Bombay High Court
Rahul S/O. Virendra Deshmukh And ... vs State Of Maharashtra Thr. ... on 6 May, 2016
Bench: S.B. Shukre
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR.
WRIT PETITION No. 1442 OF 2016
1. Rahul s/o Virendra Deshmukh,
aged about 42 years, Occ.: Agriculturist,
r/o Deshmukhpura, Katol,
District Nagpur.
2. Sarla w/o Vishram Uikey,
aged about 54 years, Occ.: Housewife,
r/o 37, Dhawad Layout, Katol,
District Nagpur.
3. Smt. Asha Shankarrao Raut,
aged major, Occ. Agriculturist,
r/o Katol,
District Nagpur.
4. Smt. Vandana Harishchandra Rajurkar,
aged major, Occ. Agriculturist,
r/o Katol,
District Nagpur.
5. Smt. Shobhabai Ashok Jawanjal,
aged major, Occ. Agriculturist,
r/o Katol,
District Nagpur.
6. Smt. Nalini Kailash Larokar,
aged major, Occ. Agriculturist,
r/o Katol,
District Nagpur.
7. Suresh Champatrao Parbat,
aged major, Occ. Agriculturist,
r/o Katol,
District Nagpur.
8. Smt. Geeta Mahesh Chandak,
aged major, Occ. Agriculturist,
r/o Katol,
District Nagpur.
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9. Rajesh Sukhdeorao Dehankar,
aged major, Occ. Agriculturist,
r/o Katol,
District Nagpur.
10. Girish Dhanrajji Paliwal
aged major, Occ. Agriculturist,
r/o Katol,
District Nagpur. .... PETITIONERS.
VERSUS
1. State of Maharashtra,
through its Secretary,
Urban Development Department,
Mantralaya, Mumbai-32.
2. The Hon'ble Minister of State,
State of Maharashtra,
Urban Development Department,
Mantralaya, Mumbai-32.
3. The Collector,
Civil Lines, Nagpur.
4. Smt. Laxmi Ishwarchand Joshi
aged major, President,
Municipal Council, Katol.
R/o Joshi Lodge, Near Katol Bus Station,
Katol, Distt. Nagpur. .... RESPONDENTS
.
INTERVENERS
1. Jitendra Nemalalji Tupkar,
r/o Near Purushottam Mandir,
Katol, Distt. Nagpur.
2. Charansingh s/o Babulal Thakur,
r/o Near Railway Station, Katol,
District Nagpur.
3. Kishor s/o Shankarrao Gadhve,
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aged about 37 years,
Occ.: Business, r/o Pethbudhwar,
Prabhag No. 2,
Katol, Distt. Nagpur.
.....
Shri Sunil Manohar, Senior Advocate, with Advocates Shri Rahul V. Deshmukh and
Shri Rohit Joshi for the petitioners.
Shri A.S. Kilor, Special Counsel, for respondents 1 to 3.
Shri A.J. Gilda Advocate for respondent no. 4.
Shri M.P. Khajanchi Advocate for intervenors.
.....
ig CORAM : S .B. SHUKRE, J.
RESERVED ON : 29 .04.2016.
PRONOUNCED ON : 06.05.2016.
JUDGMENT :
By this petition, the petitioners have challenged the legality and
correctness of the order dated 20.2.2016 passed by the respondent no. 2, the
Hon'ble Minister, thereby disqualifying the petitioners under the provisions
of Sections 55B and 42 of the Maharashtra Municipal Councils, Nagar
Panchayats and Industrial Townships Act, 1965 (hereinafter referred to as
the Act, 1965).
2. The petitioners, when the impugned order was passed,
were or had been the part of the Municipal Council, Katol, in such capacities
as petitioner no. 1 being the President; petitioner no. 2 being the Ex-
President and the Councillor and petitioner nos. 3 to 10 being the
councillors and petitioner no. 10 being a co-opted councillor. They were
disqualified by respondent no.2 for the reason that they were found to have
indulged in misconduct and disgraceful conduct. The alleged controversial
conduct of the petitioners related to the allotment of some minor works to
one contractor, Shri Bambal.
3. Some councillors belonging to the opposition parties filed a
complaint before the respondent no. 2 alleging that the petitioners
committed illegality in allotting the work to said Shri Bambal in the meeting
held on 7.5.2013. The respondent no. 2 took its cognizance and directed
respondent no. 3 to make an inquiry into the allegations made in the
complaint under the provisions of Section 311 of the Act, 1965. The
respondent no. 3, on his part, directed the Sub Divisional Officer to make an
enquiry and submit his report, which he did on 31.12.2013. It is the
grievance of the petitioners that in the inquiry that was conducted,
statements of petitioners were not recorded and the relevant documents
were not properly considered. This report was forwarded by respondent
no.3 to the respondent no. 2.
4. On receipt of the report, respondent no. 2 issued a show
cause notice on 02.8.2014 to the petitioners framing therein charges of
misconduct. The first charge was about dividing the work relating to
carrying out repairs to the existing works, roads etc. in violation of clause 18
of the Standing Order No. 36 and the provision of Section 72 of the Act,
1965. It is the submission of the petitioners that in fact provisions of
Section 72 of the Act 1965 were not applicable to the present case and the
Standing Order No. 36 having been issued by the Director, Municipal
Administration, an authority not having any power to issue such instructions
as contained in the Standing Order, did not have any force of law and the
instructions were, at the most, administrative in nature, and, therefore, only
had recommendatory effect. The petitioners' case thus has been that there
has been no violation of any direction of law when the repair work was
divided by them. The second charge was in respect of non-compliance with
the instructions contained in the Standing Order No. 36, in particular clause
no. 27 thereof, which prescribed qualifications of a contractor, and the
contractor Shri Bambal, to whom the work was allotted, surrendered it to
one Shri Surendra Lohi for its being carried out by the latter. According to
the petitioners, clause 27 related to qualification of an agency to be
appointed under clause (ii) of Section 49A and not to a rate contractor
appointed under clause 19 of Standing Order No. 36 and, therefore, there
was no violation of the said clause. It was also the case of the petitioners
that there was no evidence to show that the work was actually surrendered
to Shri Surendra Lohi. Charge no. 3 was about illegally passing the
resolution on 07.5.2013 and committing dereliction of duty by not accepting
the lowest tender submitted by one Shri S.L. Bhakte. Charge no. 4 was
about recovery of excess payment made to the contractor. It was the
contention of the petitioners that even the third and fourth charges were
baseless as Shri Bhakte was appointed as a contractor for a different period
than the period for which Shri Bambal was appointed. According to them,
Shri Bhakte was appointed for the period 2013-14 whereas Shri Bambal was
appointed for the period 2012-13. It was also pointed out that Shri Bambal
did not receive payment for most of the works he executed and, therefore,
there was no question of causing any loss to the Municipal Council and, as
such, there was no further question of any recovery of the loss to be made.
5. According to the petitioners, all these points of defence
raised in the preliminary submissions as well as affidavit-in-reply and the
affidavits filed by them were not considered by the respondent no. 2 in any
manner. They also submit that the impugned order has been passed
belatedly, almost after a period of eight months from the date of closure of
the case and is cryptic, from which non-application of mind on the part of
respondent no. 2 in passing it is very much visible. It is thus submitted that
the impugned order is illegal and deserves to be quashed and set aside and
further consequential relief deserves to be given to the petitioners.
6. I have heard Shri Sunil Manohar, learned senior counsel,
for the petitioners, Shri Anil Kilor, learned special counsel for respondents 1
to 3, Shri Anoop Gilda, learned counsel for respondent no. 4- the newly
elected President and Shri Mohit Khajanchi, learned counsel for the
intervener. With their assistance, I have carefully gone through the paper-
book of the petition including the impugned order.
7. Shri Manohar, learned senior counsel, has submitted that
the impugned order is illegal and arbitrary for several reasons. He submits
that the impugned order passed by the Hon'ble Minister on the face of it
discloses non-application of mind to the facts of the case and legal
submissions made by the petitioners. He submits that respondent no.2 has
relied upon the standing order no.38 which had no force of law and has
illegally held that the conclusion of Inquiry Officer regarding violation of
certain clauses of the standing order and also Section 72 of the Act, 1965 is
correct. He further submits that the impugned order does not take into
account the fact that Shri Shashikant Bambal, the contractor to whom the
works in question, in all 29 works, were allotted were to be executed in the
year 2012-13 and not in the year 2013-14 and Shri Bambal was appointed
as a rate contractor and not as an agent to whom neither the provisions of
Section 49A(ii) applied, nor did the clause 18 of the Standing Order No. 36.
He also submits that the Hon'ble Minister failed to take into consideration
that to a rate contractor like Shri Shashikant Bambal, if at all the Standing
Order no. 36 applied, clause 19 was relevant for which purpose neither any
qualification as prescribed under clause 27 of the standing order was
necessary nor did any prohibition against division of work as provided under
clause 18 of the standing order apply.
8. Learned Senior Counsel further submits that the other
contractor, Shri Bhakte, was appointed for carrying out various works of
repairs of the Municipal Council for the year 2013-14 and not for the year
2012-13. He submits that Shri Bhakte was the contractor appointed by the
Municipal Council for carrying out various works during the period of one
year starting from 1.6.2013 as per the work order dated 15.5.2013 and Shri
Bambal was appointed as a contractor for carrying out various works of
Municipal Council during the period of one year starting from 01.6.2012.
Therefore, learned senior counsel further submits, there was no question of
applying same rate of payment that was approved for Shri Bhakte to the
works carried out by Shri Bambal. He further submits that in any case there
was hardly any difference of amount between the rates quoted by Shri
Bambal and the rates quoted by Shri Bhakte and this difference was of
approximately Rs.38,000/-. He further submits that out of 29 works
completed by Shri Bambal, full payment was made to him in respect of only
two works, part payment was made to him in respect of one work and
payment for the remaining works was withheld by the Municipal Council.
He also submits that Shri Bambal, even then, had on affidavit submitted to
the Municipal Council that he was ready to accept the payment for the
works done by him at the rate quoted by and approved for Shri Bhakte.
According to him, there was no financial loss ultimately caused to the
Municipal Council and, in any case, there was no allegation made against
any of the petitioners that they acted in this case dishonestly and with mala
fide intention to cause wrongful gain to some body and wrongful loss to the
Municipal Council.
9. Shri Manohar, learned senior counsel, further submits that
there has been no violation of any provisions of the Act, 1965, much less
Section 72 of the said Act. He submits that the provision of Section 72, as it
existed in the original Act, came to be substituted by the amending Act No.
15 of 2012 and the substituted Section 72 came into force with effect from
4.8.2012. He submits that now in the newly substituted Section 72, no
limits on the financial powers of the standing committee are fixed and the
issue of placing of limits on the financial powers has been left to be
determined by the rules to be framed by the State Government. He points
out that so far no rules in this behalf have been framed by the State
Government and, therefore, respondent no. 2 could not have accepted the
conclusions drawn by the Inquiry Officer that apart from standing order no.
36, Section 72 of the Act, 1965 has also been violated in allotting the works
by the petitioners to the contractor Shri Bambal.
