) 1 A.W.R. 260. The Bench in considering the expression 'arrears of any kind' occurring in Section 18(1)(d) of the Hyderabad Gram Panchayats Act held that it would not take in amounts due as a result of misapplication or misappropriation of money by a Panchayatdar. The Court was dealing with a case in which the Panchayatdar purchased a plot of land from the Panchayat, but paid only a portion of the price and misappropriated the balance. An enquiry was held, and the Panchayatdar was served with a notice calling upon him to pay the amount due by him within fifteen days from the date of the receipt of the notice. The Panchayatdar failed to make the payment. The Court was of the view that the expression 'arrears of any kind' cannot take in loss, waste, or misapplication or misappropriation of money by a Sarpanch coming under the ambit of Section 127 and that it would be doing violence to the language of that expression to say that a sum of money said to have been misappropriated by a Sarpanch is an arrear of any kind. The Court took the view that the reference was only to arrears of taxes or rents or dues of a cognate nature. With great respect, I am unable to agree with the view of the Bench of the Andhra Pradesh High Court. In explaining the meaning of the words 'otherwise than in a fiduciary capacity' the Bench observed:
It denotes that a person who fails to pay the tax or rent, etc., due by him in his individual capacity and not due in his capacity as the trustee or guardian of a minor, etc., suffers the disqualification.
7. While it cannot be disputed that the words cover tax due in the individual capacity and not due in the capacity of trustee or guardian of a minor, the exemption cannot be stretched to include the case of a person who was entrusted with the money and who by misappropriating it became liable to pay the amount. For the reasons stated earlier, I am unable to accept the view of the Andhra Pradesh High Court, that the expression 'arrears of any kind' is not applicable to sums which have been misappropriated by a Panchayatdar.
8. It was next contended that Section 25(2)(g) requires that a bill or notice ought to have been duly served upon the person and that the time if any specified in the bill or notice for payment should have expired. In this case, on the records it is clear that notice demanding payment was given before the suit was filed. But there is nothing to indicate that after the decree was obtained any further notice was given. I do not think that the section requires that notice should be given after the decree had been obtained. All that the sub-section requires is that the petitioner should owe an ascertained sum for the payment of which a notice had been duly served upon him. The conditions have been satisfied and the disqualification under sub Section 2(g) of Section 25 is applicable to the present case.
9. For the reasons stated above, the writ petitions are allowed with costs payable by the 1st respondent (one set) Advocate's fee Rs. 250. The order of the Election Court setting aside the election and ordering fresh election is set aside. The Civil Revision Petition is allowed with costs.