10. Learned senior counsel further submits that although it has
been alleged that the petitioners, in allotting the contracts of 29 works to
the contractor, disregarded the requirement of clause 27 of the Standing
Order, a bare perusal of which would disclose that it applies to an agency to
be appointed under Section 49A(ii) of the Act, 1965 and not to a rate
contractor, like Shri Bambal. Therefore, the finding recorded by the Hon'ble
Minister on this count is completely erroneous and is in disregard of the
statutory provisions. He points out that even the complainants were present
in the general body meeting held on 16.5.2012 and the decision to appoint
Shri Bambal as the rate contractor for carrying out various works on behalf
of the municipal council was taken unanimously when Resolution No. 37/3
was adopted by the general body of the municipal council. He further
submits that for the year 2011-12 some of the works of the Municipal
Council were given to another rate contractor, Sk. Nasir, who was just like
Shri Bambal, an unregistered contractor, and that was done when the
complainants were in power. He submits that now if any fault is to be found
with the decision of the Municipal Council to appoint Shri Bambal as a rate
contractor, the complainants would also be adversely affected and that they
would also have to resign.
11. Learned senior counsel further submits that even though
there was a charge that Shri Bambal, a rate contractor, to whom 29 works
were allotted, did not execute those works by himself and got them done
through one Surendra Lohi, no evidence was placed on record and,
therefore, this charge would have to be held as not proved. He further
submits that when there has been no evidence of causing of any financial
loss to the Municipal Council and nothing on record to show that any
statutory provision has been violated by the petitioners, there would be no
question of directing recovery of excess payment allegedly made to the
contractor. As a matter of fact, learned senior counsel further submits, the
payment in respect of 26 works has been completely withheld, and there is a
willingness shown by the rate contractor to accept the payment for the
works completed at the rate quoted by Shri Bhakte, who was appointed as
the rate contractor for carrying out the works arising in the subsequent year.
12. Learned senior counsel further submits that although
inquiry was conducted as per Section 311 of the Act, 1965 and this section
clothed the Inquiry Officer with the power of a civil Court for recording
evidence and enforcing attendance of witnesses, the Inquiry Officer did not
record the statements of the petitioners for the reasons best known to him
and simply relied upon the official record. He also submits that in a case
like the present one, it is not necessary to give any hearing to the
interveners/complainants. Learned senior counsel further submits that the
elected councillors cannot be disqualified casually and the standard of proof
required for proving the charge of misconduct against them is much stricter
than that would be required in disciplinary proceedings conducted against
an employee. He submits that for the charge of misconduct to be proved, it
must be shown that the councillors acted without any bona fides and
willfully committed misdemeanor or were grossly negligent in performing
their duties. He also submits that there was no charge of corruption made
against the petitioners nor any evidence showing causing of wrongful gain
or loss to anybody. According to him, discharge of duty negligently, if it is
there, is not enough to say that misconduct as contemplated under Sections
55B or 42 of the Act, 1965 has been committed by the elected
representative and something more taking the negligence towards
boundaries of criminality is required. He submits that at the most the
conduct could be considered to be in the nature of financial or some
irregularity not amounting to misconduct.
13. Learned senior counsel further submits that the impugned
order does not give any reason and on this ground alone the order is liable
to be quashed and set aside. He also submits that the arguments were heard
by respondent no. 2 on 9.6.2015 and the impugned order has been passed
on 20.2.2016, i.e. after expiry of about eight months from the date of
hearing and the impugned order does not disclose that the submissions
made by the petitioners were considered and conclusions were properly
drawn. Learned senior counsel submits that such failure on the part of
respondent no. 2 has caused serious prejudice to the petitioners. Thus,
learned senior counsel submits that the impugned order is illegal, perverse
and arbitrary warranting interference with it.
14. Shri Kilor, learned special counsel for respondents 1 to 3,
submits that there is a fundamental flaw in this writ petition. It only
challenges the order of the Hon'ble Minister and does not seek quashing of
the inquiry report submitted by the Sub Divisional Officer on 31.12.2013.
He submits that the inquiry has been conducted under the provisions of
Section 311 of the Act, 1965 and such inquiry, being statutory, would have
its binding effect on the persons named in the report and if any adverse
conclusions are drawn in the inquiry, which in fact is the case here as
against the petitioners, the adverse findings would still remain on record
and would lead to further necessary consequences. Therefore, he submits
that it was essential for the petitioners to challenge the inquiry report dated
31.12.2013, which they have not done, and therefore, he submits that this
writ petition has only academic value and nothing more. He further submits
that had the petitioners challenged the inquiry report, this writ petition
would have been required to be placed before the Division Bench of this
Court.
15. Shri Kilor, learned special counsel, further submits that the
inquiry conducted by the Sub Divisional Officer was in detail and minute
examination of the relevant record by the Inquiry Officer revealed that in
passing the resolution of awarding works to rate contractor, Shri Bambal by
the standing committee, there was violation of certain clauses of the
standing order No.36 and also the spirit of Section 72 of the Act, 1965 and
therefore, the Inquiry Officer did not think it necessary to record the
statements of the petitioners. He submits that the Inquiry Officer has not
imputed any motive to the petitioners and what he has found in his inquiry
is only clear-cut violation of the established financial norms in allotting the
works to the rate contractor Shri Bambal and since this could not have been
considered as mere financial irregularity, the Inquiry Officer found that the
petitioners, while being the President or the Ex-President or the Councillors
of the Municipal Council, Katol, committed misconduct. Therefore, the
Inquiry Officer has rightly not recorded statements of the petitioners.
16. Shri Kilor further submits that a bare perusal of the works
allotted to Shri Bambal, as stated in the inquiry report, would be enough for
reaching the conclusion that these works were intentionally and artificially
divided in different parts so as to bring estimated cost of each of these works
within the limit of Rs.40,000/-, which limit was earlier prescribed in Section
72 for exercising of financial powers by a standing committee without
seeking any prior technical sanction from an engineer designated or
recognized by the State Government as per the proviso to Section 72, as it
stood prior to 2012 amendment. He submits that this act on the part of the
petitioners, apart from being violative of Section 72, was also violative of
clause 18 of the Standing Order No.36. According to him, clause 19 of the
standing order did not apply to the works in question as the works allotted
to Shri Bambal were not only in respect of carrying out repairs to roads or
other structures but also original works, may be minor in nature if taken
part wise and not so if taken in consolidated manner, as for example, the
construction of RCC cement pipe drains.
17. Learned Special Counsel further submits that clause 27 of
the Standing Order No. 36 prescribing requirement of qualification,
experience etc. for a contractor to be eligible to be appointed for carrying
out works on behalf of the Municipal Council applies to all contractors who
are nothing but agencies of the Municipal Council. He submits that if in the
general body meeting held on 16.5.2012 some of the complainants had not
resisted passing of the resolution for appointing Shri Bambal as rate
contractor for various works of the Municipal Council for the year 2012-13,
later on when it came to confirming the decision of the standing committee
to allot particular works to the same contractor, the complainants resisted
the same and this is evident from the minutes of the General Body Meeting
held on 16.7.2013. At that time, the complainants had taken an objection to
the allotment of these works to the said contractor. He further submits that
since the Municipal Council, as per the provision of Section 73 of the Act,
1965, is a superior body over the standing committee, it was the duty of the
councillors to ensure that all the relevant clauses of Standing Order No. 36,
in particular clause no. 27, prescribing qualification etc. for the contractors,
were duly complied with and this duty was attempted to be performed by
the complainants, but was willfully not discharged by the petitioners. He
submits that it is not necessary that any decision taken regarding allotment
of some works to a contractor by the standing committee must be accepted
by the Municipal Council and the Municipal Council must ensure that the
Council's funds are spent prudently and in the best interest of public.
18. Learned Special Counsel further submits that if the
argument of learned senior counsel for the petitioners regarding financial
powers of the standing committee being unlimited under the provision of
Section 72, there being no rules framed in that regard by the State
Government, is to be accepted, the result would be, every Municipal
Council in the State of Maharashtra would be exercising its powers in an
infinite manner without any restriction whatsoever and this would lead to
arbitrary exercise of power, which is anathema to the principle of rule of law
running through Articles 14 and 21 of the Constitution of India. He submits
that if no rules have been framed by the State Government, the Municipal
Council would be under an obligation to respect the guidelines issued by an
administrative authority appointed under the provisions of the Act, 1965
regulating the exercise of contractural powers and providing a safeguard
against their arbitrary exercise by the councillors.
19. Learned special counsel further submits that the impugned
order records reasons, although briefly, and since the copy of the inquiry
report was furnished to each of the petitioners along with the show cause
notice, no prejudice could be said to be caused to the petitioners by
recording of such brief reasons. He submits that a bare perusal of the
impugned order would show that the Hon'ble Minister has applied his mind
to the facts of the case as well as legal submissions and reached his
conclusions properly, legally and reasonably. He submits that it is not the
requirement of law that when a quasi judicial authority like respondent no.
2 exercises statutory powers regarding disqualification of the councillors, he
must always record reasons in details and when he is in agreement with the
report of the Inquiry Officer, it is enough for him to express so by briefly
recording the reasons, which is what, learned special counsel further
submits, the respondent no. 2 has done in this case. He also submits that
the law that the judgment must be given within three months from the date
on which the arguments are heard by and large applies to judicial
authorities and not the executive authorities like respondent no. 2, the
Hon'ble Minister, exercising quasi judicial powers conferred upon them
under the statutory provisions. He also submits that the word 'misconduct'
takes within its fold all types of acts which are acts of misdemeanor, acts
done in violation of rules or established procedure or those acts which
amount to dereliction of duty and which could be termed as improper
behaviour. According to him, violation of the established procedure by the
petitioners is nothing but misconduct as contemplated under Sections 55B
and Section 42 of the Act, 1965.
20. Shri Gilda, learned counsel for respondent no. 4, submits
that it is well settled law that when the Government does not frame rules in
exercise of rule framing power, it is permissible for the administrative
authorities to issue executive instructions and when such executive
instructions are issued in the absence of rules framed by the State
Government, they would have a force of law. This way, he submits that
Standing Order No. 36 has a force of law and all it's clauses were binding
upon the petitioners, which they have disregarded thereby committing
misconduct within the meaning of Sections 55B and 42 of the Act, 1965.
21. Shri Khajanchi, learned counsel for the interveners, has
submitted that the newly amended Section 72 is a conditional legislation as
it depends for it's existence on framing of the rules and if the rules have not
been framed, the settled law would indicate to us that the earlier provision
did not get repealed. He also submits that the interveners, who were the
complainants, had opposed the decision of the standing committee
regarding allotment of works to Shri Bambal, he being not a qualified rate
contractor. He also submits that the show cause notice issued to each of the
petitioners was accompanied by the inquiry report and the inquiry report
being in great details, the petitioners could be said to have had enough
opportunity of defending themselves and, therefore, brief recording of
reasons by respondent no. 2 cannot be said to have caused any prejudice to
the respondents. He submits that by illegally allotting the works to the rate
contractor in violation of the established norms, the petitioners have
committed breach of the doctrine of public trust. Therefore, according to
him, the impugned order cannot be said to be illegal or arbitrary.
22. The impugned order is based upon the inquiry report
submitted under Section 311 of the Act, 1965. Perusal of the impugned
order would show that the respondent no. 2 has accepted the conclusions
along with the reasons given therefor by the Inquiry Officer in his inquiry
report dated 31.12.2013. Therefore, reference to the inquiry report
becomes essential for dealing with the arguments canvassed before me by
the rival sides. The conclusions reached in the inquiry report in essence are
to the effect that while performing their official duties, the petitioners
violated the provision of Section 72 of the Act, 1965 and also the relevant
clauses of the standing order No. 36. It is the contention of learned senior
counsel for the petitioners that the grounds of the conclusions reached by
the Inquiry Officer and so by the respondent no. 2 are misconceived as
Section 72, as amended with effect from 04.8.2012, does not place any
limits on the financial powers of the standing committee, that the rules
prescribing such limits, in view of Section 2(35) read with Section 321,
have not been framed so far by the State Government and the standing
order No.36 does not have the force of law as it has not been issued under
any authority given to the Director, Municipal Administration, nor does the
standing order make any specific reference to any such authority having
been given to the Director. On the other hand, it is the contention of
learned counsel for the respondents that the amended provision of Section
72 is yet to take effect and it would take effect only when the rules
regulating exercise of financial powers by the standing committee or the
Council would be framed by the State Government and till the time such
rules are framed, the standing committee or the Council would continue to
be governed by the old provision which prescribes the limit of Rs.40,000/-
for sanctioning execution of works relating to construction of road, bridge,
building or water supply or drainage without obtaining any prior technical
sanction from an engineer designated or recognized by the State
Government. It is also their contention that when no rules are framed,
Government can issue administrative instructions regulating exercise of
power by the standing committee or the Council and, in any case, the
standing order No. 36 which is nothing but an executive direction is binding
upon the elected councillors till the time a declaration from a Court of law
that it is not binding is sought and granted.
23. In order to ascertain the correctness of these arguments, it
would be necessary to briefly consider the unamended provision of Section
72 of the said Act and also it's amended version. In the unamended
provision of Section 72, there was a proviso which specifically put a cap of
Rs.40,000/- in the case of "C" class municipalities, here we are concerned
with "C" class municipality, with Katol Nagar Parishad falling in "C" class,
for exercising financial powers regarding sanction of any work of
construction relating to roads, bridges, buildings, water supplies or
drainages etc. without obtaining prior technical sanction from the
designated or recognized engineer. The proviso to unamended Section 72
being relevant is reproduced as follows -
"Provided that the (Standing Committee or the Council) shall not
sanction any project or scheme involving construction such as a
road, bridge, building or water supply or drainage scheme costing
over Rs.75,000/- in the case of "A or "B" Class Municipal area and
Rs.40,000/- in the case of "C" Class Municipal area, unless prior
technical sanction therefor is obtained from such officer of State
Engineering Service as the State Government may designate; or
where the Council has appointed a Municipal Engineer or a Water
Works Engineer referred to in Sub-section (2) of Section 75 and
such engineer is recognized by the State Government in this behalf
unless prior technical approval therefor is obtained from such
engineer who may be concerned with the scheme."
In place of the said old provision of Section 72, new Section 72 has been
brought in force by the method of substitution of the earlier provision by the
Maharashtra Act No. 15 of 2012 with effect from 4.8.2012. The new
Section 72 reads thus :
"72. Limits of powers of Committees and Council in
respect of financial sanction
The powers of financial sanction of the Standing
Committees and the Subject Committees of different classes of
municipal councils shall not exceed such limits as may be
prescribed;
Provided that, the Standing Committee or the Council
shall not sanction any project or scheme involving construction such
as a road, bridge, building or water supply or drainage scheme
costing over such amount as may be prescribed, unless prior
technical sanction therefor is obtained from such officer of the State
Engineering Service, as the State Government may designate, or
where the Council has appointed a Municipal Engineer or a Water
Works Engineer referred to in sub-section (2) of Section 75 and such
Engineer is recognized by the State Government in this behalf,
unless prior technical approval therefor is obtained from such
Engineer."
It is clear from the amended Section 72 that now limits on the financial
powers are not embedded in the Section and they are left to be prescribed
by the State Government by framing rules therefor in exercise of its rule
making power under Section 321 of the Act 1965. This provision lays down
that the standing committee or the Council shall not exercise powers of
financial sanction exceeding such limits as may be prescribed. In Section
2(35) the word "prescribed" has been defined to mean "prescribed by the
rules", and that would mean the rules to be framed by the State Government
by notification in the official gazette, as provided under Section 321 of the
Act, 1965. Admittedly, no rules have been framed by the State Government
so far prescribing any financial cap on the powers of the standing committee
under Section 72. If no rules have been framed by the State Government,
apparently, there cannot be any violation of the amended provision of
Section 72 by the petitioners.
24. Shri Khajanchi, learned counsel for the interveners would
submit that even though rules have not been framed, it would not change
the position drastically so far as the limits on financial powers of standing
committee or the council are concerned and old provision prescribing limit
of Rs.40,000/- would continue to hold the field. This is because of the fact,
he submits, that the law is, as held in the case of The Central Provinces
Manganese Ore Co. Ltd. vs. State of Maharashtra - (1977)
1 SCC 643,
when an amended provision is brought on the statute book by substitution
of the old provision and is made dependent upon framing of the rules, it
does not result in automatic repeal of the old provision till the time the rules
are framed and the substituted provision would become legally effective
only upon framing of the rules. This argument, however, cannot be
accepted for the reason that in C.P. Manganese Ore Co. Ltd., supra, the
amended provision substituting the old provision had not received the
assent of the Governor General under Section 107 of the Government of
India Act and that was the reason why the Hon'ble Apex Court found that
the amended provision substituting the old one had not become legally
effective and, as such, the substitution did not have the effect of repealing
the old provision. Such is not the case here. The amended provision of
Section 72 has arrived on the statute book in substitution of the old
provision of Section 72 and it has been brought into force with effect from
04.8.2012. Once a substituted provision is brought into force, it would be
legally effective for all purposes. This would result in repeal of the old
provision of Section 72. Therefore, I find that the new provision of Section
72 brought into force with effect from 04.8.2012 has resulted in repealing of
old provision of Section 72.
25. In the case of Zile Singh vs. State of Haryana & ors. -
(2004) 8 SCC 1, referred to me by the learned senior counsel for the
petitioners, it has been held that substitution of a provision results in
repealing of earlier provision. In the instant case, the substitution of the old
provision by the new provision has become complete when the substituted
section 72 was brought into effect on 04.8.2012. It would then follow that
such substitution has resulted in repeal of the earlier provision of Section 72
of Act, 1965.
26. Shri Khajanchi, learned counsel for the interveners, has also
relied upon the case of P.C. Agarwala vs. Payment of Wages Inspector,
M.P. & ors. - (2005) 8 SCC 104. However, with due respect, I do not find
that this case provides any assistance to the argument made in this regard
by him. This case deals with the rules of interpretation applicable to
legislation by incorporation or by reference and lays down the test for
ascertaining the effect of incorporation of some provision of an existing Act
into a later Act. In the instant case, the newly amended Section 72 has been
brought into existence by substitution and not by incorporation and,
therefore, in my respectful submission the said case of P.C. Agarwala would
have no application to the facts of the present case.
27. Thus, it could be seen that the newly amended Section 72
having been brought into force with effect from 04.8.2012, would be the
section which would have relevance for the exercise of financial powers by
the standing committee or the municipal council and not the old provision
of Section 72. This provision leaves the matter of fixation of financial limits
on the powers of the standing committee or the council to the rules to be
framed in that regard by the State Government. The position, as it stands
today, is that no such rules have been framed by the State Government. So,
it has to be said that apparently there has been no violation of the provision
of Section 72 by the petitioners in the instant case.
28. What does that mean - is it that the financial powers of the
petitioners, under the provisions of the Act, 1965 are unrestricted,
uncanalised and unfettered? The answer has to be no. Reasons are to be
seen in the framework of Indian polity governed by a written Constitution.
India is a democratically governed Republic, where ultimate power resides
in it's citizens and the elected representatives exercise power for and on
behalf of the citizens. This makes all its democratic institutions as well as
functionaries of the democratic institutions, whether elected or appointed,
accountable to people of India. The accountability of public functionaries to
people of India is well defined by the principle of rule of law, a principle on
which the scheme of Indian Constitution is based. In several judgments of
Hon'ble Apex Court, it has been held to be part of Articles 14 and 21
pervading them like "brooding omnipresence" (See: Maneka Gandhi Vs.
Union of India - A.I.R. 1978 SC 597) and striking at "non-arbitrariness"
(Ramana Dayaram Shetty Vs. The International Airport Authority of India &
others - A.I.R. 1979 SC 1628). The principle of rule of law provides a
safeguard against the arbitrary exercise of power and requires every public
functionary and public authority to act fairly, reasonably and prudently in
the public interest and for the public good. In the case of Natural
Resources Allocation, In Re, Special Reference No.1 of 2012, (2012) 10
SCC 1, the Hon'ble Apex Court has elucidated the scope of Article 14 of the
Constitution of India in its applicability to the public authorities engaged in
contractual obligations. The Hon'ble Apex Court has held that while
exercising the executive powers in the matters of trade or business, public
authorities must be mindful of public interest, public purpose and public
good. The observations of the Hon'ble Apex Court, as they appear in
paragraphs 183 and 184, are reproduced thus :
"183. The parameters laid down by this Court on the scope of
applicability of Article 14 of the Constitution of India, in matters where
the State, its instrumentalities, and their functionaries, are engaged in
contractual obligations (as they emerge from the judgments extracted
in paras 159 to 182, above) are being briefly paraphrased. For an
action to be able to withstand the test of Article 14 of the Constitution
of India, it has already been expressed in the main opinion that it has
to be fair, reasonable, non-discriminatory, transparent, non-capricious,
unbiased, without favouritism or nepotism, in pursuit of promotion of
healthy competition and equitable treatment. The judgments referred
to, endorse all those requirements where the State, its
instrumentalities, and their functionaries, are engaged in contractual
transactions. Therefore, all "government policy" drawn with reference
to contractual matters, it has been held, must conform to the aforesaid
parameters. While Article 14 of the Constitution of India permits a
reasonable classification having a rational nexus to the object sought to
be achieved, it does not permit the power of pick and choose
arbitrarily out of several persons falling in the same category.
Therefore, criteria or procedure have to be adopted so that the choice
among those falling in the same category is based on reason, fair play
and non-arbitrariness. Even if there are only two contenders falling in
the zone of consideration, there should be a clear, transparent and
objective criteria or procedure to indicate which out of the two is to be
preferred. It is thus, which would ensure transparency.
184. Another aspect which emerges from the judgments (extracted in
paras 159 to 182, above) is that, the State, its instrumentalities and
their functionaries, while exercising their executive power in matters
of trade of business, etc. including making of contracts, should be
mindful of public interest, public purpose and public good. This is so,
because every holder of public office by virtue of which he acts on
behalf of the State, or its instrumentalities, is ultimately accountable to
the people in whom sovereignty vests. As such, all powers vested in
the State are meant to be exercised for public good and in public
interest. Therefore, the question of unfettered discretion in an
executive authority, just does not arise. The fetters on discretion are
clear, transparent and objective criteria or procedure which promotes
public interest, public purpose and public good. A public authority is
ordained, therefore to act, reasonably and in good faith and upon
lawful and relevant grounds of public interest."
29. In the case of Noida Enterpreneurs Association vs. Noida
& ors. - (2011) 6 SCC 508, the Hon'ble Apex Court has held that the State
or the public authority which holds the property for the public acts as a
trustee and, therefore, has to act fairly and reasonably. The Hon'ble Apex
Court has held that the public trust doctrine is a part of the law of the land.
The relevant observations of the Hon'ble Apex Court, as they appear in
paragraphs 38, 40 and 41, are reproduced thus:
"38. The State or the public authority which holds the property for
the public or which has been assigned the duty of grant of largesse,
etc. acts as a trustee and, therefore, has to act fairly and reasonably.
Every holder of a public office by virtue of which he acts on behalf of
the State of public body is ultimately accountable to the people in
whom the sovereignty vests. As such, all powers so vested in him are
meant to be exercised for public good and promoting the public
interest. Every holder of a public office is a trustee.
40. The public trust doctrine is a part of the law of the land. The
doctrine has grown from Article 21 of the Constitution. In essence, the
action/order of the State or State instrumentality would stand vitiated
if it lacks bona fides, as it would only be a case of colourable exercise
of power. The rule of law is the foundation of a democratic society.
[Vide Erusian Equipment & Chemicals Lstd. v. State of W.B. -(1975) 1
SCC 70; Ramana Dayaram Shetty v. Intentional Airport Authority of
India - (1979) 3 SCC 489, Haji T.M. Hassan Rawther v. Kerala
Financial Corpn. - (1988) 1 SCC 166, Shrilekha Vidyarthi v. State of
U.P. - (1991) 1 SCC 212 and M.I. Builders (P) Ltd. v. Radhey Shyam
Sahu (1999) 6 SCC 464.]
41. Power vested by the State in a public authority should be
viewed as a trust coupled with duty to be exercised in larger public
and social interest. Power is to be exercised strictly adhering to the
statutory provisions and fact situation of a case. "Public authorities
cannot play fast and loose with the powers vested in them." A decision
taken in an arbitrary manner contradicts the principle of legitimate
expectation. An authority is under a legal obligation to exercise the
power reasonably and in good faith to effectuate the purpose for which
power stood, conferred. In this context, "in good faith" means "for
legitimate reasons". It must be exercised bona fide for the purpose and
for none other. [Vide Commr. of Police v. Gordhandas Bhanji - AIR
1952 SC 16, Sirsi Municipality v. Cecelia Kom Francis Tellis - (1973) 1
SCC 409, State of Punjab v. Gurdial Singh - (1980) 2 SCC 471,
Collector (District Magistrate) v. Raja Ram Jaiswal (1985) 3 SCC 1,
Delhi Admn. v. Manohar Lal - (2002) 7 SCC 222and N.D Jayal v.
Union of India - (2004) 9 SCC 362.]
30. The above authorities clearly lay down a proposition of law
that all the public functionaries holding the property, by application of
principle of rule of law, must hold the same as trustees and, therefore, while
allocating or distributing the same, must act in a fair and reasonable manner
and in the interest of public largesse and for public good and for public
purpose. Therefore, in spite of there being no apparent violation of Section
72 of the Act, 1965, in this case, the petitioners, being the trustees of the
public property, cannot be held to be having unrestricted and unfettered
powers while allocating public works on behalf of the municipal council to
any contractor. There has to be some limit, some restriction, some fetter on
the powers of the council or the petitioners in contractual matters or
otherwise it would be antithetic to concept of rule of law, the very
foundation of Indian Constitution. Such fetters and restrictions could be
found in the Standing Order No. 36. But, then the question would arise,
keeping in view the argument of learned senior counsel for the petitioners,
whether various instructions or guidelines stated in the Standing Order No.
36 [page 84 of paper-book] would bind the elected representatives of the
Municipal Council of Katol like the petitioners or not. According to the
learned senior counsel for the petitioners, these instructions having been
issued by the Director, Municipal Administration, without any authority
either under the statute or rules framed by the State Government do not
bind the elected councilors like the petitioners. He also submits that in any
case the instructions in the Standing Order No. 36, particularly those
contained clauses 18 and 27 thereof, would have application to only those
cases where the contractual work has to be carried out by some agency
appointed by the Municipal Council and would not be applicable to a person
who is appointed as a rate contractor, as in the present case. On the other
hand, it is the contention of learned special counsel for respondents 1 to 3
and learned counsel for respondent no. 4 that even though these
instructions are in the nature of executive directions, they would certainly
bind the elected representatives when it comes to performance of their
executive functions, like awarding of contracts and so on, as long as these
directions are not inconsistent with any express provision of the statute or
rules made thereunder and particularly when they provide safeguards
against the arbitrary exercise of powers by the elected councilors.
31. So, first it will have to be found out whether the
instructions stated in the Standing Order No. 36 would bind the petitioners
or not. For this purpose, a reference to Section 49A of Act 1965 would be
useful. Section 49A reads as under :
"49A. Performance of functions by agencies
Where any duty has been imposed on, or any function has
been assigned to a Council under this Act or any other law for
the time being in force, or the Council has been entrusted with
the implementation of a scheme -
(i) the Council may either discharge such duties or
perform such functions or implement such schemes by itself; or
(ii) subject to such directions as may be issued and the
terms and conditions as may be determined by the State
Government, cause them to be discharged, performed, or
implemented by any agency;
Provided that the Council may also specify terms and
conditions, not inconsistent with the terms and conditions
determined by the State Government for such agency
arrangement."
It is thus clear from the above provision of law that a Council may either
discharge its duties or perform its functions or implement its schemes either
by itself or by any agency. This would mean that execution of various public
works which a Municipal Council must do in the interest of it's denizens, can
be done by the Council by itself or through an agency. It is also clear that
whenever the Council decides to get its works executed by an agency, it
must abide by all such directions as may be issued and such terms and
conditions as may be determined by the State Government. The proviso to
Section 49A gives some freedom to a Council to specify its own terms and
conditions for getting various works executed through an agency, however,
subject to the limitation that the terms and conditions specified by the
Council are not inconsistent with the directions and/or the terms and
conditions issued and determined by the State Government. Thus, the
purpose this Section seeks to achieve is that in contractual matters, the
powers of a Municipal Council must not be unrestricted and uncanalised and
must be regulated some way or the other so as to answer the test of
"fairness, reasonableness and transparency" implicit in the concept of rule of
law. This provision of law, it is note worthy to mention, does not refer to
any rules framed by the State Government and only lays down that the
allotment of works or handing over of its duties by a Council to an agency
for being performed or discharged by it shall be subject to such directions
and such terms and conditions, as may be issued and determined by the
State Government. Use of the expression "such directions as may be issued
and such terms and conditions as may be determined by the State
Government" is sufficient indicator of the fact that the State Government
need not necessarily resort to it's rule making power under Section 321,
though it can and may issue directions or prescribe terms and conditions
through executive fiats issued as Government resolutions. This would lead
to a further conclusion that the Government resolutions issued by the State
Government in pursuance of or with a view to achieve the purpose of the
said provision of law would be binding upon a Municipal Council and the
only liberty given to a Municipal Council is to specify such terms and
conditions, as are not inconsistent with the terms and conditions determined
by the State Government. In the present case, it is not the case of the
petitioners or even the respondents 1 to 4 that the Municipal Council, Katol,
had specified its own terms and conditions for execution of various works of
the Council through an agency, as per its power under proviso to Section
49A. Therefore, if the Inquiry Officer has placed reliance upon particular
terms and conditions determined by the State Government, and which
reliance has been found to be correct by the respondent no. 2, it cannot be
said that the petitioners would not be bound by those terms and conditions
and would be having absolute freedom while exercising their powers in
terms of Section 72 of the Act, 1965. Ultimately, principle of rule of law which
is embodied in Section 49A of the Act, 1965, would necessarily make all
powers including financial powers of public functionaries like the petitioners
subject to some limitations and reasonable restrictions not inconsistent with
other statutory provisions or rules framed by the Government.
32. With this background, let us now examine the Standing
order No. 36. Upon its close perusal one would find that what has been
stated therein is in the nature of guidelines to be followed by the Municipal
Councils while discharging their duties or performing their functions
through some agency. These guidelines are consistent with the provisions of
Section 49A. It is further seen that these guidelines have been issued on the
basis of executive directions already issued in this regard by the State
Government vide its resolutions dated 2.1.1992 and 4.2.2003. These
guidelines, broadly speaking, clarify and elaborate what is already there in
the Government resolutions dated 2.1.1992 and 4.2.2003. This can be seen
from clauses 4 and 5 of the Standing Order. It is also not the case of the
petitioners that these guidelines are inconsistent with the Government
resolutions dated 2.1.1992 and 4.2.2003. If this is the nature of the
guidelines issued vide Standing Order No.36, there is no reason why they
should not be considered as part and parcel of the Government resolutions
dated 2.1.1992 and 4.2.2003. Consequently, it would have to be held that
the guidelines issued vide Standing Order No. 36 would also be binding
upon the Municipal Councils in addition to the directions issued under
Government resolutions dated 2.1.1992 and 4.2.2003, and accordingly I
find so.
33. It is significant to state here that clause 53 of the Standing
Order No. 36 affords some limited freedom to Municipal Councils in getting
executed their works through any agency by laying down that the Municipal
Councils may make some changes in the terms and conditions as per the
demand of local conditions subject, however, to the condition that these
changes and amendments shall not run contrary to the Standing Order, rules
and regulations framed by various departments. This is in line with Section
49A of the Act 1965 conferring some liberty upon the Municipal Councils in
contractual matters. Under the proviso to it, a Municipal Council has the
freedom to specify its own terms and conditions not inconsistent with the
terms and conditions determined by the State Government for an agency
agreement. The whole purpose of Section 49A, or for that matter the
Standing Order No.36, I must say at the cost of repetition, is that powers of
the councillors in relation to an agency agreement should not be
unrestricted and uncanalised and there should be some fetters on them.
That is the reason why sub-section (ii) to Section 49A makes exercise of
powers in contractual matters dependent upon the directions as may be
issued and terms and conditions as may be determined by the State
Government from time to time. However, having regard to the fact that
local conditions may vary, the proviso to sub-section (ii) of Section 49A
gives some liberty to a Municipal Council to prescribe its own terms and
conditions not consistent with the terms and conditions laid down by the
State Government so as to enable it to satisfy the local needs. But ultimately
what matters is regulation of contractual powers of a Council by
Government directions or by prescription of certain terms and conditions,
whether by the State Government or by the Municipal Council and that is
the essence of Section 49A of the Act, 1965. This would only emphasize
what is already said and which is to the effect that discharge of duties or
performance of functions or implementation of various schemes by the
Municipal Council through some agency is something which is not
unrestricted, uncanalised and unregulated. This is also consistent with what
has been held by the Hon'ble Apex Court in the case of Noida Enterpreneurs
Association, supra, wherein the Hon'ble Apex Court has held that the State or
public authority holding property for the public or which has been assigned
the duty of grant of largesse acts as a trustee and that public trust doctrine is
a part of the law of the land and this doctrine has grown from Article 21 of
the Constitution of India and ultimately makes accountable the State and all
the public functionaries to the people in whom the sovereignty vests. This
doctrine makes all the public functionaries to act reasonably and fairly
promoting all the while public interest, public purpose and public good. The
relevant observations of the Hon'ble Apex Court in this regard are already
reproduced in the previous paragraphs.
34. In the instant case, no terms and conditions in pursuance of
Section 49A have been prescribed by the Municipal Council, Katol, or at
least my attention has not been invited to any such terms and conditions. It
is also not the case of the petitioners that the Municipal Council, Katol has
prescribed its own terms and conditions for allotting its works for execution
to an agency. Since the performance of its functions by the Municipal
Council of the petitioners, the earlier discussion has shown, must be
regulated one way or the other and since no such regulation by prescribing
the suitable terms and conditions has been put in place by the Municipal
Council, Katol, the principle of rule of law would demand that the Municipal
Council abides by the executive directions of the State Government and the
guidelines contained in such such instruments as the the Standing Order No.
36, which tend to clarify and elaborate the directions given in the
Government resolutions, so long as they are not contrary to any statutory
provisions or directions having the force of law. Therefore, even though the
Standing Order no.36 has been issued by only a Director, Municipal
Administration, an authority appointed under Section 74 of the Act, 1965,
and does not show which power it utilizes for it's issuance, it would be
binding upon the councillors of the Municipal Council, Katol. Sans these
guide-lines and absent it's own terms and conditions, powers of the
Municipal Council, Katol in contractual matters would be absolute with no
restrictions whatsoever which may give rise to a situation of arbitrariness
succinctly described by Locke in the 17th Century in the words, "wherever
law ends, tyranny begins" (See: Principles of Administrative Law by M.P. Jain and
S. N. Jain, page-7, 6th Enlarged edition, Reprint 2010, Lexis Nexis ). In this
scenario, these guidelines serve the purpose of rule of law by declaring, in
the words of Sir William Wade, "The powerful engines of authority must be
prevented from running amok" (See: Wade Administrative Law, 8th Edn. p.5,
Oxford University Press).
35. In the case of Veerendra Kumar Dubey v. Chief of Army Staff
& ors. - (2016) 2 SCC 627, the Hon'ble Apex Court has held that though
administrative instructions cannot make inroad into statutory rights of an
individual, these instructions, when they prescribe a certain procedural
safeguard against arbitrary exercise of power, will not fall foul of the rule or
be utra vires the statute. The observations of the Hon'ble Apex Court
appearing in paragraph 15 are relevant in this regard and they are
reproduced as under :
"15. It may have been possible to assail the Circular instructions if the
same had taken away something that was granted to the individual by
the rule. That is because administrative instructions cannot make
inroad into statutory rights of an individual. But if an administrative
authority prescribes a certain procedural safeguard to those affected
against arbitrary exercise of powers, such safeguards or procedural
equity and fairness will not fall foul of the rule or be dubbed ultra
vires of the statute."
36. The guidelines issued vide Standing Order No.36 are
nothing but safeguards against the arbitrary exercise of powers by the
standing committee or the Council in contractual matters and, as such, as
held in the aforesaid case of Veerendra Kumar Dubey, the Standing Order
cannot be called as beyond the scope of the authority of Director of
Municipal Administration and thus it would bind the petitioners. Even
otherwise, if it is the case of the petitioners that the guidelines stated in
Standing Order No. 36 are not binding upon them as they have been issued
beyond the scope of the authority of the Director, Municipal Administration,
the petitioners cannot by themselves decide that they are not so binding
while performing their executive functions. These guidelines in the nature
of executive instructions would still bind them as long as they are not
challenged in a Court of law and declared to be ultra vires the authority of
the Director, Municipal Administration, as held in the case of Krishnadevi
Malchand Kamathia & ors. vs. Bombay Environmental Action Group &
ors. - (2011) 3 SCC 363. This is also because of the fact that these
executive instructions have been issued on the basis of the Government
resolutions having a binding effect in terms of Section 49A of the Act, 1965
and, therefore, just as an order of a competent authority would have to be
followed, these guide-lines would also have to be treated the same way and
that would necessitate the affected person to approach the Court of law and
seek a declaration that they do not have the force of law. That has not been
done by the petitioners and, therefore, the Standing Order No.36 would also
have the binding effect in this case.
37. Shri Gilda, learned counsel for respondent no. 4 has placed
his reliance upon the cases of (i) Ram Sunder Ram v. Union of India &
ors. - (2007) 13 SCC 255, (ii) State of Orissa & ors. v. Mamtarani Sahoo
& anr. - (1998) 8 SCC 753, (iii) K.H. Siraj v. High Court of Kerala & ors.
- (2006) 6 SCC 395, and Surinder Singh v. Central Government & ors. -
(1986) 4 SCC 667 to support his argument that executive instructions with
binding effect can be issued whether the power to issue such instructions
exists or not and that wrong reference made to a provision of law/rule,
would not adversely affect the executive instructions issued by an authority.
All these cases, in my respectful submission, would be of not much
assistance to the facts of the present case, as what has been found in the
instant case is that the Standing Order has been issued on the basis of
Government Resolutions issued from time to time by the State Government
to serve the purpose of Section 49A of the Act, 1965 and they only provide
safeguards against the arbitrary exercise of power. It has also been found
that providing of such safeguards is the essence of Section 49A and it does
not matter who keeps them in place, whether the State Government or the
Municipal Council and when such safeguards are not a strap-on feature of
Katol Municipal Council for exercise of its powers in contractual matters,
those safeguards would have to be found out elsewhere, like the
Government Resolutions and/or executive instructions or guide-lines like the
Standing Order no.36. Thus, the facts of the instant case distinguish
themselves from the facts of the said cases where the central feature had
been either absence of rules or presence of rules with wrong reference or no
reference to source of power or presence of rules not providing for every
aspect of the matter.
38. Learned counsel for the interveners has referred to me the
case of M.I. Builders Pvt. Ltd. v. Radhey Shyam Sahu & ors. reported in
(1999) 6 SCC 464 wherein it has been held that when a statute provides
that certain acts should be done in a particular manner prescribed in the
provision, it must be done in the same manner. While there cannot be any
dispute about the principle of law so laid down, in the instant matter, there
being no direct issue involved about departing from the procedure laid
down in the statutory provision, in my humble opinion, I do not see any
direct application of the said ratio to the facts of the present case.
39. The next limb of argument of learned senior counsel for the
petitioners is that Standing Order No. 36, particularly its clauses 18 and 27
are not applicable to a rate contractor, like Shri Bambal and are applicable
to the agencies to whom the work contracts are awarded. Learned special
counsel for respondents 1 to 3 and learned counsel for respondent no. 4 as
well as learned counsel for interveners in unison disagree with the said
submission of learned senior counsel for the petitioners. In my view, the
said submission of learned senior counsel is not consistent with the concept
of agency. While the term 'agency' has not been defined any where in the
Act 1965, the concept of agency originates from and receives its regulation
from Chapter X of the Indian Contract Act, 1872. Under Section 182 of the
Indian Contract Act, which will have to be taken recourse to in the absence
of any definition of the said term having been given in the Act of 1965, the
expression "agent" has been defined to mean a person employed to do any
act for another or to represent another in dealing with third persons. It is
obvious that a rate contractor appointed by the Municipal Council would
squarely fall within the said definition of "agent", as given in Section 182 of
the Indian Contract Act. He is a person who is different from the person
called under Section 182 "the principal" for whom he performs some act or
whom he represents in dealing with the third person. Therefore, a rate
contractor who is a person appointed by the Municipal Council to do acts on
behalf of the Municipal Council would also be an agent and would be in the
connotation of the expression "agency" employed in Section 49A of the Act
1965 and the Standing Order No.36.
40. Having seen that the guidelines contained in the Standing
Order No.36 were equally binding upon the petitioners, the next question
arising would be, whether there has been any breach of the terms and
conditions of the Standing Order No. 36 and if so, whether it amounted to
misconduct on the part of the petitioners, as contemplated under Sections
55B and 42 of the Act of 1965. The answer to both these questions, in view
of the material available on record, especially the Inquiry report of the Sub
Divisional Officer dated 31.12.2013, has to be given as in the affirmative.
The reasons for this conclusion are stated in the foregoing paragraphs.
41. Clause 18 of the Standing Order No.36 lays down that
when any contractual work is to be allotted, it should not be allotted by
sub-dividing it into smaller works, as for example, when there is a work
relating to a road passing through one ward, then that work should be
considered as one work or such work be considered as one work for one
ward. This would indicate that for doing similar works in one ward, the
contract should be allotted by consolidating all such works into one work for
one ward. Clause 27 of Standing Order No.36 deals with qualifications and
experience of the agents through whom the Municipal Council gets its
contractual works done. It prescribes that before an agent is appointed for
performing contractual works, the Municipal Council must determine the
qualification of such agent and the criteria for prescribing the qualification
should be determined on the basis of technical capability, resources,
availability of financial means, technical experience, availability of qualified
manpower, and registration with concerned departments of the State
Government. It particularly prescribes that the agent or the contractor
should be registered with the Public Works Department and if he has been
allotted any contractual work relating to water supply, he should also be
registered with the Maharashtra Jeeven Pradhikaran.
42. It is the contention of learned senior counsel for the
petitioners that Clause 27 is applicable to only agents and not to rate
contractors like Shri Bambal, and that even clause 18 is not applicable
to him. According to him, only clause 19 is applicable to him. This is
refuted by the learned special counsel for respondents 1 to 3 and learned
counsel for interveners. I have already found that the concept of
"agency" as contemplated under Section 49A as well as Standing Order
No.36 cannot be distinguished from the idea of rate contractorship. A person
who performs the functions of the Municipal Council and acts on it's behalf,
whether one calls him an agent or a rate contractor, fundamentally stands
in relationship with the Municipal Council as it's agent. Therefore, the
argument that these clauses are not applicable to a rate contractor and are
applicable to only an agent is fallacious.
43. Now, taking a look at the inquiry report dated 31.12.2013 is
essential as it spells out in details the number and kind of works allotted
and the manner in which they were allotted to the rate contractor, Shri
Bambal. This report shows that basically there were five types of
contractual works; such as (i) repairs of cement concrete roads, (ii)
construction of a drain made up of RCC cement pipes, (iii) painting of
buildings and compound walls, (iv) construction of RCC cause way ( jiVk)
over a water stream or nullah, and (v) repair of drains. Out of these five
works, two works- namely construction of a drain with RCC cement pipes
and construction of RCC cause way over a water stream were the works
relating to construction proper or original works and not of the kind of
repairs to the existing works and thus were squarely covered by clause 18
and not the clause 19. Therefore, the argument of learned senior counsel
for the petitioners that what was applicable, if at all it was applicable, to the
allotment of works to Shri Bambal was clause 19 and not clause 18 of
Standing Order No. 36 is misconceived. While clause 18 applies to all kinds
of works, original or repairs, clause 19 applies to works which are purely in
the nature of repairs to the existing construction and it says that such works
as filling of pits and potholes on the roads, tarring of roads, carrying out of
repairs to pipelines supplying water, motors/pumps and so on and so forth
should be got done through rate contractors to be appointed by inviting
tenders. Two of the works out of the five works, stated earlier, could not
have been allotted to a rate contractor like Shashikant Bambal in this case
by the petitioners. The purpose of clause 19 is convenience and time
saving. This is seen from the reason stated therein. It is that such kind of
repair works are required to be done quite frequently and it is not possible
to invite tenders every time and frequently. However, this is not the case
with the contractual works relating to making of original construction like
laying of a drain in RCC (reinforced cement concrete) pipes or construction
of a cement cause way over a water stream. For these works, tenders must
be invited, as per clause 18 of Standing Order No.36, by treating all similar
works in one ward as one work for that ward and that there should be no
dividing of same work in one ward.
44. In addition to original works, Shri Bambal was allotted
repair works also. Repair works can be allotted as per clause 19, to a rate
contractor. But, to say that clause 18 mandate against sub-dividing one
work or similar works in one ward does not operate against repair works is
to defeat it's object, the object of transparency and accountability in
contractual matters. It is clearly laid down in clause 18 that as it was
noticed by the Directorate that some of the Municipal Councils were
allotting contractual works by sub-dividing them in different works, it was
found necessary to direct that the same work should not be divided.
Contingent situations that may arise in such matters are also dealt with
therein. It is stated that when works relating to roads in one ward are to be
carried out, these works should be treated as one work and the tender
should be invited only for such one work instead of inviting tenders for
different works and that if any work is going to arise again in next three
months, a consolidated tender for all these works be invited. In other
words, clause 18 mandates that there should be no sub-dividing of same
work or similar works in one ward and when same kind of work is going to
arise again in next three months, tenders should be invited not for just one
work but all works that are going to arise in next three months. This clause
does not discriminate between original works and repair works and equally
applies to all works. So, for this reason also, I find no substance in the
argument of learned Senior Counsel in this regard.
45. On perusal of the inquiry report dated 31.12.2013 it can be
clearly seen that while allotting various contractual works to the rate
contractor, Shri Bambal, similar works in the same ward, as for example,
works relating to repairs to concrete road and, RCC cement pipe drain
construction work, though falling in the same ward, were sub-divided so as
to have the estimated cost of each of these works to be between Rs.35,000/-
to Rs.40,000/-. The painting work at Sr.Nos. 10 and 11, though related to
same premises, was sub-divided into two different works - one relating to
the building and the other relating to the compound wall, with cost
estimates at Rs.40,000/- each. The other items disclose that the works
relating to the repairs to cement concrete road in one ward were sub-divided
into different works costing either Rs.40,000/- or Rs.35,000/- or
Rs.34,000/-. Same has been done in respect of the work relating to
construction of drain in RCC cement pipes. Such division of works and their
subsequent allotment made separately to Shri Bambal is against the
mandate of clause 18 of the Standing Order no.36, which applies equally, as
we have seen earlier, to original construction works as well as repair works
done to existing structures or roads under clause 19. In addition to violation
of mandate against sub-division of same work or similar works in the ward,
there has been a breach of other mandate of clause 18 requiring allotment of
original work by inviting a separate tender and not on rate contract basis.
As said earlier, the work of construction of RCC cause way over water
stream was the original work and so it could not have been allotted to a rate
contractor. Under clause 19, the rate contractor exists for carrying out not
the original works but only repair works or the works which by their nature
are required to be done again and again. Construction of a drain in RCC
cement pipes and construction of RCC cause way are not the kind of works
which are required to carried out again and again. They have a considerable
long life, although repairs to them may be required. But, that is a different
aspect.
46. As regards clause 27, I find that there is a violation of this
clause also when the contractual works were allotted by the petitioners to a
rate contractor like Shri Bambal. It is not in dispute that he was not a
contractor registered with the Public Works Department. There is no
material on record showing that he was registered also with the
Maharashtra Jeevan Pradhikaran, at least for the purpose of works relating
to water supply. Therefore, there has been a breach of even this clause in
allotting the contractual works to Shri Bambal.
47. From the above discussion, it becomes clear that while
awarding contractual works to the rate contractor the mandate of clauses 18
and 27 of the Standing Order No.36 has been violated, but it has been done
by the petitioner nos. 1 to 9 and not the petitioner no.10 as the petitioner
nos. 1 to 9 were parties to the decision taken in that regard, while petitioner
no.10 did not seem to be so, the reasons for which are recorded in
subsequent part of the judgment. These clauses constituted together an
effective safeguard against the arbitrary exercise of power and in the
absence of any other terms and conditions having been prescribed by the
Municipal Council, Katol, governing the aspect of allotment of works to
contractors, ought to have been followed by the petitioners. It is true that
there has been neither any allegation of corruption nor any proof of
obtaining of wrongful gain or causing of wrongful loss to anybody. It may
also be true that in the past one contractor viz. Sheikh Nasir, though
unregistered contractor, was similarly awarded with works. But, whether
allegation of corruption and proof of wrongful gain, etc. or not, a violation
of sage-guard against arbitrary exercise of public power as contained in
clause 18 and 27 is serious. Similarly, a violation blinked away and a sin
buried in the conspiracies of the past, are no worthy precedents to emulate
the unworthy. In law, precedents are the role models which espouse what is
right and denounce what is wrong. They do not operate in a reverse way,
even for a moment. Fairness, reasonableness, accountability and
transparency on the part of public functionaries like the petitioners engaged
in performing public functions are the shining attributes of the rule of law.
In this case they required that the safeguard as provided under Standing
Order No. 36 was duly respected and followed by the petitioners in
discharge of their official duties. This is also a part of public trust doctrine.
If the public functionaries do not adhere to these laid down norms, then
who else will? If their such disregard for established norms is viewed
leniently or as mere irregularity on the ground that there is no allegation of
corruption or no evidence of causing of any loss or in the past it was
ignored, it would open flood-gates for further violations by many giving
same justification. As a matter of fact, the aspect of obtaining of wrongful
gain or causing of wrongful loss is something which could not have been
effectively enquired into in an inquiry conducted under Section 311 of the
Act, 1965. The reason being that for unearthing evidence in that regard an
Inquiry Officer would require much wider powers of inquiry, akin to an
Investigating Officer making investigation under the provisions of Code of
Criminal Procedure, such as power to visit premises and take search and so
on and so forth, which powers are not to be seen under Section 311. Be that
as it may, fact remains that public functionaries like the petitioners must
discharge their duties in accordance with the established procedures and
norms, which is a requirement of doctrine of public trust and principle of
rule of law. If they do not do so, their such conduct would turn into a
misconduct, it being reflective of violation of the instructions and guidelines
issued in accordance with or under the authority of law. When such
violation occurs in allotting contracts where spending of public funds is
involved, it becomes all the more serious and cannot be treated as a mere
irregularity. The question involved here is not of motive or causing of loss,
but essentially of the example that it presents to all the subordinate
authorities and the public at large whose interest and welfare are expected
to be promoted by the public functionaries. If such conduct is not taken as a
misconduct and only a financial irregularity on the ground that there has
been no wrongful loss or there has been meager loss of just about
Rs.38,000/-, as submitted by the learned senior counsel for the petitioners,
any officer of the Municipal Council or a public functionary of the Council
would be free to do an act the way he thinks fit, may be on his own fancies
and yet get away from it saying that no loss has been actually caused or
difference in amounts paid and amounts ought to have been paid is
marginal. There will not be any respect for rule of law, there will not be
any certainty about the decisions taken and there will not be any credibility
left in the decisions taken and the public works executed on the basis of
such decisions. This would be the birth of arbitrariness, a sworn enemy of
principle of rule of law. Therefore, in my view, the violation of the afore-
stated clauses of Standing Order No. 36 by the petitioners is a misconduct
which is serious in nature and which is not the commission of mere financial
irregularity or error in judgment.
48. Learned senior counsel for the petitioners relying upon the
cases of Sharda Kailash Mittal vs. State of Madhya Pradesh & ors. -
(2010) 2 SCC 319 and Baburao Vishwanath Mathpati v. State of
Maharashtra & ors. - 1996(1) Mh.L.J. 366, has submitted that a holder of
a democratically elected office-bearer can be removed only when there are
grave and exceptional circumstances and not when there are only minor
irregularities, that the misconduct must be grave or willful or intentional
and should not be a wrong behaviour or unlawful behaviour not amounting
to mere negligence or error of judgment. He also submits that standard of
proof of misconduct is much stricter. There can be no dispute about these
principles of law. But, I have already found that the violations committed by
the petitioners in this case cannot be dismissed as mere irregularities. I have
also found that if public functionaries start justifying violations of
established norms and procedures in contractual matters involving
distribution or allotment of public money on the ground that no financial
loss or a little loss has been caused and that no gain has been proved to have
occurred to the petitioners, there would be breach of doctrine of public trust
as well as creation of a chaotic and free for all situation allowing the public
functionaries or elected representatives to conduct themselves in a
capricious manner. The argument that for an act to be adjudged a
misconduct stricter proof is required also holds no water as the violations
found to have been committed here themselves speak for their seriousness
fitting into the latin principle, "res ipsa loquitur".
49. In the case of Ravi Yashwant Bhoir v. District Collector,
Raigad & ors. - (2012) 4 SCC 407 the Hon'ble Apex Court has particularly
observed in paragraph 12 that the word "misconduct" , though not capable
of precise definition, gets its meaning from the context, the degree of
deviance and its effect on the discipline and the nature of the duty. These
observations extracted from paragraph 12 which have been quoted from P.
Ramanatha Aiyar's Law Lexicon, Reprint Edn. 1987 p. 821, are reproduced
thus :
"12. .... Thus, it could be seen that the word 'misconduct' though
not capable of precise definition, on reflection receives its
connotation from the context, the delinquency in its performance
and its effect on the discipline and the nature of the duty. It may
involve moral turpitude, it must be improper or wrong behaviour;
unlawful behaviour, wilful in character; forbidden act, a
transgression of established and definite rule of action or code of
conduct but not mere error of judgment, carelessness or negligence
in performance of the duty; the act complained of bears forbidden
quality of character. Its ambit has to be construed with reference
to the subject-matter and the context wherein the term occurs,
regard being had to the scope of the statute and the public purpose
it seeks to serve ....."
"{See also State of Punjab v. Ram Singh2 }"
{2(1992) 4 SCC 54}
It is clear from these observations that the expression "misconduct" has to be
understood in the context of the facts and circumstances of each case and
whether a particular act would amount to misconduct or not would depend
upon its context, intensity of the deviance, nature of the delinquency and
its over all effect on the discipline of the institution and also the nature of
duty during the performance of which the alleged misconduct has occurred.
The duty to be performed by the councillors while spending public money is
of high standard and it must fit into the parameters of fairness,
reasonableness, accountability and transparency so that the public trust in
the councillors is preserved. Any violation of an administrative instruction
or guidelines of binding nature, though not resulting in any proved loss to
the Municipal Council, would be viewed with great suspicion by the public
and would have adverse impact on the discipline of a Municipal Council. It
would also be a transgression of established and definite rule of action.
Therefore, following the law laid down in the cases of Sharada Kailash
Mittal, Baburao Vishwanath Mathpati and Ravi Yashwant Bhoir, supra, I find
that breach of clauses 18 and 27 committed by the petitioner nos. 1 to 9 in
allotting the contractual works in the instant case is a misconduct of serious
nature, as contemplated by Sections 55B and 42 of the Act, 1965.
50. Learned senior counsel for the petitioners has submitted
that the impugned order does not disclose any reasons and shows lack of
non-application of mind, though it is the requirement of law, as held in the
cases of Sharada Kailash Mittal, Ravi Yashwant Bhoir, supra, and Lalita
Malhari Barve v. State of Maharashtra & ors. - 2002(5) Mh.L.J. 401.
Countering the argument, Shri Kilor, learned special counsel has submitted
that the impugned order discloses reasons as well as application of mind,
although in a brief manner. He submits that this is because of the fact that
respondent no. 2, upon considering the inquiry report in the light of the
arguments canvassed on behalf of the petitioners, found that the conclusions
made in the inquiry report are based upon evidence and are proper, and
therefore, the respondent no. 2 passed the impugned order by recording
only brief reasons. He submits that in matters like this, whenever the
decision making authority decides to concur with the findings recorded in
the inquiry report, all that is required in law for such an authority is to
record its own conclusions with brief reasons and it is only when such
authority differs with the inquiry officer that the authority would be
required to consider each of the findings and state detailed reasons. For
this submission, he relies upon the case of Tara Chand Khatri v. Municipal
Corporation of Delhi & ors. - AIR 1977 SC 567.
51. So far as concerned the argument relating to absence of
application of mind on the part of respondent no. 2 and absence of any
reasons in the impugned order, I must say that the argument is not
completely correct. Reasons are indeed recorded, although very briefly.
The impugned order also shows application of mind to the facts of the case.
It is also stated in the impugned order that the Hon'ble Minister- respondent
no. 2, had even considered the legal submissions made on behalf of the
petitioners. What is, however, not seen in the impugned order is dealing by
the Hon'ble Minister with the detailed factual aspects and also legal
submissions point by point. In the authorities relied upon by the learned
senior counsel for the petitioners and referred to earlier, the principle of law
enunciated is that the order of a quasi judicial authority, like respondent no.
2, must reflect application of mind as well as reasons and that it is not
enough to just make conclusions without giving any reasons. The reason
being, as held by the Hon'ble Apex Court in the case of Ravi Yashwant Bhoir,
supra, that if such a decision reveals "inscrutable face of the sphinx" it would
become virtually impossible for the Courts to perform their appellate
function or exercise power of judicial review in adjudging validity of the
reasons. The affected party will also know as to why the decision has gone
against him. It is also the cardinal requirement of principles of natural
justice. The observations of the Hon'ble Apex Court in this regard appearing
in paragraph 46 are reproduced thus :
"46. The emphasis on recording reason is that if the decision reveals
the "inscrutable face of the sphinx", it can by its silence, render it
virtually impossible for the courts to perform their appellate function
or exercise the power of judicial review in adjudging the validity of
the decision. Right to reason is an indispensable part of a sound
judicial system, reasons at least sufficient to indicate an application of
mind of the authority before the court. Another rationale is that the
affected party can know why the decision has gone against him. One
of the salutary requirements of natural justice is spelling out of the
reasons for the order made, in other words, a speaking out. The
inscrutable face of the sphinx is ordinarily incongruous with a judicial
or quasi-judicial performance."
It is clear that the rationale behind the principles of giving of reasons and
application of mind is that the courts should be able to properly perform
their function of judicially reviewing the order and the affected party should
know as to why did the decision go against him. In the instant case, as
stated earlier, the impugned order discloses application of mind but the
reasons given are cryptic. What is not notably seen in it is point by point
dealing with the submissions that may have been made on behalf of the
petitioners. So, the flaws in the impugned order relate to cryptic reasons
and absence of point by point consideration of submissions. As regards
short reasons, I must say, the deficiency is made up by the reasons recorded
in the inquiry report which has been accepted by respondent no.2 and copy
of which has been furnished to each of the petitioners. About absence of
reflection on submissions that may have been made, I must say, it would
have to be examined in the light of the prejudice thereby caused to the
petitioners. If any prejudice has been caused to the petitioners, they would
stand on a solid ground and the impugned order would be liable to be
quashed and set aside for this reason alone. If the case is otherwise, and the
court is still able to perform its function of judicial review properly, and the
detailed reasons are also to be found, if not in the impugned order but in the
inquiry report, I do not think that the petitioners would have any case in
this regard.
52. It is seen from the impugned order that it is entirely based
upon the inquiry report dated 31.12.2013 and the inquiry report is in great
details dealing with all relevant aspects of the matter. It also explains as to
how there has been violation of the guidelines contained in the Standing
Order No. 36 by each of the petitioners. Some of the conclusions recorded
in the inquiry report are to the effect that the works allotted to the rate
contractor Shri Bambal were not carried out by himself, but were actually
executed by another person Shri Surendra Lohi and that though the tender
submitted by one contractor Shri Bhakte was much lower than the tender
submitted by the rate contractor Shri Bambal latter's tender was accepted.
These conclusions, although upheld in the impugned order, are wrong and
not based upon the facts established on record. There has been no evidence
whatsoever to show that Shri Bambal got executed the works allotted to him
through Shri Surendra Lohi. As regards the tender of Shri Bhakte being
lowest, it must be stated, his tender being for the year 2013-14 had no
nexus whatsoever with the tender of Shri Bambal, which was accepted for
the year 2012-13. But, except for these two wrong findings, there has been
no other finding recorded in the impugned order which could be said to be
not based on the evidence available on record. The violation committed by
the petitioner nos. 1 to 9 is writ large from the face of the record, for which
these petitioners do not have any answer and could not have any in view of
the facts borne out from the inquiry made in this matter and law applicable
to these facts, as discussed earlier. Had it been the case of these petitioners
that the Municipal Council, Katol, had determined its own terms and
conditions for inviting tenders and allotting contractual works to various
contractors, the argument of causing of prejudice to them could have been
accepted as in that case it could have been said that the inquiry report as
well as the impugned order are one sided and that they do not take into
account the other side of the story. But, there has been no other side of the
story put-forth by these petitioners. If they say that the guide-lines in
Standing Order did not bind them then they would also have to say that
allotment of works was done in accordance with other norms, as powers
pertaining to them cannot be exercised arbitrarily, which they have not said.
So, there is no question of prejudice having been caused to them. That
apart, the impugned order has been passed on the basis of inquiry report
and as the inquiry report records findings giving reasons in details, it cannot
be said that this is a case wherein ultimately no reasons are given or there
has been absence of application of mind or that any prejudice has been
caused to the petitioners. So far as the ratio of the case of Tarachand, relied
upon by the learned special counsel for the respondents 1 to 3, regarding
sufficiency of brief reasons is concerned, I do not think that it could be
straightway made applicable to the facts of the present case as it related to a
service matter involving dismissal of the appellant from service as an
assistant teacher, which are not the facts of the present case.
53. Learned senior counsel for the petitioners has also
submitted that the statements of the petitioners were not recorded by the
Inquiry Officer who conducted the inquiry under the provisions of Section
311 of the Act, 1965, even though he was vested with the powers of civil
court to record the evidence. This argument cannot be accepted for the
reason that there is no provision of recording of statements of the person
against whom inquiry is made either in Section 42 or Section 55B or Section
311 of the Act, 1965. Under Section 311, discretion has been given to the
Inquiry Officer to summon and examine any person whose evidence appears
to him to be material. If the Inquiry Officer does not think it fit and proper
in his discretion to record statements of the persons against whom
complaint has been made, same cannot be assailed just for the sake of it. It
has to be shown that such exercise of discretion was wrong and caused
prejudice to the concerned persons. It is not the case of the petitioners that
if their statements had been recorded by the Inquiry Officer they would have
been able to put-forth a particular defence. I have also found that in this
case there has been no other side of the story, there being no guidelines and
no terms and conditions fixed or determined by the Municipal Council on its
own for exercise of powers under Section 49A of the Act of 1965 and,
therefore, no prejudice has been caused to the petitioners. The argument is
therefore rejected.
54. Learned senior counsel for the petitioners has submitted, by
relying upon the cases of (i) Devang Rasiklal Vora v. Union of India &
ors. - 2004(2) Mh.L.J. 208, (ii) Savitri Chandrakesh Pal v. State of
Maharashtra & ors. - 2009(4) Mh.L.J. 406; (iii) Pradeep K.R. Sangodkar
v. State of Maharashtra & anr. - 2007(Supp.) Bom. C.R. 544; (iv) Joint
Commissioner of Income Tax, Surat v. Saheli Leasing & Industries Ltd. -
(2010) 6 SCC 384 and (v) Anil Rai vs. State of Bihar - (2001) 7 SCC 318,
that endeavour should be made not only by the courts but also by the quasi-
judicial authorities, like respondent no. 2, to deliver the judgment or order
as early as possible and in any case within three months of the date on
which the matter was closed for judgment/order and that the order should
be reasoned and be communicated to the parties immediately. He submits
that in this case the impugned order has been passed after expiry of eight
months from the date on which the arguments were heard and the matter
was closed for orders and on this ground alone the impugned order is liable
to be quashed and set aside.
55. Shri Kilor, learned special counsel for respondents 1 to 3,
submits that the law laid down by the Hon'ble Apex Court in this regard,
which is the basis for issuing guidelines by this Court in the cases of Devang
Rasiklal Vora, Savitri Chandrakesh Pal and Pradeep Sangodker, referred to
above, applies to only judicial authorities and not to the authorities like
respondent no. 2 performing statutory functions under Section 55B or
section 42 of the Act, 1965.
56. The argument of learned special counsel that these
guidelines cannot be made applicable to the authorities like respondent no.
2 is against the view taken in the cases of Devang Rasiklal Vora, Savitri
Chandrakesh Pal and Pradeep Sangodker, referred to above. Respondent
no.2, the Hon'ble Minister, when he passed the order of disqualification of
the petitioners under Sections 55B and 42 of the Act, 1965, discharged his
duties as quasi-judicial authority and, therefore, it was expected to render
the order as early as possible, which he has not done in this case. But not
passing of the order within the time frame of three months is not be all and
an end of all affair. In the case of Saheli Leasing & Industries Ltd., supra, the
Hon'ble Apex Court has issued some guidelines in this behalf. One of the
guidelines is to the effect that after the arguments are concluded, an
endeavour should be made to pass the order at the earliest and it be passed
not beyond the period of three months. This guideline came to be issued in
a case where the judgment of Division Bench of Gujarat High Court was
under challenge. The Hon'ble Apex Court made it clear that the guidelines
laid down in paragraph 5 of the judgment are only some of the guidelines
which are required to be kept in mind while writing the judgment and that it
was only reiterating what had already been said in several judgments of the
Hon'ble Apex Court.
57. The aspect of early delivery of judgment order has been
particularly dealt with in details by the Hon'ble Apex Court in the case of
Anil Rai, supra. In paragraph 10 of the judgment, the Hon'ble Apex Court
has dealt with a situation when the judgment is not pronounced within
three months from the date of reserving it. The Hon'ble Apex Court held
that where a judgment is not pronounced within three months, any of the
parties to the case would be permitted to file an application in the High
Court with a prayer for early judgment and as and when such an
application is filed, it shall be listed before the same Bench by which the
judgment is reserved for fixing the date of the judgment or passing of
appropriate orders. It has also been held that if the judgment, for any
reason, is not pronounced within a period of six months thereafter, any of
the parties to the lis shall be entitled to move an application before the
Hon'ble Chief Justice of the High Court with a prayer to withdraw the case
and make it over to any other Bench for fresh arguments. The ratio of this
case has also been followed by the learned Division Bench of this Court in
the case of Devang Vora and by the learned Single Judge of this Court in the
case of Pradeep Sangodker, supra. Though the directions of the Hon'ble
Apex Court in the case of Anil Rai, supra, were in the context of a judgment
reserved by a judicial authority and not by a quasi-judicial authority, in view
of the fact that this Court has already taken a view that these directions
would also be applicable to quasi-judicial authorities and Tribunals
respectively would have their application to the instant matter. So, the
directions given in the case of Anil Rai, supra, would have to be followed
even by the quasi-judicial authorities and parties before the quasi-judicial
authorities. Therefore, the procedure, as laid down in clauses (iv) and (v) of
paragraph 10, regarding filing of applications with a prayer for early
judgment and prayer for making over the matter to some other bench, in
this case, to some other authority, was required to be followed by the
petitioners. That has not been shown to be done by them. Then the
question of causing of prejudice to the petitioners by belated delivery of the
judgment would also have to be considered. According to the learned senior
counsel for the petitioners, non consideration of the legal submissions by the
respondent no. 2 is a prejudice caused to the petitioners. I am not inclined
to accept the argument for the reason that the violation of guidelines
contained in Standing Order No. 36 having a binding effect upon the
petitioners has been established in the inquiry conducted under Section 311
of the Act, 1965 and it has never been the case of the petitioners that they
had followed the guidelines and terms and conditions determined by the
Municipal Council for exercise of powers by them in contractual matters. As
such, there was no question of disregarding the instructions in the Standing
Order No.36. There is thus no prejudice caused to the petitioners by belated
passing of the impugned order in as much the petitioners have not shown
that they had followed the procedure prescribed in Anil Rai, supra.
Therefore, the petitioners, in my humble opinion, would not get any
assistance from the afore-stated cases referred to me on their behalf by the
learned Senior Counsel.
58. It is also the contention of the learned senior counsel for the
petitioners that the two contractors- Shashikant Bambal and Shri Bhakte,
both submitted affidavits to the effect that the latter would have no
objection if the works allotted to him were carried out by the former and the
former would have no objection in accepting the payments for the works
done by him at the rate quoted by the latter which were some what lower
than the rates quoted by the former. These affidavits have not been
considered by the respondent no. 2 and rightly so. These affidavits are of
14.8.2014, much after the allotted works were completed by the rate
contractor and, therefore, could not have had any bearing upon allotment of
works already done in violation of clauses 18 and 27 of the Standing Order
No.36 by the petitioner nos.1 to 9.
59. It is also the contention of learned senior counsel for the
petitioners that the appointment of the rate contractor Shri Shashikant
Bambal in the General Body Meeting held on 16.5.2012 was by unanimous
resolution and, therefore, allotting of works to him later on for the same
year, i.e. year 2012-13, for which he was appointed as a rate contractor by
the standing committee or by the petitioners cannot be seen as illegal. He
also submits that the Standing Committee, while passing the various
resolutions on 07.5.2013, had only accepted the recommendations of the
Junior Engineer and did not do anything on its own like sub-dividing the
works, allotting the works to an unregistered contractor and so on. He
further submits that if the petitioners are to be held guilty of misconduct of
allotting contractual works to an unregistered contractor, and by sub-
dividing the various works, all the councillors who were party to the
resolutions passed unanimously to appoint Shri Bambal as the rate
contractor would also have to face the action of disqualification and the
concerned Junior Engineer is required to be subjected to a disciplinary
enquiry. The said arguments cannot be accepted for more than one reason.
What has been done in the General Body Meeting held on 16.5.2012 is only
appointment of Shri Bambal as the rate contractor by accepting his tender
and nothing more. By the Resolution bearing No. 37/3, only rate
contractorship of Shri Shashikant Bambal has been fixed and it was so fixed,
as seen from the letter of Chief Officer dated 15.5.2013, for a period of one
year with effect from 01.6.2012 and no specific works were allotted to him
then. Therefore, only because Resolution No. 37/3 has been passed
unanimously by all the councillors, the complainants, some of whom were
also the councillors at that time, could not be blamed. It were the Standing
Committee which approved the allotment of specific works, which were sub-
divided by the Junior Engineer into small works with estimated cost of
Rs.40,000/- or below for each of the works and when it came to
confirmation of such allotment of works in the General Body Meeting held
on 16.7.2013, the complainants had raised objections, whereas, the
petitioner nos. 1 to 9 brushed aside those objections and confirmed those
allotment of contractual works and that was done through unanimous vote,
as at least nine councillors had left the house in protest by that time. This
can be seen from the copy of the minutes of the General Body Meeting dated
16.7.2013 available on record at page 175. Then, if the Junior Engineer had
submitted his note-sheets seeking sanction of the Standing Committee by
sub-dividing several works into different works so as to bring them within
the limit of Rs.40,000/- for each of the works, a separate action can be
considered to be taken against him. But, if that action has not been taken,
the holders of elected office cannot escape from their responsibility as
elected councillors under the law. They cannot say that the violation was
basically committed by the Junior Engineer and the same should have been
brought to their notice, which was not done by anybody. In fact, the
Standing Order No. 36 makes it clear that the guidelines contained therein
are applicable to all the Municipal Councils and in clause 53, it is specifically
stated that all the guidelines contained in the Standing Order should be read
over in the General Body Meeting. Therefore, the argument made in this
regard is rejected.
60. As regards the argument of learned Special Counsel for
respondent nos. 1 to 3 about this petition having only academic value and
no practical utility, I would say that in view of the conclusions reached
earlier, no need has remained there to consider it in any way. However,
before parting with the judgment, it would be necessary for me to refer to a
few more judgments cited by the learned senior counsel and learned counsel
for the interveners. Learned senior counsel for the petitioners has relied
upon the following cases -
(I) Parmeshwar Prasad v. Union of India & ors. - (2002) 1
SCC 145
(ii) City of Nagpur Corporation v. Khemchand Khushaldas &
sons - (1996) 10 SCC 24.
In the case of Parmeshwar Prasad, supra, it has been held by the Hon'ble
Apex Court that it is only that authority which is having power to make rules
which, by issuing instructions can fill up the gaps. Here, there is no
question of filling up of gaps in the rules framed by the authority, there
being no rules framed, and, therefore, this case would be of no help to the
petitioners. In the second case, the Hon'ble Apex Court held, in the context
of notification sanctioning octroi rates, that the power to make rules
prescribing maximum rates of taxes could be independently exercised by the
State Government but there was nothing in the section which would make it
obligatory to first specify the maximum amount of rates of tax before it
exercised its independent power of making rules for imposition of a tax.
Here, there have been no rules framed as envisaged in Section 72, and,
therefore, this case law too would not be applicable to the facts of the
present case.
61. The cases relied on additionally by the learned counsel for
the interveners are as follows :
(i) (2010) 13 SCC 586 - Mehar Singh Saini, Chairman,
Haryana Public Service Commission & ors., In Re
(ii) 2001(1) Mh.L.J. 901 - Sureshkumar s/o Kanhaiyalal
Jethlia vs. State of Maharashtra & ors.
(iii) 2015(3) ALL MR 831 - Sau. Yojna Bharat Mali vs. The
State of Maharashtra & ors.
62. In the case of Meharsingh, supra, the Hon'ble Apex Court
has observed that when the term 'misconduct' is not defined it has to be
understood and explained in its common parlance, keeping in view the
object sought to be achieved. In the case of Sureshkumar, supra, the
Division Bench of this Court held that in order to hold a particular conduct
to be misconduct, what matters is seriousness of the act complained of. In
the case of Sau. Yojna Bharat Mali, supra, the learned Single Judge of this
Court held in the facts and circumstances of that case that even though the
petitioner in that case was not heard when the Collector submitted his
report it had no consequence whatsoever on the case at hand as it was seen
on the basis of admitted facts that misconduct was writ large on the face of
the record. Following the ratio of the cases of Meharsingh and Sureshkumar
and going by the view taken by the learned Single Judge in the aforesaid
cases respectively, I have made my conclusions in this case.
63. In the circumstances, I find that so far as the petitioners 1 to
9 are concerned, the misconduct as contemplated under Sections 55B and
42 of the Act, 1965 has been proved against them, they being party to the
decision in question and nothing wrong or illegal about the impugned order
could be seen. As regards petitioner no. 10, it is the contention of learned
senior counsel that he is a co-opted councillor having no right to vote. This
contention has not been specifically traversed by the respondents. So, if the
petitioner no. 10 did not have any right to vote there would be no question
of supporting the misconduct of the other councillors, like the remaining
petitioners. Therefore, so far as petitioner no. 10 is concerned, this petition
deserves to be allowed and for the remaining petitioners it needs to be
dismissed.
64. In the result, the writ petition is partly allowed and the
impugned order dated 20.2.2016 disqualifying the petitioner no. 10 Girish
Dhanrajji Paliwal and debarring him to be a Member of the Council or any
Local Body for a period of five years is quashed and set aside and all
consequential benefits as a Member of the Council stand restored to him.
65. Writ petition of rest of the petitioners stands dismissed.
66. Rule is partly made absolute and partly discharged in the
above terms. No order as to cost.
67. At this stage, learned counsel for the petitioners makes a
request that direction should be issued not to hold bye-elections for filling
up the posts of Members of the Council for a period of six weeks. Learned
special counsel for respondents 1 to 3, learned counsel for respondent no. 4
and learned counsel for interveners do not have any objection. The prayer is
granted.
68. It is directed that the elections for filling of the posts of the
Members of the Council shall not be held for a period of six weeks from the
date of this order.
JUDGE
